Saturday, September 20, 2014

Deregulation of Local Government (whimsy)

Distortions in the market occur when there are monopolies.  Typically, a distortion involves the consumer either paying WAY more for good or services than they would otherwise pay, or there is a poverty of choices or the customer must endure absurd waiting periods for items/services that should be commodities.

Two kinds of monopolies are common.

One type is a "natural monopoly".  The power company that owns the local power distribution grid is a form of natural monopoly.  So is the local distributor of natural gas.  In days of yore the phone company that owned the land-lines leading into your home had a natural monopoly. Historically, governments were this kind of monopoly.

Sometimes it is the nature of the product that creates a natural monopoly.  Large landscaping trees might be this kind of monopoly. The rootballs are fragile and weigh many tons.  Because of the nature of the product, it is nearly always more cost effective to purchase from the most local source regardless of how poorly he runs the business.

The other common monopoly is created by collective bargaining, that is, Unions.

The intersection of these two types of monopolies creates an obstacle course that is difficult and time-intensive to navigate.

Consider the permitting processes to run/expand/start a business.  Each level of local government (township, county, state) issues permits for different, unavoidable aspects of running a business.

Consider that an electrician who is issued his journeyman's card has reciprocity in townships, counties and states other than his own. Is there any reason, other than custom, that my residential wiring cannot be "permitted" by the journeyman electrician employed by a neighboring county as an inspector?  The wiring is being permitted on the condition of compliance to the National Electric Code standards.  What is the problem?

Suppose I am trying to start a business in a township that is hostile to business.  In these crappy economic times it may surprise some readers but there still are anti-business townships.  Often, they are bedroom communities and they (the clerks and supervisors) think that there is already too dang much traffic.  Why can't I call up Perry Township Hall in Shiawassee County to get permitted in any county in Michigan?  THERE IS NO VACANT COMMERCIAL PROPERTY IN PERRY TOWNSHIP!

That is because Perry Township is pro-business.  They understand time is money.  They prepare a tailor-made punchlist of the permits required for your type of business.  The punchlist includes a list of the supporting documentation that the businessman must provide.  They include a phone number and a case number. You, as a businessman, call that number when you have your ducks all in a row.  The township schedules a meeting where all of the permitting entities have representation.  The businessman's submissions are inspected and they have a signing party.  It is much like when you close on a house.  BAM!  DONE!

Part II, Perry Township 

Other services

Telephone service is, well, a service.  When Ma Bell was deregulated she had to allow competitive carriers access to her infrastructure and to unbundle packages.

The fastest growing segment of most state budgets is corrections.  Surely, given the fact that a computer with the computational power of an 1970 IBM mainframe sits on every horizontal surface in government offices it is possible to unbundle the cost of corrections.

As a taxpayer I want to purchase my "corrections" services from Kentucky at $15,000 per inmate year rather than my home state of Michigan at $28,000 per year.  Any person who commits a felony against ME would receive the gentle ministrations of the Kentucky penal system rather than Michigan's....where Judge Giddings ruled that convicts have a constitutional right to color TVs and Cable.  The fine citizens of New York state would gain even more.  Their per inmate cost is north of $60K/year.  Data from HERE.

Corrections is just a start.

If Michigan spends $10,800 per pupil and North Carolina spends $8,300 per pupil, why can't I purchase this service from North Carolina and have it vendored through to my local education outlet, just like buying natural gas, or electricity.  I buy the product and pay a small fee for the rental of the delivery system.  It is not as if my kids will be shorted by having to study North Carolina state history. If anything they will get more as North Carolina was one of the original 13 colonies. And the state universities in North Carolina are easily on par with those in Michigan.  As with corrections, taxpayers in New York State have even more to gain. Their per student cost is a bit more than $19K per pupil.  Data from HERE.

1 comment:

  1. That's a pretty sad indictment of your area... Hopefully you'll get it sorted out!