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I’m not going to embarrass the pants off Jea Street by pointing him out… If you know him, or of him, you’ll know whom I’m talking about. If you don’t, he could be anyone, sitting in the audience of your districts Board of Education Meeting…
But, Jea Street just did a very dumb thing. He fires off a public letter calling for the firing of three Christina School Board members calling them super “obstructionists”…
Really. Super obstructionists? Is that like Superman? Wouldn’t it have been smarter to call them Spider obstructionists? Like Spiderman? Or Bat obstructionists? Like Batman? or Under obstructionists, “like little olde me,…….. Underdog”.
Look, Jea Street!…. It’s a frog….. A F-R-O-G?
This isn’t a “new” or “confused” Jea Street. This is the Jea Street from decades ago hammered Red Clay and who so concerned the Red Clay Board that they had rent-a-cops attend board meetings. This is the Jea street who hammered everyone within earshot about achieving racial equality. This is the Jea Street who never opened his mouth when the shining lights of state and district politics (were any minorities of note involved in this?) went for and obtained Charter, Choice, and Neighborhood Schools. This is the Jea Street I always considered racist and have not seen any change in his position on that. This is the Jea Street who had to be aware of what was happening to Warner and all the kids there in recent years – and said nothing. This is the Jea Street who watched as Red Clay designed and implemented a racially divided district – and said nothing. So, the only conclusion I can draw from this is: What’s in it for Jea Street? — Adam Smith, aka Batman.
Did the councilman really just invite any whack job in Delaware to seek out school board members and deal with them as if they were weapons of mass destruction? Line crossing? (Translated: show up at your efffin board of education with an AR 15 and whack the m–fu–ers.) Django aka Django.
I used to simply feel sorry for this guy until I saw him act in person worse than he acts with pen in hand at the GABMAAFWF govt School (not education) Choice event at Woodlawn Library a few months ago. Now I have a tremendous and somewhat fearful distaste for his self serving rants and sanctimonious rage. His is the most dangerous of several common actions of the all too common race pimp class of citizens. Peter Parker aka Spiderman.
And to think some thought The Jea Street was the latest dance. It’s the “Hustle” all over again. Clark Kent aka Superman.
This is the jea who watched high ranking 100K admins in RC and CSD help keep it quiet for years. some were paid directly by the districts, others had companies with contracts! it is disgusting at every level. What has happened in education in DE is comparable to the robbery the banks and defense contractors have done to the public. Alfred…. (Butler to Adam Smith.)
(If you don’t now know who jea street is, he is the little guy driving the tank in the video linked above…….) Now, I don’t know Jea Street or care to really, after the ringing endorsements his actions have resonated, but since I have a hard time remembering faces, I use cartoons… In this case, Jea Street is close to “J Street” which as most know, is right beside “K Street” in Washington DC.
This is fitting. ”J Street” (which I will call him/her for the rest of this highly educational and scientific article) is carrying water for the Lobbyists of Pure-Profit Management of Public Schools (PMS)….. When “J Street” slips under the influence of PMS he gets wild and loose with facts. He gets emotional; PMS will do that to a person…..
This preposterous decision destines the resolution for failure and guarantees continuation of the District’s modus operandi of ongoing discrimination that I have been complaining bout since Novermber 17, 2005…
(Note to Reader: ”J Street” has forgotten with his temporary amnesia the two African American superintendents who PRECEEDED Dr. Williams and were in place during the OCR fiasco…one of whom is Maryland’s current State Superintendent of Education, Lillian Lowery.) PMS does make you forget important things…..
(Note to Reader: Mr. Evans had run for that position the previous election and had been thumped, repudiated, and badly beaten like a chump if I remember correctly, by a 10 to 1 margin. Upon hearing that his opponent had resigned, Mr Evans made himself the only person available for that position. The board felt that someone so rejected by parents of students in that district, could only do harm by being allowed to sit in that position for if he were allowed on as a voting member, it could set up court challenges in the future for everything the board did from that point onward..) PMS seems to have made “J Street” forgetful here as well.
(Note to Reader: Across this nation, many districts are opting out of RTTT because it simply costs more to achieve, than the funds one is given. Of all the districts in this state, Christina first recognized this, and in order not to be forced to spend far more than they get, they are negotiating with the Department of Education for leeway in using the funding in ways that wouldn’t cost the district more to use the money. Meaning it is actually cheaper, NOT to accept RTTT funding, and therefore NOT implement all the costly purchases required by RTTT, This frees up money which can be used on things like educating children inside the inner city, something which has been put on hold, since RTTT began.) This of course cannot be comprehended when one as PMS.
Apparently, “J Street” is being manipulated by “K Street” to intimidate the board of Christina. ”K Street” feels that refusing to buy products from only certain firms sanctioned by the state as official suppliers, and using that money to actually help children learn, instead of line their pockets, is an outrage. Unfortunately. For a rich man to scream… “I’m not wealthy enough! Buy my ‘effin’ product” turns people off. But that is no problem for them, as long as their neighbor “j street” will do it for them and …yes… blame it on race, even though those guilty, were all Afro-Americans…..
In case you missed it above…. “J Street” is the guy driving the tank..
Yep, the Paul Ryan budget was released today. As expected it is a budget designed to protect the top 1% from any bad thing that could possibly occur to them. As was poetically so well put by Romney during the past campaign…. ” ha, ha, ha, ha, ha…. The rest of us don’t matter….”
Today prominent theologians of all religions universally excommunicated the Republican Party of the United States of America from any pretension of anything corresponding to organized religion.
“They’re a cult, I tell you!!!”
Republicans in congress. God is watching you. And if you Fundamentalists would read your Bibles, you’d already know whose side He is on.
The rest of us… If you thought Republicans would come to their senses and start reinvesting in America, the joke is on you.
Nothing will ever change until America gets mad enough to rid ourselves of this pestilence forever…. You don’t have to vote for a Democrat. Most of you won’t… But you do… have to not vote for a Republican….
Unless you no longer consider yourself a moral individual, change your Registration…. TODAY!!!!!!!
Most of you missed this, but Alan Levin and Senator Bob Marshall stopped by coincidentally at the same time to visit Rick Jensen of WDEL, and smooth as he was, Rick convinced both to sit down for an hour and go head to head over the topic of privatizing the Port of Wilmington….
First Alan Levin; Delaware Economic Development Office….
a. Delaware river will be dredged to 45 feet.
b. Panama canal will open to new big ships from the Pacific, which will be coming up the Delaware River.
c.. Ships if not coming here, may go to ports north to Philly, Paulsboro, Newark NJ, Norfolk.
d. If we don’t accommodate these larger ships, jobs will go elsewhere taking 3000 jobs. By 2016 we should start seeing them.
e. Was not a sweetheart deal. Competing bids were proffered. Local ILA (International Longshoreman) even asked the state to search out new private/public partnership bids back in Sept 09
f. Turns out that the Bank of Montreal was advisor for port transactions, the division was located in San Francisco. It’s job is to just finance ports. Sent out 70 inquiries 17 expressed inquiries for further information, 4 actually made bids. 2 were called non responsive. leaving 2 good. Kinder Morgan and one private equity group financed by local individuals.
g. Of the two bids received, the Kinder Morgan bid secured workforce. The other group said they would rob workforce pension and union bust to squeeze their profit out of efficiencies.
h. Kinder Morgan bid grants a three year guaranteed security, to the ILA, to the teamsters, to the businesses outside.. What other business gives you a three year guarantee?
i. Kinder Morgan would grow profits by increasing tonnage. They want to add 3 additional warehouses 200,000 square feet each, and 28 additional jobs. The other bidder, made up of local cutthroats, would cut the workforce to squeeze out its profit.
j. Kinder has the ability to bring in additional volume, to negotiate and bring other companies in. The other bid doesn’t. Improvement costs are substantial. $12 million per crane. It costs between $60-70 million to replace berth 5 and 6, just the repair of which will cost $8-10 million. We need the long term lease. Companies want return over time. they won’t do it for 5, they won’t do it for 10. That’s why it is a 50 year lease. The people of Delaware want commitment as well. They don’t want someone saying “we’re outta here” after 5 years.
k. BDO did an independent audit. As does the State Senate they also show a $ 3 million yearly loss. Reports are posted in their auditor’s office. BDO is independent and won’t jeopardize their reputation by lying about the port of Wilmington. It is bottom line business. Net profit in the end, is minus $3 million dollars. The General Assembly is putting in $10 million a year for improvements. That $10 million doesn’t get us past where we are. It doesn’t get us out to the large ships. We need to get out into the Delaware and that will cost $100′s of millions of dollars. Kinder Morgan has considered expanding the Delaware River auto berth, built 20 years ago to accommodate Volkswagon. The berth goes southward. Kinder would go northbound, and put two berths, with two cranes which will service the 3 warehouses being built.l.
l. LNG is off the table, that has been committed to in the General Assembly and will also be in the lease. Can Wilmington accommodate LNG tankers? No! The port of Wilmington is not big enough to do LNG. And two, they will not increase coal over today’s level; our same level of 100,000 tons of coal is stipulated for the next 50 years.
m. Protests against the port are having negative effect. Both Mr. Kinder and Mr. Foster came with the understanding we were the ones seeking and they were not expecting negativity. They understand the ebb and flow, but were not prepared for this huge outcry. it was us. We invited them to the party. Had they come to us as a hostle takeover, the outcry could be right and proper… So far we’ve done what we thought was right. We got to find a way to stop the annual spending of the $10 million because the $10 million won’t get us out to the river. Kinder proposed and promised and has done it elsewhere.
n. Kinder Morgan if they have a customer who needs to get to the river, they then will build to go to the river; they can make the extension at that time. But Kinder (like any successful business) does not promise or commit to anything except what it is prepared to do today.
o. If deal falters, the future of port will be tenuous. It will continue to have great management, and a great workforce, but won’t have the proper resources to go to river.
p. If deal collapses, no, the port won’t go bankrupt. but collapsing the deal is not responsible. Being responsible is doing something to stop the $10 million bleeding.
Now… state senator Bobbie Marshall…author of Senate Bill 3 signed by Jack Markell, overseeing the lease of port….
a. Big problem is… we do not have details of Kinder Morgan. No written proposal,
b.Expansion is something we all favor. but deal receded into one of ” no expansion”, but we will now have to turn over the entire port. including the 300 acres owned by Delaware citizens, managed by Diamond State Port Authority to someone we don’t know.
c. Port is actually a profit making entity if you remove the depreciation yearly. Actual operation is profitable.
d. Port could grow jobs within the interior 250 acres if port grows and expands, and with new money, more employment opportunity exists if expansion occurs…
e. Point out that Julius Cephus (ILA) has rallied people, businesses, and elected officials, and has pointed out that this may not be beneficial in long term.
f. Preliminary proposal at this time, the due diligence will be present by end of month which will allow presentation to bond bill and bond bill will hold hearings on the proposal… Senate Bill 3 requires review by bond committee.
g. Members of legislature representing the state of Delaware, passed bill in 1994 to allow Diamond State to operate the day to day operations, but never was it place in the code, to give either Diamond State or the governor sale and total control of 300 acres of port property. General Assembly and its citizens are the tenant. Diamond State Port is the renter.
h. Port of Wilmington Directors are responsible to exercise “all function” of port….including the leasing of lands to companies…. That is different from” selling” the land of the taxpayers out from under them. The state taxpayer keeps ownership but leases to Kinder Morgan.
i. All interested parties, need to read Miami Herald and how expansion of Panama Canal will affect the ports of the east coast. We need to invest the Delaware river side of the port and that is not happening with Kinder Morgan.
j. This is a lease, this is not a sale to Kinder Morgan. The Diamond State board can do leases…. Alan’s understanding is if the bond bill committee approves Kinder Morgan deal, it goes to the House and Senate for up or down vote with no debate. But Marshall say debate will be impossible to quench.
k. Any one can appear before the bond bill committee… Alan will appear. Senators can appear. Kinder Morgan will be given total control of port. Diamond State Board will still be in place, will still have oversight, but not its running on a day to day basis. They make sure agreement is in force, and if not, they will take appropriate action.
l. Worried about control People getting laid off? Kinder Morgan will automate and cut employees down to one. Low skilled people will get shut out, Has happened all over the country. Failed private ports run by Kinder Morgan, cut people. (Which ones ask Jensen.)
m. Kinder Morgan is interested in the fruit business, Kinder Morgan is paying premium for fruit; they want to build three warehouses. Already they are seeking long term contracts with Dole, Chiquita, and the Chilean Pacific Seaways in order to get their fruit. They have to have to be given the chance.
n. (Jensen) Depreciation needs to be on the form to comply with IRS. Depreciation is where the loss of the port is coming from. Without it, the port is profitable according to Marshall.
o. Kinder Morgan is a bulk and liquid bulk company. (John Vitale): Concerned this deal will cost him money; his business is on the outside of the port. Container experience is limited to one 10 acre container port in Florida. Taht is all the experience they have. Products generating most jobs in ports are containers, breakable containers as in fruit, and automobiles. Handling bulk products are the least job creators. The outside area around the port has grown because the conscious decision not to handle bulk, because they didn’t mix with fruit and automobiles… .
p. Ok, (John Vitale) With Kinder Morgan switching to bulk, we could end up out on the river, but we still would have 20 percent of today’s jobs.
q. Flat out,(John Vitale) bulk products are far more profitable and will drive out costlier containers which are labor intensive, forcing the outside businesses to go out of business. High number of jobs at the port are there because of fruit, these will be lost by not sticking to containers…. A for-profit company will not be in the best interest of the existing port.
r. Ferrous alloys, fertilizer, liquids are not competitive with the outside businesses. (Alan). We can promise this: employees will last three years, we will get an income stream to the people of Delaware, and that capital improvements will happen. Check out Vancouver where Kinder Morgan has spent in last two years, $140 million spent on improvements for cargo bulk containers, something they didn’t anticipate when they leased it two years ago. …They are willing to pay a premium for our expertise. They think fruit is good business.
s. Concern that we are putting too much faith in hope. Kinder Morgan is a Wall Street for-profit stockholder company. Delaware’s General Assembly’s support is contingent on growing business to the river. Legislators are very worried about the external businesses existing outside the port. i
t. Bonds $7 million owed to the city (Roger Roy) .. In 1994, we made two deals with Wilmington: one to pay them over time, and the other was to take over the bonds they owed, which is to pay off their bonds which they currently have. State still owes city close to$7 million..
u. (Kowalko). We will debate the bill on the floor. … Alan is saying the Bond Bill Committee will debate the pre proposal proposal… not the proposal because at this time, there is no proposal. Issue is not about Kinder. … The bond bill was to discuss t he ethics of privatization of the port, not the deal itself. Therefore when it goes on the floors, that will be the only time to debate the actual Kinder Morgan proposal.
v. (Liz Allen) Vancouver contract shows Kinder Morgan is not liable or loss for any cargo, not liable for any delay, strikes, fires explosions, or acts of god, and Kinder Morgan is indemnified from all losses…. Both (Alan and Rick) spoke up that sounded like a standard hold-harmless contract, one required for all business. So who is responsible if there is an explosion (Liz)? Responsibility goes to Kinder Morgan, they have the liability(Alan), their insurance covers that, and we are not absolving them of liability. All obligations go to the person leasing the deal, not the lessor…
w. (Rick) Emotion doesn’t make sense. Why so much negative emotion?. (Bob Marshall) Those interested and raising concerns are those who work in the port, work in businesses around the port. Kinder Morgan is a profit making company, former operator working as Enron officials, that raised a red flag. Rick asks: is everyone at Enron a criminal? No.
x. (Alan) Trepidation is about change to what we know. We have tried to mitigate that concern on everyones issue. Bottom line is people of Delaware can no longer afford putting $10 million a year to upgrade the port.
y. (Alan)we take money away from everyone else in the state to bolster the port. We have an obligation to the port of Wilmington, but we can’t take anything away from Seaford, and Laural, and education and public safety….
Today inside the Senate a vote was taken on Bob Marshall’s bill that requires the General Assembly’s approval if the Port of Wilmington gets sold to Kinder-Morgan. The deal has caused considerably concern because it has been shrouded in secrecy. No one knows of any of its details. Someone may make billions off of this, so it is important that people look over the arrangement to see who or who isn’t hurt by this major public to private transfer…..
ACT TO AMEND TITLE 29 OF THE DELAWARE CODE RELATING TO STATE GOVERNMENT AND THE DIAMOND STATE PORT CORPORATION.
Synopsis: This act would require the Diamond State Port Corporation to obtain the approval of a majority of both Houses of the General Assembly and the Governor, through the passage of legislation, before entering into any agreement or transaction whereby the Corporation would transfer, sell, privatize, or lease all or substantially all of the Port of Wilmington to a single entity, or to a related group of entities.
Here are the cosponsors of the Bill.
Sens. Henry McDowell, Blevins, Townsend, & Reps. Keeley, Mulrooney , Brady, J.Johnson, Osienski
The bill passed with 11 votes yea and 9 votes nay, and one vote not cast. It was released out of committee on the same day with 2 favorables, 3 on the merits, and 1 unfavorable…
Unfortunately it was not an unanimous vote…
Photo courtesy of Google Maps/ Lower Schuylkill
Kinder Morgan is a pipeline company. It is the fourth largest energy company in America, behind Exxon-Mobile, Chevron, and Conaco-Phillips. Though it was spun off from Enron, a point of contention which many opponents point to, it was started by those who saw to where Enron was headed and jumped the ship in port before Enron began its fateful run. In fact, it employs the whistle blower who reportedly sank Enron. So get that comparison out of the way. KinderMorgan is not Enron. It IS the fourth largest energy business in America.
Which shows how little we really know about it. For Kinder Morgan likens themselves to a toll road. No matter whether the price of gas goes up. or the price of gas goes down, as long as it gets transported by the fourth largest energy company, it makes money. Kinder Morgan transports energy.
Which is why it wants to come to Wilmington.
Big company. Little state. Equals coercion.
Today, most people have no idea what the Dupont reference means in the title. That is amazing and really shows how far things have come in thirty years… Without exaggerating too much, it would be safe to say, Dupont owned Delaware’s government, and got anything it wanted. For that privilege, mind you, they loved us and bestowed upon us many gifts, including our double laned highway stretching from Delmar to Philadelphia Pike… now named the Dupont Highway… In all honesty, one of the things that makes Wilmington such a great city, and makes Delaware one of the best states, is the generosity of Dupont bestowed upon this state with the second smallest landmass.
It came with a price. Our toxic waste dumps. Our cancer rates. Our brownfields. These were bought by Dupont’s gifts to those running our state. Vote to allow Dupont to dump toxic chemicals on a piece of land and get a museum as a bonus. Really how can anyone say no?
38 years later, no one remembers the museum, except that their school may have went there on a field trip. And that is hard to even remember while busing mom to her radiation treatment center, and taking the kids to AI Dupont for their bone marrow transplants… And with all the Advil you have to take to keep the throbbing bearable in your own head, it is a miracle that you even remember anything..
Choices have consequences. Every marriage has its cost.
It becomes a moral issue, now. Should Delaware divorce the marriage made to its high school sweetheart, the one with a long high school and college courtship? The one both families have gotten used to? The one spawning four children? The one supporting a church, a PTA, the Food Bank, the fight against diabetes, with volunteer effort, because a new suitor just happened to notice you and wants to play?
A big name like Lindsey Lohan wants to marry Delaware. She will bring a lot to the table. The question is, just as if the suitor were Lindsey Lohan, the benefit is very short term. The cost, will be on-going for the rest of our lives…. Is there a chance that such a marriage will work? There is always a chance…… but .. nope. Not in this case.
There will be a Kinder Morgan port with liquefaction plant somewhere on the east coast. It can either be in the Delaware Bay or the Chesapeake Bay. There is so much gas being found in the Marcellus Shale region of Pennsylvania right now, estimates of a massive 100 years worth, that to get a higher price for it one has to go overseas. Europe is starving for gas. Russia keeps turning their supply on and off.
Someone will need a gas port on America’s east coast and the cheapest spot is between north of the C&D Canal, and Philadelphia….
A pipeline from the terminal at Coatesville to Wilmington is rather cheap, and with minor adjustments, LNG (Liquid Natural Gas) ships docking in Wilmington will soon carry their explosive cargo to Rotterdam, Hamburg, and Sagunto, Spain. ..
This construction will be done with non-union labor brought up from Texas. Existing contractors with whom Kinder Morgan are familiar. Costs per mile, payment plans are already locked down. Gradually Southbridge with the help of Delaware’s General Assembly and the blessings of the next generation of chief executives, will be bulldozed and turned into the next Marcus Hook.
It is inevitable. Europe’s lifestream will flow through Delaware. Shipping is not as dependable as are pipelines and storage is a key component… Fill the tanks when the price is low; sell the contents when the price is high.
The Christina Riverfront, will resemble the lower Schuylkill delta. Across the river from the riverwalk, storage tanks will stretch as far as the eye can see……
This deal, that of giving away our port, WILL CHANGE DELAWARE FOREVER…. and it is being done in secret. No community involvement. All hush hush. False innuendos being given instead of details…
Are the details not as bad as the hype? Well, whenever that scenario occurs, details usually are leaked out for the very reason the are used TO SWAY OVER the public… Since they aren’t leaking, someone is trying to present a fait accompli.
Speculation is always rampant when there is silence. The best way to combat irresponsible speculation is to release the actual details. Let people know what to expect before the deal is done. Just perhaps, their objections may open your eyes to a possibility previously unconsidered, that could, if found out too late, wreak havoc with our daily lives!
Otherwise Delaware, expect to be greeted early one morning with this… : Kids? I kicked out your Mom last night… I want you to meet your new Mom… Her name is Lindsey. Lindsey Lohan… Everything is going to be just great from here on out!”
Surprising the (thought of too late) proper answer to Romney’s silly statement that: Corporations are people too… would be how I ended my post below, which is the headline above. People are capital, too.
Which means just like you have to invest in physical capital, one has to invest in human capital too.. Ironically the wisdom of this disappears in corporate boardrooms. They look at how to use capital to achieve more profitable ends. Therefore it falls upon the shoulders of Labor Unions, to bring this argument into daily discussion. sometimes by employing the action of a a strike.
Suddenly with a work stoppage, the idea that one needs to reinvest in human beings, makes itself readily apparent.
Unless you haven’t been paying attention, you already know that higher taxes increase our economic output. That has been proven over and over here, so please peruse the archives if you still think low taxes cause economic development…..
Every opportunity not to tax the wealthy, is a hit to our future economy….
Therefore raising the income level from $250,000 up to $400,000, is catastrophic. This range is the core of capital investment in this nation. This group consists of primarily small business owners who own their business. By not raising their rates higher, we make it less likely that they will turn over their profits back into their business, which of course grows jobs.
Instead, they will buy stocks, which does nothing.
The shift slows down our rate at ridding ourselves of the deficit. Over 10 years, we are now an additional $400 billion behind, or $40 billion a year… Just as a guide, at 10% interest, the $400 billion we are not paying back is costing us $40 billion a year in additional interest payments….
So, we have given up too much. Perhaps if the Republicans do not grab this offer and sign the line right now, it can be retracted under the “limited offer” clause. If we fall off the cliff, then Republicans get full blame, and the public, totally outraged over what the republicans have done to them, will insist they capitulate to the higher figure.
One can only hope that the Republicans rebuff this low offer, so we can extend a higher one, a mathematically more viable one, after January 1st….
This is the last sweetener. There can be no more….
Anyone who has read this blog over time, knows I’m all about the numbers. If it comes down to what people say, versus numbers, I’ll always take numbers and I’ll always be right. Of course sometimes you have to probe the numbers of the other side, to be sure the other side didn’t (erroneously) switch a minus sign, or divide when they should have added, but if anyone were to analyze past writings of mine, they could only concur, that numbers speak volumes…
In the Bush years I called out that the numbers weren’t matching up; we were headed for a gigantic meltdown and we did. I called for all (who listened and got out in time) to get back into the stock market at 6600 because it would reach bottom the next day and bounce upward, and it did. I called out that our economic well being was based upon removing the upper tax cuts, keeping the lower ones, and we instead, we got the Tea Party because some nuts out there still don’t read this blog.
So, as everyone knows, if given enough time, and pointed in the right direction, a person with one leg can hop towards and eventually reach the finish line. Basically the set back caused by the Tea Party Republicans, has caused us to have to complete the second half of the Obama years, on one leg….
Now, we are seeing Progress that will continue, unless the Tea Party is able to knock out our other leg….. The Romney/Ryan budget does exactly that on a macro scale. (One would expect that from someone who grew up in a little town and has never learned there are other ways to do things.)..
One of the most credible sources out there these days, is the Federal Reserve of St. Louis. Consisting almost entirely of Republicans, when they say things are going well, I will tend to believe them. And they are excited by the latest returns. I borrowed these from the Business Insider, but just seeing them in sequential order, is like art, a beautiful thing for a numbers person to behold…..
Yes, to change the lyrics off a CCR song, ” I see a GOOD moon a’rising….” The only thing that can derail this economy off its tracks, is any major Republican victory in November… Barring that, we are on our way…..
Obama and the Democrats did pull us out of the worst Recession (it would have continued as a Depression if Republicans had been in power) since the Great Depression…..
Trust the numbers: only with continued Democratic leadership, will the money keep coming back…..
Hats off to the News Journal and particularly Eric Ruth.. (I’m not even going to post the link due to the horrible structure of their page and the fact that the link will be discontinued in just a few days.) The article appeared in Sunday August 26th’s hard copy paper and was featured on the front page of Section E, the Business Section.
A) Across the state more than one in four renters have to pay more than 50% of their pay on housing.
B) The supply of apartments that lower income Delawareans can buy into, dropped 47% statewide and 61% in just New Castle County ever since the Bush presidency began and tax laws were changed.
C) To afford the “average” two bedroom apartment in Delaware, a worker must make $18.68 an hour…. yet none of the jobs coming on line will come even close to that amount.
D) Someone working close to minimum wage would need to work 114 hours every single week to meet that amount ( there are 168 hours in a week and if given 8 hours of sleep a night, that only leaves 112 hours meaning that person would only have 6 hours one night to spend not working…. )
At the same time, apartment space costing over $1000 increased during the Bush tax years by 347% in New Castle County and 1610% in Kent County….. According to Kevin Kelly, nothing new in affordable housing has been built in Delaware ever since the Bush Tax Years began.
In his words…. “THE GOVERNMENT SIMPLY NEEDS TO DO MORE”…. (That was a developer speaking, btw. No “we built this” there….) (Also to blame was Tom Gordon’s UDC that put limits on density. Limits on density mean more land area is needed per resident thereby raising costs per unit because more land is required to be bought per each structure.)
Enough data… Now for the interpretation of it..
Simply put: the costs of rental have grown beyond what the market can afford…. There are not enough people making enough money to pay for what the rentals will actually cost….
Two options. both involve government intervention. One, we can use public money to make of the difference. And the second, is that we can use private money to make up the difference. There is no other money out there so we are limited to these two options…..
In Option One, we can do it several ways. One we can use rent control to suppress the amount the owner get for the use of their individual properties.(legal) Two, the government can pay the difference between what the owner requires, and what the constituent can actually pay (subsidized)… Three, the government can forcefully legislate the minimum wage scale to a much higher rate, and in consequences jack up all wages across the bottom scale in the state… Four, the government can get into the housing business by itself contracting to build large scale properties with high density housing, and then subsidize those units based on their constituents ability-to-pay… All these are possible. All have been done before. All have extenuating consequences.
Option Two, is no better….
As private contractors go under(bankruptcy), equity firms can buy up properties at pennies on the dollar, and then with because of lower initial investment, charge much cheaper rates than could the property’s previous owner, who had too many costs to cover… (Bain Capital method)… Let’s say Toll Brothers goes under, with $2 billion in debt. That gets erased, and Bain Capital buys the entire complex for $1 million. It does not lose money; it is more concerned with the fact that it has space available that is not being utilized. If it can’t fill it for $800 a month, then sell it out for $700 a month, and when that market dries up, sell out for %600 a month. It is all profit so the equity firm really doesn’t care…) This forces rates down.. For how can you legitimately sell a similar property at $1200 a month, when across the street the exact same thing is selling at $600 a month.. To sum up, we can lower rental prices by bankruptcies and forced liquidation.
Obviously, if you want to earn as much off a property and can only get $600 a month per unit, then you will have to build twice as many properties on each square foot, as you would have if $1200 was reasonable. Equally obvious is that you would have lots of people living in a tiny space, and creating a higher density and demand for goods and services on the streets below… This aggravates frustration levels and makes living in such a climate unbearable.
The best solution is to return to normal tax levels.. those that existed before the Bush Tax Cuts. When you do that, it works on multiple fronts. The higher corporate levels get taken out of the amount of anticipated profit. Therefore, it becomes advantageous for a builder to now rent to a low cost tenant and be able to deduct that cost off his anticipated tax payment. If the builder is taxed at 50% corporate profit, and his profit from a $1000 dollar rental is $500… then he will pay 50% of that and only keep $250… Essentially the income coming into the firm will be $250 even though he actually get $500 and pays $250 of that in taxes. So, if he gets a 50% deduction off of what he loses in rent for someone of some type of affordable housing program, then his tax on that transaction, if he sells the apartment for $750 will be…. ($250 profit x 50%) – (tax credit of $250 X 50%) = 0 and he will pay no taxes on that income. He will make the same $250 in profit after taxes as if he’d sold it to a high income constituent for $1000… So now, he has to make a choice… do I sell it now at $750 and fill the apartment, or have it stand empty earning nothing until someone rich who can afford but doesn’t want the economical option of owning a home, just happens to fall into my lap… Obviously $250 for that property is better than the negative $30 the upkeep and maintenance would be on that unsold unit.
That example, is how higher taxes with deductions can force a private settlement of this higher rent problem.
Higher tax rates also force lower level incomes, higher. Minimum wage jobs are hard to keep skilled workers in. As soon as they become trained and an asset to their company, they take their skills to a higher paying employer. That is why there is incentive on the part of these employers to keep employees happy by paying them more money… If a minimum wage company is making $1 billion in profits, and paying 50% corporate tax on its profits, it will pay $500 million in taxes. That is money it earned and is lost. out the door, removed from the company. What happens when corporate rates climb higher, is that companies say to themselves, where can we put our money in our business so we don’t have to report as high an income and have to pay so much in taxes? How can we keep more of our money?
One is by building new units. Two is by putting more money into research and development. Three is by putting more money into advertising. Four is by allotting more money to be paid to good workers…. As any nut (except Duffy) can see, all of these options provide rapid growth to the overall economy. Multiply this by every corporate business, you have the seeds of a massive economic expansion….
So an employee who is a good worker, can rise from entering a $7.25 minimum wage opportunity to making $11 to $12 dollars an hour. Because he knows what he is doing it is actually cheaper for the company now to pay him more instead of constantly turning over $8.00 an hour positions and incurring regular training expenses as well as incurring the additional losses that come from a lost customer base, mistakes, inventory shrinkage, etc… That extra investment if not now placed in that employee, would have just gone to the government anyway, if he’d been artificially kept at $7.25 and hour.
So higher tax rates cause over all income to rise. And rising incomes make affordable housing that much more affordable…..
So, the way out of this conundrum, is to raise corporate tax rates. The problem began with the cuts, and will end, as the repercussions of the much needed tax rise start to enter the market…
This policy is ten years too late getting rectified. Waiting another 4 more years, will no doubt, negatively impact, if not destroy America forever….
Just raise the rates.. Vote in people who promise if elected they will raise corporate tax rates to where the fairly should be….
That is all. It is a simple solution, that is begging to be implemented… We know it works… Instead of facing reality, we just keep electing servants of the rich, who keep gumming up the works, messing things up… and so, after ten years, we have yet to return to sanity… Maybe this time, America will wake up… and realize … hey, they’ve been roofied…