The Covid Government stress test

After the debacle of Wall Streets epic fail leading to the 2009 economic crash, the government forced the consolidation of banks with standards that included a “stress test” to make sure none of them were “too big to fail” and other nonsense. The fed’s choice to bail out the banks and the insurers who created this false sense of security, did so with no regard to the common man, who ended up taking a bath. A wave of foreclosures swept the country- many, made even more complex due to deregulation of the markets- which allowed “robosigning” and remote lien registrations. Now, a house across the street from me, remains a zombie property, because the company that bought the note on secondary markets, can’t produce proof that the note was legit- or any payment history. The new owner, my neighbor, who invested sweat equity and quite a bit of money in it, can’t sell it- without paying off a note that no one can produce.

What we saw was a giant transfer of wealth from the poor to the wealthy, and a bailout of billionaires by the entire country. We have socialism for the rich, but capitalism for the poor. It’s wrong, and what’s worse, is it’s happening again.

When Covid first hit, I made recommendations on how to prevent history from repeating itself. I called the post “Just hit pause” () and the solutions were simple, with no complicated qualifications, no winners and losers, and most of all, no redistribution of wealth or gambling on outcomes while we’re under siege from a malicious microbe. Of course, we didn’t take the simple fair route, instead, making PPP and EIDL loans- and hoping everyone would do the right thing- by keeping employees- and then the stupendously stupid short term $600 a week bonus for the unemployed- while those who were deemed “essential workers” toiled away at their low paying jobs.

I followed up with another post: “Pivot: cut cities, not services“(April 19, 2020) which suggested a move to Unigov- to consolidate and tighten government belts while everyone else is doing the same. What better time to take a thorough look at redundancy and inefficiency in government, just like every restaurant owner has done? Entire industries have had to pivot with the new realities and many may have made seismic changes with work from home, telehealth, remote learning and online ordering and delivery.

Yet, while our local political “leaders” whine about not being bailed out by the feds for their huge drop in income tax collection, we don’t see local governments reinventing themselves, instead we get threats of service cuts.

Even Kettering, which I consider the best run city in Montgomery County by a long shot, took epic blows this week when Synchrony Financial announced that it was going to close up shop in their offices in the old DESC complex on Wilmington Pike and move their entire operation to work from home. The city says they will lose $2.1M a year in income tax collection. Then, WilmerHale, a national law firm announces a move to Miami Township– a move of mere miles, but in terms of benefits for their white collar employees making good money- an instant raise of 2.5% on their pay because Kettering has an income tax- and Miami Township doesn’t. You can’t say it’s for space- the old location was 45K SQ FT and the new one is only 4K SQ FT more.

Now, before you start suggesting that Kettering somehow failed WilmerHale by not granting them some kind of “incentive package” (read that as the poor subsidizing the wealthy with exclusive tax breaks or incentives) know that Kettering city manager Mark Schwieterman offered the firm an incentives package to stay, but WilmerHale chose profits over community. The same thing that lead to NCR leaving Dayton, the same thing that’s been going on at the LexisNexis complex as buildings are vacated as they shift employees and resources to North Carolina’s Research Triangle.

There’s a good possibility that in the next year, massive amounts of class A and B office space will be available at cut rate prices as many companies have realized they can operate with their workforce working from home- and that home can be anywhere in the country- from high rent San Francisco to low rent Dayton.

Yet, we’re still going to be re-arranging deck chairs on our own Titanic of too many banana republics and profligate politicians. One of the reasons NC is so successful at recruiting our businesses is that they have countywide government- while we have never-ending turf wars and waste resources on socialism for the rich- tax abatement, incentives, Joint Economic Development Districts, Tax Increment Financing districts, special improvement districts and the like. As well as letting public employees try to play developer with tax payers money- in direct competition with free and open markets, sometimes with disastrous results (the list is long, but my favorites right now both belong to Dayton City Manager Shelly Dickstein who blew about $5M declaring 12 acres of the Twin Towers neighborhood blighted- so she could option property 3x, so she could bring a new Kroger to the corner of Wayne and Wyoming- without having a contract with them, and then, her deal with “Student Suites” where she gave them $2M to build student housing for Sinclair Community College students- and then gave demolition contracts to Steve Rauch Demolition- (now indicted by the feds as part of the “Culture of Corruption” clusterduck) and then even more money to fill in the hole he left where the old Dayton Daily News building and the fabulous terra cotta Schwind building were – on Ludlow, a block away from City Hall.

Wave a magic wand at this mess for a minute- and eliminate all 30 jurisdictions in Montgomery County, eliminate all the separate fire departments, the police forces, the swat teams, the street maintenance departments, the water departments, the parks and recs departments (merge them with Metroparks) and start to see real government savings. Less elections, so that we can see what exactly is going on with less media resources. Less websites, less, elections, less candidates, less yard signs, less clerks of courts, the list goes on.

Impose a single, universal income tax of 1% for everyone in the county. Stop with the stupid random real estate appraisals pulled out of a hat by Tyler Technologies that gouges us for millions every year to raise or lower your property values. Stop worrying about what business buys an old factory like Fuyao, or allow a hospital building that was tax abated for decades be taken out of the inventory to reduce competition by the duopoly we have running health care.

If we look at just the Dayton City Commission- between the $50K a year for a part time mayor, almost as much for her full time assistant, $40K each for 4 commissioners, then their assistants, and all the meetings- and the staff attending them (all making six figures)- and we can save tens of millions a year just by eliminating them- and put the money into direct services to taxpayers- like making sure the water pipes don’t break, that police show up when you call, that we don’t pay for schemes created just to create patronage jobs and favored contracting status for those who pay to play the game in Montgomery County.

If that all sounds good to you, you should consider subscribing to updates from Reconstructing Dayton. Or better yet, donating, We’re busy working on surveying candidates for the fall election on their positions on unigov and transforming Montgomery County from a Monarchy, to a true democracy, where the power of new ideas powers our economy instead of provincial politics.

We believe that the Covid crisis may just be the best stress test for local government and the best time to reevaluate what we need and what we can afford as a community. We certainly don’t need disgraced despots like Wayne Davis in Centerville, who’s been doing deals to buy out employees if they promise not to sue. Nor do we need another organization of mental midgets “advocating for the base” as suggested by the equally questionable city manager of Huber Heights, Rob Schommer. As if the Dayton Development Coalition isn’t a big enough farce, he’s now pushing for the “Wright Patterson Regional Council of Governments” (WPRCOG) to “allow Wright-Patterson to communicate its needs directly to surrounding governments.”

The problem is that there are all those governments: Huber Heights, Dayton, Fairborn, Beavercreek, Bath Twp., Riverside and Montgomery and Greene counties. If we were able to redraw districts and consolidate the way politicians have been able to gerrymander Ohio, We’d have the City of Dayton – which would reach from Jefferson Township to Springboro to Beavercreek to Trotwood, Vandalia and Englewood- and have one urban government with one tax rate, one sheriff, one court system, one water system and one real Mayor and one city manager.

Or, we can just wait as each little fiefdom realizes that the days of fat and happy taxes from the little people working in retail, restaurants, coffee shops, yoga studios and Amazon and Fuyao, aren’t capable of keeping them all in their little thrones anymore.

 

 

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