Radical Avenue

California has fallen into a morass of chronic budget deficits and political paralysis. The deficit has now exploded to $14 billion for the coming fiscal year. In the face of this budgetary imbalance, California politicians argue back and forth about the best remedy for the problem. Some lawmakers want to use tax and fee adjustments to help close the gap. Others adamantly oppose tax increases of any kind, and want to close the deficit entirely through spending cuts. Sound familiar?

California law requires a balanced budget which must be approved by two thirds of the legislature. And several complicated voter approved funding mandates severely limit the legislature’s ability to cut spending. As a result, we get budgets held together with accounting gimmicks and bond measures.

A host of factors, including the sharp downturn in the housing market and an expensive disaster season, have left the budget in particularly bad shape this year. And while politicians bicker, our infrastructure crumbles around us. The state government needs to find ways of paying for public improvements without raising taxes.

Some municipalities raise money by selling the naming rights to sports complexes. Private organizations like to associate their products with recognizable landmarks. This helps to create brand recognition. It follows that private groups would probably like to have their names associated with major bridges and freeways as well. Would commuters really care if they drove to work on Yahoo Freeway or Monster Avenue instead of I-5 or 680?

Local companies could point to a freshly paved freeway with their name on it as tangible proof of their investment in the community. Roads and bridges are underutilized public assets.

California, budget, deficit, taxes, roads, bridges

Every 20 years or so a humpback whale wanders up the delta in northern California and becomes an inland sensation. Police officers and local officials hate it. It means they have to use scarce resources on crowd control and porta-potties.

Where public entities see headaches, private groups see profits. You’d better believe that as soon as the crowds show up, so do the T Shirt vendors. There’s no law that says local governments can’t profit from spontaneous gatherings.

The city council should get in touch with the local chamber of commerce when events like this occur. They could rent some farmland and use it for paid parking. A big tent on one corner of the temporary lot could serve as a place to rest, grab a cold drink and get out of the sun. It’s unfair to ask taxpayers to pay the full cost of crowd control at such events.

whales, delta, dawn, Sacramento delta, humphrey, humpback whale

When city councils in this country convene to assess budget priorities, they first hear from the police commissioner, who says no one will be safe without more cops on the street. Then the captain of the fire department arrives to complain about a shortage of working ambulances. Finally, the head librarian drops by to report on unreliable printers and graffiti in the bathrooms. It’s not much of a decision.

All across our country we have treasure troves of knowledge housed in majestic downtown buildings open to the public for about 32 hours a week. Renting out space to retail booksellers would allow these libraries to keep the doors open a bit longer. Mom and Dad could drink cappuccino while browsing through the bestsellers downstairs while the kids work on school projects upstairs.

It seems that very few politicians have considered using public assets to intelligently generate revenue. They see taxes and loans as the publics’ only sources of income.

libraries, public library, public funding

Homeowner’s insurance could be a lot easier to understand. If your house is destroyed by a catastrophic event, you should get a pre-established sum of money which you can use to rebuild. It shouldn’t matter if your house is destroyed by a hurricane, a tornado, a flood, a fire or a landslide. People purchase insurance for peace of mind. They want to know that if their home is demolished through no fault of their own, their insurance will give them a predetermined cash payout. The amount of the payout should be based on the premium. If you need $100,000 to rebuild, you pay a higher premium than someone needing only $50,000.

As homeowners know, insurance doesn’t work this way. Instead, insurance companies purposely use extraordinarily complicated language to protect themselves from having to pay claims. Only certain types of disasters are covered. And instead of covering types of disasters, like hurricanes and tornadoes, insurance policies cover naturally occurring phenomena which may contribute to disasters, like the wind. This allows insurance companies to bring in experts to decide how much damage was actually caused by the wind and how much was caused by something else, a nonsensical distinction when your former home is a pile of rubble. When homeowners disagree with insurance company assessments, they must then hire their own experts and take the matter to court. Of course very few private citizens have the financial resources or stamina to battle insurance companies in this arena.

insurance, hurricanes, floods, homeowners insurance, wind damage, replacement value

Our federal government provides insurance through a number of programs. The federal flood insurance program protects homeowners from water damage. The Federal Deposit Insurance Corporation steps in to reimburse account holders when banks go belly up. Federal Crop Insurance protects farmers from catastrophic crop loss. Everywhere you look, the government is in the insurance game. But none of these organizations are designed to turn a profit.

Privately owned insurance companies on the other hand, have enjoyed record profits recently. You certainly wouldn’t know it from listening to insurance company propaganda. They’re busy trying to convince the public that trial lawyers are destroying the world as we know it. Of course the legions of trial lawyers hired by insurance companies are conveniently never mentioned. So consumers have to reimburse their own lawyers in order to obtain reasonable compensation for their losses. And they pay for insurance company lawyers in the form of higher premiums.

Something is seriously wrong with the insurance industry in America. It’s one thing for private groups to make reasonable profits in uneventful times. But we’ve had one natural disaster after another over the past few years. This is what happens when legislatures serve the interests of insurers at the expense of consumers. Some real competition in this industry is sorely needed.

insurance, federal insurance, fdic, federal crop insurance, insurance industry profits, insurance profits, trial lawyers, insurance company record profits

Insurance pays off for private sellers in this country. They profit handsomely while public sector investment goes down a sinkhole. Our government underwrites flood insurance for homeowners but does not profit from the sale of comprehensive homeowners policies. If states sold comprehensive homeowners policies, it would allow government to competitively regulate the insurance industry the way the Post Office regulates the package delivery business.

Coastal state governments for example, could offer full coverage for all structural damages caused by hurricanes. Currently, many private insurers only pay for wind damage. This puts homeowners in the untenable position of attempting to distinguish between wind damage and water damage in cases where their homes were obviously destroyed by a combination of the two. Private groups would need to match coverage options offered by public groups or risk losing business.

insurance, flood insurance, wind damage, federal flood insurance, hurricane

Congratulations to Michigan and Florida for moving their presidential primaries up on the election calendar. In the US we recognize that monopolies are bad for business. The Iowa and New Hampshire monopoly over early presidential primaries is bad for politics. It’s well past time for the other 48 states to get involved.

Let’s examine some of the reasons Iowa and New Hampshire citizens give to justify their right to go first every four years.

1) Smaller states give less wealthy candidates the opportunity to attract support with less expensive, face to face campaigning. Ok, then lets let Nebraska and Vermont kick things off next time.

2) Iowa and New Hampshire voters are more engaged. This is insulting to citizens from the other states. If voters had the chance to walk down to the corner store once a month and meet each of the candidates in person, we’d all be a lot more engaged. In California, the candidates jet in to attend high priced fund raisers, and then fly out again the next day. The closest most voters get to the candidate is a glance at the limousine as it breezes past. By the time voters in the largest state in the Union cast their ballots, the primary election is already decided.

3) Iowa and New Hampshire partisans also like to talk about tradition. The horse and buggy was a tradition in this country once as well.

presidential primaries, primaries, primary, election, Michigan, Florida, Iowa, New Hampshire

The mission of the US Postal service is described by law. “The Postal Service shall have as its basic function the obligation to provide postal services to bind the Nation together through the personal, educational, literary, and business correspondence of the people. It shall provide prompt, reliable, and efficient services to patrons in all areas and shall render postal services to all communities.” While this certainly sets forth some admirable goals, other package delivery organizations have a more immediate requirement: make money.

In the past decade or so, the Postal Service has quietly begun marketing products not directly related to the mail delivery business. You can now buy t-shirts and phone cards at the Post Office. With millions of people bringing packages in at Christmas time, it only makes sense for the Post Office to start selling some of the products that traditionally go in these packages. No time for shopping? Fax an order form to the Post Office and have them send out your fruitcakes this year. The possibilities are endless.

When FedEx makes money in the package delivery business, its shareholders benefit. If the Post Office were to engage in customer oriented profit making ventures, American taxpayers would reap the rewards.

Post Office, Postal Service, Post Office products, Post Office sales, fruitcakes, package delivery

Communism has failed. When the government monopolizes every industry, it stifles competitive innovation and leads to widespread economic collapse. Private sector monopolies cripple marketplaces as well. The Sherman Act of 1890 declared that no person or business could monopolize trade or conspire with someone else to restrict trade. The law was used to break up John D. Rockefeller’s Standard Oil Company in 1911 and AT&T in 1982.

In the package delivery business on the other hand, the US Postal Service competes alongside private organizations and no one entity dominates the market. As a result, you can send packages of almost any size anywhere in the country in a day. And mailing a letter costs less than 50 cents. We should use the Post Office model in other industries.

In an ideal situation, governments infuse neighborhood friendly moderation into the private sector and independent organizations introduce modern business practices into the public sector. The engagement of taxpayer funds directly into commercial enterprise brings legitimacy to our efforts at promoting industry reforms. By developing enforceable standards agreed on by all the players in an industry, publicly owned companies reduce the need for traditional legislative regulation. Negotiated conditions create a certain moral sway which dictated restrictions never achieve.

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Up until the 1970’s, the Postmaster General served as a Cabinet member in the executive branch of our federal government. Then, in 1971, the Post Office Department was replaced by the US Postal Service as part of a sweeping set of reforms. The Post Office became a non-partisan public organization. Congress transferred operational authority to a Board of Governors, with stamp prices set by an independent Postal Rate Commission.

Small minded politicians love to complain about what a terrible job government does when it gets involved in private sector industries. These partisans use this dishonest rhetoric as a means of serving their true masters: fat cat campaign contributors. Extremely wealthy CEOs don’t like fair competition from public or private sector groups, so they stuff the campaign coffers of willing and greedy political candidates. The politicians then give back by using their legislative and administrative resources to block consumer friendly public investments. It’s just good old fashioned cronyism wrapped up in clever sound bites like “personal accounts” and “ownership society”.

The objective evidence indicates that publicly owned organizations perform admirably when freed from the constraints of partisan politics. Postal employees concentrate on delivering the mail on time and don’t worry much about how to use their positions to favor one political party over another. And for the past 35 years, they’ve been as consistent as the seasons. Neither snow nor rain nor heat nor gloom of night stays these couriers from the swift completion of their appointed rounds.

Post Office, Postal Service, mail, Post Office Department, Postal Rates, stamps

In America we work overtime so as to improve the quality of our laziness. We’ve grown accustomed to shelling out for first class services. However mailing large packages in this country usually means waiting in line for a teller at the Post Office. A fee based reservation system and an after hours pickup schedule would be more efficient. The more personalized the service, the more the customer expects to pay.

The Postal Service should compete wholeheartedly in the international marketplace as well. Our stamp sellers are already well known in Europe, where a wholly owned subsidiary of the US government sponsored the winning Tour de France cycling team five times in the past decade.

UPS, Federal Express, DSL and others have found success in the package delivery business. The Post Office keeps prices and delivery times favorable to consumers by competing as a nonprofit in the same industry. And while the Post Office is self sustaining, it could also fund other public programs through premium service offerings. Once the Post Office is oriented towards turning a profit, it can then explore investment opportunities in courier services, web hosting, email, and cellular phone services.

Post Office, Postal Service, Lance Armstrong, Tour de France, package delivery, mail, mail delivery

Many states now require smog certification as part of the automotive license renewal process. In California, that means going to a privately owned smog certification station where exhaust emissions are measured against state standards. You pay the station for the service then pay the state for the certificate. Of course if your car is a polluter, you must hire a mechanic to make the necessary adjustments to get into compliance. Otherwise, you can’t renew your license. Once again, income that could go to the state instead goes to private companies.

In an ideal setting, motorists could bring their car in to a state owned shop and drive away with a new license plate sticker. This would require a lot less effort than the current system, which forces drivers to first get the smog certificate, and then deal with DMV directly to complete the license plate renewal process.

On December 24 of every year the malls are packed with last minute holiday shoppers. These customers are frantically clearing the shelves of whatever gifts they can get their hands on before the stores close for Christmas. The DMV could take advantage of the tendency of some to procrastinate by offering immediate service to drop in license plate renewal customers for an extra fee.

Since some drivers need to have work done on their cars to get them into compliance, the DMV could hire their own mechanics for this work. This would allow the state to provide job opportunities to people who are otherwise hard to employ. These workers would then gain the kind of practical experience that private employers look for in potential employees.

I’m not suggesting that states should shut private companies down altogether. Privately owned smog certification centers could compete right alongside the state owned centers. Customers will gravitate towards the shops offering high quality services at a fair price.

dmv, smog, smog certificate, license plate

Very few government agencies care much about providing high quality service to their customers. At most gas stations, you can either fill your own tank or you can pull into the full service bay and let the attendant do it for you. Customers expect to pay a first class price for first class service. At the DMV, there is no first class. You show up, take a ticket and wait in line with everyone else.

Time is money. Some people don’t want to wait in line for anything. They prefer to make an appointment, show up on time, do their business and leave. Better yet, they want to have a direct line to a personal agent who will handle all of their transactions expeditiously. Waiting on the phone is no more pleasant than waiting in person. And dealing with obnoxious Interactive Voice Response systems every time you need to speak with someone adds to the customer’s frustrations. The security of knowing that you can always call an individual who understands your case is worth something to a regular customer.

Privately owned organizations provide premium services to their best clients as a matter of survival. Public organizations have no similar competitive pressure because they always have taxpayer funding to fall back on. But there’s no laws requiring lousy public service either.

dmv, customer service

Stand up comedians don’t tell jokes about the DMV anymore. It has become passé. We’ve all heard about the two hour waits in the wrong line and the orange plastic torture devices masquerading as chairs. We’ve seen the crowds of people looking like actors from the latest Night of the Living Dead remake. Bureaucracy has gotten the last laugh.

Apparently the motor vehicles department has yet to realize what private industry figured out long ago. Customers will gladly pay a premium for specialized services. Today’s household may include three drivers, two cars, a truck, a motorcycle and a boat. Busy families would jump at the chance to have all their transactions handled through a single agent. With extra income generated from personalized services offsetting department expenses, these agencies constitute less of a drain on public resources.

dmv, public financing, drivers license, license plate

We learn to keep our eyes on the road in drivers’ education class. This of course, is not meant to be taken literally. Safe drivers must also monitor traffic control devices, like signs and flashing lights. Failure to obey signs that say Stop, Yield and Merge can lead to accidents and citations.

Other signs along the side of the road are purely informational. We can ignore them completely and suffer no consequences. We may also disregard billboards because they serve a purely commercial purpose.

Since I ignore the Exit 21 sign when I drive by it every day on the freeway, I wouldn’t care if that sign had other information that I could also ignore. Of course the sign would still need to clearly identify Exit 21 for anyone looking to leave the freeway at that point. But if companies could buy advertising space on road signs, it would give them a new opportunity to reach potential customers. Exit 21: Did you know that the new McTasty McSalad has only 21 calories?

road signs, infrastructure repair, traffic control, freeway signs, public financing