Grand Rapids Pundit

Producers vs. Plunderers

Posted by: GRPundit on Wednesday, 25th Apr, 2007

This past weekend there was an article in the Grand Rapids Press about the benefits that Grand Rapids City Commissioners receive. We weren’t even aware that Commissioners got both health care and pension benefits for their one day a week job.

It seems as though five Commissioners participate in the City’s health care plan, though four of them make a voluntary contribution (James Jendrasiak pays nothing). The health care plan costs the city (consequently, us) $11,000 a year.

In addition, Commissioners receive pension benefits. Again, for a one day a week job.

One is reminded of the work of the great 19th century French economist, Frederic Bastiat. In his short treatise, entitled The Law, he separates people into two classes, those who produce something valuable and those who use the law to plunder the producers:

Man can live and satisfy his wants only by ceaseless labor; by the ceaseless application of his faculties to natural resources. This process is the origin of property.

But it is also true that a man may live and satisfy his wants by seizing and consuming the products of the labor of others. This process is the origin of plunder.

Now since man is naturally inclined to avoid pain — and since labor is pain in itself — it follows that men will resort to plunder whenever plunder is easier than work. History shows this quite clearly.

Remember this the next time the City Commission complains more about how they need to raise taxes.

23 is No Longer Enough

Posted by: GRPundit on Wednesday, 28th Mar, 2007

Grand Rapids’ favorite son, Ambassador Peter Secchia, now appears as though he has changed his mind. Formerly the chair of “23 is Enough,” an anti-Wayland casino group, Secchia now seems to believe that 25 is just right.

According to Sunday’s Grand Rapids Press, Secchia has resigned his position at 23 and is now campaigning for a new casino in downtown Grand Rapids. One wonders why the change of heart.

The idea is that the GR casino would be basically a funding mechanism for the government, paying for the local pools, museums, parks, etc. While the idea seems to be in the right place, we’re very skeptical of any government unit owning an running an enterprise that the private sector should. Each time one of these publically-owned enterprises comes into existence, it generally entails the creation of new bureaucracies and un-elected governance boards (such as the DDA, the money-losing Kent County Convention and Arena Authority, etc).

One is left to wonder, though, when Secchia makes a statement like this, “I’m talking about a casino like Detroit has, (but) owned by the city, county and local people who would share the profits…” Does Secchia plan to be one of the “local people” who shares the profits? Who would own the casino? Who would operate it? Will it be just another government boondoggle, like the current city-owned golf course?

Proposal 2: Mayor Heartwell and the U of M

Posted by: GRPundit on Wednesday, 22nd Nov, 2006

The fallout from Proposal 2 continues. Grand Rapids Mayor George Heartwell has apparently decided that he wants the taxpayers of the city to pay for a federal lawsuit to stop the implementation of Proposal 2. Heartwell uses the same logical contortions of groups like BAMN to try and make an argument that banning racism and sexism somehow is discriminatory. The article linked above actually says that Prop 2 is a “civil rights violation.” It’s not clear if that’s a Heartwell quote or summary of his position, but it’s typical of the utter hypocrisy of the pro-racism lobby that Heartwell apparently belongs to.

But an even more interesting issue arises here. Mayor Heartwell, along with all the public officials in the state of Michigan, are required to take an oath of office. That oath reads as follows:

I do solemnly swear (or affirm) that I will support the Constitution of the
United States, and the Constitution of this State, and that I will faithfully perform the duties of the office of __________________ in and for the City of _________________, County of ____________ and the State of Michigan, according to the best of my ability, so help me God.

Mayor Heartwell has taken a similar oath to “support… the Constitution of this State…” Proposal 2 is an amendment to the state’s constitution. The mayor is therefore looking at violating his oath and defying the state’s constitution. Filing a lawsuit to try and stop a state constitutional amendment certainly cannot be defined as supporting the constitution.

Perhaps the University of Michigan’s president, Mary Sue Coleman, has seen the legal light on this issue. She has decided to back off her earlier statements that she would fight Proposal 2 in court. When she addressed the university’s Board of Regents this week, she didn’t mention any lawsuit. In fact, she committed to working within the law:

“With last week’s passage of Proposal 2, I want to again assure the campus community that we remain fully dedicated to a diverse university and that we will obey the laws of our state,” said Coleman. “What will be essential is that all of us - students, faculty and staff and administrators - pursue all possible creative solutions to achieve diversity at the university within the boundaries of the law.”

We tried to find some statistics relating to minority enrollment at the U of M to compare with minority graduation, but we were unable to find that information. However, we did find some information on how California’s Proposition 209, similar to Michigan’s Proposal 2, affected universities in California.

The interesting outcome in California appears to be an increase in the number of minorities graduating from universities. That’s right, an increase. Why? Because enrolling students who would not otherwise qualify for admission to a top-tier university actually does the student a disservice. Think about it this way: if you were a B-average student and a top university admitted you based on something other than your grades, chances are you wouldn’t do so well, surrounded by A-average students in a very rigorous academic environment. Students not qualified to attend a top-tier university tend to drop out in higher rates. Therefore, it does them a disservice.

By admitting students to universities largely based on academic ability, students tend to apply for and attend the university that is closer to the academic rigor level they will succeed in. Therefore, the effect of Proposition 209 is that minority students tend to apply for admission at universities at the level of rigor they are more comfortable in. Therefore, instead of dropping out due to an inability to keep up, they tend to graduate at higher levels.

The reality of minority graduation rates bear this out. Rates stayed the same both before and after the passage of Proposition 209. That is, regardless of admissions levels of minority students, graduations rates were flat.

But of course, special interests to hate to see special favors melt away will do anything they can to preserve the status quo, as our mayor is demonstrating. Never mind the fact that the city is constantly complaining about a lack of funding and funds for critical services - apparently it’s more important to use our taxpayer dollars to try and overturn the vote of a majority of Michiganders.

State Budget Gnashing

Posted by: GRPundit on Thursday, 16th Nov, 2006

The stage is already being set for a possible state (and probably local) tax increase. Today’s Detroit News reports that state revenues for the just-completed fiscal year 2005-2006 are down by $170 million. That’s about 0.85% less than they anticipated, yet we are already hearing that the world is going to end for schools and no more police will be on the streets.

But, before we get ahead of ourselves, let’s take a quick look at the budget. We compiled the graph at left from data published by the Senate Fiscal Agency. It is a summary of the total state revenue and expenditures since the 1990-1991 fiscal year. The only year when the expenditures actually went down was 2002-2003, when they declined by 0.28%, or about $118 million. However, every single year, revenue has increased.

A couple of quotes will show you how bureaucrats and politicians are so good at making situations sound much worse than they are in order to scare us into being more accepting of tax increases. From the article above:

The governor and lawmakers have erased more than $3 billion in cumulative deficits over the past four years by making budget cuts, increasing cigarette taxes and fees, and shifting money from other accounts.

You’ll see, that even though one reduction in the budget from 2002 to 2003 occurred, a grand total of $118 million, bureaucrats seem to be able to conjure up at least $3 billion in “cuts” over the last several years. How do they do this? Here’s how:

If a government budget is $100 million this year and it is budgeted to increase to $110 million next year, but the actual increase is to $102 million, it is called an $8 million cut, even though more real money is being spent. Our Grand Rapids city politicians are very good at making this sort of obfuscationary budget argument. You see, the “cut” isn’t a real reduction in spending, it’s a reduction in the anticipated increase in spending.

Now, of course, the bureaucrats’ special interest groups are crying foul. Justin King, executive director of the Michigan Association of Schools Boards, the lobbyist organization for school districts, claims that any cut in school funding this year would be “devastating.” He says that 50 school districts are approaching bankruptcy, even though schools have received a 35% increase in funding, after adjusting for inflation, over the last ten years. One presumes that he is including our own Grand Rapids Public Schools when he says that districts are on the verge of bankruptcy, even though GRPS spends $10,770 per student. You see, a reduction in the state budget of 0.85% is billed as devastating to schools.

But the sky doesn’t stop falling there. Dan Gilmartin, executive director of the Michigan Municipal League (the lobbyist organization for Michigan cities), says, “Any additional cuts would be suicidal for communities,” and, We’re laying off cops, not paving roads and not attracting new jobs.”

This is all attributed to a state payment to cities called revenue sharing. Basically it’s a redistribution of state-collected taxes to city governments. Our city bureaucrats and politicians are fond of stating that the city government has “lost” $30 million in revenue sharing. However, we again look at the real numbers. Annual city revenue from revenue sharing has declined from a high of about $27 million a year to about $23 million this year. Yes, that’s a real reduction of $4 million, but instead of saying that they have had to cut $4 million out of the budget (that doesn’t sound too sexy), they add up what they would have gotten each year if the state continued to boost revenue sharing. Presto - they’ve “cut” $30 million out of the city budget!

The cry from cities is now that they will have to cut police and fire to make up the difference of any additional “cuts.”

Never underestimate a bureaucrat whose job is on the line. They will obfuscate the budget numbers as much as possible to scare us. Instead of cities and schools engaging in simple and small (0.85%) wage cuts to preserve jobs, they will lay off teachers, policemen, and firemen, all the while still maintaining extremely generous benefits packages for those who remain.

While the rest of us have had to tighten our belts and deal with the still-stagnant and even declining economy in Michigan, government will continue to expand. Government never will have “enough” - don’t forget that.

Oh boy

Posted by: GRPundit on Friday, 3rd Mar, 2006

We just got a preview of the Grand Rapids City Commission’s upcoming agenda. The resignation of Robert Dean from the commission created an opening which the commission needs to fill. Candidates were interviewed yesterday for the appointment.

The interesting thing is that Mayor Heartwell says that the second round of interviews for the three finalists will include more hard-hitting topics, such as:

He believes they will be asked about their stand on whether to ask voters for an increase in city property or income taxes.

He also expects they will be quizzed on whether they support a living wage ordinance that could raise minimum wages in the city.

Oh boy. In other words, the litmus test will likely be something along the lines of, “do you think city government should be bigger and more invasive?” The response of “yes” will work in the candidate’s favor.

If both those issues pass in the city, get ready for making a bad economic situation even worse.

Grand Rapids State of the City 2006

Posted by: GRPundit on Friday, 10th Feb, 2006

Mayor George Heartwell starts his State of the City 2006 Speech by summarizing past state of the city speeches and reviewing accomplishments pertaining thereto.

First, he starts with cooperation between the city schools and the city government. Nevermind that his 2004 state of the city touted cost savings as a primary goal of collaboration between the two entities, now he says that they’re working together just great in building new schools. You know, bureaucrats are holding hands around the table. Wonderful news.

Second, the mayor reviews his commitment to reduce illiteracy in Grand Rapids. It’s a good and important goal. He says he wants to reduce illiteracy by 50% over the next 10 years.

The mayor then skips everything else he proposed in the 2004 state of the city, preferring not to review the things he did not accomplish, such as the education renewal zones. He also skips over his desire to strengthen the unaccountable Grand Valley Metro Council’s central-planning powers when it comes to land use, as well as his intense desire to expand wasteful and expensive mass transit systems, such as light rail.

He then moves on to a review of his second state of the city, in 2005, which was essentially a blabber-fest about pollution and saving the world’s environment, all from City Hall. He touts all the wonderful things the city government is doing without mentioning much in the way of specific end points. He does mention, however, the new hybrid electric busses which the ITP will be purchasing at the bargain basement price of $500,000 each.

The next portion of the speech focuses on the Grand Rapids economy and its growth. This is certainly good news. Several anecdotal items are cited as examples of local companies which are expanding.

However, the following section is where the mayor goes completely wrong. He makes the following statement:

Before I talk about our course of action for economic development, I want to address our “ship’s” fuel reserves and our prospects for refueling on our way to our destination of economic health. I want to talk about the city’s budget.

Does anyone notice something wrong? We’ll tell you if you haven’t figured it out. As we’ve previously pointed out, the mayor doesn’t distinguish between the health of the city and the revenue of city government. He says in his speech that City Hall is what keeps the “ship” of Grand Rapids moving forward. He doesn’t understand that city government is usually the road block to further economic growth, not the reason for growth.

However, Mayor Heartwell does go on to explain the Lean Thinking initiative the city government is using to improve operating efficiency. It’s good to see that they are working on making the government operate better within its means.

Then comes the big stink bomb. More taxes. Heartwell goes on, complaining about lost “state revenue sharing,” which has been reduced over the last several years. It’s the usual complaint from city governments. As the Michigan economy limps along, the politicians and bureaucrats want more money. Well, it’s not coming down the pike. Perhaps they haven’t looked at the unemployment rates in Michigan lately.

The point of this speech:

[W]e are rapidly approaching the time at which we must bring a tax increase question before the voters.

Yes, that’s right. Hang on to your wallets, again.

But! Here comes the logical fallacy that the mayor is so wonderful at espousing. Out of one side of his mouth he says that taxes need to be raised. But lo and behold, he then goes on to propose tax abatements for industrial facilities. Nevermind that manufacturing is going the way of the telephone operator, the real point is that he implicitly recognizes that tax reductions help economic development. If tax abatements didn’t spur growth, why would they use them? But, at the same time, he proposes a general tax increase to prop up the bureaucracy. Which one is it, Mr. Mayor? Growth of government or growth of the economy?

Finally, Heartwell closes his speech with a promise to build a sustainable business park. He want to provide everything anyone ever wanted for development: high-speed internet, wireless internet, rail transportation, green space, on-site recycling, storm water capturing, and even a chicken in every pot. Wait, he didn’t say the chicken part, but the mayor promises everything else. Perhaps he’s never heard of what the free market is. Should city government be in the internet service business? How about rail transportation? Is your wallet getting lighter?

Essentially, the speech was, once again, about further government expansion and tax increases, although this year the tax increase part was explicit. The mayor only proposed one item which reduces government – the lean thinking initiative. Hopefully, one day, the mayor will realize that the size of city government is inversely related to the economic health of the city.

State of the City Annual Follow-up

Posted by: GRPundit on Tuesday, 31st Jan, 2006

Each year we’ve looked at past State of the City speeches to see what was proposed and what was actually accomplished. See last year’s analysis, as well as 2004’s.

A quick recap: Two years ago, the mayor trumped more money for schools, city-school partnerships in administration, and more environmental education. He accomplished essentially nothing of what he promised in 2004.

Last year, the mayor focused on more government intervention in development, a personal crusade against global warming, and a promise to keep pressing for wasteful and espensive mass transit systems. Once again, not much accomplished here.

The interesting thing is that he has focused very little on actual operations of city government. What does city government do? Or, rather, what should a city government do? Provide police and fire, run a water and sewer system, provide for decent roads, and create an environment where business and people want to move to.

But what, if anything, has the mayor proposed to ensure that these things are provided? Nothing. The mayor confuses the health of the city with the growth of city government. A constant theme in his speeches is that state revenue-sharing has been reduced. City government should remain small and relatively non-interventionist in the economy. Less money for city government means fewer busybody bureaucrats, and that’s like kryptonite to politicians.

It’s most important that the city stick to core city functions. However, this mayor and city commission continue to insist that it is their role to practice social engineering. When government picks the winners and losers, we all lose.

Adopt-a-Bathroom? How About Adopt an Everything?

Posted by: GRPundit on Thursday, 22nd Sep, 2005

An interesting idea was posited by an offer by a citizen to pay to keep the bathrooms open at Aberdeen Park so the Creston High School Girls tennis team wouldn’t have to go to Burger King to use the bathroom. The City refused the offer.

This brings up a good idea. How about all parks, pools, and the zoo go private and not for profit? Each park could be adopted by a company or neighborhood and the cost would suddenly be off the rolls for the taxpayers of the city. There are examples of private parks all over the world. Some are free to users, some charge a small fee, but most are better run than government-owned and operated parks.

Why would the city refuse the offer to pay for some park operations? Because bureaucrats have no incentive to do well. Let private groups run the parks and they’ll do what it takes to keep people coming back.

Mayor in Panic Mode

Posted by: GRPundit on Tuesday, 29th Mar, 2005

Grand Rapids mayor George Heartwell held a rally in the Creston neighborhood on Monday to continue his so-called “rebellion” against cuts in Community Development Block Grants.

The mayor, along with all the big-government spenders are panicking lately because of reduced revenues to local and state government.

But the real kicker is the mayor’s quote regarding these cuts and his mission to extract more money from taxpayers, saying he won’t stop, “until God’s reign of justice permeates our world.”

We didn’t realize that Community Development Block Grants were part of God’s master plan. In fact, we have yet to see a section of the Bible that commands those in government to use the force and effect of government to extract money from people, at gunpoint if necessary, to redistribute to the poor. We always thought that the most virtue in giving was when one is giving from the heart, not when one is forced to do so under the threat of jail.

Folks like the mayor, and other Great Society apologists, are going batty because they see their welfare state being dismantled. Nevermind they have nothing to show for it.

State of the City Analysis

Posted by: GRPundit on Thursday, 27th Jan, 2005

Mayor George Heartwell gave his state of the city speech for 2005 on January 15th.

First, let’s go over last year’s state of the city speeches. He gave three, but only two were available online.

In his first 2004 SotC speech, Heartwell concentrated on education. His fluff-filled tome focused on adult literacy, city/schools operating partnerships, and education renewal zones, to divert more money to the schools. Oh, and he ended that speech with the old cliche, that it’s for the children, “…all the children.”

His second speech, which we analyzed here, was a typical stump for more political power, centralization, and central planning. He wants more money spent on a wasteful mass transit system and strengthening of the Grand Valley Metro Council for more “regional planning.” The one bright spot here is his stumping for tax-free renaissance zones. We wonder if he has any latent understanding of why tax-free zones work, but we’re doubtful.

This year’s theme? Sustainability. Whatever that means. Well, we do know what it means, but folks like the mayor won’t admit what it means. Essentially more government control of economic development. But we know that is a contradiction of terms.

Heartwell starts out the speech by touching on the issue of violence in the inner city. He looks forward to a committee’s recommendations to heal racism.

Next, he looks back at last year’s education speech and goes over accomplishments from the last year. He congratulates himself for raising taxes twice for Grand Rapids Public Schools. He discusses the success of an adult literacy program.

Then he talks about the joint operational project between the city and GRPS. The strange part about this is that it isn’t a joint operational project at all. All he can refer to is working with the schools to support more minority contractors and the sale of the West Middle School building to a developer. Huh? Last year he talked about saving money by using joint human resources, accounting, and groundskeeping departments. How have any of the above saved either the city or the schools money?

Finally, he says that a joint program with the West Michigan Environmental Action Council and GRPS has helped environmental education. But, as we pointed out previously, this program, basically to collect trash around streams, costs the city about $564 per bag of trash collected. And we thought the schools and city were hurting for money.

And then he laments the fact that the Education Renewal Zones concept hasn’t progressed as much as he liked.

Then we move on to the meat of the speech. What’s he going to do for us this year?

First, he goes over the usual doom and gloom predictions of how horrible the world will be if the government doesn’t take a larger role in our lives. For example, he cites this example: “The United States, which presently uses 40% of all the world’s oil production and 23% of all coal production will be experiencing crisis levels in these resources.”

Didn’t they make those types of dire predictions in the 70s? Yeah, and we’re still here.

So, we can see where this is going already.

He then blabbers on (see if you can make it through his speech without falling asleep) about sustainability and all kinds of government partnerships to make peoples lives better, in a sustainable way. He goes on to lament the state of the economy in Michigan and how social equity (another buzz-word of the extreme left) must be kept in mind.

The most fun (and laughs) comes from Heartwell’s diatribe about electricity usage in Grand Rapids. He wants to reduce the City’s dependence (he doesn’t clarify if he means the City government, or the people in the city - he probably doesn’t make that distinction in his own mind) on non-renewable resource power by 20% by 2008.

His plan to do so? Wind power. And you thought cellphone towers were ugly.

The mayor concludes with what he hopes the next generations will write about this one:

In 2005 and 2006, this diverse group of people in Grand Rapids found ways to interconnect business with the environment – maximizing commerce and nature.
This generation responded to the challenges of globalization by creating a city that led the state in productivity and returned the country to prosperity.

This generation created a city where neighbors cared for neighbors and children were safe.

This generation created schools that maximized each child’s potential and allowed us to respond to rich economic opportunities.

Truly, this generation created a city that sustained life.

Laudable goals. But government, bureaucrats, bureaucracy, high taxes, regulation, and central planning aren’t the way to get us there. Anyone ever look at the history of Detroit?