Harrison Square debacle continues

I have posted very little about the failed and misguided Harrison Square Project. 

I truly think at least 90% of Fort Wayne at this point realizes that the Harrison Square Project was poorly thought out and has 100% failed by ANY definition of failure.

The only real result of this project has been a little “Economic Re-arrangement” in Fort Wayne. 

Councilman John Shoaff has finally brought up the $5000 per day penalty that Barry Real Estate should have paid to the City of Fort Wayne since June 1st, 2009.  Barry Real Estate has been contractually obligated to pay the City of Fort Wayne $5000 per day since June 1st because they breached their contract to build the Harrison Square Condominiums by June 1st, 2009. 

The City of Fort Wayne to date has made excuse after excuse for Barry Real Estate and has failed to collect a dime.  The City of Fort Wayne has underfunded pension plans and is looking at very “tough” budgets for the next couple of years and desperately needs more revenue.   When you factor in the loss of revenue from the loss of Navistar over the next three years the City budget looks especially grim. 

I personally think the City of Fort Wayne is failing its fiduciary duties to the taxpayers of Fort Wayne by not collecting the money from Barry Real Estate that the City is due.

It will be interesting to see how the City Council members align themselves on this issue.  I fully expect the Mayor’s office to continue to make excuses for Barry Real Estate.  I fully expect Mitch Harper (R), John Shoaff (D), and Tom Smith (R) to attempt to hold Barry Real Estate to the terms of their contract.

I am not sure about the rest.  I have a feeling they will stand as follows:

1. Marty Bender (R), he will support the Mayors office as usual.
2. Liz Brown (R), I have no idea.
3. Karen Goldner (D), I expect her to support the Mayors office.
4. Tom Didier (R), he supported the original project and I expect he will support the Mayor’s office as well.
5. Tim Pape (D), he supported the original project and I expect he will support the Mayor’s office as well.
6. Glynn Hines, (D), he supported the original project and I expect he will support the Mayor’s office as well.

So I think it is likely our Mayor and our City Council will decide to let Barry Real Estate get away without fulfilling their contract with the City of Fort Wayne which disgusts me.  Please realize that if you stop paying your City Utilities bills they will turn off your utilities.  If you fail to pay your property taxes the County will sell your house at auction.  For some reason Barry Real Estate is not required to pay the money they owe…

Mike Sylvester

Fort Wayne City Council and the K2 ordinance

There are a whole lot of important items that the Fort Wayne City Council needs to address; however, K2 is not one of them.

It is hard for me to believe that our City Council has wasted so much time regulating another substance that likely only need to be regulated for minors.

Here are some ideas for the Fort Wayne City Council to spend time on rather than regulating substances like K2:

The City pension funds are underfunded; this deserves serious attention.

The City and other local Economic Development groups have given numerous tax incentives to companies who have completely failed to do the items they promised they would do in order to qualify for these tax credits.

Navistar is pulling out of Fort Wayne over the next three years and this will damage our City badly.

The City of Fort Wayne is going to have serious budget problems over the next couple of years.

There are many more items I could list; however, I think these four are sufficient.

I am disappointed that our City Council decided to regulate K2 for adults.

I have to admit that the first time I ever heard of K2 was the press coverage on the topic due to the proposed city ordinance.  That leads me to beleive that K2 is not a huge issue; at least not as important as the three items listed above…

Mike Sylvester

Double Dip recession is coming

“Mainstream” economists are putting the odds of a double dip recession around 20%.  I put the odds of a double dip recession at about 80%. 

There are many reasons I think the economy will take a turn for the worse in the next year:

1. The main reason is that I feel the unemployment rate will fluctuate between 9% and 11% nationally.  The Government has spent well over a trillion dollars trying to stimulate the economy and trying to create or “save” jobs.  This stimulus has only served to somewhat limit the increase of unemployment.  Many economists argue that without stimulus unemployment would be between 12% and 14% at this point.  A majority of the stimulus money has now been spent; hence, the effects of the stimulus will diminish over the next year or two.
2. The Construction industry is in dire trouble.  New home construction has plunged (as it should have plunged).  The first time home buyer credit (one of the dumbest policies in recent memory) served to drive home demand forward; in other words it caused some people to purchase homes a year or two early.  Now that the tax credit has expired residential real estate is going to be even more sluggish.  There are also a large number of houses on the market; so many in fact that few new homes should be built.  There are also millions of homes that will be foreclosed on in the next couple of years; once these houses are put on the market housing prices will drop even further.
3. Construction is also in trouble due to commercial construction.  Commerial construction has the exact same problems listed in #2 above.  The United States is overbuilt with both residential housing and commercial buildings.
4. I am happy to say the the national savings rate has increased to 6.4%.  This is good for the United States in the long term; however, personal consumption is about 2/3 of GDP.  The increase in the national savings rate comes at the expense of current expenditures; which in turn drive GDP.  The fact that Americans are saving more today actually increases the chance of a double dip recession.
5. Credit has contracted in the United States which is great news for our long term fiscal outlook.  It means that Americans are actually slowly paying down their pre-existing debt (Or banks are writing off bad loans) and are taking out less new loans (which drives consumer spending).  Since less credit is being taken out that means less money is currently being spent.
6. Many states are in dire fiscal trouble; heading the list may be California, Illinois, and New York; however, many other states are not far behind them.  Even with the silly bill Congress recently passed which gives the states 10 billion dollars so they can lay off fewer teachers the job losses in various state and local governments is going to be relatively large.  Do not get me wrong most states and local governments desperately need to downsize their number of employees; however, this downsizing will cause more unemployment and will increase the chances for a double dip recession.
7. Many local Governments and schools districts are also in dire trouble.  Read #6 above.
8. Our Federal Government seems paralyzed and unable to act largely due to politics.  The Democratic Party has no long term solution to our economic troubles and seem afraid to undertake any actions that could improve our short term economic prospects because they are afraid of the Republicans.  The Republicans are instead focused on our long term economic prospects and are less concerned about the short term economy.  Basically our Government has no plan to deal with our economic conditions and the two major political parties are chiefly concerned with blaming the current economic conditions on the other political party.

I currently feel that we will have a double dip recession.  I think it will occur early - mid 2011.

What do you think?

Mike Sylvester

President Obama and the Mosque at Ground Zero

President Obama came out last Friday and basically supported religious freedom and supported building a mosque in New York near the site of the 9/11 attacks. 

I 100% agree with President Obama’s original remarks from last Friday. 

As long as they have the funds I think any religious organization should be able to purchase any private property in the United States as long they comply with all of the local, state, and Federal regulations (Of which there are way too many). 

I have no problem with a mosque being built in New York near the site of the 9/11 attacks.  None…

Conservatives and Republicans immediately attacked President Obama’s remarks.     

As has become typical for this Administration; President Obama immediately backtracked and tried to “re-frame” his remarks because he did not want to be criticized over yet another issue.

President Obama needs to develop a “back bone” and he needs to stop “flip-flopping” and stop flailing around.  It makes him look completely incompetent.

Mike Sylvester

Is President Obama “weak” on terror?

I have heard several Republican pundits and Republican politicians claim that President Obama is “weak” in regards to prosecuting the “war on terror.”

I have no idea what these “morons” are talking about.  Consider the following:

1.  We have just as many troops in the Middle East under President Obama and a Democratic Congress as we had under the Republicans.

2.  We are spending even more on our military under the Democrats than we spent under the Republicans.

3.  We are spending FAR MORE on Homeland Security under the Democrats than we spent under the Republicans.

The “war on terror” is insane and should be stopped.  It serves absolutely no purpose except putting our troops in harms way, killing a bunch of civilians, and killing a few terrorists.  It is wasting hundreds of billions of dollars that could be better spent.

President Obama has continued the policies of his predecessor in regards to the “war on terror” and that is shameful.

I do not know why the Democrats in Congress are not continually lambasted by the “Peace Wing” of the Democratic Party.  The Democrats are hypocrites in this issue in a big way.

Mike

Its the economy stupid…

The Democrats are going to lose a significant number of seats in Congress this coming November.  This is due to several reasons:

1. The Party in power almost always loses seats in the mid term elections.
2. The economy is struggling and headed for the toilet again. 
3. The Democrats have irritated a large number of Republicans and Independents with their health care reform bill.  Worse yet for the Democrats their own base is not excited by the bill they passed.

I do not expect the Republicans to take both the Senate and the House; however, I do expect them to gain a significant number of seats in both the House and the Senate.

Mike

Council Should Amend Proposed K-2 Ordinance

The city council is considering regulating the K-2 product (and other similar products) which is described by some as a “synthetic marijuana”. Users of this product allegedly receive a marijuana-like high but will not test positive for marijuana. Currently there is no Indiana state or federal law restricting its distribution or posession.

The ordinance for consideration, sponsored by Mitch Harper and co-sponsored by Tom Didier, would introduce a fine system that would penalize businesses up to $2500 for selling the product and individuals up to $1000. One criticism that has been made about the product is that while it is labeled as something you shouldn’t ingest, it is obviously being smoked by the vast majority of the people who purchase it which is likely the real intent of the manufacturer.

Some might consider this consumer fraud but I would not agree with that position. I think the label was put there partly to avoid future regulations from local governments and law enforcement. But, more likely, the labeling is there to avoid existing regulations regarding food and drink products. I think nearly everyone would agree that those who smoke the product know full well why they are buying it and what the real intent of the manufacturer is. Thus the fraud isn’t on consumers but on what the manufacturers probably believe is an over-bearing government.

Harper has pointed out that his proposed ordinance is relatively modest and will mostly effect younger children who can obtain the product from a local neighborhood store and experiment with a “THC analog” substance. On a wider scale, he recognizes that this ordinance won’t have much of an impact on adult use since those users can easily drive to other cities to purchase the product.

My position is that regulation of this product is unwarranted. There are no credible studies or evidence that I have seen to suggest this substance is dangerous. But even if there were, I do not believe it’s the government’s responsibility to make decisions for people regarding what they want to do to their own body. I do sympathize with trying to protect children but that is the job of parents and not government. As for adults, they are more than capable of deciding if they want to ingest this product.

How is this different than banning trans fats, high fructose corn syrup or any other health-related product? I do not believe that Harper is a Souder-esque drug warrior - I think he’s merely trying to react to community requests that something be done about a product that many think is targeting and harming children. Therefore, I think an appropriate compromise might be to regulate the use such that minors are prohibited from purchasing or possessing the product - the same standard we apply to tobacco purchases. While perhaps not an ideal solution, it would still follow and support what I believe is the true intent of the ordinance - namely to restrict impressionable kids from trying something that might be potentially harmful and addictive.

At the end of the day I believe that in a free society people should be free to make their own decisions - even bad ones. The city council should reject this ordinance or at least amend it in such a way that doesn’t restrict adults from making choices about what they wish to do with their own body…

A Welcome Change in Transparency

The new deputy mayor, Beth Malloy, seems to have smacked some sense into Mayor Henry when it comes to transparency. Councilman Mitch Harper has been working with Malloy and also crafted an ordinance to require all city spending to be posted online.

the council this month unanimously approved an ordinance requiring the city to post all of its expenses online. The new law only provided an exception for employee compensation and did not mention economic development efforts. Yet unlike the consulting report, the Henry administration supported this effort.

Deputy Mayor Beth Malloy told the council the work can be done at little or no additional cost.
[...]
Councilman Mitch Harper, R-4th, wrote the online expense bill for the city and said he was glad to see the support from the administration. He said it appears Malloy, who replaced Purcell last month, has been given the authority to take control of the city’s transparency efforts, which should make them professional.

“She seems to represent something of a change,” he said.

Harper is being diplomatic here but I don’t think there’s any doubt that previous deputy mayor, Greg Purcell, was not a major advocate of open government provisions. He was an old-school bureaucrat who didn’t understand how technology has shortened the news cycle and that any effort at information control was futile and ultimately counterproductive.

While I don’t support the idea of a deputy mayor in general, it does appear that Malloy might be the person who can finally start giving mayor Henry some much-need good advice…

Union Suicide

I’ve been away tending to matters related to the day job (blogging doesn’t pay too well) and there have been several stories that I’ve wanted to comment on but haven’t had the time. I’m hoping to address those in the next few days and I suppose I’ll start with the outsourcing of the FWCS janitorial positions.

During the FWCS budget debate I supported the outsourcing of these positions for the simple fact that if the choice comes down to janitors or teachers then I’ll choose the teachers and I assume most people feel the same way. But the philosophy behind the outsourcing is more general than just “this position vs that position.” In the private sector employers have something referred to as “core competencies” - these are positions that add to the business bottom line. For example, if you run an accounting firm then accounting would be one of the core competencies.

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