Income Disparity And Rational Market Considerations

            Analysis was greatly surprised today to learn that what it had suggested in the October 24, 2013 post (Income Disparity Part Two Or What Is Wrong With This Picture?) is already in progress within another central Ohio community (in a different form but the same perspective). Analysis has repeatedly critiqued the current Licking County/Newark model of subsidizing corporate enterprise in hopes of revitalizing jobs, urban development, etc. Various posts have revealed that this approach primarily reinforces the income disparity growing yearly in the US. It was suggested that instead of the current dysfunctional model of corporate welfare used to attract business tenants to the greenfield industrial “campuses” around central Ohio, the city of Newark should pursue a model that rewards residential inhabitants to revitalize downtown Newark. Such a program (of sorts) already exists. It is entitled the My Home Program. “The City of Whitehall, Apprisen and Huntington Bank have partnered together to offer a special mortgage financing offer exclusively for City of Whitehall borrowers participating in the My Home Program. Borrowers must meet qualification requirements.  Buyers can receive 4% of loan amount (up to $5,000) in down payment assistance.” (from the City of Whitehall official website). It has already been successfully implemented for over 30 residential homebuyers. Apprisen is a central Ohio non-profit consumer credit counseling service and Huntington Bank is, well, one of the largest and oldest banks in Franklin County (akin to Licking County’s Park National Bank). Here is a program that is directed toward encouraging residential ownership that is now working. The city of Newark, with its 43% non-owner occupant residential housing should take note. Perhaps this may be of interest to the newly elected city council. Pass it on.

 

            On a separate note, here is more insight on the corporate subsidy for “jobs creators” and their ability to continue the downward spiral of income disparity in the US. The Boeing Company, flush with future orders on its commercial aircraft (in addition to its defense contracts) is looking to honor these with an expansion of manufacturing capacity. Its latest contract offer with the machinists union having been rejected, and the company no longer desiring to negotiate, has resulted in its letting out bids for communities across the US for sites to build its new 777X aircraft. Places like North Charleston South Carolina are only too eager to spend public money to purchase and develop “greenfield” facilities (clear open land developed with new custom buildings). The public expenditure would eventually be paid off through the taxes on the folks who would be working the jobs involved with this production. In addition to this gifted facility, Boeing would also get tax breaks, etc. In a November 25, 2013 article entitled Boeing Picks 15 Potential Sites Nationwide To Build 777X, The Seattle Times’ Dominic Gates writes, “Aviation analyst Richard Aboulafia of the Teal Group expressed skepticism Saturday that Boeing would choose a greenfield site — a completely new location with no experience in airplane manufacturing. “That’s just really a bad idea,” said Aboulafia. “You are adding multiple layers of risk both in terms of workforce and infrastructure.” Boeing did that on the 787 Dreamliner program when it chose South Carolina to build big fuselage sections. That caused such delays and quality problems in the jet program’s early years that the chief executives of both Emirates and Qatar Airways, whose orders launched the 777X in Dubai last week, declared in interviews there that they have told Boeing not to repeat that experience.” Later Gates reports, “He [Boeing spokesperson Doug Alder] said the company still has “no plans to re-engage in contract talks with the Machinists union.” The 31,000 members of the International Association of Machinists (IAM) union on Nov. 13 rejected by a 2-to-1 margin a Boeing contract offer that would have secured the 777X work for Washington state. The proposed contract would have frozen employee pensions and introduced a new wage structure that drastically slowed wage growth for new hires, who would take 16 to 20 years to reach the top of the pay scale instead of the current six years.” Other sources (radio, online analysts, etc.) report that it is a known fact that the current Boeing corporate leadership despises unions and favors a place like South Carolina, a “right to work” state. Gates concludes his article, “With the state-versus-state competition now truly under way for the 777X work, industry analyst Aboulafia said that, “From the standpoint of economics, none of this makes sense.” Although Boeing is at loggerheads with the union over reining in long-term labor costs, those costs are such a small proportion of the overall cost of building airplanes that, “You could meet the union halfway and it wouldn’t have any material impact on the competitiveness of your pricing.” “The only thing that makes sense is that (Boeing executives) are just angry, doing this in a spirit of distaste and antipathy” toward the union, he said. “Maybe the union has brought that on themselves,” Aboulafia added. “I don’t know. But it’s nothing to do with rational market considerations.””

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Nuts

Once, at a business seminar, the speaker stressed that the only constant we can rely on is change (a bit disturbing to most of the “invested” business audience; change is such a hassle, sigh). That was during the heyday of disruptive innovation, primarily the personal computer which was eating the big mainframe guys’ lunch but also videos, CD’s, self serve, a plethora of cars from Japan, etc. It wasn’t called “disruptive innovation” then (though it was change, and disruptive to most), just sound business advice from savvy successful entrepreneurs.

A recent exchange in the online Newark Advocate commentaries (re; an article about Walmart defending its employees’ soliciting for contributions to afford a decent T day) reminded me of that. The main imbroglio was between a “liberal” point of view (Walmart should more equitably share their success with those who helped achieve it) and the ready-made answer given by a “conservative” (no one is forcing the employee to take a job there). The New Oxford American dictionary gives “a person who is averse to change and holds to traditional values and attitudes, typically in relation to politics” as the definition of conservative. Wiktionary gives about the same, but shorter: “A person who favors maintenance of the status quo or reversion to some earlier status”. NOA defines “liberal” as a person of liberal views (obvious to say the least!). Liberal as an adjective is defined variously. “open to new behavior or opinions and willing to discard traditional values” is the first given. Wiktionary is only a tad better: “One with liberal views, supporting individual liberty”. That same day AP ran a couple of quickie articles, “How many nuts should you eat for your health?” and “Study ties nuts to lower cancer, heart death risk.” In fact the former article even states “Regular nut eaters were less likely to die of cancer or heart disease, in fact, were less likely to die of any cause during a 30-year Harvard study.” (Eureka!). To pollinate the almond crop in early spring (next to marijuana, the most lucrative agricultural cash crop in California) now requires over half the bee hives existing in America. Last year, the migrant commercial beekeepers who supply the bees for pollination fell short in meeting this demand. Not that there was suddenly an overabundance of almond trees. Rather, there is a steady depletion of bees (and beekeepers). There is, however, an overabundance of reasons given for this change. They are irrelevant. What is relevant is that this disruptive change is what the business speaker spoke of at the seminar. “A person who is averse to change and holds to traditional values and attitudes” is on precarious ground in dealing with the healthful (and tasty) properties of almonds, their relationship to bees, and our topical/systemic pesticide reliant agricultural practices. Favoring “maintenance of the status quo or reversion to some earlier status” doesn’t cut it with regard to addressing or solving the problem (of change, of the continuous loss of pollinators). No amount of digging in one’s heels and insisting that if “it was good enough for granddad, it’s good enough for me” will deal with the change that is already in progress. Wiktionary defines a “progressive” as “A person who actively favors or strives for progress towards improved conditions, as in society or government.” NOA gives “a person advocating or implementing social reform or new, liberal ideas.”

To Repeat This Menu, Press 2

            In the news this week a German automotive component manufacturer came out as a new tenant at the Central Ohio Aerospace and Technology Center campus (Xperion, 59 jobs welcomed to area, The Newark Advocate 11-15-13, Kent Mallett). The “jobs creators” concelebrated the exchange of vows. All the trappings of this commitment ceremony were there – a traditional ground breaking with tent (though the spec building was already under construction) and German pilsner for all (sans Polka band. Oom Pah!). Continuing news of the past weeks is the closing of Meritor (just miles down the road) with its accumulated loss of hundreds of jobs. It is reported to already be packing up and moving production machinery out of its Heath factory (no “campus” for this manufacturer). The company made its workers a non-negotiable offer of “considering” to not relocate if the workers took a 62% pay cut (and gave management half of their lunch).

 

            Not news but what makes the news, cell phones are ubiquitous though they haven’t quite done in line phones (everyone has one; it is how we “stay connected”). Line phones, like electric power, were the sign of progress for a community, especially rural ones. Those “served” by this convenience reported outages or destruction for the benefit of all. One would call in a noise on the line, damage to a pole, or that a neighbor’s phone was out because it made things better for everyone. In turn the company relied on its eyes and ears in the community that it profited from. Today you can’t do that (the same with cell phones, utilities, etc.). When one calls in to make such a report, a wonderful “Suri” clone comes on the phone claiming intimate interest if only you’ll push her buttons. There is no capacity to say something is wrong with the system as one is immediately accosted with assuming personal responsibility for announcing (and owning) the problem. This is instantly followed by arranging to set up an appointment for the company’s representative (technician) to meet with the problem (you) and take care of the request (complaint). All this may entail a service charge, “Suri” is not remiss to announce. In short, it is made clear (through “Suri”) that the only beneficiary of all this will be solely the one who is kvetching (who likewise will end up paying for it). No possibility to consider any of this from a community standpoint (I’m calling for my neighbor, or for the last thirty years whenever this kind of interruption has taken place, it is because something is awry at your junction box, etc.). Later, the squeaky wheel will receive a deeply personal missive from “Suri” concerned that “we made things right” and inquiring “how did we do?”

 

            ““That (teamwork) effort doesn’t end today or when you take possession of your building and begin operations,” Johns [Heath Mayor Mark Johns] said. “You’ve heard about the teamwork, and I want you to know you are now a part of that team.” [To which Lt. Gov. Mary] Taylor added, “This united effort is why we are all standing here today. We’re looking not only to help those here today, but want the same opportunities to continue for future generations throughout Ohio.”” (Mallett, betrothal ceremony report) Wiktionary describes “hegemony” as “Domination, influence, or authority over another, especially by one political group over a society or by one nation over others”. In short, it is what determines the topic, the conversation, and what can be said and how it can be said. To repeat this menu, press 2.

Shorts

            Yahoo news page had this headline: “Why New Employees Can’t Write, And Why Employers Are Mad” on CNBC (11-12-13). I couldn’t read the article since it was a video (and you don’t read videos, you watch them). The dictionary lists the word “and” as a conjunction. Logic says when two items are conjoined by “and”, they are true if and only if both cases apply (in contrast to “or” where only one of the two need apply). Reading and writing are inseparable. Sparta owner Chris Ramsey bemoaned the limited use of his in house reading room library. “No one reads.” An acquaintance spoke of a job teaching writing at CTEC, and of the challenge it presented. New employees may not be able to write but they probably have incredible ability creating, finding and getting videos, photos or appropriated texts online.

 

            Speaking of employers, one of Newark’s biggest was represented at the Local Leaders Breakfast at Moundbuilders Country Club (according to an article by The Newark Advocate, Kent Mallett 11-12-13, State Farm: No layoffs here, but some jobs moving).  Susan Krieger, vice president of operations, is quoted as rationalizing the challenge of luring professional workers with: “That’s a little bit more difficult to find in Licking County, it’s hard to attract a lot of college people to our Newark location.” (as opposed to, say, New Albany?) What the incidentals are regarding such a claim is irrelevant. One begins to understand how class myths, stereotypes and tropes are perpetuated and reproduced. Within walking distance of the State Farm offices is the large campus of COTC/OSU, with Denison University just down the road. Many “professionals” commute both from Newark to Cols. as well as Cols. to Newark every day. Characterizing and typecasting Newark as a blue collar, working class town continues to override the actualities of 21st century life.

 

            And life in the 21st century is indeed becoming stranger and stranger. The Rev. Al Sharpton and his National Action Network are advocating a boycott of Kanye West. Seems North West’s daddy has embraced the stars and bars as his own (the rebel flag of the southern Confederacy – see “Civil War”, not necessarily Ken Burns). “I took the confederate flag and made it my flag. It’s my flag now.” (MSN Music News 11-12-13 Rev. Al Sharpton Leading Kanye West Boycott). In this day and age of branding and whose name is on your butt, one would be justified to wonder if that welder’s cap, that snot rag pulled out of a pocket, or that back window screen on a pickup truck is a genuine Kim Kardashian’s Kanye stars and bars, or just the same old tired KKK one. How will we ever know? How will we ever really know for sure? Flags, like words, are not always read the way they are written.

UPC And Licking County Public School Students

 

            The 11-10-13 Newark Advocate ran an article by Anna Jeffries, Enrollment down slightly in many Licking school districts. The article gave preliminary data made available “from Licking County schools” (?) with specific numbers for the various school districts and an accounting of how these number were arrived at, and what they are used for. ““We are just a microcosm of the state of Ohio,” Hile said [David Hile, superintendent of Licking Valley Schools]. “The state of Ohio is losing population, people are moving and we have aging populations. All the demographic factors affecting the country and the state are affecting Licking Valley.”” Although the statistics show a slight decline within Newark City Schools (the largest school district in the county) Jeffries writes “The district is seeing significant growth in its lower grades, from kindergarten to fourth grade and, if that continues, it could increase enrollment going forward, Ute said [Newark City Schools Superintendent Doug Ute].” The significance of the count is more than statistical, “It’s important to be precise to ensure students are being tracked properly and schools are funded accurately, he [John Charlton, Ohio Department of Education spokesperson] said.” To counter what Anna’s headline establishes, some districts have opted for open enrollment, siphoning off students from adjoining districts to offset the decreased state funding that per head state calculations produce. This in turn leaves those adjoining districts with less. Analysis believes a UPC number attached to each student might be of benefit here. The economic “value” (asset/debit) of each individual could be “tracked properly” and so much more efficiently.

           

Analysis now looks at another set of statistics. Half Our Public School Students Are Officially Poor by Laura Kiesel, TheStreet (11/06/13) reports that “A study released last month by the Southern Education Foundation found that nearly half (48%) of the nation’s 50 million public school students, and half or more of those in most Southern and some Western states, are now low income. The report based its findings on USDA figures for students in preschool through high school that qualified for federal free and reduced-price meal programs in the 2010-11 academic year. According to the federal guidelines, the income cap for these programs for a family of four was $40,793 in 2011.” Further in the article she writes “U.S. Department of Education statistics reveal that the number of homeless children enrolled in public schools rose 10% in the 2011-12 academic year from the year before, bringing the number to a record high of more than 1.1 million. This is a 72% increase since the 2006-07 school year — just before the Great Recession. In particular, 43 states have experienced consecutive annual increases in youth homelessness since the onset of the recession, with 10 states reporting increases of 20% or more. Worse yet, these statistics are probably an underestimate of the nation’s homeless children; they don’t consider infant and toddlers, or children not identified as homeless by school officials. Additionally, some students may not be included in the Education Department statistics because although they are eligible for aid for the homeless through their schools, their families are ineligible through the US. Department of Housing and Urban Development.”

 

Analysis asks whether these are one and the same folks (with or without a UPC number to track them properly)? Is the local reader of the Jeffries article connecting with what Kiesel reports? Did the recent cut in food stamp funding, etc. advocated and endorsed by Licking County’s congressional representatives embrace the  Licking County students covered by the Kiesel findings (“We are just a microcosm of the state of Ohio,”), or are these “some other” people, not necessarily those represented by Pat Tiberi and Bob Gibbs? Does the state funding “solution” championed by Licking County’s various state legislative representatives promote and encourage a Universal Product Code mentality and efficiency regarding the education of Licking County Public School students?  

Voter Information Guide

            This time of year newspaper editorials urge voters to be informed. Newark is no different. After running extensive articles on the various races, sides and issues, The Newark Advocate does just that; a thankless job. Two priorities stand out in the upcoming election – school funding and Newark City Council representation. Reasons giving for the various new or renewal school funding levies usually come down to cuts in state funding, changes to tax base, etc. Most of the districts have already implemented austerity measures on top of austerity measures and now must rely on the voters continued support. With the council representation, themes emerge, sound bytes, talking points. They may be block watch programs, police and fire protection, neighborhood revitalization, etc. All are pretty general. All are subsumed within the overriding consensus topic of jobs and economy. In that there is no partisan division.

 

            The Toledo Blade recently did an excellent job of reporting on the State of Ohio’s policies, practices and outcomes regarding jobs, jobs creation and the economics involved (loans, grants, tax credits, etc.). These speak directly to what the council candidates only spoke of in general, positive terms and what school districts have to “manage” as the new reality. The Blade covered the years 2007 through 2013, years of Democratic and Republican administration (truly no partisan division). The reports by Kris Turner are State Does Little To Track Jobs From Loans, and Millions Of Dollars Lost In Ohio’s Pursuit Of Jobs dated 10-27-13, Political Ties Aid Firms Seeking State Assistance 10-28-13, and Many Jobs State of Ohio Says It Created Don’t Exist 10- 29-13. The headlines speak for themselves. Recurring themes found such as lapses with vetting as well as verification mirror those that led up to the financial meltdown on Wall Street in 2008. As corporations are entities existing only in contemplation of the law (now having religious convictions!), they appear under various guises, affinities and subsidiary connections. Oftentimes their only contact point is a PO box in a distant city. “Today, many of the procedures that resulted in governmental lapses are now being performed out of the public’s view. At the behest of Governor Kasich, the Ohio Department of Development was eliminated and morphed into the downsized Ohio Development Services Agency in September, 2012. Criticism of the Department of Development was a staple of Mr. Kasich’s gubernatorial campaign in 2010. The new agency — per the Republican-backed legislation that created it — contracts some of its services from JobsOhio, a nonprofit that was created by the state, seeded with taxpayer money, and shielded by law from public scrutiny. JobsOhio now vets and collects information about companies that request state assistance. The information JobsOhio amasses is reviewed by the Development Services Agency. Neither entity would comment on whether that information is a public record. Unlike the Development Services Agency, JobsOhio is not required to disclose the details of its activities to the state auditor or the General Assembly.” (Millions Of Dollars Lost…10-27-13). An analogous situation exists within Licking County/ Newark revealed recently with regard the Arcade and the adjoining properties affected by an antiquated fire suppression system/red and white X status designation. Ownership of properties/business was listed as some corporation, which in turn was found to be part of some other company which were in turn found to be located within the holdings of some individual. Much of the debate regarding property maintenance in Newark centers on this issue of ownership, and responsibility. The Blade article found that when a corporation defaults, goes bankrupt or just disappears in the night, tracking down the loan money owed is next to impossible. The grants and tax credits used as incentives require no reimbursement. “The loan, grants, and tax credits Mr. Snyder’s [C. David Snyder, Cleveland businessman] companies received are an example of how business people use relationships with politicians to grow their companies. State financing is particularly attractive because it carries a lower interest rate than a bank loan. Even better, state officials sometimes dole out grants that don’t have to be paid back.” (Political Ties Aid… 10-28-13) Vetting, eligibility, verification and eventual collection (enforcement) of how the public’s money is spent finds itself with increasingly smaller departments and with no public disclosure now legislated as a prerequisite. Though not the size of the NSA, the secrecy clause, or default lack of accountability due to overworked, understaffed oversight can likewise be found in Licking County as well as Newark. Bullet points from The Blade’s series reveal some troubling outcomes. “Among the findings of the investigation:

■ Buckeye Silicon is one of more than a dozen examples of a breakdown in the vetting, oversight, and management of loans and grants awarded to companies.

■ The state routinely invests in businesses that have financial problems and legal troubles. It also awarded loans and grants to companies whose executives were hefty political donors or were connected to top politicians in Columbus.

■ About 50 percent of the companies that received grants to create jobs failed to live up to their state job commitments. Those businesses were paid $45.5 million, which is half the grant funding the state awarded to spark job growth.

■ Many state records detailing job creation related to grant funding contained inaccuracies, which skewed the total number of jobs created by 25,000.

■ In total, 25 percent of the firms that received loans issued during the five-year period needed more time to complete projects, couldn’t make payments on time, or closed. Those 51 loans represent $79.2 million, or about one-third, of the $235.8 million that was paid to companies.” (Millions Of Dollars Lost… 10-27-13)

“But The Blade’s investigation found a much bigger problem:

● Reports from businesses that have open grants — meaning they still are using state grant money — inflated job figures by 59 percent. The 294 reports that were reviewed stated firms created 27,815 jobs, but state officials said they created 16,458 jobs — a difference of 11,357 fewer jobs.

● Reports from businesses that finished spending state grant money show they failed to create 83 percent of the jobs they promised to the state. The 240 reports reviewed stated those firms promised to create 10,173 jobs, but said they created only 1,775 positions. Officials at Ohio Development Services Agency, however, claim those companies created 15,006 jobs.

Of the 534 grant records reviewed, 195 contained errors, including incorrect job-creation numbers. The Blade asked the state about each error it found and state officials replied with new data, which was used to determine if companies created or lost jobs. The corrected state data was not recorded on official documents, but was sent to The Blade via email.” (Many Jobs… 10-29-13)

 

            In light of the Blade’s reporting, it is disappointing to note that no candidate for representation on Newark’s City Council differentiated themselves regarding how the public’s money is spent in terms of the bi-partisan refrain of jobs and economics of jobs creation. The same means of attaining that goal favored by the State of Ohio are echoed within Newark municipal policy and practice. Carte Blanche management of public money’s directed at this outcome are vetted, verified, monitored and enforced by either private agency with no requirement of disclosure, or burden an understaffed, overworked public department. And the candidates take no issue with that!

            The school districts across the state formerly found themselves under attack by the very reasons that today the State (and local) legislature create as legal policy for purposes of “competitiveness” in jobs creation and economics. After repeated insistence that school funding had been misspent, frittered away on nonessentials, districts found themselves increasingly restricted in funding and use of funding by the State. Although always transparent by decree (local public funding), schools found they needed to be even more so in addition to being required to justify any actions taken through stringent accountability, testing and achievement results. This accountability of public moneys (on public schools) didn’t extend to the business driven model of charter or private schools which, like some of the examples given by The Blade, could just disappear off the radar screen like a blib, leaving parents (and local public schools) scrambling to meet the public education requirement of the students affected. The obsession with creating jobs/economics on the backs of the working people who provide the funding is creating a bubble akin to that which the school districts experienced over the last 30 years (educate by providing the latest technology, which somehow was never quite new enough). The only difference lies in the legislated non-accountability that the jobs creators enjoy; no testing or achievement standards. It is now virtually impossible to have a “results driven”, publically funded jobs creation economic in the State of Ohio, or locally for that matter. And the candidates found it of no importance in their appeal for votes.

           

Yes voters need to be informed and now, more than ever, they need to vote.