Friday, October 6, 2017

Unsustainable Sustainability Strategy: Tax, Subsidize, and Build

Unsustainable Sustainability Strategy: Tax, Subsidize, and Build
October 3, 2017

The Projected New Normal

On September 29, 2017, California Governor Jerry Brown gifted California residents with yet another package of taxes and regulations by signing 15 bills intended to mitigate the state’s housing-affordability crisis. The Governor, as well as legislators who passed the bills, all made clear this was only a start. Hence forward, Californians must expect a steady stream of affordable housing funding proposals and mandates to ensure that every community meets its Regional Housing Needs Allocation numbers. A new steering committee, the CASA Steering Committee -- whose slogan is Production, Preservation and Protection – is tasked with making tax, subsidize, and build the “new normal.”

The Bay Area is an epicenter of unaffordability, and it appears leaders in the region’s major cities are on board with the state’s tax, subsidize, and build plan – either because they are true believers or because they fear loss of state transportation funds if housing goals are not met.
The Perils

As an aside, it should be noted that California is among states that enjoy the following distinctions,

* highest taxes
* highest priced real estate
* highest unsheltered homeless population
* highest state debt per capita, not even counting unfunded pension liabilities.
* most regulated
* declining net in/out migration per 1,000 residents

It also should be noted that the states’ cities and counties have their own debt and pension liabilities woes. They also have challenges associated with poor quality schools and crime.

At some point, the costs associated with high taxation, micromanagement, bureaucratic expansion, and crowding will outpace the benefits of subsidies. Add to the costs project labor agreements, diversity-tracking paper work, disgruntled residents demanding control over their neighborhoods, and we get perilously closer to the tipping point.

Although the combination of all these variables have the makings of a perfect storm, especially in the high-cost Bay Area, as a rule, once so much time and treasure is invested in a strategy such as the tax, subsidize, and build plan, it is difficult to change course. No one sees an alternative to getting on board.

Comments of participants during the CASA Steering Committee meeting of September 27, 2017, provided good examples of the one-track option gripping the Bay Area. Here are samples.

Steve Heminger, Executive Director of MTC, declared housing planning and construction are on a new track, and some “sacred cows” will need to be discarded.

Jake McKenzie, President of MTC, indicated a need for “different taxation structures” to finance housing needs.

Scott Wiener, CA Senator, said the 15 housing bills, including his SB 35 containing the gas tax, were a first step, a “healthy down payment.”

Ed Lee, Mayor of San Francisco, declared that plenty of affordable [subsidized] housing is the only solution to ensure that people who work in the City, including first responders, also live in the City.

Libby Schaaf, Mayor of Oakland, indicated her hope for bold action. She noted the predicament of people who would like to move but fear not being able to find anything they can afford.

Bob Alvarado, Executive Officer of Nor Cal Carpenters Regional Council, expressed perhaps the most direct comments. He noted that in the past, builders produced a lot of track housing in bedroom communities; since that is no longer possible, new ways to build need to be found. He added that there is push back on taxes, so there needs to be impetus for voters to vote in favor of more taxes; a lot of money is already spent on promoting bond and local measures.
Failing On All Fronts, but No Plan B

Steve Heminger opened the CASA meeting mentioned above by saying that in the current housing affordability plan, "We are failing on all fronts." However, there is no Plan B.

The tax, subsidize and build mind set is the "new normal." It will continue to be promoted to the voting public. Advocates of the current plan will continue to be the only ones welcomed at the MTC/CASA table. Hopefully, those who take the possibility of a perfect storm seriously will also take action by pushing back and suggesting alternative plans.


Private Property

Private Property

Of the different configurations of property rights, only private property provides a workable basis for a free society, a productive economy, and justice. In the 18th century and earlier, the single word property was customarily used because it was understood intuitively that only private property provided the incentive to work hard. Treatises such as Adam Smith’s An Inquiry into the Nature and Causes of the Wealth of Nations did not specify that private property was the indispensable foundation of political economy because hardly anyone championed an alternative. Private property was “sacred” and, therefore, needed no intellectual defense. By the 19th century, however, and particularly in the Communist Manifesto (1848), the phrase private property began to be used pejoratively. Aristotle had defended it in passing, but the incentives and disincentives of the different configurations of property had, by the 19th century, not yet been systematically analyzed. It could be said that private property was attacked before it was fully defended. Karl Marx gave no indication of understanding why private property was essential to economic life.
Private property restricts government power and decentralizes decision making. It confers on an individual the right to use and dispose of some good and to prevent others from doing so. In a free society, there will be thousands or millions of such owners. They can sell their rights to specific property to the highest bidder and retain the proceeds. With communal property, in contrast, the rights to some good are shared in an undefined fashion by a definite or indefinite number of people. A good portion of the U.S. landmass was communal before the arrival of Europeans. Within a family, many goods also are treated as communal. As for state property, the managers who control access to it are employed by the state and cannot legally profit from the sale of such assets. Normally, state property is not for sale at all. If it is, the proceeds are expected to go into the public treasury, not into the pockets of state employees.
Since the time of the Roman Republic, it has been understood that some goods are naturally managed by the state—those that are needed to provide for the common defense, for example, or for administering justice and enforcing the rule of law. The provision of these goods runs into the difficulty that nonpayers cannot easily be excluded from sharing in their benefits. But most goods, as the Romans agreed, are best owned privately. It is assumed that the economic analysis of private property also embraces the freedom of contract.
From about 1870 to 1990, nonetheless, a majority of Western intellectuals viewed private property critically. Given that it may have been first acquired by force and inherited by heirs of no necessary merit, how could it then be justified? To this question, David Hume offered an answer: The “stability of possession” was so important, he wrote, that dispossession was unwise in cases where the origin of the title had become “obscure through time.” If we can only say that it may originally have been acquired by force, the injustice involved in seizing it is far greater than that involved in tolerating the mere possibility that remote ancestors were thieves. A distant and possible injustice would be “corrected” by a present and certain one.
Under the Stuart kings, Sir Robert Filmer had argued that all English law owed its existence to the royal will, and kings could therefore redistribute property as they saw fit. Replying in his Two Treatises of Government, John Locke located the right to property in labor. For every man, he argued,
the labour of his body and the work of his hands, we may say, are properly his. Whatsoever then he removes out of the state that Nature hath provided, and left it in, he hath mixed his labour with, and joyned it to something that is his own, and thereby makes it his Property.
It is a measure of the unpopularity of private property among intellectuals in recent decades that a dozen academic works have been issued that attack Locke’s defense, using arguments that the apologists for the Stuart tyranny might have admired, among them those written by, for example, Jeremy Waldron, Alan Ryan, Andrew Reeve, and G. A. Cohen. But all such arguments were futile inasmuch as the case for private property depends not on the ingenuity of philosophers, but on intractable features of human nature. The need for private property would be just as great if no philosophical defense of it had ever been written. The simplest argument for it is the minimal one. Property rights have to be assigned somehow if chaos is to be avoided, and the only known alternatives to private ownership—communal or state ownership—do not and will never work.
Communal property has this great defect. If the members of a commune have the right to equal shares in the overall product, those who work hard will subsidize those who do little. Idleness is thereby encouraged and industry discouraged. This phenomenon is generally known as the “free rider problem.” It was restated in 1968 by Garrett Hardin in an influential article, “The Tragedy of the Commons.” If an attempt is made to circumvent this problem by apportioning reward to effort, the commune has already moved halfway toward privatization.
The free rider problem is encountered when a group goes to a restaurant and shares the tab equally or in a “master-metered” apartment building where the utilities bill is divided equally among tenants. The solution—separate checks, individual utility meters—is the equivalent of “converting” from communal to private property. When such a conversion is made, efficiency increases—utility companies report that electricity consumption may decline by 20%—but, more important, justice is introduced. Heavy electricity users and expensive eaters will pay more, whereas the frugal will pay less. In short, each person is given his due.
This notion corresponds to the classical definition of justice found in Aristotle and Thomas Aquinas. Private property is comparable to a set of mirrors that reflects back on individuals the consequences of their acts, thereby, in an approximate way, institutionalizing justice in society. That is probably the single most important argument in favor of a private property system. The pilgrims who came to Plymouth Colony on the Mayflower in 1620 at first tried communal property and were on the point of starvation when they shifted to private ownership. “This had very good success,” William Bradford reported, “for it made all hands very industrious, so as much more corn was planted than otherwise would have been.” As for the “common course” or communal arrangement, it “was thought injustice.”
Under stringent conditions, communes can be made to work. They must be small enough that members know one another, and they must be imbued with religious zeal or enthusiasm that imparts a spirit of self-sacrifice. This system would not be stable if its members were permitted to have children and to divide into families. Catholic, Orthodox, and Buddhist monasteries with communal property have survived for hundreds of years. The Israeli kibbutz attempted to preserve families and do away with private property, but was unable to do so. By 1989, the 3% of the population then living on kibbutzim had accumulated debts of $4 billion, which were paid by the state.
As for state ownership, the lengthy experiment in Soviet Russia proved that it could not be the basis of a productive economy. Central planners did not have enough information to know what commands to give, and the planning system reduced the people to a form of slavery. They had no incentive to do more than the minimum required to avoid punishment. The failure of this experiment was disguised for a long time by the Western acceptance of Soviet statistics. Both the Central Intelligence Agency and Paul Samuelson’s best-selling textbook, Economics, reported for decades that the Soviet economy was growing twice as fast as the U.S. economy. In the year the Berlin Wall fell, the Statistical Abstract of the United States maintained that the per capita income in East Germany was higher than in West Germany. It also was hoped that the abolition of private property would promote a change in human nature. But “New Soviet Man” stubbornly refused to appear.
A kind of taboo surrounded the discussion of property in the Western world while the Soviet experiment was underway. After it was over, books favorable to private property began to appear. Long obscured and almost forgotten, private property at once appeared as a kind of lens through which history could be reviewed. Empires that had succeeded in the past, such as the Roman and the British, were shown to have legal systems that gave security to property and so encouraged the accumulation of wealth. Countries that have conspicuously failed in our own day, often referred to as the Third World, have been shown to have lacked secure, transferable private property rights. Against all post–World War II predictions, the West has widened its economic lead, and the most important reason was that it had retained the institution whose importance Western elites had failed to grasp: private property.
In the decades ahead, the pressure to privatize property where it has not already occurred will grow stronger as the population increases.

Further Readings
Bethell, Tom. The Noblest Triumph: Property and Prosperity through the Ages.New York: St. Martin’s Press, 1998.
Bradford, William. Of Plymouth Plantation. Samuel Eliot Morison, ed. New York: Knopf, 1952.
Cohen, G. A. Self-ownership, Freedom and Equality. Cambridge: Cambridge University Press, 1995.
Hume, David. A Treatise of Human Nature, 1739–1740. Oxford: Oxford University Press, 2000.
Locke, John. Two Treatises of Government. Peter Laslett, ed

Thursday, October 5, 2017

The Two States of California

Classical scholar, Victor Davis Hanson, resides in Central California, educates at Stanford in Palo Alto, and addresses the political, economic, and cultural disparity between the liberal elites along the Pacific Coast and the rest of the state, 40 miles east of the coast. At the American Freedom Alliance's "California: From gold to dust" conference in L.A. 20 August '17.

Wednesday, October 4, 2017

Band uses delay to create cool video

Any time there's a live streaming video, there will always be a little bit of delay in the feed. If you've ever been on a conference call, the short delay is noticeable enough to make things slightly awkward, but on services like Facebook Live, the delay can be multiple seconds.

Most people live with it, the band The Academic decided to embrace it.

Using the delayed audio and video from a Facebook Live, the band managed to create a loop version of their song "Bear Claws." It's a little easier to understand if you actually see it in action, but essentially, the band performs for a Facebook Live feed that's then projected behind them. They manage to sync up and perform with the same delayed feed a few seconds later, and as the song progresses, it gets more and more interesting.

"We rearranged each instrument on “Bear Claws” to fit Facebook Live’s delay, with each loop getting more complex, adding instruments, rhythms, and melodies. Additionally, by projecting the video live from a soundstage we created an infinite tunnel consisting of all the previously recorded loops," the band explained on YouTube.

Probably the coolest way to create something new from a tech flaw.

Happy Mother's Day: What Would My Mom Do? (Drink Tab and Lock Us Outside)

What Would My Mom Do? (Drink Tab and Lock Us Outside)

I’m about to tell you the truth: parenting has become very precious in our generation.

This very morning, a mom posted how on her son’s birthday, she assembles a comprehensive “time capsule” including items, photos, and products related to that particular year, stores it in a set of antique trunks, and plans to present them all to him on his 18thbirthday as a tribute to his entire life.

Holy. Crap.

Cannot. Deal.

When I think about upping the joy in parenting and diminishing the stress, I propose that much of our anxiety stems from this notion that our kids’ childhood must be Utterly Magical; a beautifully documented fairytale in which they reside as center of the universe, their success is manufactured (or guaranteed), and we over-attend to every detail of their lives until we send them off to college after writing their entrance essays.

It becomes this fake pressure, which results in its trusty sidekick: guilt. And nothing steals joy away from parenting more than believing you are doing a terrible job at it. And nothing confirms you are doing a terrible job at it then thinking you should run out and backfill eight antique trunks as a memorial to your third-grader’s life.

So here is my trick for keeping the joy and losing the stress:

What would my mom do?

I was born in 1974, good readers. It no more occurred to my mom to coddle us Precious Snowflakes than it did to quit drinking a case of Tab a day. If you told my mom to craft a yearly time capsule for each child to store until graduation, she would have cried tears of laughter all the way to Jazzercise. My girlfriend asked me just yesterday:

“Do you remember your mom ever volunteering in your classroom?”

“NO mom was ever in our classroom. We rode the bus to school on the first day, had one Christmas party that consisted of store-bought cookies and cherry kool-aid, then school ended and we played outside until Labor Day. That was the school year.”

My mom says that she and her friends just raised us, while my friends and me “parent” (these are sarcastic finger quotes). And honestly? She’s right. They didn’t worry endlessly, interfere constantly, safeguard needlessly, or overprotect religiously. They just raised us. And we turned out fine.

Confession: as we head toward summer, I get this itchy, panicked feeling, because we are staring down twelve unstructured weeks, and all I can picture are my five kids sleeping too late, losing brain cells on their various screens which I will feel conflicted and guilty about, and driving me crazy. How will I balance work? How will I keep them entertained? How will I occupy fourteen hours a day? How will I maintain their reading levels? I already feel like a Bad Summer Mom and it is March, for the love. Which tells me I need to default to my trick:

What would my mom do?

Well, first of all, we didn’t have 24/7 access to cartoons, video games, and YouTube, so she did what all moms did: told us to play. The end. It never crossed my mom’s mind to “entertain us” or “fund expensive summer endeavors” or “create stimulating activities for our brain development.” She said get the hell outside, and we did. We made up games and rode our bikes and choreographed dance routines and drank out of the hose when we got thirsty. I swear, my mom did not know where we actually were half the time. Turned out in the neighborhood all day, someone’s mom would eventually make us bologna sandwiches on white bread and then lock us out, too. We were like a roving pack of wolves, and all the moms took turn feeding and watering us. No one hovered over us like Nervous Nellies.

And never one time, not once did I feel unloved or neglected.

My parents majored on the majors and minored on the minors.

Is this safe? Sorry, neighbors.

Tree skateboarding. It is a thing at the Hatmaker house apparently.

Could it be that we are simply too precious about parenting? Have we forgotten the benefit of letting our kids fail? Figure it out? Work hard for it? Entertain themselves? We put so much undue pressure on ourselves to curate Magical Childhoods, when in fact, kids are quite capable of being happy kids without constant adult administration. I would argue that making them the center of the universe is actually terribly detrimental. A good parent prepares the child for the path, not the path for the child. We can still demonstrate gentle and attached parenting without raising children who melt on a warm day.

Guess what the side effect is for us parents? RELIEF. Get your joy back! Try it. Pull back as Cruise Director and adopt the “what would my mom do” approach, and see what happens. What do you know? The kids are all right! They aren’t poor, neglected Oliver Twists. They won’t come completely unraveled. They aren’t helpless, hapless ninnies who can’t figure a bloomin’ thing out. Their futures aren’t doomed. We don’t want to produce young adults that despair at the first obstacle they face. Don’t we want them to learn that they are one part of a healthy family, not the centrifugal force of their entire environment?

And mamas and daddies? We get to jettison that manufactured guilt that tells us we aren’t doing enough, when in fact, no generation of parents has ever done more. (My friends in higher education are actually begging us to DO LESS PLEASE BECAUSE THESE CHILDREN DON’T KNOW HOW TO FILL OUT AN ONLINE FORM WITHOUT HELP.)

Let’s get our joy back and resist all this made-up stress! Let’s recapture the joy of watching kids play in sprinklers, build forts out of couch cushions, create dramatic “programs” (my parents have PTSD from ours), and run around the neighborhood with their friends. Let’s give them back the gift of imagination, self-sufficiency, creativity.

What did our moms do?

They let us be kids, and we wobbled and skinned our knees and made up our own fun and enjoyed the simple pleasures of childhood without any flash and dazzle. But you know what? We knew we were loved and we knew we were safe. We never doubted the most important parts of the story. We weren’t fragile hothouse plants but dirty, rowdy, resilient kids who ate Twinkies and candy cigarettes and lived to tell.

Mama, don’t fall for the yearly time capsules. You have everything your little ones need: kisses, Shel Silverstein books, silly songs, kitchen dance parties, a backyard, family dinner around the table, and a cozy lap. They’ll fill in the rest of the gaps and be better for it. Your kids don’t need to be entertained and they don’t need to be bubble-wrapped; they just need to be loved.

It’s all any kid has ever really needed.

Will Hyper Growth come to Marin thanks to SB 35?

Thanks to SB 35 that was signed into law this week,  hypergrowth is now possible in Marin. 

Tuesday, October 3, 2017

We are paying the price for lack of public pension reform

Marin Voice: We are paying the price for lack of public pension reform

By Bob Bunnell, CSPP

Most large public agencies have risk management departments. They either don’t understand defined-benefit pension plans or choose to ignore the huge risks of public pensions that have been designed with absolutely no regard for cost containment.
We are just starting to see the results of this complete and total ignorance of basic defined benefit pension principles.
These include required taxpayer contributions increasing by huge amounts each year, public entities such as the county making additional taxpayer contributions above what is required to reduce unfunded liabilities, and tax increases everywhere to provide the needed revenue for the seemingly endless contribution appetite of virtually all public pension plans.
The Tax Reform Act of 2006 addressed private union and single-employer defined-benefit pension issues and provided a framework for the sustainability of private pension plans. Public pension officials have failed to address pension reform in any meaningful way.
Following are some of the main reasons for the huge risks of the public pension system:
• Final salary plans. The private union pension plans that I administer are career-average plans — participants accrue a benefit each year that is added to their prior benefit accruals. If a participant has a large increase in benefit accruals at the end of his or her career, it affects his benefit accruals for those years only, not his or her whole benefit.
Final-salary public plans, where the participant’s whole benefit is based on his or her highest three-year-average compensation, can create huge increases in benefits and huge unfunded liabilities for participants at the end of their careers. Final-salary pension plans are extremely risky from a cost standpoint.
• Aggressive assumptions. Public plans have used assumptions that are far too aggressive. This creates negotiated benefits far too high and if those assumptions are not met, then there should be a means other than just increasing taxpayer contributions to address the inevitable resulting unfunded liabilities.
Legislators have failed to address this issue and the results are huge increases in taxpayer contributions. Our local public officials have failed to endorse any meaningful pension reform.
• Benefit increases. Compounding both of the above was the complete irresponsibility of our public officials in the early 2000s to grant benefit increases, probably illegally, in the range of 30 percent to 40 percent to all participants.
So, let me get this straight, use aggressive investment return assumptions and then spend all of the gains from the stock market run-up in the ’90s and expect taxpayers to make these plans whole when the future unfunded liabilities inevitably happen?
The lack of fiscal responsibility and disregard for risk is incredible.  See full article HERE

How to Create a Gun-Free America in 5 Easy Steps

After the terrible Las Vegas mass shooting,  gun control seems to be on everybody's lips.  Here are five easy steps to achieve it.

CASA-How they plan to use the Gas Tax to Force Development in Marin and the Bay Area.

Monday, October 2, 2017

How Zoning Rules Would Work in a Free Society

How Zoning Rules Would Work in a Free Society

Paved with Good Intentions