by Martha Quillen
I’ve been reading about rational markets and the Efficient Markets Hypothesis recently. Well, actually I started reading about basic economics about fifteen years ago after I realized that there was something really crazy about small-town financial planning.
And my overwhelming conclusion after fifteen years? Fiscal policy is screwy at every level.
Community planning was the rage in the 1990s, especially comprehensive planning, which encouraged citizens to consider everything simultaneously: financial development, infrastructure, zoning, parks, recreation, industry, utilities, education, et al.
In 1995, Governor Romer initiated Smart Growth seminars to facilitate such planning, and throughout Colorado, citizens addressed a broad assortment of topics, answering questions such as: How much growth do you want? What kind of industry do you want? Where would you like to have parks? And schools? How many do you want? Where do you think restaurants and retail stores should be located? How about used car lots? Gas stations? And green space?
I started regarding this as Colorado’s Field of Dreams planning tactic. In the movie, Kevin Costner repeatedly murmured “if you build it, they will come,” and a famous baseball team arrived, magically and mysteriously. Roy Romer’s mojo, however, was apparently better than that of Costner’s character. Coloradans didn’t have to build anything: we just had to plan it, and the rest would follow. It struck me as a little insane, but fairly fun – and definitely interesting.
As fledgling proprietors of a somewhat experimental local news magazine, Ed and I went to meetings in Salida, Gunnison and Alamosa, and kept track of plans being developed in Saguache, Crestone, Buena Vista and beyond. As it turned out, most rural Coloradans wanted the same things: more and better jobs, light industry, preservation of green space and ranchlands, and a bigger share of tourism dollars. We also wanted real estate development and growth to “pay its own way” instead of increasing the bills for all of us.
I thought it was somewhat silly to encourage citizens to propose so much with so little regard for costs, budgets, materials and other realities, but people took those plans very seriously. And before long the plans became serious business – produced and directed by outside planners.
Some planning proposals drew substantial criticism, but local officials told residents that they were merely twenty-year plans intended to serve as advisory tools – not blueprints. Having your property designated as green space or public land did not make it so.
But property owners were dubious. I remember one elderly sheep farmer who threatened to shoot the entire Salida City Council because his property had been designated as a future city park. Our city fathers tried to explain that nothing was likely to happen until long after he died, since it was a twenty-year plan, but the man insisted that his children and grandchildren should get his land, not Salida.
The situation got more complicated after local bankers admitted that such plans, especially if passed and incorporated into local zoning maps, could potentially change property evaluations and affect whether a property owner could get a loan.
The planning process grew increasingly argumentative. Some residents simply couldn’t afford the city’s new plans, yet proposed reforms kept flowing. It was time, some planners and city officials agreed, to vanquish trailers, modulars, cyclone fences, and unsightly outbuildings.
Nobody wanted to suggest that our beautiful little resort town had slums, so planners defined certain businesses and homes as blight and then discussed some specific “blights” publicly. Little towns are seldom as idyllic as American folklore professes, but the way things were going in Salida, it looked like our small town might end up more like Salem, Massachusetts than Mayberry.
Exactly who were dangerous threats to the public welfare and who were righteous goodmen depended on your point of view, but a schism had definitely developed, and tempers flared. Mayor Nancy Sanger had been popular for many years – until she started railing at complainants, and even tried to banish a few of them from city council meetings. She got in a major tiff with the Atlantis Community, an activist organization that supports accessibility for the handicapped, over whether Salida needed some new curb cuts. She told the Denver Post’s Ride the Rockies that they weren’t welcome in Salida, and then she supported a loitering law to keep kids from hanging out in Salida’s new and improved downtown area.
Sanger was voted out of office in November of 1997, but things were never the same.
Those comprehensive plans didn’t change much. Local jobs with benefits are still scarce. Poorly funded real estate developments continue to cost our communities plenty. Light industry remains elusive, and sprawl, taxes, and our cost of living keep increasing.
But in retrospect, the planning process probably helped foster some significant changes. By the end of that era, we had more expert advisors, town administrators, financial directors, and consultants than ever before. For better and for worse, small communities today are managed more by professionals than by their elected officials, and now citizens seem to feel more ignored, disregarded, and powerless than ever.
In recent years, politicking has gotten really contentious, and a lot of the public’s rage has been directed at the public sector. But do Americans really believe that school teachers, firemen, librarians, road workers, clerks and kindergarten aides are all pulling in big bucks? Or that those people somehow brought down the global economy?
Surely not, because that’s crazy. In fact, that’s even crazier than the speculative frenzy, irrational exuberance, and insanely over-optimistic interpretation of rational market theory that inspired American economists, bankers, and political advisors to ditch old-fashioned caution and oversight.
Our economy is where it is today because fiscal experts led us to this precipice. But our feelings of fury, powerlessness, and suspicion are more likely due to having let those experts usurp our voices.
Banks, industries, lobbyists and think tanks are good at making government aware of their needs. But ordinary working class Americans are not.
One of the easiest ways to tell that our voices have been stolen is to listen to us. Either ordinary Americans have lost their voices, or what we want most isn’t jobs, safe products, affordable health care, or to know that our life savings and pension plans are securely invested. No, according to what citizens clamor for, what we want most is to operate as governmental officials ourselves – and to adhere to old political ideologies such as laissez faire, trickle down and supply-side economics, deregulation, privatization, self-regulating markets, and constitutional fundamentalism.
But those are not things we can use, nor even things that we can reliably evaluate. They are ideas, and some of them are actually thoroughly discredited theories, which very few people truly comprehend, and which, as it turns out in the case of the economic theories, even Alan Greenspan, bankers, and Federal regulators didn’t fully understand.
Years ago, I read Against the Conventional Wisdom by Douglas Dowd, a fiercely leftist economist and historian. You can love or hate Dowd’s politics, but he expresses little love for modern U.S. fiscal policy (be it proposed by Republicans or Democrats). A depression era scholar educated in a program established by Franklin Roosevelt, Dowd believes that the Kennedy administration destroyed much of the direction and impetus of labor reforms by putting experts in charge of everything. He doesn’t think it was Kennedy’s intention to hurt working class people, but he questions whether academic experts can really address the needs and concerns of workers. Dowd thinks workers should speak for workers.
But that’s not the way things work in America. America’s newest populists don’t speak for workers, they champion wealthy taxpayers, bankers who want deregulation, millionaires confronted with estate taxes, huge corporations that want big tax breaks and little oversight, and international oil companies who want to “drill, baby, drill” and pay nothing if it spills.
And those rich bankers, industries, and citizens also lobby for what they want. So who speaks for working class citizens?
Nobody, least of all themselves. Instead, American workers usually bash each other. Right now, times are tough and jobs are scarce and Americans are clamoring to close schools, fire teachers, put janitors out of work, lay off police and firemen, bust unions, slash Medicare and Social Security, and reduce government services.
When is the best time to knock out hundreds of thousands of public sector jobs and reduce people’s benefits? When your fellow citizens are already down, out, and hungry.
And what will become of American business when fewer and fewer Americans have any money left to buy anything? Hey, we’re already in a deep recession, why not dive into a depression?
It’s little wonder that economists deluded themselves into believing in the essential efficacy of markets, because if markets aren’t stable, reliable, and rational, what is?
Certainly, not us.
Martha Quillen has been trying to figure out how to retire before she’s 85, and thus hasn’t yet determined how to fix the U.S. and international economies.