Selling Public Property to Balance The Budget?

Robbie Wills poses the question above on his web site.  Below is the full article. Beneath it is my response.
Kimberly Leonard writes for Stateline.org that some states struggling to balance their budgets are moving to sell or lease public property such as state office buildings, prisons and major tollways, a strategy attacked by some as a short-term fix.  Arizona and California lawmakers, for example, have pursued “sale-leasebacks” of state buildings. Connecticut is planning to sell unused office buildings, vacant land, cars and equipment.

Should Arkansas state entities such as the Arkansas Department of Environmental Quality or the Arkansas Teachers Retirement System, both of whom own their own buildings, follow a similar path?  Should we be unloading surplus vehicles and other equipment? 

Here’s the link and here’s an excerpt:

The deals afford the states quick cash, while guaranteeing investors a profit after recouping the cost of the building through the long-term lease payments from the state. Arizona officials said they have received about 100 inquiries from interested buyers, including real estate investors, financial investors, the private sector and nonprofits.

“We are selling class-A office space with 100 percent occupancy, so it creates a great opportunity for an investor and is a good help to state programs,” said Eric Lamoureux, spokesman for the California Department of General Services.

Connecticut is also selling assets to help meet its target to add $60 million to the general fund during the next two years, but its sales are permanent and apply only to property the state no longer uses. The state is planning to sell office buildings, vacant land, cars and equipment. The state treasurer and the Office of Policy and Management are scheduled to submit by Feb. 3, 2010, a list of assets the state could sell, said Adam Liegeot, spokesman for the governor’s office.

In Arizona, the sale-leasebacks are part of the state’s budget plan to help close a remaining $2 billion deficit in the fiscal 2010 budget. Lawmakers have approved a tentative list of state-owned buildings that could be sold, including the executive office tower, possibly the House and Senate buildings, 10 prison complexes and a state mental health facility.

The sales are expected to generate $737 million for general operations, according to news reports, while costing taxpayers more than that from the lease-back payments during the next 20 years. The state, which has not released what these agreements will cost the state, will continue to pay for the operations and management of the property.

Dear Sir:

I believe that selling state property is a badly conceived idea. This property belongs to the citizens of the state in perpetuity. It is difficult to conceive the costs to future generations based on current evaluations. For instance, there were large areas of poor scrub land in Oklahoma that yielded oil. Who knows what treasures lay beneath the soil of Arkansas? As some of the studies I have included links to indicate, it’s extremely difficult to calculate value for even short periods of time.  

You might argue that many of these shifts of public property could be done as leases. But the leases I have seen in the press are for periods of time like 75 years. For all intents and purposes that is forever as far as this generation is concerned. We have an ongoing responsibility to the citizens both future and current that should not be abdicated by putting it off.

Politically there are powerful interests determined to promote this kind of privatization. Are the people of Arkansas well served by a new and determined group of lobbyists whose successful efforts could result in millions and eventually billions of dollars of profit diverted from public possession and public needs? Citizen activism is a brief phenomenon. Lobbyists and business interests are eternal.

Would these be fair deals? Arkansas budget shortfalls are likely to be regular in the future with important needs unfunded in the short term. How hard are the Arkansas negotiators likely to be when the budget must be completed on a fixed schedule and vital public needs are at stake? The City of Chicago negotiated in the middle of a budget crunch and signed on to a very poor deal.

The Texas Legislature researched and debated the subject quite heatedly. They killed the deal amid concerns that they simply could not figure out the proper value and what kind of safeguards the public deserved.

South American began the privatization process almost twenty years ago by privatizing highways. What happened? It was a disaster. The promised benefits failed to materialize. The report concludes that private public partnerships on roads are always suboptimal. (page 5)

In conclusion, privatization is a short term solution for long term budge problems, a band aid when surgery is necessary. The benefits are unproven, disputable or simple not there. These kinds of decisions that transfer public property to the private sector are worthy of the greatest possible scrutiny and they seldom receive it.

Let me point out one additional matter. If privatization is always better than public management, why are you employed?  If you and your colleagues are unable to find viable revenue for the state’s future and incapable of creating highway authorities and other governmental bodies capable of good performance, why shouldn’t you be privatized? (Forgive me, I would never suggest actual privatization nor do I wish to infer you are not working hard or performing a valuable service to Arkansas. I am merely taking the argument for privatization to its logical conclusion.)

If democracy is the best form of government, what does yielding up large portions of the public’s possessions to private industry say about our ability to govern ourselves? The citizens of the United States have faced war and a succession of economic crises. We don’t have to yield to these challenges by quick fixes. We are the people who will show the world how a democracy even in the most serious of economic difficulties can survive and prosper.

Sources

Dennis Enright’s testimony before the United States Senate (2008)

http://finance.senate.gov/hearings/testimony/2008test/072408detest.pdf

Dennis Enright’s testimony before the Texas State Senate Committee On Transportation and Homeland Security (August 12, 2008)

http://www.senate.state.tx.us/75r/senate/commit/c820/handouts08/081208/Dennis_Enright.pdf

Report of the Legislative Study Committee on Private Participation in Toll Projects

ftp://ftp.dot.state.tx.us/pub/txdot-info/library/pubs/bus/tta/sb_792_report.pdf

This was hardly a recommendation and on July 8, 2009, the Texas Legislature denied the Texas Department of Transportation the authority to build privatized toll roads in cooperation with private developers.

 http://enr.ecnext.com/coms2/article_intr090708LoneStarStat

This is U.S. PIRG’s report on toll roads and protecting the public interest.

http://www.uspirg.org/home/reports/report-archives/transportation/transportation2/public-roads-private-costs-the-facts-about-toll-road-privatization-and-how-to-protect-the-public-texas

The City of Chicago decided to lease out their 36,000 parking meters. The Office of the Inspector General released a devastating report that the city has rushed through the deal and had not properly analyzed the costs.  

http://www.chicagoinspectorgeneral.org/pdf/IGO-CMPS-20090602.pdf

 

Ethics Continuously Created by Everyday Activities

Anna Peterson when asked what the most important message is contained within her new book: Everyday Ethics and Social Change: The Education of Desire

That ethics is not disconnected from ordinary activities. This means a couple of things. First, almost nothing we do is “value neutral.” We can’t separate out the times we are acting “morally,” and the rest of our lives. Second, it means that ethics are not something constructed or articulated in the abstract and then applied, in a top-down fashion, to concrete circumstances. Rather, ethics are created in and through ordinary practices. This means we ought to think more carefully, perhaps, about the ethics we enact (or don’t) on a daily basis. In the end, I think, movements for social change seek to transform everyday life so it becomes safer, less oppressive, and more joyful for more people (and other creatures). So it makes sense that the roots of a radical ethic for social change can be found in the best parts of our everyday lives.

I have strongly professed such beliefs in my teachings on ethics. I strongly believe that the moral stance we have in place is the main factor in what we decided when the ethical dilemma arrives. It is obvious to me, that we create our ethics continuously, and the destruction of our ethical framework takes place in small daily increments. This is why traditional business ethics teaching has little effect. What the more foolish call the “real world” eats it up. The real world is the kind of person you are as opposed to the crawling maggot the world would prefer you become.

Who Is Responsible For Our Financial Crisis?

Dylan Rattigan nails it (from the November 25, 2009 program, Morning Meeting):

Exactly and more importantly making sure that we identify who burned the house (the house being the American economy) down, who made themselves rich burning the house down, getting the money back from those who made themselves rich burning the house down, punishing those who burned the house down and then building a new house that doesn’t allow people who like to burn houses down to build them. And they’re acting like the house fire was an accident and I think that’s where you run into a lot of problems.

There has been a continuous failure of the Obama Administration to place blame or establish penalties for the long term financial wrong doing that created the greatest economic crisis since the Great Depression. Without accountability what reason do those who have profited so much from hurting so many to stop their actions?

Does The Bottom Line Always Trump Ethics?

From Reuters, a comment from China Labor Watch:

“The case of Wal-Mart, the world’s largest retailer, shows that corporate codes of conduct and factory auditing are not enough by themselves to strengthen workers’ rights if corporations are unwilling to pay the real price it costs to produce a product according to the standards in their codes.”

Acting ethically costs real money. It limits the return on investment. It complicates dealings with suppliers, competitors and often the government.

Doing the right thing is never cheap. The wrong thing can make you enormous sums of money in a world where this kind of behavior has no down side.

jp

Pets to Benefit from Holiday Cheer

Generally speaking the occasional pet story doesn’t bother me. However this was the leading or top story on CBS News’ web site. The only other thing going on was the crisis in the treasury department and the Federal Reserve Board. And they have mentioned the largest economic crisis since the Great Depression. Now I freely admit that later in the business news they became more serious. But really, doesn’t this belong in the “popular” news or how about just moving it down a hair so it isn’t the number one story.

What Moral Stance?

As I discuss the ethical implications of various business practices, I am troubled by the multiple possibilities of moral stances. Catholic Social Doctrine, Protestant Social Doctrine, the Southern Baptists’ total absence of any moral doctrine in regard to the business expressed as free market absolutism, Plato and Aristotles advocacy of the good life, the life examined and well lived, Kant’s categorical imperative, Friedman’s thinly veiled advocacy of Friedrich Nietzsche Superman, (the moral and ethical are weaklings who place limits on the “real” achievers because otherwise they couldn’t cut it); what do you advocate when examining the strange conduct of American business?

I will search for the best options, but it is not going to be easy. But doesn’t that fit with so much else?

The fight for justice, truth and honor is never won. The forces of evil rise again and again. There is no golden stake you can thrust into their heart to stop their depradations on the poor and helpless, their use of the levers of power to enrich themselves when they have contributed nothing and worst of all their continued recruitment of the young an a half wit philosophy of joining a group of “special” people, achievors, the real makers and shakers, an Ayn Rand doctrine that makes you special without any accomplishment or achievement save a twisted belief.

What is there but to fight, to struggle. Hear the words of Cyrano de Bergerac
in the last act of the play.

(He raises his sword):
What say you?  It is useless?  Ay, I know
But who fights ever hoping for success?
I fought for lost cause, and for fruitless quest!
You there, who are you!–You are thousands!
Ah!
I know you now, old enemies of mine!
Falsehood!
(He strikes in air with his sword):
Have at you!  Ha! and Compromise!
Prejudice, Treachery!. . .
(He strikes):
Surrender, I?
Parley?  No, never!  You too, Folly,–you?
I know that you will lay me low at last;
Let be!  Yet I fall fighting, fighting still!

Let us fall knowing that we acted with honor. Let us die with a curse on our lips for the sanctimonious, pompous evil doers among us. Let us die well.

United States Attacks Financial Fraud Two Years Late

Justice must be seen to be done. A society in which the wealthy or well connected get different justice than others is a society in real trouble.

When someone murders someone, you start looking immediately. When you have a theft you go and start asking questions. But if you are American financial institutions, you get a two year head start.

The Obama administration has decided to launch “a sustained, multilevel attack on financial fraud.”

Isn’t that just precious? They’re on the job!

I can’t help but wonder why people who stole billions of dollars, moved many Americans into poverty and missed totally destroying the world’s economic system by a hairs breath get two years to dispose of the evidence and develop new schemes of raping the public.

I have to ask if this government and this president are serious in any way at pursuing the financial malfeasance of those who have made large campaign contributions.

Morality and ethics demand that criminals be brought to justice. But not only that, simple logic dictates that they who have victimized millions should be priority targets for investigation.

Chamber of Commerce Stacks the Deck

Truth. We are taught to respect it. It might be said that truth is the basis of morality and ethics. Certainly the search for truth is the basis of modern science.

But the United States Chamber of Commerce already knows the truth. To paraphrase the movie, Treasure of Sierra Madre, “They don’t need no stinking research.”

In a series of memos, the Chamber explains that it has decided to pay $50,000 dollars to a “well-respected economist” to write a study explaining that the health care bill will cost jobs.

“The economist will then circulate a sign-on letter to hundreds of other economists saying that the bill will kill jobs and hurt the economy. We will then be able to use this open letter to produce advertisements, and as a powerful lobbying and grass-roots document.”

This the Chamber’s procedure. We decide on a result. We hire someone who “looks” respectable but has the morals of a syphilitic serial killer. He conducts a study predesigned to our conclusion. We get the research result we want and we can call it science.

Tell me, what does this say about the organization and its lobbying effort?

Camp Lejeune Whistleblower Fired

Few ethical dilemmas are as gut wrenching as to whether or not to blow the whistle on unethical, inefficient or stupid practices by your employer. The personal cost is often very high. For Dr. Manion, it was the loss of his job and the high likelihood that no one else will hire a “trouble maker” like him.

There is no doubt in my mind that Dr. Manion fulfilled his duty to his country and his profession. There is no doubt in my mind that the government here was intent not on the care of veterans but on covering its thoroughly incompetent butt.

Let’s not mince words. Firing conscientious workers is a clear and distinct message to leave your morals at the door, that if you are asked to participate in crimes, you’d better participate. It is the last refuge of the employer scoundrel, unless you consider murdering the employee a possibility. The Navy failed in its duty to the nation, to its members and to any semblance of moral responsibility.

THE STORY

Dr. Kernan Manion was terminated by his contractor. His contractor said the Navy asked for him to be terminated.

Manion was made aware by his clients that many on base were suffering severe psychological problems that were going untreated because the system wasn’t working properly due to neglect and because superior officers penalized those who sought treatment.

The soldiers told him that they felt it was likely someone would snap and there would be a mass shooting on the base. Manion wrote memos warning of the problem and provided documentation supporting his findings.  The navy did not want to see these memos.

On June 24, a supervisor for the contractor warned Manion to stop making trouble. “Kernan Manion, it is requested that you cease and desist all further correspondence with the government,” the supervisor with NiteLines, Pamela Friend, wrote to Manion.

After his firing, Manion wrote to President Obama:

“Frankly, in my more than 25 years of clinical practice, I’ve never seen such immense emotional suffering and psychological brokenness — literally a relentless stream of courageous, well-trained and formerly strong Marines deeply wounded psychologically by the immensity of their combat experience,”

How Do You Measure Happiness?

We live in a world of stories, facts and numbers. Numbers often drive politics even though many do not understand what those numbers mean. Numbers appear to be definite. One and one make two. Really? If you have two apples, that is one and one making two. What if one of the apples is rotten? Is it still two apples? What if one of the apples is smaller than a plum? Is it still two apples? What if one is a horse apple or an Adam’s apple? Numbers are simple only in theory.

Numbers also and often unfortunately drive ethical discussions: “the greatest good for the greatest number, etc.” One critical number in this society and many other is the Gross National Product. Often subjected to interpretation and re-interpretation depending on your policy view, this number is considered the measure of success for a society. That no one is exactly sure what it means or that we are often ambivalent as to whether or not money can buy happiness. We often yield to the tyranny of this number. Ethical thinking does not stop when confronted by a statistic. It is something of a wall to be climbed over but much thought has to overcome the complex and the mundane.

France has been confronting the question of how to measure the country’s prosperity, through Gross Domestic Product or the Happiness Index. Today, it was announced that GDP has won out over the other measure.

In 2007, the French Government commissioned American Economist, Joseph Stiglitz to develop economic measurements that included happiness and other quality of life measurements.

There have been modifications to the simple idea of GDP in the past. For instance the United Nations uses the Human Development Index which is based on measurements of life expectancy, education and standard of living.

Gross National Happiness measures sociological and psychological elements as well as economic ones to determine a nation’s success. It was expected that Stiglitz’s ideas would move French measurements in that direction. But it was not to be.