Wednesday, January 03, 2007

Seperation of Business and State

Most of us accept the idea of church and state seperation. Certainly there is squabbling as to what that means exactly, but nobody who is taken seriously is advocating a state religion. Thus, except for some whackos on the fringes, the basic concept of church and state seperation is accepted as a good thing. And it is.

But what of seperation between state and business? This concept is seldom discussed. Indeed, we hear frequently of public-private partnerships. And this is always spoken of as a positive. I don't think it is at all, and I find this frequent fusion of business and government far more threatening than paranoia about a state religion.

Consider the large developments under way or proposed in our area. Many of the developers are either former elected officials or at the very least are quite savvy politically. Political skills are neccessary to navigate or circumvent the often onerous government roadblocks.

Consider the Point Blue development at the former Walker Manufacturing location. It is a large plot right on Lake Michigan. If a developer can't make a profit developing lakefront property without government assistance, then we should ask why this is so.

Are property taxes too high? Are the building regulations too onerous? Yes and yes I believe.

So the politically savvy developer goes looking for money from his government pals, often in the form of tax breaks. A public-private partnernership developes. The politicians can point to the development when reelection time comes around and the developer gets the development profits without having to worry about the risk. The risk, minus the profits, goes to the taxpayer. In other words, we get screwed.

Many of us are developers, though we may not think of it that way. We may aspire to own a larger home or put an addition on our current home. These investments also benifit the community. The only difference between us and the big developer is that we lack the political influence. Thus, we get no tax breaks. We don't get the regulatory burden lifted. And of course, we assume all the risks, as we should. And of course your private development is made all the more difficult because you are presently underwriting the risk of other developments.

So the next time you hear someone hail the virtues of public-private partnerships, I hope you will at least begin to question whether that is a good thing. Perhaps a seperation of state and business is a better idea.


Anonymous said...

Separation not seperation

Denis Navratil said...

Oops. Any thoughts on the content?

Anonymous said...

I read with interest about the bottom dropping out of the condo market, nationally. Therefore,I understand lending institutions' reluctance to invest in projects like Pointe Blue, when coupled with the potential super-fund level of pollution clean-up, and the EPA's power to exceed the individual investor's liability beyond the amount that they have invested. But, damn the icebergs! If we can just get these deck chairs lined up, everything will be fine!