Facing Record Unemployment, Abbott Misdirects to Football

"Good and upright is the Lord;
Therefore He teaches sinners in the way."
Psalm 25:8

At first glance, this looks really good:

Gov. Greg Abbott said Friday that Texas is working to have the college football season start on time, with at least some fans in attendance, as the state continues to reopen amid the coronavirus pandemic.

Abbott, speaking during a TV interview, said there are still a few factors that remain to be seen, such as stadium capacity, the availability of medical treatment for the virus and the overall status of the outbreak in Texas. Abbott said he expects to know more about those issues around mid-July.

Until you realize:

The state’s April jobless rate was 12.8% — Texas’ worst monthly tally on record.

That number, included in the Labor Department’s monthly report released Friday, is the government’s clearest and most comprehensive look at the economic devastation in Texas since the coronavirus pandemic first swept the state in March.

Previously, the state’s worst-ever monthly unemployment rate was 9.2% in November 1986, as Texas reeled from the last big oil bust. Now, with more than 2 million Texans who have filed for unemployment during the outbreak, the contracting oil industry is only part of the state’s economic problems.

Abbott could have made that announcement about football at any point in the past few weeks.  Yet, he waited.  Gee, we wonder why.

Could it have had anything to do with the fact that Abbott knew today's unemployment numbers were going to be really bad...and that he wanted to change the subject?!?

Nah, too cynical.

Bottom Line:  Nobody wants a somewhat normal college football season more than this author.  That's certainly welcome.  But let's not kid ourselves about the real news today.

#TXLEGE: Texas Municipal League EXPLOITING CRISIS (to push tax increases)

"By covetousness they will exploit you with deceptive words; for a long time their judgment has not been idle, and their destruction does not slumber."
2 Peter 2:3

[Note: Obviously, since this so-called Coronavirus kerfuffle took over the news, this website has a whole bunch of new readers.  For those of y'all who weren't previously aware, it's completely legal in Texas for local governments to hire lobbyists at the state legislature.  A longer discussion of taxpayer funded lobbying is outside the scope of this blog post, but new readers can learn the history of this sordid practice here and here.]

We probably shouldn't be surprised, but still:

A new law passed last year restricts local governments’ tax rate increases to 3.5%. But it also appears to let them bypass that cap in the case of a state or federal disaster declaration in their area.

The Texas Municipal League, which represents city governments, argues that Abbott’s disaster declaration due to coronavirus triggers that section of the property tax law. Cities can increase taxes by 8% and most will not need to hold an election to significantly raise taxes next year, if they are raising money to respond to the disaster, according to TML.

[Note: Emphasis added]

Obviously, we get it.  It's who they are.   It's what they do.

That doesn't make it any less disgraceful.

Two million (plus) Texans unemployed in the past two months, but the Texas Municipal League gotta protect their cut.

Bottom Line: We never thought "Everything's bigger in Texas" included the loopholes used for tax hikes. Apparently, we were mistaken. We regret the error.

Lubbock Businesses Getting Close to Civil Disobedience

"But Peter and the other apostles answered and said: “We ought to obey God rather than men."
Acts 5:29

Interesting, via. Chad Hasty:



Highlights:

• At least two Lubbock businesses "have spoken to an attorney and are ready to reopen."

• Will take sensible precautions.
• eg. Limiting the # of customers in the store at one time and so-called "social distancing."

• The Lubbock city council is picking winners and losers.
• Big box stores are ok, but small businesses aren't.

• Amarillo is allowing small businesses to operate with sensible precautions.

• It's time to do more.

• "If Amarillo can do it, so can we."

• "This really is a stand that people are making."

Last week, we suggested that lawsuits would soon be appropriate.  What we're seeing in Lubbock is, honestly, further than we would go personally (for now).  However, it's very interesting that others feel this way.

Bottom Line: The status quo can't go on much longer.

#atxcouncil: Adler busted Gaslighting about Job Growth

"A false witness shall not be unpunished: and he that speaketh lies, shall perish."
Proverbs 19:9

LOL, via politifact:

Austin’s mayor made a best-in-the-nation claim about local job gains that made us wonder.

Steve Adler, who seeks a second term in November 2018, was asked on KLBJ-AM’s morning May 8, 2018, "Todd and Don Show" about ending "the red tape and paperwork that businesses have to go through just to expand in this city."

Adler replied: "You ought to minimize the bureaucracy as much as you can. But we’re doing something right in this city, you guys have to admit, right? We’re creating more jobs than any other city in the country. We have an economy that’s on fire. I mean, we’re doing something right," Adler said, going on to agree that he also wasn’t trying to take personal credit for the gains.

....

Adler told the morning radio hosts that Austin is creating more jobs than any other U.S. city.

To the contrary, federal figures show the five-county Austin metropolitan area (not Austin alone) trails some other U.S. metros including the No. 1 Midland area for its pace of jobs gained and it lags more than 25 metro areas in raw jobs gained. It would be accurate to say the Austin area lately has enjoyed greater percentage job gains than other metro areas of 1 million residents or more.

We rate this Adler claim False.

#atxcouncil Invents New Entitlement (and you'll NEVER believe what Wendy Davis said)

"Is it not lawful for me to do what I wish with my own things? Or is your eye evil because I am good?!?"
Matthew 20:15

It's done, at least for this round.

Early this morning, in a 9 - 2 vote (Troxclair and Houston against), the Austin City Council created a municipal entitlement.  For every thirty hours any employee at any private/non-profit (but, of course, the City of Austin itself is exempt) employer will now be required to receive an hour of so-called "sick leave."  What could possibly go wrong?!?

Obviously, benefit mandates beget fewer jobs.  Obviously, this new entitlement will strangle startups in the cradle.  Obviously, the employer/employee relationship is none of the city council's business.

But we took a more practical route during public testimony:



Having worked (off and on) in the service industry since 2003, allow us to elaborate on the point we made about this new entitlement being abused: People are going to exploit this new entitlement to nurse hangovers.  People who work in the service industry like to get hammered after work.  If you stay out till 3AM and you have a 6AM start time, it doesn't take a genius to see how this new entitlement will function in reality.  Anyone who tells you otherwise either a) doesn't understand the service industry or b) is a liar.

And paying people to come in late to work because they have a hangover is wildly unfair to the rest of the team.

As for supporters:

The lovefest continued:

Meanwhile, Austinites are left with fewer jobs, lower wages at the jobs that remain, and higher cost of living.

Thanks council!

--------

If last night's debacle had been limited to bad economic policy, it would have been bad enough.  But supporters devised an even more diabolical rationalization for this new entitlement.  And you'll never believe which washed up hack of a politician they trotted out to make it:

:

[Note: That really happened.  Wendy Davis testified immediately following this author.  You can view the full six surreal minutes between the 8 minute mark and the 14 minute mark here.]

So, according to the left, we need to invent so-called "sick leave" entitlements to facilitate the slaughter of innocent children.

Gotcha.

But they weren't done; check out Alexa Garcia-Ditta from NARAL:



Again: That really happened.

Psychotown.

-------

Silver Lining: For as horrifying as that abortion talk might have been, it's also why we're confident the legislature will nuke this ordinance; even the RINO's can't kill it now.

-------

Bottom Line: There's a reason why, during public testimony, we used the phrase "hot mess."

#atxcouncil: Austin Chamber Finds its voice over Sick Leave Mandate

"as newborn babes, desire the pure milk of the word, that you may grow thereby,"
1 Peter 2:2

Better late than never (we suppose), via. today's Austin Chronicle:

That assertion became more relevant earlier this week when the Greater Austin Chamber of Commerce released a statement expressing "contingent opposition" to the ordinance and asking for more research and at least a 90-day delay. "The Greater Austin Chamber of Commerce Board of Directors is opposed to this ordinance," the statement reads, "if the Council does not contract for an appropriate independent [economic impact] study and does not provide the public 90 days to give feedback before they take a vote."

What the hell took you so long?!?

However we got here, this is still a positive development.  This sick leave mandate would be a nightmare for anyone who wants a job in the City of Austin, and it's good to see employers belatedly speak up.  Welcome aboard.

Ironically enough, we were just wondering yesterday how this mandate would impact the Amazon bid; guess we know now.

Either way, it looks like the needle has moved in a positive direction since last September.

Bottom Line: We'll take it....

Casar uses service industry as human shields for terrible idea

"Beware of false prophets, who come to you in sheep’s clothing, but inwardly they are ravenous wolves."
Matthew 7:15

No thank you:

Austin City Council Member Greg Casar helped kick off a campaign Monday to get an ordinance passed requiring all employers in the city to provide paid sick leave to their workers.

“Almost 40 percent of Austin’s workforce is not allowed to earn paid sick days by their employers,” Casar said in a news conference at the Workers Defense Project on Manor Road.

“If you are a service sector worker or a construction worker, it’s more likely than not you don’t have paid sick days,” he said. “But this isn’t just low-wage workers. Twenty percent of middle-income Austinites are not allowed to earn paid sick days by their employers.”

About 223,000 Austin workers (37 percent of the total workforce) do not receive paid sick days, according to figures from Work Strong Austin, a coalition of community organizations that launched the campaign Monday.

Casar said he will introduce a resolution at the Sept. 28 City Council meeting and hopes to work with the community, businesses and the rest of the council to get an ordinance passed by the end of February. It would apply to part-time and full-time workers, he said.

Where to begin?!?

Start with the fact that Casar's proposal would lead to fewer jobs and lower cash wages for the jobs that remain.   That's what happens when you mandate higher benefits while the employer's revenues stay the same.  We also wouldn't be surprised if Casar's proposal accelerated the move from 1040's to 1099's.

When you mandate higher costs for something, you shouldn't be surprised when you get less of it;  when Greg Casar wants to mandate higher minimum benefits for each new employee hired, you shouldn't be surprised when a lot fewer people are hired.

Beyond the generally anti-employment nature of Casar's proposal, move on to the fact that for the jobs that remain it would stack the deck in favor of large, established, employers.  That's because large, established companies are more capable of absorbing cost mandates than their smaller, newer, competitors.  Casar's proposal is as anti-startup as it gets.

[Note: Because Casar's proposal would stack the deck in favor of large employers, we wouldn't be surprised if the Chamber ends up supporting it; that's what we would make of any potential "business" support.]

[Note II: We also wouldn't be surprised if Casar's proposal resulted in a new round of wage waivers for big employers.]

Consider some of the Food and Beverage companies currently achieving national prominence that began as Austin-based startups in the past few decades:

• Amy's Ice Cream

• Pluckers

• Chilantro

• Peached Tortilla

• Deep Eddy/Tito's/Dripping Springs vodka.

• Every craft brewery that's sprung up over the past few years.

• We could continue naming local brands, but we think you get the point.

None of the companies we just listed would have survived their early years if the type of mandate Greg Casar now proposes would have been in place 10 or 20 years ago.  At this point, most of those companies pay higher wages and offer more benefits than the industry average.  But none of those companies could have done so had they been forced to absorb those costs in their early years.

Casar wants to frame this as a fight against McDonalds.  But the truth is that McDonalds is going to be fine either way (and they might even benefit from his scheme).  The reality is that Casar's proposal is a declaration of war against the next Amy's, the next Pluckers, and the next Chilantro.

Finally, there's the personally insulting nature of this entire proposal.  It's not a secret that this author works in the service industry, and we will simply point out that we are perfectly capable of negotiating with our various employers without 'help' from grandstanding politicians.  If anything, by making it more difficult to find another job, the afore mentioned grandstanding politicians decrease our leverage with various employers.

[Note: While we're on the subject of how #atxcouncil mandates have effected us personally, don't tempt us to tell about our experiences navigating the stupid little "ban the box" ordinance they passed last year.]

We understand that Casar et. al. have cherry picked sympathetic examples to justify their position.  That doesn't change the fact that the best way to produce favorable working conditions is to have a robust market with lots of competing employers.  Mandating higher employment costs doesn't help anyone.

Bottom Line: Casar's proposal is kryptonite for local employment.  It would be bad for everyone, but it would be even worse for early stage startups.  Nothing good can come from this mandate.

TPPF Poverty/Prosperity Summit: Poverty and it's Causes (Panel 2)

"Open your mouth, judge righteously,
And plead the cause of the poor and needy."
Proverbs 31:9

Stephen F. Austin Hotel -- TPPF's is Prosperity and Poverty summit continues; the second panel is on public policies than help move people from poverty to prosperity:

Broadcast live streaming video on Ustream

Highlights:

• Chuck Devore (TPPF):
• Poverty rate is based on cost of food, which has come down over 50 years.
• Factored for cost of living, California has the highest poverty rate in country.
• Texas lowest among big states.
•  Texas has more jobs and lowest poverty among big states
• Go figure.

•  Jeff Rowes (Institute for Justice):
• 30% of Americans need permission from the government to work.
• In the real world, special interests with time and money bend the rules to their advantage
• eg. African hair braiders and Steel Tariffs
• State of Louisiana shutting down monks making caskets.
• Public action for private profit is illegitimate, and it's not judicial activism for courts to strike it down.
• Appoint judges who understand this and change the culture of judges.
• The reason courts allow this is to avoid the government embarrassment.
• The free-market and economic liberty is the greatest anti-poverty program ever known.

• Marvin Olasky:
• The Sharing economy is template for connecting those with needs and those with means
• Breaks down professional/amateur divide.
• Charitable equivalent of Air B'N'B

• 84th #TXLEGE:
• School choice for all children
• Eliminate Margins Tax
• Economic Liberty legislation
• Give people the economic means to free up time for volunteer activity.

TPPF Poverty/Prosperity Summit: Poverty and it's Causes (Panel 1)

"Open your mouth, judge righteously,
And plead the cause of the poor and needy."
Proverbs 31:9

Stephen F. Austin Hotel -- TPPF is hosting a summit on Prosperity and Poverty; the first panel is on poverty and its causes:

Broadcast live streaming video on Ustream


Broadcast live streaming video on Ustream

Highlights:

• Richard Alm; SMU:
• The rich have capital, the poor don't.
• Freedom Capital Stock -- Free Enterprise over Time

• Sandy Schultz; Work/Faith Connections:
• Poverty is poverty of relationships.
• Spiritual poverty is the root cause.
• Under the surface is a feeling of inferiority, shame, and voicelessness.
• Start out by helping them return to work.
• We give people incentives to spend long periods of time out of work, which ultimately makes employers suspicious.
• Coaxing people into becoming productive citizens is a multi-year process.

•  Alan Graham; Mobile Loaves:
• #1 Cause of poverty is a "profound loss of family"
• Smell of poverty = bouquet of Christ.
• Policy without relationships = More poverty.
• Modest Living Income - You can get people off the streets where they're earning sufficient income to covert the basics for $500/month.
• It's legal to panhandle, but you can't sell drinks on street corners to earn income.
• "Our guys already know how to fish, how do we get them a license to fish?!?"

•  Bob Woodson:
• The principles that apply in our market economy should apply in our social economy.
• 4 types of poor folks.
• Broke and down on luck
• Disincentives
• Genuine mental and physical disabilities.
• Bad decisions

•  The issue isn't private vs. public; it's competent vs. incompetent.
• Don't 'design' remedies for people you don't know, build on what already exists in a community.
• Make the poor agents of their own transformation instead of delivering them from themselves.
• In our social economy, we honor credentials, in our market economy, we reward results.

Abortion Barbie Threatens My Job

"Consider the work of God;
For who can make straight what He has made crooked?"
Ecclesiastes 7:13

Oh Helllllllllllllllllllllllllllllllllllllllllllllllllllll No:

Davis Proposes Texas Minimum Wage Increase

Democratic State Sen. Wendy Davis shook up the race for governor today when she appeared at a rally at UTSA and called for raising the minimum wage in Texas to $10 an hour, Newsradio 1200 WOAI reports.

Davis called it a 'family issue.'

"Half of the 2.8 million people in Texas who would benefit from an increase in the minimum wage are supporting families," Davis said.

Davis made her announcement as fast food workers across the country are staging strikes and other social protests to demand their wages be raised to $15 an hour.

"7.25 an hour is $15,000 a year, and I know from experience that is not enough to support a family," Davis said.

Davis' proposal was met with cheers from a rally at UTSA.

The proposal for an increase in the minimum wage shakes up a political campaign which has been largely about attacks and counter attacks.

Several cities and states around the country are raising the minimum wage or considering it, but this is the first time the issue has been seriously proposed in Texas.

Without going into excessive detail, this author works part time in the service industry.  Given our position in the company, we wouldn't be directly impacted by this proposal, but it would have a SEVERELY adverse impact on the company.  With all due respect, Abortion Barbie, this author doesn't need your help negotiating mutually agreeable terms with our employer.

Battleground Texas...spreading misery and poverty because, you know, #HAILSATANTX!!!

Urban Affordability: How "Progressive" governance Kneecaps middle class families

"Dishonest scales are an abomination to the Lord,
But a just weight is His delight."
Proverbs 11:1

3 fantastic articles on how big government at the local level ALWAYS begets higher cost of living and fewer jobs at lower pay.

First up is City Journal on the cautionary tale that is NYC:

Throughout his speech, de Blasio said little about what he thought was causing the city to get so unaffordable for so many. If he’d been honest with himself, though, he would have to see the very government that he leads—and the expansion of which he enthusiastically supports—as a major contributor to the economic difficulties of the city’s non-wealthy, especially middle-class families. From its arcane regulatory regime to the nosebleed taxes and fees it imposes on firms and individuals—usually amplifying similar measures radiating out from the state government in Albany—New York City government drives up the cost of living and working in the city dramatically, making it harder for ordinary New Yorkers to get ahead. Unfortunately, the mayor’s policy agenda—demanding that businesses grant employees paid sick leave and compelling real-estate developers “to build affordable homes for everyday people,” among other steps—will only make the problem worse.

[Author's Note: Emphasis added]

....

A recent New York Times story, summing up research on urban income differences, noted that income inequality “is closely tied with the availability of affordable housing.” Places where housing becomes very expensive, the report observed, tend to hemorrhage middle-class residents and instead become communities made up primarily of the rich, who can afford stratospheric housing prices, and the poor, who can get government housing subsidies. And New York, according to information from real-estate website Trulia that the Times cited, has the highest housing prices, relative to incomes, of any American city except San Francisco. In New York, the typical middle-class family can afford only about a quarter of available homes, the data suggest.

....

Yet de Blasio neglected to mention a far more significant reason that housing is so pricey in New York: it’s incredibly expensive to build in the city. Perhaps the most comprehensive examination of New York construction costs is a 2005 study by three policy experts from the New York City School of Law, released under the auspices of New York University’s Furman Center for Real Estate and Urban Policy and the Robert F. Wagner Graduate School of Public Service. The report found that the price tag for building a 15-story, multiunit apartment building in New York had become the highest of any city in America (San Francisco was second).

....

Needless to say, the expense pushes up rental rates in the city’s unregulated apartments. A 2010 study by the Association for Neighborhood and Housing Development estimated that covering the cost of financing, building, and operating a new apartment building in New York City, including taxes, required a minimum rent for its units of $2,100 per month. To live comfortably with such rent, a family would need an income of at least $86,000. Further, developers become understandably unwilling to construct apartment buildings where they can’t be assured of such rent premiums. The high construction costs result not only in inflated rents in new buildings, therefore, but in an overall shortage of housing, which drives up the price of already-constructed unregulated units.

And it’s New York’s tentacular state and local government that helps make it so wildly expensive to build. The NYU study found a host of government policies that drive construction prices higher. For starters, city agencies responsible for overseeing and regulating building were often openly hostile to new construction, the study discovered. “The Buildings Department is still one of the major drivers of the high cost of housing in New York City, rather than an agency dedicated to reducing expense and facilitating development,” the report observed. Even experienced builders, the study found, now typically employed well-paid “expediters” to move their projects through the city’s foot-dragging approval process, adding an average cost of about $200,000 per building.

Taxes and fees tied specifically to development—many of them rare in other cities—are another factor in Gotham’s sky-high building costs. For example, New York levies a transfer tax on land when a developer buys a plot, and then a mortgage-recording tax when a builder borrows to finance his project. And the builder faces significant sales taxes on construction materials, too. For a hypothetical New York apartment building, going up on a plot of land bought for, say, $5 million, real-estate, mortgage, and sales taxes would add $1.6 million to the development price tag.

New York’s local and state elected officials also write laws and codes that curry favor with various special interests with a financial stake in development, raising prices higher still. Litigation-friendly New York State makes it easy to sue builders and developers, for instance, which benefits construction-worker unions and trial lawyers, two powerful Albany lobbies, but makes insurance on the construction of an apartment building as much as 8 percent to 10 percent of total costs—twice the national average. The Scaffold Law may be the most striking example of this kind of legislation. Unique in the country, it mandates that a developer or contractor is completely liable if an employee gets injured on a job site, even if worker negligence played a role. Even workers found to be drunk on the job have won big judgments.

Another costly government barrier to building is the city’s excessive fondness for historic preservation. Initiated in the mid-1960s as a way of protecting truly exceptional structures—a fallout from the unfortunate demolition of the original Penn Station—the city’s landmarking process has morphed over time into a way for local activists and progressive politicians to stymie development of any new construction in neighborhoods often all but devoid of historic value. Nowadays, notes Harvard economist and City Journal contributing editor Edward Glaeser, nearly 16 percent of buildable land in Manhattan resides in historic-preservation districts, and about half of it is largely off-limits to development. (See “Preservation Follies,” Spring 2010.) In a city desperately needing housing construction, the preservation districts lost an average of 46 units of housing per tract during the 1990s, according to Glaeser’s research. Not surprisingly, the cost of housing in these districts has risen substantially faster than in other areas of the city.

The authors of the NYU study calculate that easing or eliminating the impediments that they identified could reduce housing construction expenses by 19 percent to 25 percent—a massive savings. Further, they add, these figures “likely underestimate the full impact of the recommendations because they do not take into account the supply effects of the proposals to make additional land available for residential use.” If enacted, the changes could cause rents to fall by as much as 26 percent, the authors projected.

....

“My name is Matiur,” a landlord who owns a rent-regulated building with six apartments in Queens testified to the rent board last year. “I moved to the United States from Bangladesh 36 years ago and have owned my building since 1997. Unfortunately, low rents [including one apartment that rents for just $280 a month] make it impossible for me to maintain my building.” Landlords worry about the city’s rising taxes on multiunit residences—increases that outpace rents. Since 2003, property-tax collections in the city have soared from $9.9 billion to $19.8 billion, thanks to rising assessments and a major tax increase engineered by the Bloomberg administration. As landlord Michael Vinocur said at a rent hearing last year, “My taxes are 80 percent higher now than five years ago, and my rent revenues have gone up less than 20 percent.”

....

New York puts additional pressure on residents and businesses through its extraordinarily high taxes, which ripple throughout the economy and raise prices for everyone, “everyday people” included.

....

New York imposes other strains on non-wealthy residents in the form of additional heavy business taxes and fees and intrusive business regulations. These measures curb job growth—above all, in middle-income occupations—and make it tough for new firms in the city to survive, let alone flourish and provide their owners with an entrepreneurial route to the middle class. The IBO study found that New York levies business taxes at nearly double the average found in other big cities—$1.06 per $100 in taxable income, compared with 55 cents per $100.

....

Companies remain willing to keep their highest-paid executives in New York because those workers thrive in a global business capital, and low-income jobs for unskilled workers follow because the city still needs service workers—those employed by restaurants, retailers, and hotels—to provide basic amenities. But companies derive little payoff from keeping middle-income jobs in pricey New York when technology allows them to situate these positions in less expensive locales....Average pay in Manhattan for a financial-services job is now $246,000 annually; in New Jersey, the securities industry is more of an upper-middle-income business, with average pay at $97,600 annually.

It’s also incredibly cumbersome to start a business in New York City. A recent study by the finance site WalletHub.com ranked New York a discouraging 126th out of America’s 150 largest cities in the ease of launching a firm. A recent World Bank report noted that a would-be entrepreneur needs to obtain six permits, on average, to start a new venture in the United States (compared with just one in business-friendly New Zealand). But according to NYC Business Express, he’d need ten—six local and four from the state—to open, say, a simple office-supply business in the city. A study by the Kauffman Foundation and Thumbtack.com gave New York City a D for welcoming entrepreneurs.

All these impositions and requirements snuff out growth and opportunity. The NYC Jobs Blueprint study released by the Partnership for New York City last September estimated that it costs 50 percent more to build a business in Gotham than in the U.S. in general. One consequence, the study pointed out, is that New York businesses aren’t “scaling up”—that is, they’re not growing larger at an encouraging rate. Between 2003 and 2010, New York City saw no rise in the number of firms with 50 or more employees. Another worrisome sign: the city experienced a net loss during that time span of so-called tradable companies—firms in industries with the capacity to do business outside the five boroughs, and hence possessing the largest growth potential. “Because companies in a high-growth mode need all available resources to invest in people, New York is less attractive as a job expansion location than lower cost alternatives,” the study observed.

....

Putting still another strain on ordinary citizens, New York’s government pushes up the prices at establishments that do business directly with consumers, such as retailers and restaurants. For decades, the city’s politicians have tended to meddle in these industries for their own political aims, often keeping out disfavored firms and squelching competition....A 2009 study by the Bloomberg administration estimated that New York needed 100 more supermarkets to serve its residents adequately and was losing $1 billion in sales a year as shoppers left the city to buy food.

New York’s political class has similarly thwarted the efforts of America’s largest retailer, Wal-Mart, to open a branch in the city. Elected officials, many backed by labor organizations, have justified denying permits to the firm by charging that it exploits working people and ruins neighborhood prosperity. “Wal-Mart has blazed a path of economic and social destruction in towns throughout the U.S,” then-congressman Anthony Weiner told the New York Times in 2005. New Yorkers, however, think far more highly of the retailer. In 2012, the company says, basing its finding on credit-card receipts, city residents spent a staggering $215 million at its New York metropolitan area stores outside the city. And surveys show that New Yorkers overwhelmingly want the stores, with their low prices and broad selection.

The higher prices that inevitably result from these restrictions on commerce are a substantial burden to ordinary New Yorkers, who can’t regularly leave to shop in the suburbs.

....

All these factors—the expensive housing, fat tax bills, and high prices—have a direct and powerful effect on people’s daily lives. In a 2008 City Journal article, Glaeser calculated that, after including the costs of housing, taxes, and transportation, the average Houston family wound up with 50 percent more income to spend than the average New York family. The difference in real dollars: about $32,000 in spendable money for the typical Houston family, compared with just $21,000 for the New York family. (See “Houston, New York Has a Problem,” Summer 2008.) In a similar study of median incomes adjusted for cost of living in 50 metro areas, City Journal contributing editor Joel Kotkin and the Praxis Strategy Group’s Mark Schill determined that Houston workers enjoyed the nation’s highest effective pay: the annual average Houston salary of $67,279 was worth $75,256 when adjusted for the city’s lower-than-average cost of living. By contrast, in New York, the average annual salary of a worker, $77,640 on an unadjusted basis, shrank to $50,169 when corrected for the city’s high costs—above all, housing and taxes (see Figure 4). That left New York a poor 41st among metro areas in average annual effective pay.

 Next we have Max Borders:

Some people think cool cities are just expensive. And advocates of smart growth think the cool draws people and the growth has to be “managed.” Those who live there are happy to tolerate the planners for all sorts of reasons, but signaling one’s ideological bona fides is surely high among them. There is also the (generally unstated) desire to curb the growth—that is, to keep out the newbies before they ruin everything. Your favorite dive bar could become a chain restaurant, god forbid. And many well-heeled urbanites will go without cars and cram themselves into all manner of tiny dwellings to indulge environmental self-congratulation.

Smart growth thus becomes a catch-all: a cluster concept for socially engineering your way to bourgeois bohemia and treating everything in town as the property of an enlightened elite (which every self-respecting progressive goes along with lest she be considered unenlightened, or worse, not a member of said elite).

If they’re being honest with themselves, however, denizens of such places have to admit there is not only a growing gap between rich and poor in these towns, but a disappearing middle class. Much of this gap in San Francisco, for example, comes from the fact that some of the largest companies in the world are headquartered there, even among folks who self-identify as progressives. That’s a lot of rich people.

....

U cities

I shamelessly borrow the term “U city” from entrepreneur Gary Hoover, who is used to doing business in developing countries where a lot of the major cities are U cities. Here’s the idea: When you have a strong middle class, the population—when mapped on a curve—looks more or less like an inverted U (X is the number of people, Y is the level of income.) But the inverted U can get flipped to a regular U when, for example, the middle class starts to leave, the rich come and stay, and the poor are trapped by incentives. U cities predominate in the third world, primarily due to rampant cronyism—which limits possibilities for a middle class to emerge. In the United States cronyism is a factor, too. But so also are urban planning and growth management policies.

Smart growth

To understand how wealth disparities worsen in cities like these, we have to look at clusters of policies that go under the name "smart growth." They aren’t the only policies that create U cities, but these three areas drive the U city pattern, so they’re a good place to start the conversation:

• strict zoning regulations and building codes 

• rent control and low-income housing subsidies 

• rail investments preferred over roads

These three points alone suffice to set any city on the path to being a U city. (Austin, where I live, is trending that way.)

[A]dd in strict zoning regulations and building codes. In a relatively free housing market, the cost of creating new housing supply is generally far lower. So, for example, city planners don’t have to approve a townhome or building for mixed use, declare it residential only, or whatever—if it can be built at all. Not so in areas with byzantine building codes and zoning. In these areas the stock of housing is limited and restricted to certain areas of the city. Of course, this makes housing far more expensive. Now, that’s okay for wealthier people. Indeed, they’re content with paying more. Once they’re there, they really like the idea that not so many more people are moving into the area. If you’re a middle-class earner, this makes life considerably more difficult as housing is far less affordable.

....

By now the progressive town fathers have likely picked up on the fact that this is happening. So they expand or maintain policies like rent control and subsidized housing for the poor. Poor people who’ve been there for a while cling to their rent-controlled or subsidized housing—as is reasonable to do given the incentives (but which sadly represents another “poverty trap” for the poor.) Of course, basic economics tells us that rent control exacerbates the problems of a limited housing supply, as developers have far fewer incentives to build properties and tenants have great incentives to stay put. The rental market is therefore less dynamic and the price controls distort the housing market even more—further limiting the availability of affordable housing. Non-rental properties may get built. But as we say, their supply is artificially limited, too, so these are reserved for tech execs.

....

For conscientious social signalers in progressive cities, the only thing that’s going to pull them out of their Priuses is rail transit. The trouble is, light rail is really, really (really) expensive. In fact, on average, rail transit is four times more expensive than driving per passenger mile, according to Cato transportation analyst Randall O’Toole.

Not only is light rail profoundly wasteful in cost-efficiency terms, it means resources that could have gone to increasing road capacity or building bus networks are lost (not that buses benefit town cronies). People who idealize walkable cities are simply kidding themselves, as most people drive their cars anyway and grumble about the awful commuting times—which new rail line thruways end up making worse.

Now, let’s not forget that rail is an expensive proposition. To give you an example of just how expensive it is, consider that the average U.S. light rail rider only pays in his/her fare about 10 percent of the total cost of the ride. Boosters rarely bring up costs, and cost overruns always plague such projects once voters take the bait. The people who do use rail don’t see or feel the budgetary nightmares their (in most cases, mostly empty) train cars create.

That’s because a lot of the costs get shifted onto people who will never see or take light rail in their lives—people who live in cities without rail, or people who live in rural areas. So much of the tax burden for these rolling pyramids falls disproportionately on the poor and middle class. After all, funding for such projects—even if they benefit rich, urban progressives—comes from sales and property taxes (which are not progressive taxes).

....

Now what about inverted-U cities? We could call these “fried-egg” cities, but that’s not terribly sexy. I prefer “galaxy cities” for obvious reasons. The idea behind galaxy cities is that, all things equal, you’ll not only get a fat bell of a middle class on the graph, but you’ll also get a galactic distribution of housing options if you look from above. Some call this sprawl, because more affordable housing extends outward from a denser core, phasing out at the periphery after the suburbs and exurbs. Not-so-obvious reasons for the galaxy metaphor include dynamics that have been unpacked in the work of the Santa Fe Institute (SFI), a group that studies all sorts of phenomena in complex systems.

....

Future cities

Galaxy cities of the future will be far smarter than any city that adopts smart growth, as galaxy cities will do the following:

Eliminate unreasonable zoning restrictions and costly building codes. Some believe that cities without zoning laws and building codes will have collapsing structures and factories moving in next to residential housing. It would take us too far afield to explain why free prices and a robust system of common law would help settle conflicts that might arise from the absence of zoning and municipal codes. Suffice it to say that with prices undistorted, property rights well established, and municipal courts using tort principles to settle disputes, cities will continue to find equilibria that will make galaxy cities far more hospitable to people across the income spectrum (especially the middle class). And if, god forbid, poor or middle-class people have to live in the same zone as a warehouse, at least they’ll be able to afford it.

Get rid of rent control and, instead, voucherize housing for the poor. Assuming full privatization of housing is not politically viable, then cities should simply get rid of government housing projects and rent control. Instead, the municipal government can offer housing vouchers for the poor based on an income scale specific to that city’s cost of living.

Think of any given citizen as needing to go to any given point in the city. Instead of going from point A to point G—with only points B, C, D, E, F in between—galaxy cities will build travel networks that assume people want to get from point A to point n (read: “any point among millions”) as quickly, efficiently, and safely as possible. To accommodate galaxy-city travelers, they will create distributed networks and vascular systems. And until there are flying cars, these systems will be built around cars. There are a number of great ways to build car-centric systems:

• Remove regulations against ride-sharing technologies, such as Uber and Lyft; 

• Prepare for the coming age of driverless cars (We have the technology!); 

• Convert as many intersections as possible to traffic circles; 

• Optimize traffic lights using computer modeling; 

• Use congestion pricing and hot lanes, where possible; 

• Liberalize and privatize all bus and van services; 

• End municipal transport and taxi cartels; 

• Let resources follow cars rather than hoping cars (or people) follow resources; 

• Respect the urban ecosystem as it is rather than as you would hope for it to be.

The extent to which planning for transportation is a market-based phenomenon is the extent to which cities will become more convenient, cost-effective, and dynamic for everyone.

 Finally, Ross Kecseg of Empower Texans details the situation closer to home:

Texas still has the second highest, per person local debt in the United States. And although it appears that the growth over the last twelve months has slowed when compared to past years, the long-term trajectory is alarming.

So which local governments are borrowing on your behalf?

Cities and school districts are the largest taxing, borrowing and spending entities, making up two-thirds of the overall debt burden.

....

Although necessary in some cases, debt financing is an extremely expensive way to pay for government services. Although Texans have received $200 billion in tangible assets for local government entities, they will pay an additional $128 billion in interest expense alone; a tangible cost without a tangible benefit.

In other words, taxpayers will pay $328 billion for only $200 billion in actual benefits.

 Each of the articles is worth reading in full; see here, and here, and here.

Why do some cities tick?!?

"For rulers are not a terror to good works, but to evil. Do you want to be unafraid of the authority? Do what is good, and you will have praise from the same."
Romans 13:3

Texas State Capital -- This afternoon, we attended TPPF's Texas Success Story: Understanding which U.S. Metro's are leading, lagging, and why.  The event discussed tried and true methods for economic development, and how they impact individual cities.  Texas wins again!!!

Tom Gray of the Manhattan Institute led off.  He discussed his recent study that discerned four traits of economically vibrant cities: Energy development, Agglomeration - cities growing for a reason beyond natural advantage, Business Friendly focus, and Manufacturing Renaissance.  Texas has 3 of those factors, which is why metropolitan areas in this state perform so much better.

Jerry Morales, who recently defeated a Battleground Texas stealth candidate in the Midland mayoral race, spoke next.  Midland currently has the lowest unemployment rate in the U.S.  While that's a good thing, it brings a different set of challenges.  One major problem in Midland is that the housing stock has failed to keep up with population growth.  This has created "boom town homelessness" where people come looking for jobs but don't have sufficient savings to find housing in a town where a 1 bedroom apartment starts at $1,000 per month.  Midland is proactively addressing this problem, with the United Way and Salvation Army (ie. not city government) taking the lead.

Don Baylor of the Center for Public Policy Priorities spoke next; the less said about his presentation, the better.

Chuck DeVore of TPPF closed out the speakers.  He discussed how "the larger government is as a share of the local economy, generally speaking, the worse it will do."  Specifically, there is a tremendous impact of cost of living on the ability of the average family to make ends meet.  As government grows, it means higher cost of living and fewer jobs.  DeVore's presentation was familiar to veterans of the Texas Model.

[Personal Note: While DeVore didn't discuss this in his presentation, it's worth pointing out that government growth begetting higher cost of living is the core issue of this Urban Rail boondoggle.]

Kudos, finally, to TPPF for having Pok-e-jo's cater today's event; this website STRONGLY encourages TPPF to make this a regular feature of their events!!!

Revised Numbers: Texas economy better than thought, California worse....

"Consider the work of God;
For who can make straight what He has made crooked?"
Ecclesiastes 7:13

NICE:

The BEA revised California’s real GDP growth downward from 2009 to 2011 in each of three years by a cumulative 2.6 percent, the third-largest negative revision in the nation.

In other words, California’s economy shrank an additional 2.6 percent before it grew 3.5 percent.

So, in the past five years California’s real GDP contracted 0.3 percent, one of ten states where economic activity was less in 2012 than it was in 2008.

By contrast, the BEA revised Texas’ growth upward by 0.5 percent from 2009 to 2011.

Texas’ newly revised real GDP growth from 2009 to 2012 was 13 percent.

From 2009 to 2012, California’s share of the U.S. economy shrank from 13.1 percent to 12.9 percent while Texas’ portion of the American economy increased from 8.2 percent to 9 percent.

Some critics might contend that Texas’ economic boom is wholly due to the revitalization of the Lone Star State’s oil and gas fields through fracking. However, if the entire mining sector is removed from the calculations, Texas’ economy would have still grown at a faster pace than California’s from 2009 to 2012. Further, California has about two-thirds of the nation’s proven shale oil reserves in the vast Monterey Shale formation—that the Golden State makes the political choice not to allow the extraction of this underground wealth can’t be held against Texas.

Read the whole thing here.

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Update (6/20): TPPF informs us that this is actually a year old piece that came out in June 2013; our bad.

Rick Perry meets David Asman in NYC

"Now it came to pass in the third year of Hoshea the son of Elah, king of Israel, that Hezekiah the son of Ahaz, king of Judah, began to reign. He was twenty-five years old when he became king, and he reigned twenty-nine years in Jerusalem. His mother’s name was Abi the daughter of Zechariah. And he did what was right in the sight of the Lord, according to all that his father David had done."
2 Kings 18:1-3

During his recent NYC trip, Governor Perry sat down with Cahnman's Musings' old family friend David Asman to discuss economics and Texas' recent success:



Highlights:

• 30% of jobs in the last decade were in Texas.

• "You don't see tech companies moving to New York."

• Texas has the 3rd highest graduation rates in the country.

• Note: We have to laugh when Perry talks about accountability in government schools, considering that he helped gut accountability in the government schools last session.

• We agree 100% with Perry on immigration.

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For some reason, the video player isn't loading; if you want to watch the video, you can follow the link.

Rick Perry Tells Cuomo and DiBlasio to Pound Sand

"He trusted in the Lord God of Israel, so that after him was none like him among all the kings of Judah, nor who were before him."
2 Kings 18:5

Following a suggestion we made late last year, Governor Perry is in NYC this week; Breitbart Texas reports:

New York City will get a brief taste of Lone Star State economics, as Texas Governor Rick Perry travels there to speak to various business leaders. TexasOne is hosting a reception from April 22-24, focused around Texas' pro-business policies and their positive effects on companies.

A press release from Perry's office stated that the governor plans to tout "Texas' message of low taxes, smart regulations, and job creation" during his brief stay in New York City.

TexasOne aims to market Texas "nationally and internationally as a prime business destination."

Indeed, Texas has consistently been ranked as one of the nation's best place to start a business and find a job. Perry's release pointed to a recent CNBC survey, which polled over 700 CEOs, has ranked Texas as the best U.S. state in which to conduct business for nine consecutive years.

Breitbart Texas has reported extensively on Texas' booming economy, which continues to extend into numerous industries.

....

Meanwhile, New York is home to one of the least business-friendly environments. CNBC ranked the state as the 49th best state to conduct business in.

It is not surprising that the Big Apple is rapidly losing inhabitants to Texan cities. Breitbart Texas previously reported on new data released by the federal government which shows that people from America's biggest cities, like New York and L.A., are moving to Texas cities. Using the new data, Bloomberg Businessweek compiled a list of the top fastest-growing large metros. Four Texas cities made the top ten: Austin (which ranked number one), San Antonio, Houston, and Dallas. The bountiful job market and business-friendly environment have unquestionably been the driving forces behind the ever-increasing populations in Texan cities.

Perry is also airing this ad while he's in New York:



As someone born and raised in NYC, this topic hits home.  New Yorkers who want to keep their guns and their money have an option.  Move to Texas!!!

Ted Cruz Punks Julian Castro

Fantastic clip from the 2012 Texas Tribune festival:



Highlights:

• Between 2009 and 2011, San Antonio unemployment went up 1%, median income went down $2000, # of residents on food stamps went up 4%.
• Castro was first elected in 2009.
• Castro makes the same excuses as Obama.
• Author's note: While it's not discussed in this clip, we're also curious about what happened to cost of living in that time.

• Ted Cruz: Workforce participation rate at lowest in 30 years.
• Quotes Jay Leno
• In 3.5 years of Obama, GDP growth has only been 1.5%

How the Media invented "the California Comeback"

Did you know that California is in the midst of a 'comeback'?!?

Neither did we.

According to the the Burnt Orange Report and the New York Times, however, big liberal California has come zooming back; this absurd piece at Rolling Stone epitomizes the genre:

But in astonishingly short order, America's shrewdest elder statesmen blazed a best-worst way out of California's economic morass. With a stiff cocktail of budget cuts and hard-won new taxes, Brown has not only zeroed out the deficit, he's also begun paying down the debt. "Jerry Brown's leadership is a rebuttal to the failed policies of Republicans in Washington," says Neera Tanden, president of the Center for American Progress. "California is proving you can have sane tax systems, raise revenues, eliminate structural deficits and have economic growth."

Evidence for 'the California comeback' is based two 'statistics': an (allegedly) falling unemployment rate (still the fifth highest in the country and two points higher than Texas) and an (alleged) budget surplus.

But the media portrayal is a smokescreen.

First things first, the drop in unemployment is the result of a plummeting labor force participation rate:

The difference between a 66 percent rate and a 63 percent rate – three percentage points – translates into 900,000 potential workers, and were they still part of the labor force, it would mean California’s unemployment rate would be more than 13 percent, instead of the current official rate of 9.4 percent.

[Author's note: This piece was written a few months ago, but the premise remains.]

Next up, the Budget Surplus:

The new budget will put a wrench in budget transparency by including a provision that will allow local agencies to make their own rules when it comes to the California Public Records Act. Rather than mandate that these agencies respond within ten days, the agencies themselves will now control that process. NBC 7 San Diego, June 16, 2013.

The budget shell game continues in Sacramento, where Gov. Jerry Brown and state legislators have heralded their plans to keep more conservative revenue estimates in this year’s budget—only to shift other funding predictions. Those include estimating greater receipts from property taxes ($300 million); lower estimates on implementing the Affordable Care Act ($80 million); and reducing the amount that will be repaid to schools by $650 million. Los Angeles Times, June 11, 2013.

California’s “balanced” budget ignores the long-term debt obligations of the state for retirees and for money borrowed for the unemployment insurance fund. Sacramento Bee, June 12, 2013.

California has a newfound “surplus” thanks to outrageous budget gimmicks that simply ignore state debt. Rather than making the necessary payments into the state pension fund, California, as well as many other states, skip this step and claim to have a balanced budget. Manhattan Institute: Public Sector Inc., May 30, 2013.

California's current budget is attempting to close a major gap in public school funding created by a decade-plus-long practice of delaying funds into the next fiscal year. Charter schools have been disproportionately affected by this scheme, as they have been forced to take out bridge loans, and in turn, incurring larger interest payments. Gov. Jerry Brown's 2013-2014 budget proposes repaying $1.8 billion in deferrals-but from 2009-2011, the state added $6.3 billion in delayed payments. The program began with a $1.1 billion deferrals in 2001-2002. Los Angeles Times, April 16, 2013.

 But who needs the truth when there's an agenda to push....

Stewardship: More Spending is NOT the Solution

Fantastic video from Concerned Women for America on how little we get for how much we spend:



Highlight:

• That education chart was shocking.

Peter Schiff DEMOLISHES Larry Kudlow

With all due respect Larry Kudlow, you probably shouldn't have gotten out of bed this morning:



Highlights:

• Ben Bernanke is not Paul Volcker and President Obama is no Ronald Reagan
• Personal Note: That's the understatement of the year!
• Everything they've done since 2008 has made the situation worse.
• This decline in Gold is a buying opportunity.

• The money printing will continue and the inflation is there; anyone who shops knows that.

• Who cares what the government says in their doctored numbers?!? 

• For the record: This David Goldman character is a moron.

• With all due respect to Larry Kudlow, none of this stuff has materialized...YET!!!

UPDATE: California Welfare Scam Parody

Three months ago, we brought you this shocking video of a Calfornia Welfare recipient; while everything she says in the original video is true, it turns out that that interview was the companion piece to this hilarious parody:

Welcome to America in Barack Obama's second term