Archive for the ‘Fiscal Reform’ Category

Aphorism LXX

Tuesday, November 5th, 2013

The dreaming Chicago Left, allied with old Red true-believers, civil libertarians, New Left “progressive independents,” and life-style radicals, labored mightily, and brought forth a Rube Goldberg health care web application disclosing both Stalinist bureaucracy and American government purchasing systems for all that they are.

Social justice proposals that are to be implemented by government are always realized in bureaucracy. The mastery of bureaucracy is more about competence in performance, gained after constant study and relentless pursuit, than it is about naive good intentions and panacea promises.

Government, because of the complexity of bureaucracy and of procurement and other constraints, can never be the sole source of social justice. We’re lucky that we didn’t have to endure a violent revolution and over seventy years of human suffering to find that out once again.

Not that this revelation will matter to the true-believers, whose response to their own abysmal failures is ever: “Much more is needed of the same.”

After spending several years trying to destroy religious and mediating institutions, it’s only a matter of time for, out of sheer desperation, the present architects of social justice to turn again to “public-private partnerships” with the same organizations previously on their hit list to solve their embarrassing problem.

© Copyright 2013, Albert J. Schorsch, III
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Why Research Universities Merit the “Freedom of the City”

Sunday, May 6th, 2012

What I shared with university colleagues on 5/6/12–

Colleague,

I’ve been thinking of implications of the various [Illinois] pension bills in the light of the larger question of the need for economic development in Chicago and in Illinois.

Yale economist Robert Shiller, the co-originator of the Case-Shiller housing index, recently made a dire prediction, that the housing market may not recover for a generation, meaning “in our lifetimes.”

The implications of this prediction, if correct, are profound. The political game of chasing around and announcing “jobs, jobs, jobs” may shortly be practically useless. Longer-term sources of economic growth besides tax incentive gimmicks to attract and retain businesses will have to be found.

Cities have historically grown and thrived because, as centers of commerce, they were in some sense free economic zones that became magnets of opportunity for both migrants and for entrepreneurs. But our generation of legislators, whether federal, state, and local, have somehow embraced bureaucracy and regulation as a solution, and are locking out opportunity.

By reducing constraints upon UIC’s [University of Illinois at Chicago] growth as an urban, state research university, Chicago and Illinois could become a greater research and educational magnet, drawing more scientists, more businesses, and more students, and rival Boston or LA within two or three generations, if we collectively make the right decisions to unshackle our research universities and institutes and let them grow and thrive. The “freedom of the city” must be extended to the University of Illinois (both UIC and UIUC [University of Illinois at Urbana-Champaign]) and to partner institutions as research leaders.

In order for such a strategy to succeed, civic leaders who are alumni of NU and U Chicago will have to drop their elite snobbery and allow UIC to thrive as well, since UIC in the long term can “bring the big numbers” of both graduates and researchers to help Chicago and Illinois thrive. But even these three Chicago research universities are not enough to build a “rival Boston” strategy for this region.

That is why legislative action that drives away research talent, and the dollars that senior professors and principal investigators bring with them, is exactly the wrong economic development strategy for Illinois.

As long as state research universities are lumped into legislation covering all matter of non-research institutions, and subject to numerous unintended consequences and unpredictability, the state research university will not thrive to the extent that it could in Illinois. We already see talented colleagues voting on the expected results of such election-year legislation with their feet before the final votes are cast.

Infrastructure alone will not bring Illinois or Chicago back. We have to have a “somewhere” to where the roads and bridges lead. Because real estate will not be an answer for perhaps a generation, state and other research universities do help answer the question of “somewhere.” So let’s not sandbag research universities with bureaucratic disincentives for success, OK?

There are so many encouraging changes taking place at UIC, especially UIC College Prep–there should be dozens more such Chicago and Illinois high schools!–that I’m sad to see some of our colleagues go at this critical moment for UIC.

But we do have a great opportunity, even in these awful times for Illinois, to actually make the right legislative decisions to shape a better future.

Regulatory freedom for the Research Universities of Illinois is part of the answer. The sooner the University of Illinois, including UIUC and UIC, can be set apart with its own legislation freeing the development of research and the attraction and retention of talent from regulatory constraints, the better.

But who will take the lead in spreading this message? Who’s got the guts to do this in an election year?

Much easier to add more bureaucracy and to call it “reform.” Yet where is the economic development–which is what we really need–in that?

So far, the legislature has taken the safe DMV approach–more rules and more roads. But rules and roads leading to what?

Cordially,

Albert Schorsch, III

© Copyright 2012, Albert J. Schorsch, III
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Aphorism XII

Monday, May 17th, 2010

Politicians and partisans who promise to avoid future panics or recessions, in effect to end the Business Cycle, are promising in economic terms to pass laws against bad weather.

Such politicians and partisans should be taken about as seriously as anyone else who promises to end bad weather. Such political and social snake oil has a long and destructive history.

An economy can’t simply be armored against panic and recession by law or fiat. It can only be better armored when more governments, businesses, institutions, and individual consumers have adequately learned to prepare for bad economic weather.

© Copyright 2010, Albert J. Schorsch, III
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A key to state government reform: Making transportation pay more of its own way

Sunday, March 14th, 2010

Much has been written about the fiscal crises among US state governments. These governments have turned to gambling and to other Rube Goldberg funding schemes to provide funds for schools, pensions, etc.

But there’s a hidden malfunction among these state fiscal systems which can be fixed. Almost every one of these states do not adequately raise revenues to support their transportation sectors: highways, roads, bridges, public transportation, and associated infrastructure. This lack of adequate funding means that taxes intended for other uses must be diverted to pay for maintenance and improvements in the transportation sector. This lack of adequate funding for the transportation sector especially weakens the education sector, among others.

In the US, the romance of the free and open road has led to a free-rider culture. Transportation experts often favor increases in the gasoline tax because they encourage energy conservation and the consumer choice of other transportation alternatives such as rail. But few tax increases are fought with the passion evoked when gasoline taxes are proposed to be raised. Therefore, significant increases in gasoline taxes are presently not a likely solution for the needs of transportation infrastructure.

In addition, a culture of political corruption usually surrounds each transportation sector. Because of steady and lucrative road and infrastructure contracts, both contractors and unions feed a portion of their transportation revenues back to the political sector. What has arisen is a self-perpetuating gravy-train for political interests that works against the public interest. This transportation gravy-train produces more uses of transportation funds than there are sources. As I publicly stated many years ago on NPR, “Thar’s gold in them thar concrete.”

One path, then, to both government reform and to its rationalization would be a determined public effort to make the transportation sector pay more of its own way in tolls and taxes, so that wear and tear on public roads are paid to a greater degree by the users and less by the public at large. Such a movement would not only free up more dollars for other legitimate uses, but would lead to transportation behavior more consistent with the resources we actually have available.

The technology exists to install a transponder in every car and truck at the point of manufacture. These transponders should be required. More heavily-traveled bridges and roads could be added to those which charge electronic tolls. Even if these tolls are only pennies, they will add up. It is time to move steadily in this direction. It is only fair that those who use roads pay a greater share of their use of them, instead of sticking other taxpayers with the bill.

Admittedly, the addition of tolls for infrastructure use or congestion pricing are imperfect solutions. Charging for use of roads or bridges or for miles traveled does not have the built-in incentive for energy savings that increasing the gas tax includes. However, increasing the gas tax is presently so unpopular it would not be the practical option until the public mind changes about taxing the use of fuel.

In addition to the above suggestions, the political donations of the transportation sector should be published on a regular basis in conjunction with reports to legislatures on the completion of transportation and infrastructure projects.

© Copyright 2010, Albert J. Schorsch, III
All Rights Reserved

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