Archive for the ‘The War on the Poor’ category

Increasing Poverty and Homelessness: Who Benefits?

27 March 2014

Giving politicians the power to manage the economy causes all kins of problems. For one thing, they act in their own interest – just like anyone else. This shouldn’t be a surprise to anyone, but it seems to be. It’s time to get past the idea that politicians (or bureaucrats) are wise and altruistic overseers of the economy, taking necessary actions to correct imperfections and imbalances caused by, well, regular people.
A good example is the proposed legislation in the Maryland General Assembly to raise the state minimum wage by nearly forty percent. The purpose of this law is to make it illegal for a high-school dropout — let’s call him John — to agree to accept a $10 hourly wage from a shop owner.
The evidence clearly shows the likely result of this action. If the shop owner has a job, she will hire the best-qualified person she can. A person with a good work history, or a high school diploma or GED, will seem like a better bet than John. John, representing the lowest level of skills and education in our society, will be the loser from this legislation. He will become unemployed, and likely remain unemployed for the long term. An increase in the minimum wage almost always increases unemployment for that reason. Specifically, it increases the already abysmal employment prospects for those starting out in the job market (the 17 – 25 cohort), and even more so for the black and Hispanics in that group. An increases in the minimum wage ends up being a knife in the back of the least advantaged, the worst-off among us. When Montgomery County sought to raise the minimum wage, this was the advice they got from expert labor economists at the University of Maryland and Georgetown University. The deleterious effects, the economists testified, are more likely when the increase is large and when the unemployment rate is already high. Economist Stephen Fuller looked at the Maryland bill and concluded it would probably cause a reduced standard of living and higher costs.

But political management of the economy doesn’t pay any attention to those people at the bottom. When the high school grad with the increased wage gets his paycheck, he’ll thank the politicians who caused it. The politicians have no incentive, however, to be concerned about the people at the very bottom of the economy – the ones we should be most concerned about. John’s lost job or lost employment opportunity doesn’t have any political loss for them. They are seeking political support, and they get rewards for increasing the minimum wage — and also for increasing unemployment, poverty, and homelessness.


Damn the low-income residents and the jobless: Anybody but WalMart!

10 April 2013

The building on the corner of Connecticut Avenue and Aspen Hill Road in Aspen Hill has been empty for three years.  At the same time, downcounty residents have been looking forward to a WalMart opening in the area, where heavy discounts on household goods and groceries would be available.  And to complete the confluence of opportunity and fortune, Walmart is interested in occuping the space, which would establish dozens of jobs.  Sounds like a fortuitous win/win/win situation, right?  Who could oppose this?  Councilman Craig Rice, who is often looking out for the interests of low-income residents,  is eager to see it happen.

But Councilman George Leventhal, who is often looking out for politically popular causes, is trying to stop it.  After all, criticizing Walmart is all the rage among Leventhal’s upper-income constituents.  It’s chic to oppose the lowbrow store, which doesn’t serve gourmet fair trade chai or organic truffles.  Leventhal complained that “the county has not had a chance to weigh Walmart over other potential uses for the land.”

It’s been three years, George, and no one else is moving in there.  Yet he continues to block the approval process, hoping that someone more tasteful might be persuaded to move there.

Good News on the Law Enforcement Front

31 October 2012

The commander of the Drug Enforcement Section of the Montgomery County Police was quoted as saying that they are going to step down enforcement of marijuana laws on low-level users.

Better that they should cut out enforcement altogether, against buyers and sellers, but this at least represents a better value for the county’s taxpayers.

Band-Aids for Affordable Housing

26 October 2012

A new controversy involves the plan for the City of Rockville to buy the Fireside Park Apartments, a 236-unit complex in the Hungerford area. The purchase will cost $36 million, and Montgomery County is offering to chip in.  Rockville plans to subsidize apartments for households earning up to 60% of the county median income.  For a family of four, for example, subsidized apartments  would be available if their income was as much as $65,000.

A few thoughts:

– Creating public housing projects has rarely been an effective solution to achieving affordable housing.

– Homelessness is a serious problem.  The county should be looking towards long-term structural solutions, not just band-aids.  That begins with recognizing that MoCo policies are largely responsible for causing homelessness (and inflated home prices), and those policies must be changed to alleviate it.

– MoCo government seems to have no understanding of the economics of housing, or how their policies are making housing too expensive.  Rockville is competing with a private firm seeking to purchase the complex.  That is wasteful.  Richard Nelson, director of MoCo’s Department of Housing, defended the purchase: “Their objective — return on equity — is not the public policy of supporting affordable housing.”   Increasing the supply of housing, by economic reasoning, will help alleviate the high price of housing.  Too bad Nelson seems to be ignorant of this.   Governments in general, and especially Montgomery County, are more often blinded by the attraction of building something they can point to and say “That’s ours.”  The edifice complex wins out over an effective policy to improve housing.

Helping Low-Income Residents — A Valuable Change in Zoning Regulations

9 September 2012

The county planning board is proposing a beneficial change in zoning regulations, to make them less restrictive.   The change would make it easier for homeowners to create accessory apartments (better known as “mother-in-law suites”) in their homes.  These apartments have kitchen facilities, bathrooms, and a separate entrance.

There’s a public hearing on the proposal on Tuesday, at 7:30 pm,  in the council building.

There are clearly problems that can be caused or exacerbated by these apartments.  They can increase crowding, including parking.   There’s a more general concern about stress on public and private services and infrastructure.

But they also have multiple benefits:
— They provide a way for families to live close to each other, when it is not otherwise financially feasible.  The classic example is a separate apartment for an elderly parent, who otherwise could not afford to live near a grown child.  Often, a mother-in-law suite is the difference between an elderly parent living at home and institutionalization.

– They help alleviate the problem of housing affordability by increasing the housing stock.  This county has a serious affordable housing problem.  Simple economics suggests that one reason for that problem is insufficient supply of housing units to meet the demand.

– They help provide additional income for people who are struggling in the bad economy..

– -They help alleviate unnecessary sprawl.  Cheaper housing can be difficult to build in the densely populated part s of the county.  If not for these apartments, people might be looking to build new housing on unused green space.

If we are serious about alleviating housing costs, and helping the poor get on their feet — this zoning change would be a change for the better – and deserves support.

Fiscal Year 2013

13 August 2012

Montgomery County has launched the new fiscal year, and the budget is as scary and precarious as ever.

The budget includes a 6% increase over last year’s spending, even though revenues are down.  (Surprised?).

There’s money in the budget for more buildings at Montgomery College, recreation centers, and twenty new schools (twenty?).  Disturbingly, the budget also calls for expenditures to alter the southern entrance to the Bethesda Metro station.  That expenditure isn’t being made because there’s anything wrong with the entrance, but rather to facilitate the Purple Line.  The Purple Line isn’t coming soon (if ever); why spend this money in vain?  At least wait until the funding for the Purple Line is secure.

This all means new borrowing, when the county is already laying out over $300 million annually to cover existing debts.

How to pay for all this?  The despised energy tax increase was cemented permanently into place.  That measure initially jacked up the taxes by 155%, but was sold to the public as being “temporary” (again — surprised?).   An energy tax is a regressive tax, because it takes a larger proportion of income from the poor than from the wealthy.   That’s an inconvenience for some people, but likely a health hazard for the elderly and lower-income populations, who will have to turn down the air conditioning at a time of record heat.  And, of course, the weighted property tax rate goes up almost 5%.


A Second Chance for Charter Schools in Montgomery?

31 January 2011

Last week was School Choice Week, highlighted by activities around the nation supporting the ability of parents to choose the best education for their children.  One aspect of school choice is charter schools. There are over forty charter schools in various jurisdictions around the state – but none have ever  been approved in Montgomery.

MoCo is a particularly dismal place for those trying to establish charter schools.  Montgomery County Public Schools  fights hard to maintain their monopoly, and they are strengthened in the iron triangle with the support of the Montgomery County Board of Education and the Montgomery County Education Association (the teachers’ union).    That’s a power trio that you don’t mess with in this county.

In 2010, two applicants for charter schools found that out the hard way, as the Board of Education summarily dismissed their applications to establish public schools that would not be beholden to the MCPS bureaucracy.  (In a textbook example of the foxes guarding the henhouse, the County Board of Education is given control and decision authority over charter school applications ).

One application came from Global Garden Public Charter School, envisioned as a small K-8 school in the Kensington/Wheaton area.   The school would feature a longer school day and a longer school year, an IB program, and have a substantial focus on foreign language education.

Another application came from Crossway Community Charter School, a K-6 Montessori school, also in Kensington.

Upon appeal, the State has slapped the County Board for their decision to reject the applications.

–           The Board of Education did not provide any rationale, in writing or orally, for turning down the 350-page application.

–           TheBoard of Education used criteria for evaluating the applications that are nearly impossible to meet.

–           The Board of Education did not follow state regulations for evaluating the applications

–           The state’s decision also implied that several members of the Board were biased against allowing any charter school to operate in Montgomery.  They cited explicit statements by Board members  that were hostile to charter schools, because they might take resources away from MCPS.   The State had to remind these Board members that charter schools are public schools.  These Board members were not concerned with public schools, therefore; they were surely  not concerned with the education of Montgomery students.  They were concerned with protecting the MCPS monopoly.

–           The stated also cited statements to the same effect by MCPS superintendent Weast.  <Why, you have to ask, is the MCPS superintendent involved in the decision to allow competing public schools?  Because MoCo can’t even manage the façade of a fair evaluation. >

The ruling from the State concluded that the County Board of Education needs to re-evaluate the applications.  Unfortunately, we don’t have reason to believe that the Board will be any less biased this time around.   It might help for those who are interested to contact the Montgomery County Board of Education and emphasize the need for professional evaluation, instead of defending their turf.