Beyond the Numbers

Throughout the financial crisis, many mainstream experts have directed their attentions toward "the numbers." They have focused on data points, monthly statistics, long-term averages, cyclical swings, and rates of change of various trends.

However, their insistence on a quantitative approach has often left them blind to other realities. By limiting their perspective to what they can count and collate, they have missed a secular mood swing, broadscale adjustments in attitudes and expectations, and myriad behavioral shifts that are defining new perspectives on living and lifestyles.

Such a myopic frame of reference is also leading many people to support "solutions" to current difficulties that leave things worse off in the longer term. In "The High Cost of Citizen Badwill," the Of Two Minds blog discusses how a band-aid being used by cash-strapped municipalities could be setting the stage for serious problems down the road.

Cities which have been jacking up parking tickets and other fees may not realise the future cost of the badwill they are creating.

In accounting, there is a wondrous category for that ephemeral quality known as "goodwill." That represents the market value of customer/client goodwill and the "blue sky" asset of being a trusted provider of a valued good or service.

There should be a special accounting category for the "badwill" being generated in stupendous quantities by cities, municipal agencies and other local governments.

Parking tickets that were $20 a decade ago are now over $80. Traffic violations can easily exceed $300, and that's before penalties.

My wife was in line recently to pay our city garbage colection fee, which incidentally has doubled in a few years, far outstripping inflation (supposedly negligible). She reported that the room was crowded with irate citizens who were there to pay their $80+ parking tickets.

Many were voicing anger about the poorly marked signs which declared a once-safe parking area was now a "no parking" zone. It might be ironic to some that in this famously liberal university town, the angry murmurings of the citizenry and the calls for protests are rising not in response to international issues but to the exploitation of the citizenry via outrageous parking tickets.

The badwill being generated may well haunt the city for a long time to come. Rather than forthrightly laying out the city's budget and breaking out its costs, and then asking for a tax increase from all residents, the city masks its costs for city employees' pensions and raises revenues by jacking up parking and other fees.

The extra money raised is rather modest compared to the mountain of badwill the city is generating.

When the city is finally forced to come hat in hand to voters for more direct taxes, it may find it has destroyed the goodwill of its residents with rip-off rates and fee increases. The city may find that stripmining its citizens for a couple million dollars has wiped out tens of millions of dollars in goodwill it once possessed.

The badwill it has generated will not dissipate easily. City officials better wise up to the goodwill they are squandering in their self-serving "revenue enhancement" policies and the gargantuan badwill they are collecting with every outrageous ticket and jacked-up fee.

Comments

[Getreal1]

Chicago is a prime example of a city gone bad. You can't even go to some of the shops there as the only place to park is in the nearby neighborhood and you must have a city tag in order to park there. Well forget about shopping in those shops. Also they'll write you a ticket for an expired tags while your car is parked at the airport. My tag expired while I was on a business trip and when I got back I had a ticket. It's bad enough that you have to pay $13/day or more just to park, and get a $50 ticket to boot. There is more to say about Chicago, but I just don't care to.

[Phil Goodman]

Philadelphia is just as bad. In the name of being "green" they implement a storm runoff fee to every property's water bill. This fee is supposed to to go toward city processing of runoff water caused by the amount of impervious surface on a piece of land. For over 40 years, my vacant lot has been well-kept with grass over dirt. They now charge me a monthly fee because grass is considered impervious surface. What a joke. They are now effectively charging me for the rain falling on my property.

[mountainaires]

They're onto a new scam lately where I live: Trafficams to catch traffic violations.It's ingenious; and it's hideous. They save money by hiring fewer police; and the fines are bringing in revenues. But, badwill is growing.

[francismarion]

As a contractor,I've been getting rolled by municipalities for years.

Not only do you pay for the privilege of working in their confines, you are subjected to review boards and the petty tyrrany of enforcement officials that either ignore violations or scrutinize the smallest aspect of a project, neither of which is in their job description.

That's why I retired early. I was making decent money but I got tired of their guff. My advice: let the local merchants know you are no longer coming into their stores and why.

When an enemy is stronger than you are, avoid him.

[Jason]

This is an important topic that deserves more attention. CHS really hit the nail on the head. How can Americans not see that they live in a soft-totalitarian state when one is taxed for the rain that falls on their property? Local governments are desperately trying to hold on to the status quo even though they horribly mismanaged city finances in good times. Now that revenues are down, they are scratching and clawing to stay in place or close to it. And yet, the American people are not in the streets. They protest nothing with a loud voice. Instead, they murmur a few comments on internet message boards and comment sections and claim that is their civil disobedience. Where is the tipping point for these people? What's it going to take to get them away from the home computer or off the couch?

[francismarion]

Jason

I share your frustration. Let us know how you did when you decide to take your own advice.

We are being balkanized by all these petty bureaucratic entites, degenerating into a morass of medieval dukedoms. Most people are subjected to the whims of these overpaid largely useless masters by living in a city or town. For now the air is freer in the country. When they get out here I'm aftaid some people will start shooting.

[kevinearick]

The Big Con (David Maurer)

“You can’t cheat an honest man,” which is why the ponzi always ends in fascism. The virus runs out of resources and gets desperate. Feed a virus. A membrane is a membrane is a membrane.

Application:

The computers put the mark up;
The media plays the con;
The financial salespeople are the ropers;
The institutional brokers tell the tale & give the convincer;
The questionnaire is the breakdown;
The paper profit puts him on the send;
Wall Street is the big store that takes off the touch;
Blaming the victim blows him off;
Multinational law puts in the fix;
The big box store is the dollar store;
Congress is the inside man;
Oil is the big switch;
Chicago and New York are still competing to put up the best storefront;
The judge is the fallback;
The amateur is the lackey that hides the revolving door for the professional;
When the ponzi collapses, the grafter is replaced with the heavy racket.

There is nothing new about critters wanting something for nothing, or Pavlov substitution for its relative, intelligent investment to release quantum energy, with a promise to be paid on Tuesday for a hamburger today. The hallmark output is community micro-incrementalism, with circulation falling to 0.

Schedule infrastructure improvements accordingly. Feed the black hole to just starve it, no too little to backfire, not so much to choke it out, and remove choke as it warms up. Roll out only for a structural equity return, with a small family trust and a normally open, so absence of your energy opens the ac circuit and shorts the dc circuit. Encourage children to build their own tools.

Rules by Which a Great Empire May Be Reduced to a Small One
(Benjamin Franklin, 1773)

“If you can find prodigals who have ruined their fortunes, broken gamesters, stockjobbers, these may do well as governors. Attorney’s clerks and Newgate solicitors will do for chief justices … To confirm these impressions and strike them deeper, whenever the injured come to the capital with complaints of maladministration, oppression, or injustice, punish such suitors with long delay, enormous expense, and final judgment in favor of the oppressor. When such governors have crammed their coffers and made them so odious to the people that they can no longer remain among them with safety to their person, recall and reward them with pensions. All will contribute to encourage new governors in the same practice and make the supreme government detestable.”

Application:

More and more people are born into the collapsing circle, assuming its “reality”, to never experience a well-run organization in the entirety of their lives, first selling themselves short, and gradually everyone around them, it never having occurred to them to swim against the current, confirming gravity as if it were the natural end to the universe, ultimately, finding those swimming against the current enemies of the State, fascism.

Replicative multinational enterprise systems set global HR policy, hiring pieces to fill ignorant cubicles, which is fine for the multinationals, but disastrous for the so shorted communities, because only those creating economic loss are hired, creating a vicious circle. What is left at the end of the distillation is talking paper pushers, tending computers, with no practical skills, when the filter is compliance.

Just because a wave has high voltage does not mean it carries high current, nor is it wise to assume continued supply based on the amplitude. The vise will get to the gatekeepers behind the real estate franchises and land tracts locking up the communities, all in good time. They aren’t going anywhere, and the public audit will continue to its natural end, before the re-fit commences.

So, fusion and fission are mechanical and quantum; both are required to build the periodic autotransformer. When did the universe begin is a dc question. The dc bus never sees the negative rail, assuming only growth in the positive rail as the path to the future.

So, there I was … just fixed an elevator all the multinationals failed to fix, making my employer, so he invites me to a celebration dinner, where his wife’s friend asks for my mother’s maiden name …

Anyone gettin' tired of filling out apps to keep the HR machine lubricated?

[Jason]

"Let us know how you did when you decide to take your own advice."

I appreciate your dig at me. Fortunately, I live in a large city that hasn't overreached very much, but I expect that it's coming as they will run out of options sooner or later. So far, the city cut the budget and there hasn't been many large fee increases that I am aware of

About that worst I've seen is a new $1.50 fee for street lights. Some other fees have been raised by minor amounts, but it was awhile since they had been raised.

It's a big city in the midwest with a very country/farmer background that is so far, holding on to personal responsibilty and fiscal conservatism fairly well.

My point though, which wasn't a dig at anyone here, is that the internet seems to be the outlet for public outcries and protesting, and has replaced the in the street in your face marches and protest of old. I think the internet has become a poor substitute for changing anything on a structural level. People want their voices to be heard, or to feel like they are being heard, and through the internet, they accomplish that. But what does the internet ranting accomplish? Nothing really except for increased partisan hatred that will probably lead to Civil War 2.

[roger]

Jason :
This statement is attributed to President Sarkozy
(thank you for the internet, it keeps them off
the streets)

[sharonsj]

Every municipality is looking to raise money because the mainstays of revenue-- property tax, school tax, sales tax--is going down. I don't mean what they charge you is going down, in fact, every tax is going up. That's because people are losing their homes and jobs, and aren't spending much money. So the local governments don't have enough money to meet their obligations.

The other problem is that those cities made promises to the unions for police, fire, and teachers--not to mention how much our politicians pay themselves. They gave away the moon and now can't pay the retirees, so they're going back to the average person and squeezing them for more cash.

I agree that bitching on the internet is no substitute for having a bunch of screaming, protesting crowds on the Washington mall or in front of city hall.

[Chaz Sanderson]

The little guy is getting squeezed every which way and this will implode at some point. Here are 2 more examples:

Bank of America (which took over Countrywide's mortgage book)used to allow a 6 day grace period before tacking on a fee (not a late fee) now it is down to 3 days.

North Brunswick, New Jersey which has exorbitant property taxed and charges sky high water costs used to give away leaf bags in autumn. That has ceased as of the season.

I could go on and on .....

[craig]

They (the politicians) do not care...and really what are we going to do about it? In short order we won't be able to get on the internet to communicate our view points.

Commodity inflation is loose, portending ruin of middle class

http://gata.org/node/9010

Government Using Anti-Terrorism Laws to Crush Dissent

http://tinyurl.com/33l5266

[buzzsaw99]

The voters here refused a water rate increase. The very next day the city manager listed a number of punishments that would be doled out. Some of the changes didn't save any money at all they really were just punishments and he said as much in the newspaper interview. Don't mess with city hall or they will take you down, all of you.

[craig]

So explain to me how things get done for the good of the "collective" people?

Wednesday, September 15, 2010
Goldman Sachs Becomes Republican?
What a disgrace that large banks like Goldman Sachs can place their bets on candidates for government as easily as they can make a killing in the financial markets! So much money is thrown at those running for office that it is no wonder that all politicians look as though they are bought and paid for and, thus, owe some allegiance to those who have given them the big bucks. How could it be otherwise?

http://www.goldmansachs666.com/

[Harry]

Ask why?.....and don't give me she wants to change the world nonsense...

Meg Whitman Becomes Biggest Self-Funded Candidate in History

Meg Whitman, the former EBay Inc. chief executive officer, has contributed $119 million of her own fortune to her campaign for California governor, making her the biggest self-funded candidate in U.S. history.

http://www.bloomberg.com/news/2010-09-15/whitman-s-119-million-makes-her-biggest-self-funded-u-s-candidate-ever.html

Whitman feels heat as Goldman's image tarnishes

http://articles.sfgate.com/2010-04-22/bay-area/20860041_1_goldman-sachs-meg-whitman-democratic-candidate-jerry-brown

[Keith Carroll]

After a bit of research I am prepared to guess that Charles Hugh Smith of "two minds" blog is talking about Berkeley. I just got another Berkeley ticket for not having a front license plate on my car. This has happened about 5 times in the past and only, only when I am parked in Berkeley (no other police department seems to care). The last one cost me $105. (I know, I know - I just don't want to put a front license plate on my car). Quite frankly even though I live next door to Berkeley, if I can shop somewhere outside of Berkeley, If I can see a movie outside Berkeley or doing anything else and not have to go into Berkeley, I try to do so.

[DavosSherman]

Title should be government deflation. LOL!

[affidavit forms]

they the politicians, are they thinking about the commoners? we need to debate on it.