Thursday, July 28, 2016

An Example Of Local Government Run Amuck!

Public Was Sold Bogus "Artist's Renderation"
One of the several projects proposed in the city where I live reflects what is happening across much of America. We should all be concerned at how financial restraint is being cast aside to create cookie-cutter cities and an illusion of growth. Four projects have been proposed or are about to begin. One has to do with a massive investment along the rivers that run through downtown, it includes walks and shops. The second a 20 million dollar revitalization of a one block historic area into a multipurpose area containing apartments, shops, retail space, and entertainment. Next, comes a new downtown arena that would compete with our recently expanded coliseum just three miles from the city center. Last but not least a new apartment tower downtown, it is this project that I want to write about today and the incestuous financing that should send fear into the hearts of all American taxpayers.

Proposed Riverfront Development More "Costly Fluff"
Fort Wayne is a city of over 250,000 people, a nice size in that it is large enough to offer the amenities of a large city without the hassle and overpowering difficult problems that often result from living in a concrete jungle. The city located in an area that thrived during America's industrial revolution boasted of major employers like International Harvester, Dana, and GE in the days when manufacturing was king. Like many cities in America, the downtown area struggled as businesses relocated from the city center as the national trend of developing suburbia unfolded. After World War II when the nation started planning the interstate highway system the city voted "no" on the idea of running an interstate through the downtown and in the decades following many decisions to locate major projects on the outskirts or suburbs added to the downtown's decline. Current government wisdom is the way to reverse this decades-long trend is to spend, spend, spend!

Fort Wayne possesses one financial jewel all cities would love to have and that is a legacy fund. The city negotiated a "lease/sale" of its city-owned electric company which competed against its much larger regional rival during the 1970s and the money flowed into a "lockbox" account that collected interest for decades. When that box was recently opened it contained over 75 million dollars that local politicians lust to spend. They call it reinvesting the money, but as they rush to skim a million here, and a million there from the fund it is difficult to make the distinction as whether their definition of "reinvest" is a bit too broad. One thing is abundantly clear city officials see the current environment as a "get big and grab all the Federal and state money you can" or die situation. As they dip their hand into the legacy fund they are also in line with their hands out for all the big government money they can rake in. City government is on a "spendathon" of gigantic proportions and the generic quote below says it all; “This partnership sends a strong message that we value downtown and we’re committed to an excellent quality of life that will continue the unprecedented momentum in our community.”

One example of just how wild this has become is a project they have been busy putting together and promoting that includes building apartments downtown in conjunction with an office building nearing completion. In May of 2015 talks of the residential tower phase of the downtown, Ash Skyline Plaza project resumed after being put on hold because of financing problems. While the two projects are considered separate they are so intertwined it is difficult to recap one without spilling over into the other. The City’s investment of $39 million for the Skyline Garage component includes the construction of the parking garage, land acquisition, site preparation, streetscape improvements, utility upgrades, as well as other project enhancements. Funding for the City's investment in the garage came from a combination of tax increment financing (TIF) funds through the Fort Wayne Redevelopment Commission, Legacy funds, and support from the Allen County-Fort Wayne Capital Improvement Board (CIB). Still, they say no property taxes were used to fund the Skyline Garage. The larger than planned parking garage and additional site work are part of the reason the cost of the Ash Brokerage Corp. headquarters and the multi-use project has jumped to $98 million from $71 million.

The project is expected to include a large public investment in the form of tax increment financing funding, Legacy Fort Wayne funding and funding from the Allen County-Fort Wayne Capital Improvement Board. The private investment includes $29 million from Ash Brokerage the largest independently owned brokerage agency in the United States. The $98 million Ash Skyline Plaza project that is nearing completion originally featured a 17-story apartment high-rise next to a 95,000-square-foot building set to hold Ash Brokerage’s new corporate headquarters. Ash Skyline Plaza, the national corporate headquarters for Ash Brokerage, is on track for completion in May. The apartment tower was put on hold but never say die, and that brings us to where we are today. Talks have veiled a  plan that envisions a 12-story tower with retail and commercial space on the first two floors. The addition of the commercial component to the residential tower opened the door for the city to apply for federal New Markets Tax Credits, which are designed to encourage economic development in low-income areas.

It should be noted these apartments in no way will be inexpensive to lease. Besides dumping in government money and a slew of tax credits the financing appears murky because the city of Fort Wayne has picked up the  cost for several parts of this project. The city-funded work that addressed soil conditions at the site and the relocation of a sewer line as well as the project’s publicly financed parking garage with 1,100 parking spaces. The garage will meet current needs, anticipated growth and future development in the downtown area and is larger than the 750 spaces that initially were announced. As noted construction of the garage is substantially complete. The west side of the garage has opened for monthly users from nearby properties and customers visiting the new Lake City Bank. Portions of the east side of the garage remain a construction area. Ash Skyline Plaza, the national corporate headquarters for Ash Brokerage, is on track for completion in May.

On January 13, 2016,  Fort Wayne Mayor, Tom Henry announced Great Lakes Capital (GLC), a real estate private equity firm based in South Bend, Indiana with offices in Fort Wayne will develop the residential component of the major development project in downtown Fort Wayne. An agreement between the City of Fort Wayne and GLC was signed for the residential development to be known as “Skyline Tower.”  The $40 million investment will consist of the construction of 124 apartments, as well as retail and office space totaling 170,000 square feet. Retail will be located on the first floor, office space on the second floor, and 10 floors of apartment units. “Collectively, GLC and Bradley Company collaborate to build and manage long term,” said Brad Toothaker, President, and CEO of Bradley Company and Managing Partner of GLC. “This project is the quintessential model of a public-private partnership with businesses and the community coming together to create a project that truly moves the needle for the region as it elevates the landscape of Fort Wayne’s downtown.”

To expand on this, GLC will be utilizing Community Revitalization Enhancement Credits from the Indiana Economic Development Corporation and New Markets Tax Credits to assist with the financing of the project. The City’s investment toward Skyline Tower will be a $4 million bond paid for through tax increment financing revenue generated by the project. Property tax revenue generated within a TIF district can be captured and used for improvements within that district.after approval by the Fort Wayne Redevelopment Commission and Fort Wayne City Council. Also, the Northeast Indiana Regional Development Authority is expected to consider Skyline Tower as part of the Regional Cities initiative. With these necessary approvals, construction could begin in late summer-early fall. The anticipated completion of the retail and office spaces is expected to be in late summer-early fall 2017, and completion of the residential portion in late 2017-early 2018. It seems that while optimistic about the potential to get this new residential tower built the city delayed making the announcement until it was sure that it had all of the “commitments" needed in order to move forward.

A councilman voting against the project said he was uncomfortable with the ratio of public funds to private funds represented. Working through the haze my head began to spin, but it is important to take a closer look at the numbers surrounding this project. The project is expected to cost about $40 million. In addition to the $4.1 million from the city, the project is being funded with about $17 million in federal New Markets Tax Credits, about $5 million in local equity, and about $5.5 million in state Community Revitalization Enhancement District (CReED) credits, Brad Toothaker, managing partner of Great Lakes Capital, told the council. The firm has also asked northeast Indiana’s Regional Development Authority for $2.8 million in Regional Cities Initiative funds to fill the final funding gap. “In the spirit of truly getting as much introduction of upside funds into the project, we’re working with the state of Indiana to grow the CReED credits that are available based on some project cost allocations,” Toothaker said. If approved, that would allow the company to reduce its request from the regional development authority.

Adding to the feeling the relationships between these groups is a little too incestuous is that both companies, Great Lakes Capital, and the Bradley Company, have committed to relocating their offices into Skyline Tower, which guarantees nearly 70 professionals will occupy a substantial portion of the newly created office space. The Bradley Company recently became a force or known in the area when on December 2, 2014, the Bradley Company announced it was changing the name of Fort Wayne’s commercial real estate full-service broker NAI Harding Dahm to consolidate the Fort Wayne Office under the brand name “Bradley Company. In June of 2013, a merger between Bradley Company and Fort Wayne’s NAI Harding Dahm took place.

To make this appear to be happening in real time a constant barrage of upbeat news is being released, such as a story of how Ruth’s Chris Steakhouse seating between 250-300 people and employing about 50 will be located on the first floor of the new Skyline Tower. This will be the fourth Ruth Chris in Indiana. Ruth Chris as an upscale restaurant and while the food is very pretentious the atmosphere is very welcoming. Franchise partner Larry Griggers says when he first presented the idea of opening in Fort Wayne to the restaurant’s corporate office, he was met with silence. He had been studying cities like Omaha, Lexington, Lincoln, Nebraska, so forth,” Griggers said, but he said he ultimately chose Fort Wayne because of the city’s promise to revitalize downtown. The steakhouse will not open until fall of 2017, the foundation may not even be in the ground, but this is confirmation it is happening. Ruth Chris won’t be the only upscale establishment in Skyline Tower. DeBrand Fine Chocolates as well as The Golden, which specializes in craft cocktails, will also be tenants.

As far as putting this complex scheme together, a city official is quoted as saying “it’ll be because New Market Tax Credits helped get it done.” The credit awards are determined through a competitive application process, in which a city, nonprofit or bank details the project and looks at the challenges it faces in getting conventional financing then pitches the benefits the project will provide to the community at large. The amount of the tax credits, if awarded, vary depending on the size and scope of the project. According to the U.S. Treasury Department, the New Markets Tax Credit Program attracts investment capital to low-income communities by permitting individual and corporate investors to receive a tax credit against their federal income tax return in exchange for making equity investments in specialized financial institutions called Community Development Entities (CDEs).

As a final note, in 2014, the city of Fort Wayne was awarded $33 million in New Markets Tax Credits. When the award was announced in June 2014, the city said it would dole the credits out for multiple projects over the next several years. Two examples of projects that used the credits are The Harrison, a downtown housing development next to Parkview Field (a new baseball facility), and a massive expansion of the Turnstone Center for Children and Adults with Disabilities that added space for sports and other activities to grow. I suggest this is a strong signal that crony capitalism has grown to where government and quasi-government entities have become the main engine of growth. My only fear is that in the end taxpayers will be presented with a bill for these boondoggles and the current exuberance.


Footnote; I wrote this article on May first, however, I have been slow to hit the publish button because it may not interest all that many people. Where it becomes important is if many other cities have also started down a similar path that blurs the line between private and public, sound investment and speculation. We are borrowing from the future for pet projects of the political class.

Footnote #2; It should be noted that while the amounts being spent may seem very modest to people living in America's coastal cities and other regions of the country these are still substantial sums in a many areas.  As always your comments are welcome and please feel free to view the archives for another post you might find interesting.

Footnote#3 Since this was written  the 20 million dollar revitalization of a one block historic area into a multipurpose area is now being hailed mas a 30 million dollar project.

Monday, July 25, 2016

Coup In Turkey - And Why It's Important

Coup In Turkey And Fragility of Governments
The recent coup in Turkey speaks volumes as to the fragility of Governments and should be viewed as a warning to investors on just how vulnerable governments can be, this can have a big affect on your imvestments. News broke last weekend that for the first time in more than 35 years that tanks were in the streets as members of Turkey’s military were trying to forcibly overthrow their government. It is now clear the attempt to overthrow President Erdogan and his government failed, however, it is a clear reminder that governments can be very fragile. Unless a government is overwhelming popular, and even then, it risks the possibility that at any time an effort might take pace to remove it from power.

One concern growing in many countries is the source of Erdogan's support, much of it was from the young but one thing that is very troubling was the streets were filled with men and very few women. This indicates his support is largely derived from those fueling the trend towards nationalism and growing Islamist fervor. The fear is the secular Turkey where all religions live together in peace is slowly being brushed aside. As an example of the level of concern the direction Turkey is moving I point to the following quote from an article appearing in the Telegraph
In an ideal world, it would be in everyone’s interests for Mr. Erdogan to cease his efforts to turn Turkey into an Iranian-style Islamic republic, thereby allowing Turkey to retain its place at Nato’s top table. But if he really is determined to pursue his radical Islamist agenda, then Nato will have no option but to rid itself of its troublesome Turkish ally.
Turkey's New Presidential  Palace Has 1150 Rooms
Many people have come to see the Turkish leader as a deeply corrupt radical Islamist dictator. Turkey ’s President has been accused of behaving like a “sultan” after he built himself the biggest residential palace in the world. Over 30 times the size of the White House and four times the size of Versailles, the lavish palace cost Turkey $615 million. This makes it easy to understand why following his prosecutions of academics and steps to constrain critical media, opponents have accused Erdogan of transforming Turkey into an autocracy. 

 Even before the failed coup, Erdogan’s administration had been taken on the ambitious political project to change the Turkish state from a parliamentary system to a presidential system. Erdogan claims the change is necessary to update the constitution and bring about a more stable government. This would allow Erdogan to expand the powers of his current office, in June Erdogan approved a measure to strip legal immunity from members of parliament, a step that could pave the way for prosecutions of opposition pro-Kurdish lawmakers that the government sees linked to terrorist.

The message "if people within your country oppose your government they are terrorist" is not new and is embraced by leaders such as Vladimir Putin and Barack Obama. This attitude tends to create a violent reaction. Worsening political violence have deepened divisions within Turkey during the last few years. The Turkish state has engaged in a massive confrontation with Kurdish separatists that left hundreds dead and displaced more than 350,000 Turks in the southeastern part of the country. Turkey was shaken by an escalating series of militant attacks, by both militant Kurdish groups and ISIS, culminating with a suicide assault on Istanbul’s main airport in June which killed 44 people.

Some Observers Suspect Coup Was Staged
It is under the cover of the failed coup that Erdogan  is now moving to purge the state of what he claims are the participants and perpetrators of the coup. At the moment the clampdown is focused on the plotters and the followers of Turkish cleric Fethullah Gulen, whom the government blames for the coup. Gulen currently resides in self-exile in the U.S. and denies involvement.

The BBC reports that at least 50,000 people have been rounded up or stripped of their positions since the coup and this does not include 15,200 education workers and 1,577 University Deans that were fired, below is a list of his targets. It appears that Erdogan like the infamous Saddam Hussein who spilled so much blood in Iraq has busied himself with the task to become a Turkish version of Adolf Hitler. In many cases, Erdogan is pushing not just to jail these people but for the death penalty for what he sees as acts of treason. Conspiracy theories abound that Turkish President Erdogan may have even staged the coup himself as a way to cleanse the system of his enemies because it was so poorly executed.
  • 6,000 military personnel have been arrested, with more than two dozen generals awaiting trial
  • Nearly 9,000 police officers have been sacked
  • Close to 3,000 judges have been suspended
  • Some 1,500 employees of Turkey’s finance ministry have been dismissed
  • 492 have been fired from the Religious Affairs Directorate
  • More than 250 staff in Mr Yildirim’s office have been removed
Part of the suspicion Erdogan staged the coup is based on facts Fox News was quick to point out, such as not a single high-level member of government was killed or detained. Only yesterday I read an article making the case that a badly flawed Erdogan and his small "d" democratic government represented the people of Turkey far better than those behind the coup, this is debatable. Too many observers Turkey, a member of NATO and was supposed to become a member of the European Union is rapidly becoming a hardcore radical Islamic dictatorship. One thing is clear, the direction Turkey takes will ultimately  have tremendous implications and profound impact on Europe and the entire Middle East in coming years.

Saturday, July 23, 2016

Euro-zone Post-Brexit Is A Bit Of A Snake-pit

The Euro-zone has entered the post-Brexit referendum stage. This stage and the future of the Euro-zone is certain to hold great challenges and increased risk. In my opinion, many people have greatly discounted the test awaiting governments faced with growing opposition to expanding the control of those in Brussels  Few people deny that major problems existed before the Brexit vote which will only embolden those wishing similar referendums to exit the union. The efforts of those in power to portray the Euro-zone as stable and not under stress have until now been successful but may quickly lose sway if millions of Europeans hit the streets in loud protest.

Few Women Support Less Secular Turkey
The proof that no panic currently exists as to the Euro-zone's demise is evident by how markets ignored and basically shrugged off the recent coup attempt in Turkey as a nonevent. The failed coup took most of the world by surprise, however, it is difficult to ignore the fact that since it occurred the political changes taking place within Turkey are in massive conflict with the values touted by the countries of Europe. Pictures of Erdogan supporters broadcast across the world often showed the streets were filled with men and no women. This reinforces the argument he is a deeply corrupt radical Islamist dictator that will use this coup to consolidate his grip on power and move Turkey away from its secular past.

The simple fact Turkey is rapidly becoming a horrible fit with other members of the Euro-zone that value human rights and the rule of law. This complicates its future integration into the union. Human rights groups are concerned that the clampdown currently underway is being carried out without due process and political opponents fear the government could squander the moral high ground it gained after the coup by attempting to further centralize power. Time will tell if this is going to create a country that will come together around a vision that is more inclusive or used as an instrument to fuel nationalism and expand Islamist fervor. The estimated number of victims of “Erdogan’s purge” has hit 50,000, but the final number will not be known for quite some time.

The lack of panic does not mean all is well. The growing anti-globalization movement which has gained support in developed countries across the world is very strong in areas of high unemployment and many people would like the option of voting against more political power flowing to a growing power grabbing bureaucracy in Brussels. The influx of people fleeing trouble in the Middle East and terrorist entering the area with them has added fuel to the fire and calls that governments do more to protect their citizens. The situation has gotten so bad when it comes to terrorism and safe travel that many Americans will simply not risk a visit to the area even though the dollar has strengthened against the euro.

Several terror attacks have shattered the calm Europeans have coWme to expect. The Bastille Day attack in Nice, France and a more recent attack on a train in Germany when a young male refugee attacked and killed riders with an ax outside W├╝rzburg. The attacker, who was shot and killed by police, was registered as an Afghan refugee a year ago and lived with a foster family in a Bavarian village. With violence like this occurring more and more often it is little wonder people are on edge and placing blame on German leader Angela Merkel who opened the floodgates offering both immigrants and refugees a new home.

Leaders Are Always Meeting, But Little Action
As usual, the meetings of leaders in Brussels and other cities yield little other than more meetings and photo opportunities. In an article not long ago I wrote about how the Euro-zone is a dysfunctional mess. Supporters of deeper financial integration cannot break through a roadblock from Germany and some of the other better off countries to secure agreement on a common scheme to protect bank deposits. This means the poor countries remain poor and the economic divide continues to grow. As usual difficult structural reform is lacking and the only real effort being made by politicians is to give the impression that leaders are hard at work trying to arrive at how to correct the problem.

Even as I write this article news is breaking of another massacre in Munich where at least 10 people have been killed. An 18-year-old gunman opened fire in a shopping mall, killing 9 and injuring dozens, the shooter who died from a self-inflicted gunshot wound and was of dual German-Iranian nationality. It is hard to imagine how these type of events don't add to the feeling Europe is facing a bleak future. With its economy remains mired it a funk showing little growth even after the ECB has pulled out all stops in an effort to foster growth. The governments have become bloated and many suffer under huge debt and obligations. This has left many people wondering if the best years of the economic union have passed.

It has become the chief pastime of those in power to meet and talk, enjoy a lavish dinner, then meet and talk some more, sadly action is seldom seen. The massive problems in Greece stand as a monument to Euro-zone inaction. For years the pledges to address the crisis as a common force has produced little in the way of positive results and the populace has grown weary. We continue to hear the promises of money and action to come, but nothing seems to get done. Mix in a few gems of unrest, such as the independence movement by Catalonia gaining strength in Spain, and it is easy to understand how fragile the Euro-zone really is.  

Sunday, July 17, 2016

Is The "Stop Globalization" Movement Justified?

Over the last several years the "stop globalization" movement has gained support in developed countries across the world. The question must be asked whether this trend is a Negative Nelly thing? The Urban Dictionary defines this term as a way to describe someone that is negative, doesn't look at the bright side of things and complains. Currently, the forces against globalization are growing stronger, globalization seems to be a magnet pulling blame for many of the problems we see across the planet. In the same way, our views on where the economy is headed and monetary policy have divided us into two very separate camps it seems globalization has done the same.

The British Decided They Should Go It Alone
This polarization has created some rather strange bedfellows and alliances. The subject of globalization is made up of many threads interwoven in a complex way, the discussion can include several issues such as, but not limited to, immigration and free trade. Other social concerns also feed into the mix, things like global warming, nationalism, inequality, even population growth. The political impact on all these issues, in the end, affect how countries view the world and their foreign policy. This can be seen by the recent vote in the UK to exit the European Union.

We have been sold the idea by politicians and those who benefit from such things that you need a trade deal in order to trade when in effect you can trade without one unless it is denied. This popular message has also been promoted by the media which often speaks more for those in power and the establishment than the common man. It is simply wrong-headed to think free trade is the silver bullet and that it creates as many jobs as we are often told. As we have gone down the road of increased free trade we have discovered it is often "not fair" and can come with negative side-effects. Jobs would be created anyway, many trade agreements merely shift the jobs from one area to another and the real beneficiary is usually big business.  

Trade Is Often Blamed For Loss Of Jobs
As written above, even the immigration issue can be looped back around and linked to the globalization trend. This all folds back into a larger discussion where people have rushed in with claims that much of this has to do with factors such as racism, religious intolerance, and more "phobias" than you can count. Talk about framing an issue in the most bias way, it seems that people on both sides of the issue are busy playing the fear card, often unfairly. Often a picture is painted that those in the anti-globalization camp are afraid of change and even backward. Seldom do we see a great deal of respect or recognition for their values and possibly the idea they are driven by the desire to preserve their culture and current way of life in the community in which they live.

The reality or truth of the matter is that many types of change are occurring. Changes resulting from just technological advancements are hammering away at our culture in ways few people would have imagined. While nobody should think globalization will stop in its tracks it might be in our best interest to slow it down so we have time to address some of the stress it is putting on our institutions. In one camp are those who see a positive future where the sky is blue and all is well, those pushing back against globalization are less comfortable with this trend. Change in itself can be disruptive and polarizing. A strong case can be made that not all change is good and racing blindly forward without considerations to the ramifications is a dangerous strategy.

This feeling that all is not right extends into the world economy where those of us who are less than enthusiastic about a rash of new policies and tools are very concerned and quick to point out that denial isn't just a river in Egypt. We nonbelievers have continually been assaulted by those who think the unproven economic model known as Modern Monetary Theory or MMT is the answer and cure-all to the world's economic woes. It is not uncommon for these forward thinkers to act as though nonbelievers are stupid and unenlightened. I might argue that it would be wise to not rapidly accept what we are told by those with an agenda of self-interest and pay more attention to long-term sustainability. The public is often fed a load of rubbish, you can rest assured the money interest and power brokers generally have a much louder voice at the table than the average voter.

You Can Agree Or disagree With These Rates
The truth is it will be a long time before the issue of globalization and its impact are realized or can be fully adjudicated. Most trend watchers will, however, concede it does by its very nature carry with it some problems that have yet to be addressed. While praised for bringing billions of people out of poverty and improving a countless number of lives in the eyes of many people it has not impacted all people in a fair or equable way. Creating jobs and ways for people to live fulfilling lives in a safe and predictable manner has moved upward in importance to people across the world but is proving to be a greater challenge for governments than expected.

I'm forced to wonder and ponder just how much, where we live, our age, and even our occupations has to do with how a person views these issues. Here in America those within the beltway, in the small upper reaches of the income charts, living in booming or thriving coastal areas most likely have a far different take on the Obama economy and just how well things are going than those areas where the economy continues to struggle. My career in construction and real estate in the Midwest has left me feeling I'm in the front-lines of a war that we are not winning. I do not like being pessimistic but what I see and hear is far from the picture and story being painted by the mainstream media. My background in construction has proven to me that we can quickly learn that decisions made today may take years or even decades to reveal their flaws. In the end, how well something is constructed does matter.

Trump's Choice Of Pence, Good Or Bad?

 I Choose Him!  How Will Supporters React?
Following the revelation Donald Trump has picked Mike Pence for his Vice Presidential running mate we hear the words "Tell me it isn't so" flowing from the mouth of many Trump supporters. Pence is viewed by many voters as one of the most divisive and polarizing politicians in America. When the announcement was made a cheer rang out in the state of Indiana, the cheer did not signal approval but was rather a joyous celebration that Indiana would soon be rid of the unpopular Republican Governor who was running an uphill campaign to be reelected. To many voters outside his camp, Pence is seen as a shallow stuffed shirt and an opportunist with a history of seeking power by working his way up the political food chain.

Pence Reelection Was Not Guaranteed
By selecting Pence, Trump is seen as selling out to the establishment in an effort to silence the Stop Trump movement at the convention. This only helps legitimize the claims by his detractors that Trump is a divider that will further polarize the country. I suspect that Hillary Clinton and her supporters were downright giddy that Trump has vacated the middle ground and lessened his appeal to millions of independent voters and given into the will of the hard-right conservative base of the Republican party. This leaves Clinton far more room to garner voters as a moderate and banishes Trump to the socially backward agenda that has split Republicans for years. The Republican tent remains closed and small, oblivious to the  reality many Americans are fiscally conservative but socially liberal. Republicans must wake up to the fact today fewer Americans see themselves as unbending bible touting hardliners hell bent on making others adopt their rigid social values.

One media spokesperson stated that Mike Pence is everything that Donald Trump isn't and by taking Pence on board Trump shows he can work with others and does listen. In some ways the two party system has evolved into a haves against the have-nots, it often pits those seeking more government and transfers of wealth against those wanting less intervention in our lives. Several years ago a book was written questioning why voters would ever vote Republican. It touted the idea that people were actually voting against their own interest because deep in their minds they held the misguided belief they held a higher place in the economic picture than they really did and might someday be wealthy.

An old friend of mine who passed away a few years back used a catch phrase made popular from an old radio and television comedy, The Life of Riley, to describe events that turned sour, he would say, "what a revolting development,"  These few words in many ways might sum up the feelings of many voters that are sorely disappointed. The fact that the White House quickly found grounds to praise Trump's selection bodes poorly for Trump. Some questions still exist such as just how important is the vice Presidential slot to the average voter and whether the Republicans will have a lot of problems justifying and explaining away conflicts between Trump and Pence on issues like free trade.

Most Trump supporters recognized the Donald was flawed, inarticulate, and somewhat lacking, still, the hope existed that his ego would not allow him to fail us or at least give a go at changing our current path. Trump in many ways became the candidate considered as a rejection of mainstream politics, a rejection of Washington as well as the new face of the Republican party, a party accountable to the middle class. Too many of these voters, Trump represented an effort to take back the party from the hard right that has held it hostage for years and hopefully open the tent to moderate voters. The "Make America Great Again" theme has extended beyond debates about whether we are still great and cuts into taking back power from the Washington establishment that many Americans feel have sold us out.

Both Trump and Clinton suffer high unfavorable ratings with voters, a wise choice might have been to choose a likable running mate to neutralize this issue. In an election where many voters are holding their nose as they enter the voting booth or may choose not to vote at all Pence may only exacerbate this problem because of his contentious relationship with women over reproduction rights, young people angered by his stand on marijuana, and recent uproars with the gay community. Expect Pence to galvanize liberals and motivate them to vote Democrat. As a resident of Indiana who remembers Pence campaigning for and endorsing Ted Cruz this only appears a good choice if Trump was actually seeking a mate with higher unfavorable ratings than his.

Trump's choice and how we arrived at this point only highlights the fact our flawed two party election system is a big part of the problem that creates the gridlock polarizing our nation. In the general election, any third party candidate hell bent on making a point can easily derail either party by drawing even a few votes thus having a major influence on who is elected. America’s presidential primary system is far from perfect and its flaws are then magnified by the defective and obsolete Electoral College that takes over after the general election. Time will show if Trump has negotiated or cut a good deal by making Pence part of his team. It is not realistic to think we can avoid the future by simply not voting or by throwing our vote away on a noncompetitive third party.  We are again forced to pick the “lesser of two evils” The ugly choice between a deceitful and dishonest Hillary or a candidate that I will simply refer to as him.


Footnote; The links to other post related to the election can be found below.
 http://brucewilds.blogspot.com/2016/07/hillary-fooled-me-once-shame-on-her.html
 http://brucewilds.blogspot.com/2015/09/political-debates-highlight-flawed.html

Monday, July 4, 2016

Do You Remember, Fisker Automotive Another Government Folly

There is something I hope to do on occasion, and that is re-post an old article from this blog, A great number of posting can be found in the archives of this site and many of the other sites existing on the internet. With the invention of computers and easier ways to place our thoughts before others the world has become a word generating monster and much of this work has been saved. 

The criteria for a re-post will generally fall into one of the several categories or contain elements of the following; The "remember when" this being a reminder of past events in a fast moving world. Nothing really came of this post where all eyes were focused on an issue that seemed at the time would have massive ramifications then became obscure. Last but not least looking back on predictions to bring into focus what happened afterward. Consider this a trip down memory lane. I hope you enjoy what may be the first of these re-posts as shown below.

Sunday, April 28, 2013

Fisker Automotive Another Government Folly

Great Looking Car
Fisker should be renamed "fiasco", for that is what it has become. It appears that the Obama administration. was warned as early as 2010 that electric car maker Fisker Automotive Inc. was not meeting milestones set up for a half-billion dollar government loan, nearly a year before U.S. officials froze the financing in June 2011, when the Energy Department halted further funding. This was done after Fisker presented new information that called into question whether key milestones - including the launch of the company's signature, $100,000 Karma hybrid - had been achieved, according to a credit report prepared by the Energy Department.  Fisker had received a total of $192 million of the $529 million loan before it was suspended. It should be noted that the plant was never completed and never produced any Fisker cars.

The Company Failed!
In the June 2010 email, Sandra Claghorn, an official in the Energy Department loan program office, wrote that Fisker "may be in limbo due to a lack of compliance with financial covenants" set up by the department to protect taxpayers in the event of default. Another document, from April 2010, listed milestones that Fisker had not yet met. The potential loss of $171 million would be the largest loss of federal loan money since the failure of Solyndra a solar panel maker. That company's collapse, which came despite a $528 million loan from the Energy Department, has triggered criticism of the Obama administration's green energy program. The Energy Department seized $21 million from Fisker this month as it continued to seek repayment from the car maker for the 2009 loan. A payment from Fisker was due Monday but was not made, an Energy Department official said.

Rep. Jim Jordan, chairman of the Oversight subcommittee on economic growth and regulation, said it is hard to understand why the Energy Department ever thought Fisker was a viable company that should receive taxpayer money. Henrik Fisker, the company's namesake, and founder, was scheduled to testify at Wednesday's hearing. Fisker, who was forced out as CEO as the company's troubles mounted, said in prepared testimony that he remained proud of the company's "cutting edge technology," which he said could "pave the way for a new generation of American car manufacturing." Fisker disputed claims by some critics that the Anaheim, Calif.-based company needed the federal loan to survive. Fisker said a high-ranking Energy Department official approached him in 2008 and asked him to apply for the loan, which is intended to boost electric cars and other advanced vehicles.

It was Vice President Joe Biden who announced in late 2009 that Fisker would reopen a shuttered former General Motors factory in Wilmington, Del., to produce plug-in, electric hybrid vehicles. What does Joe Biden have to do with Fisker Automotive? On the surface, the answer would seem to be nothing at all, or at least it did until the Biden himself revealed the startup automaker's plans to introduce a new series of electric vehicles under the Project Nina banner. Not only that, Fisker just so happens to have decided to build cars in Biden's home state. Coincidence? Fisker has denied that any political influence was used to obtain the loan or in negotiations over its terms, according to Russel Datz spokesman for Fisker, coincidence is exactly what it is, a good number of reasons exist to choose the former GM plant in Wilmington, Deleware, and the fact that it's Biden's home state is not one of them. Claymont, Deleware  home of Biden is roughly eight and a half miles from Wilmington.

Nicholas Whitcomb, who directed the Energy Department’s advanced-vehicle loan program until recently, testified that $8.4 billion in advanced-vehicle loans have been given out to five auto companies so far. While Fisker has performed poorly, he said, loans to firms like Ford, Nissan, and Tesla have helped build factories and are all scheduled to be repaid. Fisker ran into trouble from the get-go. The company’s business model was to design an attractive sports car and then purchase off-the-shelf parts from suppliers. But that unusual strategy carried risks. Fisker’s real legacy may be the damage it has done to federal support for other electric vehicles. The Energy Department hasn’t ”closed on a loan or loan guarantee or conditionally committed to doing so under either program since September 2011.” The reasons? Applicants are skittish about going through a “lengthy and burdensome” application process and facing the same pressures that faced companies like Solyndra and Fisker.

Efforts have been made to blunt other criticism of the loan by the Obama administration, by stressing that Fisker was an anomaly. Supporters of the Obama Administration's "green energy" loan program have banged away at the idea that Fisker's problems stem from a lack of demand for electric cars in general, but the government should press on because it is in their opinion the right thing to do. It was announced in August 2012 GM,  would be halting the manufacture of its infamous Chevrolet Volt for at least four weeks, few were shocked. The Volt was awarded the 2010 "car of the year" title, but As of this writing, GM has sold 10,666 Volts through July, which, luckily for the automaker, is a major improvement over the 2,870 it sold at this time a year earlier. GM had made predictions that this year, over 45,000 units of the car would be sold. In other words, even if Fisker is an outlier, it’s casting a long-shadow over electric-car policy.

Back in October of 2011 the Obama administration has defended its decision to allow Fisker Automotive to assemble its high concept electric sports sedan, the Karma, in Finland, even though U.S. taxpayers had made a major investment in the car's development, saying none of the American money was spent on the car's overseas assembly. But Republican critics this weekend challenged the administration's explanation, saying federal loans should have only supported applicants who would be building their cars on American soil. "The Department of Energy and Fisker executives are splitting hairs about where the money went," said Rep. Tim Murphy, a Pennsylvania Republican who sits on the House committee that has been investigating the Obama Administration's "green energy" loan program. "Ultimately, American taxpayer dollars went to a Finnish automaker to build high-end luxury automobiles for Hollywood."

 A report on ABC News' "Good Morning America" about Fisker Automotive, the recipient of a "green energy" loan in 2010, quoted auto industry experts who said Fisker's loan invited comparisons to the ill-fated Energy Department loan to Solyndra, a solar panel manufacturer that received $535 million in taxpayer support, declared bankruptcy earlier this year. That federal loan is now the subject of investigations by the Justice Department and by inspectors general from the Energy and Treasury departments. The Washington Post has discovered that the Energy Department quietly eased expectations for Fisker's projected car sales volume after it conditionally approved the loan, and made allowances for scaling back projections in the final loan agreement, this is not the way taxpayer money should be spent. The Fisker folly, and its failure, reeks of government cronyism and waste, someone should be held accountable.


Footnote; I wrote a post about Solyndra long after the company had bit the dust, also the post named "Electric Cars" goes into the subject of another failed company in Indiana that was part of this "government green push" below are the links.
             
                   http://brucewilds.blogspot.com/2013/02/solyndra-report-posted-little-late.html
                   http://brucewilds.blogspot.com/2012/04/electric-car.html

Saturday, July 2, 2016

Hillary Fooled Me Once, Shame On Her!

A saying exists warning us to be wary of those wishing to take advantage of our good nature and hoping to deceive us. Fool Me Once, shame on you; fool me twice, shame on me. While some people come across as purely disingenuous, at times we find that often we continue to give them another chance. Most of us are sad to say that at one time or another we have been sucked in or allowed someone to take advantage of our better nature. Like many Americans, while I disagreed with Bernie Sanders policies and views I do respect him and his passion, however, Hillary is a bird of a different feather. While talking about the two somewhat unlikable choices American has been given the misfortune of having to choose for President, a person close to me put it all in focus when she said, "The woman stole the china and silverware from the White House for gods sake!" that is when it all came rushing back to me.

She Stole China And Silverware From The White House
As we go through life we tend to forget certain things that seem distant or not really important but after my friend mentioned it I began to recall reports flowing out of Washington following Clinton's time in the White House. After that, a quick internet search of the term "Clintons Stole From White House" brought up a slew of articles about how President Clinton and his wife started shipping White House furniture to their newly purchased home in New York more than a year ago, despite questions at the time by the White House chief usher about whether they were entitled to remove the items.  http://articles.latimes.com/2001/feb/10/news/mn-23723

Clinton Leaving The White House
ABC News reported at the time that 
Former President Clinton and his wife, Sen. Hillary Rodham Clinton, had returned $28,000 worth of  household goods back to the White House after questions arose over whether the items were intended as personal gifts or donations to the White House. This was agreed to after they were criticized for taking $190,000 worth of china, flatware, rugs, televisions, sofas and other gifts with them when they left, in addition, the Clintons announced they would pay for $86,000 worth of gifts or nearly half the amount. Their latest decision to send back $28,000 in gifts brings to $114,000 the value of items the Clintons have either decided to pay for or return.   http://abcnews.go.com/Politics/Story?id=121856&page=1


Also, there is the issue of Hillary's financial situation when her husband left office. On June 10th 2014 in an interview with ABC’s Diane Sawyer, Hillary Clinton revealed that she and former President Bill Clinton were “dead broke” when they left the White House. This was even the fact records show during one of their last years in the White House, the Clintons reportedly earned $416,039.
Apparently, that was not enough to cover their debts and their daughter’s education. “We came out of the White House not only dead broke but in debt,” Clinton told Sawyer. “We had no money when we got there and we struggled to, you know, piece together the resources for mortgages, for houses, for Chelsea’s education. You know, it was not easy.”
This conflicts with the fact the couple purchased two homes, one in Washington, D.C., and another in Chappaqua, New York. According to an NPR report, speaking engagements and books deals quickly began bringing in money. From from 2000 to 2007, the couple earned more than $109 million. A large portion of that income came from Bill’s speaking engagements. Since leaving the White House, the former president reportedly has earned $106 million from speaking fees, a 2013 CNN report noted. http://www.huffingtonpost.com/2014/06/09/clintons-broke-white-house_n_5474015.html

It seems other publications also weighed in on Hillary's claims the family left the White House “dead broke”. Of course, that wasn’t quite true. According to Mother Jones, just before she left the White House as first lady, Hillary was given an $8 million advance for her memoir Living History. One even pointed out that she also fails to mention the pension and support that Bill would receive as an ex-President. Perhaps her attitude was an excuse for taking all those White House furnishings, or shall we say, looting and plundering which caused quite the stir way back when. It might even help explain accepting gifts from the wife of a man Bill would later pardon in a highly controversial move. Another possibility was that Hilary wanted to appear like a normal middle-class American, whatever the motivation or logic behind her statements it did little to reassure voters of her honesty.

In many ways, nothing speaks louder about the honesty and morals of a public official than how they protect and treat the property and trust of those they serve. Sadly, Hillary is what our system offers up as the Democrat's candidate this year. It should be noted that voters will most likely find little comfort in Hillary, shall we say, assuming the role of "the pot calling the kettle black" when she states Donald Trump cannot be trusted and that he is a self-serving fraud. Despite all of Donald Trump's many faults it can be said what he has done has not been while he was a public servant paid by America's taxpayers. The ugliness following the Clintons move from the White House speaks volumes as to the character of Hillary Clinton. 

To many voters, it is clear that Clinton is the status quo, the establishment. Donald Trump is the change candidate and with most Americans thinking the country is on the wrong path it is likely fear mongering may not be enough to turn back the tide that threatens to wash away those in power.  Hillary Clinton has doubled down on a strategy of character assassination to convince the American public she is the lessor of two evils. Currently, the game of character assassination is in full swing with big money and mainstream media as big players. It seems all stops have been pulled out in an effort to control public opinion. The fear card, and the race card, and the woman's card have all been tossed into the mix and we see these players have a casual relationship with the truth. During all of this one thing is crystal clear and that is many Americans will enter the voting booth holding their nose  in order to avoid inhaling the unpleasant smell.of a political system gone bad. Bottom-line, putting lipstick on a pig does not change the fact that it is still a pig. 



Footnote;  While the media has made Trump the focus of a majority of their negative coverage due to his status, as an anti-establishment outsider, Clinton is not so loved that she escapes an occasional bashing. One of my favorites is a hilarious piece broadcast on June 27th on CNN. It was worth linking below and watching time and time again. Watch Hillary Clinton and Elizabeth Warren hugathon and clap-along. CNN's Jeanne Moos reports on this political PDA.
 https://www.youtube.com/watch?v=mLXMH2h_b7Q