Sunday, September 30, 2007
Clean Energy, Dirty Money
According to the proposal, up to a million dollars will be made available to companies seeking funding assistance from state grants. As we have seen in the past, companies that need this kind of funding are generally high risk investments, the kind that apparently only our government will invest in. I agree that this funding will help bring new businesses and more jobs into Colo., but will they stay. Generally high risk businesses are just that, high risk. Many of these types of "schemes" do not succeed. In bringing these kinds of businesses here, the Governor is trying to make or economy even more unstable. I'll agree that we need more and better-paying jobs (my bank account can vouch for that), but why should we count on the government to boost our economy. It is a proven method, leave the market alone and it will correct itself.
I'd like to see a renewable source of energy sometime soon, but lets be realistic, big oil definitely won't let that happen until we have used up all there is of our dinosaur companions. Plus if you ask me the oil companies already have whatever it is our cars will run off in 20 years, they are just waiting for the right time to strike (but that's just a little of my conspiracy theorist coming out.
This sounds like a very bad idea. First of all, situations, people and preferences change from city to city. The idea of federal policies and regulations is that when a law is made on the FEDERAL level, it is a blanket regulation for all of the land. If a regulation is going to help a specific region (and that is a big "if") it would need to be tailored to that specific region. There is no place for federal government here. Not only states have the power to play on their own state-specific strengths, but,by virtue of being localized, they most likely have better information about the region which they are regulating.
Beyond this initial absurdity that leaders in Washington should make better decisions about a region as opposed to the leaders within that region, we have the added concern of greater market regulations. These things are done for the stated purpose of "increasing economic growth" which usually involved governmental subsidies to allow for greater production of selected industries and firms. Not only is this rife with rent-seeking implications, where lobbyists will try to get their specific industry "stimulated" with a subsidy, but there is the looming chance and likelihood of these stimulating the wrong sectors, creating surplus goods that are not demanded by consumers. So, instead of leaving the money in the hands of customers wo can stimulate whichever sector they want by merely buying it, they are taxed and there money is spent on other items they do not want.
The best means for economic growth is less regulations, not more regulations that are misplaced, since they come from the federal government.
'Business-friendly' tax plan mat not have intended effects
On September 25, 2007, Governor Bill Ritter proposed a change in the corporate tax code that would allegedly boost the Colorado economy by encouraging “export” businesses to locate in Colorado. The current tax code makes it unattractive for multi-state businesses to locate here because it taxes based on the amount of capital investment and the size of the payroll, instead of instate sales. Ritter’s plan would simply change this so that instate sales were the tax base.
So, from what I can make of it, the plan would change the tax base from capital and operating costs to gross income. Ritter claims this plan would bring in more businesses and boost the Colorado economy by creating more jobs. But it seems to me that Ritter’s plan may not have the effect it intends to: that is, create jobs. True it will encourage businesses that do most of their sales out of state to move to Colorado. I’m sure Colorado has some lack of such businesses, because of its current tax code, so undoubtedly it will bring more of these types in.
But what about the businesses who do most of their sales in state? These companies, I imagine, rather enjoy the current tax code. After this tax plan passes, as Ritter claims it certainly will, these businesses might see a rise in tax payments because the source of those payments will change to a base of larger volume. They’ll probably try to weather the new costs by increasing their prices, so the Colorado consumer will ultimately be affected.
Of course, I’m sure Ritter thinks (if he has considered it, that is) this decrease in business activity will be more than offset by the forthcoming ‘boost’ in jobs from the ‘export’ companies. But they may not move in immediately. Furthermore, they will probably bring in quite a few out-of-state employees, because it is easier for multi-state businesses to draw employment this way. I would say there will be no significant increase in jobs, at least in the short run, because so many new employees will come from out-of-state that original Colorado residents won’t see much change. Furthermore, the increase in taxes will raise prices, which will affect quantity demanded and thus eat into in-state sales, which may possibly cause job cuts in those businesses currently favored by the tax code. This is a good example of politically motivated public policy that is made without careful consideration for its actual economic effects.
Is Colorado Springs one of the Best Cities ti live in?
In 2006 Colorado Springs was voted one of the top cities in America to live in by Money Magazine, however many people who live in Colorado Springs are complaining that it is not. Recently in the gazette several locals claimed that they do not make nearly enough money to support themselves and their families. So why do people choose to live in Colorado Springs? Is it the scenery; the job market perhaps? Common sense seems to reason that if someone is unhappy with where they live, they should move. Generally people will try to better their economic situation. However according to the gazette rather than let market forces determine where someone should live the government should step in and aid these people that cannot make it in the city in which they reside. Is this a case of government failure? Is it the government’s job to protect families whose average income lies above the national rate of poverty, but are still unable to live comfortably?
As a result Colorado is trying to elevate the current poverty line to a higher more ‘’realistic’’ level. The gazette states the following: “The Colorado Fiscal Policy Institute in 2004 issued a report identifying the income required for self-sufficiency in each Colorado County. For a one-person household in El Paso County, the institute said income of $16,475 is required to be self-sufficient. For a household with two adults and two children, self-sufficient income is $42,145, the institute said.’’ (The Gazette 9/30/07)
The people interviewed in this article are suffering from the unfortunate consequences of their actions. That begs the question as to whether the people profiled should and/or are able to move to a cheaper location. It seems to be a catch twenty-two; if they are not able to adequately provide for themselves, they most likely will not have the resources to move to a more economical location. The article argues that the local government should be doing more to help these individuals. Providing economic assistance to help these people afford to live in a comparatively expensive area seems a bit absurd. The ultimate question here seems to be why these people are staying in an economic situation that is not allowing them to live how they wish. Increasing the poverty rate and allocating more food stamps may be a quick fix, but generally people will live where they can prosper. When the city in which you reside is simply to expensive to maintain a comfortable live style, maybe the question that one needs to ask themselves is whether a cheaper location will provide a more favorable circumstance.
The metropolis that is Green Mountain Falls boasts a population of 915 full-time residents and is located on U.S. highway 24 between Colorado Springs and Woodland Park. Mayor Pro Tem Dick Bratton stated that “In the past, the town hasn’t looked outside its boundaries. We haven’t been concerned about what’s happening around us.” Now residents are looking to prevent growth and are willing to go to great means to do so. The threat of sprawl is a battle to be fought on two frontiers as Woodland Park and Colorado Springs threaten to grow in Green Mountain Falls direction at any moment. Woodland Park has a planning area extending three miles south into Crystola where it has annexed land. Colorado Springs is currently attempting to expand up the mountain pass as developers are planning to build 55 homes near Chipita Park and 67 in Cascade, both just south east of Green Mountain Falls on Highway 24.
Town officials are looking into ways in which they can stop sprawl before it starts. They have hired a planning consultant to help them deal with the problem and are looking into annexing land surrounding the town in order to establish growth boundaries. Another method being considered is an intergovernmental agreement with El Paso County and other nearby towns to address the problems with a group effort.
Green Mountain Falls needs to annex nearby land and establish growth boundaries if they want to win the war on sprawl. Woodland Park and Colorado Springs are both embracing their growth and even planning for more in the future. The Mayor and town board seem to believe that growth or sprawl (or whatever you’d like to call it) is not inevitable and that no one will ever take notice of their peaceful mountain dwelling. I would assert that there is a certain group of people that don’t want one of the numerous tract homes that cover the eastern side of Colorado Springs. Some individuals won’t want a house that is identical to every other on the block and will be intrigued by the mountain living so close to Colorado Springs. These individuals will look up the pass to Cascade, Woodland Park and even Green Mountain Falls. Growth is inevitable and sprawl is coming.
Colorado Springs - Highway 24 Redevelopment
The widening of the highway will require in the exact words of the planners "taking" of land along the current roadway for redevelopment. The road will be widened and bridges and drainage improved to accomodate the current flood plain issues. The redeveloped land will then be parceled off and sold to the highest bidder. This will assist the local government in the costs of this project. I question what happens to the current property owners who are having their land "taken". Will be paid market value for their property as-is or as redeveloped? The answer is as-is as the redeveloped land will be further developed to accomodate strip centers, restaurants and potential for chain stores. I personally feel this is against what "west-siders" want with the redeveloped land. This redeveloped land will be more densely zoned to generate a higher tax base for the City of Colorado Springs in the future. It will not allow some current "mom and pop" businesses to relocate to this area as land rent and property values will increase with the property improvements.
I feel the highway project is necessary for future growth in this area, however some businesses and property owners will be driven from this area. I asked the question at this meeting - "What do you mean by redeveloped"? he answer I was provided said that new business or developers would come in to oversee this portion. I can only hope that the West-Side and Manitou Springs will push to keep their unique nature and not allow large box stores or retail to overtake this "redeveloped" land. The west-side is an area where people live who don't want this type of business in their backyard. I don't look at this as economic growth, rather reallocation of tax base to this area, when they can shop 3 miles away on 8th Street. I realize it is a process of change, yet sometimes change is not a good thing.
Bicycle Tax Fund
This is a good example of a continual distortion of local knowledge because of intervention. I have no doubt that the group of morons that came up with a bicycle tax thought it would be a great idea BIKES ARE SUPERDUPER AFTER ALL!!! but what it really demonstrates is an almost repulsive ignorance of basic human interaction. Furthermore, these oh-so sagacious legislators expose their flippant attitude to an individuals liberty.
What is the optimal amount of bikeways in a city? Most people with an IQ north of Quasimodo realize you cant answer the question in a concrete quantifiable number of units. Apparently though, there happens to be an optimal amount. The idea is that we can maintain more bikeways (a good thing) with this source of revenue (bike tax). However, what it does it create a change in the price of bikes and bikeways. People who previously owned bikes now get this bikeway for a reduced price since they don't burden the bike tax. Because of these manipulations in prices, prices lack the same "knowledge communicating" efficacy they previously had in a natural system. Ergo, distortions in the use of bikes, bikeways, their substitutes, inputs, complements; in a word, everything in the economy, is shifted ever so slightly away from efficient (in the proper sense of the word) allocation.
Furthermore, what a simple minded "tax and allocate" and its nonchalant use shows is a lack of respect for other persons property on the part of its advocates. What it means is that, the government of Colorado Springs knows how to use the money of people who buy and sell bikes than the people themselves. Taking money to pay for unwanted projects is no less theft.
How to Help Skinny Ethiopians
Cunningham says, "In Ethiopia, here's the significance of a dollar: A quarter will buy breakfast, a quarter will buy lunch, a quarter will help pay for education, and a quarter will help to pay for a school uniform and shoes." Giving for the sake of giving, with no expectation of return or gain, is fine. Nevertheless, I suggest that this seemingly harmless act of giving money to Ethiopians is the wrong way to create positive economic improvement. Two specific arguments support this thesis: First, giving money or food to African countries does nothing to solve the most basic economic problem in the region: corrupt/predatory government. Second, charitable donations do more than quench hunger pain, they also quench the fire for change that is needed for African economic and political upheaval. If hungry Ethiopians want change badly enough, THEY must fight it themselves.
Instead of promoting programs that mask instead of create real change, the American people are perpetuating a growing problem. Government should allow economic freedom for the success of all African entrepreneurs. If young risk-taking Africans feel as though their investments will be left to the guns of militant militia, there will be little growth! Allowing Africans to feel the pains of hunger, help fight predatory governments, and providing economic and business education, will allow a country with an abundance of resources to drastically increase its GDP and quality of life.
It may seem harsh to promote an idea that says, "Don't give!" Yet, giving a hand "up" is always better than a hand "out".
Friday, September 28, 2007
A huge new subdivision kicks off growth on Colorado Springs' east side
This article highlights the debut of Colorado Springs' newest community and prominant example of sprawl: Banning Lewis Ranch, located on the northeast side of Colorado Springs. After years and years of awaiting zoning approvals, the 24,000 acre property is finally breaking ground. The developers are promoting a picture perfect reality.
"That's why you'll find things like tree-lined streets and open-rail fences. Natural green spaces and feathery wild grasses. A new community center complete with pools and ball fields. The new Banning Lewis Ranch Academy, a K-8 charter school. And beautiful new homes in a variety of architectural styles, displaying rich character and neighborhood crafting. All interconnected by a network of trails and footpaths. It's the kind of place you just don't find much anymore. (banninglewisranch.com)"
This new community is promising much more than just a place to live, potential buyers are paying for small town living in the midst of city chaos. With a high emphasis being placed on 'small', prepare to pay for schools, parks and other commuity features like coffee schops and movie theaters; all within walking distance from home. Local trails and exercise centers that invite the community to come and get to know each other; enjoy a fresh breath of Colorado air, as long as you dont mind sharing that fresh breath with the dozen otehr neighbors scrambling for that same 'Leave it to Beaver' lifestyle. The houses will also follow suit with the small scene, the average size home for this community will be 2,400 sq ft. According to Colorado-Springs-realestate.com, the average size home for this area is closer to 3,200 sq. ft; however, at a starting price of about $220,000 are you really getting the most bang for your buck or are you being swept away by sprawl?
Wednesday, September 26, 2007
America’s Addiction to Cheap Money and the Resulting Effects on Sprawl
In a supply and demand world, however, these low rates have been a blessing to our economy and real estate. Being one of the primary drivers of our economy, real estate values have seen large appreciation values in the past 20 years. This is due in part to people making more money then they were 20 years ago and wanting to have a bigger house, but with such low interest rates it is possible for people to demand more expensive houses then they could have otherwise afforded. This has not only caused an increase in property values inside the city, but also in the suburbs, leading to some people moving even farther away from the center of the city.
Sprawl is, among other things, the outward expansion instead of the upward growth of a city. This is undoubtedly being caused by our addiction to cheap money. Since 1984, rates have dropped from their highs and stayed relatively low, this is where we get into the supply and demand issue. Since price of money had been falling people have been spending more (Americans on average spend more then they make) and with a house being the most expensive good that most people buy, home prices have been greatly effected by this increase in demand. With the low price of money more people have been demanding newer, bigger, nicer houses, resulting in higher prices and greater appreciation of house values. This higher demand has lead to people moving to where they could build the same house for cheaper, the suburbs. People will even move out to a small town just outside the city and commute in to work (i.e. Monument, CO). But now, as the two cities have grown together, even they have a small suburb developing, Flying Horse. Good or bad, sprawl is happening and is due, in part, to the low interest rates.
The demand supply equation is out of balance in this case, although the housing supply has reacted accordingly to demand, the money supply has not. It is being kept at low levels to feed our addiction. This is not just one person’s opinion, but the majority of the world also agrees with me. This can be seen from exchange rates (found at finance.yahoo.com) and the dollar’s weakening value compared to other stable currencies. For example one US dollar is now worth one Canadian dollar, where as just five years ago, it was worth almost 1.6 Canadian dollars. There has also been a steady trend in this direction, not just in Canadian dollars but also in Euros, Yen and other major currencies. This shows that other people around the world see the inflationary potential that keeping a borrowing rate this low has.
Tuesday, September 25, 2007
Blogging Assignment Illustrated
Sunday, September 23, 2007
The students had been threatened with suspension last fall for wearing the buttons and the students parents then proceeded to file a federal lawsuit claiming the district violated the children's free speech rights. The Judge also added that the students could not distribute the buttons.
When deciding this case the Judge cited a 1969 case in Iowa involving students who wore black armbands to protest the Vietnam war, saying students have the right to express themselves as long as it is not disruptive to the work and discipline of the school.
This case seems to be a classic example of organizations that possess a little bit of power going crazy. I am thrilled the kids won. I don't agree with the hitler youth, but threatening to suspend students because they were wearing buttons is a clear violation of the 1st amendment.
This case also shows how the students parents were useing the coercive power of government to get what they wanted. Normall I am aginst people trying to use government to get their way but in this case the parents were just protecting their kids right to free speech.
It is good to see that the judges in Washington don't screw up all the time.