What an awful private sector jobs report. May was the slowest month of the recovery since the pandemic began. President Biden released his plan to stimulate the economy and curb inflation, but unfortunately, his plan is more of the same taxing, spending, and regulating that is scaring business owners. Small businesses continue to have a hard time bouncing back from pandemic restrictions and regulations. Small business is the backbone of America and it’s time for real proposals from Washington to curb inflation, strengthen the supply chains, and fix the labor shortage. Most of the solution is simply getting out of entrepreneurs’ way. Read our full statement.
Profile in Courage…The Gould Standard
At a time of 8 percent inflation and a $30 trillion debt, fiscal responsibility may seem like a relic of the distant past. In reality, all levels of governments experienced plenty of problems getting taxpayer revenues to match profligate spending even before the rise of trillion-dollar deficits. New York City suffered significant financial issues in the 1970s, teetering on the brink of bankruptcy after famously being denied federal aid. But, thanks to the efforts of larger-than-life investment banker George Gould, New York City lived to see another day. Gould also took his talents to the federal government, arguing forcefully for industry-led bailouts rather than taxpayer-led “rescues.” Gould is no longer with us, having passed away this past month at the age of 94. He will always be remembered as a Profile in Courage and a champion of courageous principles that policymakers should follow. Gould began his long and impressive career by building his wealth and reputation on Wall Street. He played a critical role in expanding the investment bank Donaldson, Lufkin & Jenrette and founding the firm’s investment management division. This branch of business quickly quadrupled in annual revenue in just three years’ time, a testament to Gould’s knack for managing resources and building valuable connections. This growth helped people from Wall Street to Main Street build their own wealth.
Gould’s real test wouldn’t be in the boardroom of a major company, but rather from a much larger entity. New York City had accumulated a massive debt of more than $10 billion and private creditors and the federal government were reluctant to come to its aid. There were many contributors to this fiscal malaise, including the city’s chronic underfunding of pensions, officials’ inability to confront municipal labor officials, and taxpayer flight. Mayor Abraham Beame was running out of options, but the executive knew of a guy capable of rising to the challenge. As the possibility of default loomed in 1975, Beame called Gould at 1 a.m. to beg him to join the Municipal Assistance Corporation (created for fiscal oversight). He agreed and went on to serve as a member of “Big M.A.C.” for the next four years. Former M.A.C. executive director and chairman Eugene J. Keilin recalls, “George was, even then, a kind of senior statesman, knowledgeable about the bond markets, and a Republican when we needed credibility with Rockefeller Republicans[.]” Keilin’s point about politics was no small issue. New York City’s fiscal crisis was a sharply partisan issue, and it was important for Republicans and Democrats to work together to achieve fiscal solvency.
After the tide was turned in New York, Gould set his sights on the federal government. President Reagan’s Treasury Secretary James A. Baker III tapped Gould to serve as undersecretary for domestic finance, an important position amid rising federal red ink. Gould faced the second major test of his career when the stock market crashed in 1987 and market liquidity dried up virtually overnight. Even as voices in the Treasury and on Capitol Hill called for an immediate taxpayer bailout, Gould resisted those calls and tried his best to organize a private-sector, bank-led bailout of troubled financial institutions. While this ultimately did not pan out, Gould was one of the few public statesmen to stand up for taxpayers and fight fiscal irresponsibility. If policymakers had gone the way of Gould in recent years, the national debt would be far less than $30 trillion. Courage may not be cheap, but it is exactly what is needed to get runaway debts under control. Policymakers must strive for the Gould Standard by resisting runaway spending.
Indiana Boondoggle
Boondoggles come in many shapes and sizes. The Taxpayers Protection Alliance (TPA) has been monitoring and researching government owned (i.e. taxpayer funded) broadband boondoggles since we opened the doors at TPA. Our report, GON with the Wind: The Failed Promise of Government Owned Networks Across the Country shows how expensive and wasteful they are. Now, we’re involved with a project in Bloomington, Indiana. Officials in this city want to create a spider Tax Increment Funding (TIF) district for Meridiam Infrastructure North America Corporation for a fiber broadband project. Not only is this project redundant, but it takes taxpayer money away from other projects that could benefit the citizens of Bloomington.
Here are excerpts from a letter we sent earlier this week:
The letter of intent between the city and Meridiam violates the spirit of good governance and could very well run afoul of Section 253 of the Telecommunications Act of 1996, which preempts exclusive arrangements that favor one provider over another and therefore inhibits competition. Indiana state law also voids contracts granting communication service providers exclusive rights of access to install service facilities.
Not only was the letter of intent signed in secret, three months before it was publicly announced, but it also gives Meridiam advantages no other internet provider in Bloomington enjoys. These include priority consideration for city contracts, expedited permitting and free access to rights-of-way. In addition, an as-of-yet unnamed ISP will get exclusive access to the network for an undisclosed amount of time. TPA intends to file Freedom of Information Act requests so the public can be made aware of the behind-the-scenes discussions on this issue.
Mayor Hamilton cites the fact that only 72 percent of city residents currently receive home broadband. However, these residents already have access to the service from at least one broadband provider, so adding an additional option won’t solve anything. Bloomington should focus on promoting home broadband adoption for the 28% of its residents who are choosing not to subscribe. President Biden recently announced the Affordable Connectivity Program (ACP) that makes broadband free for low-income households, and Bloomington residents can use the program to get free service today from AT&T, Comcast, and Smithville. The city should help educate residents about their options—not use taxpayer money to build redundant infrastructure.
And, make no mistake, this move would take tax money away from other services. The $14.4 million benefit Meridiam would receive through the spider TIF district over 25 years in personal property tax abatements represents $14.4 million less in tax money that would go to city services that rely on property taxes to operate, such as the public schools.
TPA will testifying next week in Bloomington trying to convince the city to stop this project. If you live in Bloomington, please let us know.
BLOGS:
Tuesday: World Health Organization Needs to Embrace Harm Reduction for World No Tobacco Day
Wednesday:
Profile in Courage: George Gould
Thursday: TPA Responded to May’s Private Jobs Report
Friday: TPA Sends Letter to Bloomington Redevelopment Commission to Oppose a Redundant Fiber Broadband Project
MEDIA:
May 27, 2022: Florida Daily quoted TPA in their article, “Deficit Predicted to Drop in 2022, But Not Because Of Biden’s Policies Critics Insist.”
May 30, 2022: WBFF Fox45 (Baltimore, Md.) interviewed me about legislation to change the IG Advisory Board.
May 31, 2022: Dan Savickas joined The Simon Conway Show on Newsradio 1040 WHO (Des Moines, IA) to discuss the latest version of American Innovation and Choice Online Act.
June 1, 2022: WBFF Fox45 (Baltimore, Md.) quoted TPA in their story, “Ex-Baltimore County employee off payroll after using months of sick time to be compensated.”
June 1, 2022: Dan Savickas joined The Barrett Brief (New Orleans, LA) to discuss news of day.
June 1, 2022: The Center Square ran TPA’s op-ed, “Celebrating businesses that have helped reduce the tobacco burden.”
June 2, 2022: WBFF Fox45 (Baltimore, Md.) interviewed me about President Biden’s fix for inflation.
June 2, 2022: The Detroit News ran TPA’s op-ed, “Opinion: Detroit should abandon taxpayer-funded internet project.”
June 2, 2022: I appeared on WBOB 600 AM (Jacksonville, Fla.) to talk about the Texas social media law and inflation.
June 3, 2022: Townhall.com ran TPA’s op-ed, “Former WHO Directors Slam Organization’s Harm Reduction Stance, And with Good Cause.”
Have a great weekend! 
