Trump’s budget proposal is a mean, necessary, first step.

On principle, I’m a fan of some of Trump’s budget proposals. I’ve long argued our funding is upside down. There’s no reason New Yorkers should pay for art projects that get displayed in Indianapolis. There’s no reason people in Alaska should pay for a highway in Fort Wayne. It’s safe to say almost no one could name one thing paid for by the National Endowment for the Arts in Indianapolis. I’m sure there are things, but it’s unlikely anyone knows what they are on a grand scale. Asking for money from the Feds is like asking the Mayor’s office to buy you lunch.

A discussion just the other night with someone working here in Indiana suggested the millions of dollars flowing in from the federal government to help Indiana’s HIV crisis has been responsible for a hiring spree of people who work in Indianapolis and never visit the impacted areas. That’s a situation where there’s a clear order of operations: give addicts needles, then detox beds, then send them on their way with some job training. The Federal money isn’t doing much of that if any. There’s no reason Indiana can’t handle this itself. We caused it, after all.

We’d all be better off if we kept money at the local and state level, with the most going to local governments. It’ll get stuff done faster, too because nothing cuts red tape like not having any red tape to cut through.

Trump’s proposal even cuts IRS funding by $293 million, which I guess most people won’t mind.

My biggest problem with the plan is it just shifts money around, mostly to defense. There are no true net cuts to spending. If we’re going to cut these programs nationally, let’s reduce expenditures. Move money to the debt in the short term so we can lower taxes at the federal level long-term.

If I have to spend 30% of my income on taxes, I’d rather 20% of it go to Indianapolis. I live here. I walk on these streets. I have to look at the art projects done here. Cutting taxes at the federal level means we can maintain the status quo of tax expenditures if states and cities want or can increase taxes. If they don’t, at least I have some ability to move. It’s a lot easier to move from Indianapolis to Chicago than it is to move from the US to Canada. Shifting money this way would maintain the balance to a person’s tax status quo, but now people can see what they’re paying for. That’s a big deal, and this plan doesn’t do that at all. It just throws money into an existing pile no one asked for.

If there’s a big political problem in this country, it’s the perceived or real failure of governments to provide for their residents competently and efficiently. This leads to division in spending a bunch of money on taxes because you can’t see what you’re paying for. A healthy market – even of ideas – can’t function in that system.

This just leads to the federal government taking on a disproportionate amount of work to support what were always local issues and feeds more resentment. There’s no reason Congress should fund street lights for Detroit and buses for Indianapolis. The only time the federal government should provide local funding is in the event of large-scale disasters, attacks, or catastrophes that approach a scale unforgiving to a local unit of government. I’d argue flint’s water disaster qualifies.

PBS is going to be another sore point for people. We had this same outcry when Mitch Daniels cut public radio funding in Indiana around 2009. That continued just fine, WFYI is still on the air, and life went on. Remember, too, that HBO owns the rights to Big Bird first now.

It’s nuts so many great, deserving services and programs, like nonprofits funded with federal money, is so reliant on random whims of legislators who don’t know who they are. States may be in a race to the bottom on tax rates, but that’s surely driven in part by this cycle of increasing federal taxes that take money away to put it somewhere else far away. Pressure from voters in this cycle has us moving upside down.

I get that this proposal sounds bad, and there are certainly some downright mean things in there, like cutting Meals on Wheels. But we have to be adults and recognize we’re in debt. We have to make some hard decisions. One example is The Legal Services Corp., which provides legal aid to the poor, is getting cut entirely in this proposal. Legal-help services have always been over-burdened to the point no one thinks they help. They just fulfill a constitutional requirement to the minimum level. What use is that? Can’t we do better? We’re going to have to do better. A good way might be looking to the legal help in one’s community. I’d rather pay for that here in Indiana than Florida because at least the money can stay here and it might promote a stronger sense of community and pride.

A lot of America could use that right now.

This is what Indianapolis and Indiana will look like in the year 2036

Indy’s Plan 2020 is getting a lot of attention. I tried looking at their site, but almost every link I encountered said nothing or was broken. From what I hear, it’s a lot of zoning and land re-use plans that everyone is holding up as “the key to the city’s future”. I rarely believe that sort of stuff because Indianapolis, like most cities, doesn’t have any money to turn effort into momentum.

Doug Masson is doing an excellent job of summarizing Indiana’s history in his Indiana Bicentennial series.

Given Plan 2020 seems rather lofty and best-case-scenario for the future, and Doug has the State’s overall past covered, I thought it might be interesting to think about what Indianapolis and Indiana might look like in 20 years. That seems like a reasonable amount of time for gears of government to work enough to induce some noticeable policy changes at the state and local levels.

In 20 years this puts Indianapolis in the year 2036. Most millennials will now be somewhere in their 40’s. A new generation will have graduated out of K-12 education.

Indianapolis Neighborhoods

Broad Ripple will experience an overall suburbanization effect. As present-day millennials age and decide they want to hang near work and decent schools with their new families, Broad Ripple is going to look more like an old-school suburb.

Which means all the nightlife, music, and other noisy stuff will continue its trend and firmly supplant itself in Fountain Square. The current colony of artists and other industries that rely on extremely low-rents and low-cost spaces will now be setup around Garfield Park. The Cultural Trail will have extended south to Garfield Park, and East through the New York St/Michigan Street areas. However, we’ll be buzzled as to why all the growth will take place near Garfield Park and not so much on the near east side.

The 16th street corridor will continue its growth just north of Downtown and is likely to grow into something we’ve not seen much before in Indy. I think it’ll become a sort of “uppercrust young people with money” corridor. College students that have wealthy parents, Downtown workers with well-paying jobs, but with a taste that eschews the sort of shiny all-glass all-chrome aesthetic that defines Fountain Square’s new developments today. A new aesthetic of urban, gritty, classical-architecture is likely to take shape here.

The City’s continued investments in new roads, sidewalks, transit corridors, and trails will continue to expand primarily on the north side, north of Washington Street, east of Michigan Road, and west of College Ave. Nothing new here.

Lafayette Square and Washington Square malls will drag down everything around them like a collapsing star. They’ll kill spontaneity, aesthetics, and drag down safety and drive up costs in transportation. Best case is the city will work with Simon to demolish the properties and replace them with a dense node of mixed-use residential and commercial that is affordable and pushes the boundaries of quality, low-cost, office and retail space for entrepreneurs and super small businesses. “Mall to Small” we’ll call it.

Development on the south side will likely cease in this period. The south side will be waiting another 20 years (40 total from today) for suburban counties to struggle with their over-development and sprawl. Their costs will skyrocket, their residents will leave for newer exurbs, and taxes will increase. This will put Fishers, Avon, Plainfield, and Greenwood on a similar tax rate with Marion County. Thus, new development will in-fill on the south side of Marion County to at least get benefits of proximity since costs are equalized.

Shelby and Hancock Counties will benefit from that south side growth in 50-60 years from today as they become the new affordable suburbs.

Families and adults looking to flee from the City will setup shop in Westfield, Whitestown, Lebanon, New Whiteland, and Franklin. These places will resemble Fishers and Carmel today. Danville may also enjoy some exurban growth. Brownsburg will miss this boat because of a lack of vision and planning today. This will be their “lost generation”. Greenfield and Shelbyville will grow once that aforementioned south-side infill occurs.

Greenwood, Avon, Plainfield, Fishers, and Carmel will look like present-day Beech Grove and Lawrence, in that order. Carmel seems to be attempting to avoid this fate by investing heavily now, but heavy debt loads on a fickle population of residents may be their undoing. Greenwood, Avon, and Plainfield are likely unable to avoid this fate and will become old, expensive, and unsustainable once their water, sewer, road, and school systems start requiring immense repairs – all at around the same time. As property ages and becomes less valuable, they will see revenue shrink even more.

It could be that Carmel grows into an urban center unto itself, and between Indianapolis’ core and Carmel’s core the northside of Marion County becomes something else entirely. I think Carmel’s gambles today are likely to be dangerous long-term with debt. Debt is everyone’s undoing.

Indianapolis will maintain healthy bond and debt levels throughout this time, barring an emergency, and resemble our current “slow and steady” conservative approach to growth. But I can imagine a scenario where Indy’s “sports strategy” starts to show some cracks. The Colts are likely to be in negotiations for another new stadium. The Pacers will maintain shop here. The Speedway is going to see a decline in viewership, advertising, and attendance. Baseball, hockey, and soccer will continue to be such minor-players residents will loudly lament the expense of maintaining such expensive hobbies for the City. Particularly as investments in actual quality-of-life issues on the northside incenses people on the east, west, and south sides that don’t see those same amenities, but do see millions pouring into new stadium discussions.

Beech Grove and Lawrence will collapse and be folded into Indianapolis-Marion County government. They will be mere neighborhood names like Nora and Mars Hill conjure up today. Speedway may hang on, but only so long as Allison Transmission is around.

IUPUI will continue to expand east into Downtown for residential and healthcare work. Expect them to push west big time once they have a large enough plan to quickly take over the black neighborhood that’s there now. They’ll eschew growing “up” because of costs in taller buildings, preferring to keep things nice and cheap just over the river.

Indianapolis’ economy

Indianapolis’s economy will continue to be Indiana’s economy, and even more so, despite what state lawmakers will want to recognize, like today. I do not, however, think technology will be Indy’s future savior. I think our economy is likely to look a lot like today.

Salesforce will continue to expand in Indianapolis until the tech bubble bursts and their lack of profits for the sake of growth will cause total collapse of their workforce. Or, Salesforce will continue to expand in Indianapolis until a larger, actually profitable, company (like Microsoft or IBM) comes along and buys them out. That buyer is likely to have no allegiance to Indiana and we’ll enter a period of attrition as they move positions elsewhere. This will cause an undoing of Indy’s tech sector. Many will leave the city for the coasts in job relocations, but many will stay and reenter the workforce as solo entrepreneurs and freelancers. This is going to have a heavy impact on Indy’s income and sales tax revenues, but is likely to even out 10-15 years from then as the market sorts itself out. It’s hard to say which of these two things happens first. They’re racing neck-and-neck with each. What’s clear is that a select few on Wall Street and in San Francisco will be huge beneficiaries while everyday workers and the City wonders what happened and why.

Indianapolis will likely maintain most of its employment stability in government, retail, and biomedical industries (Lilly and Cummins will still do extremely well). Expect healthcare to take a dive as Boomers die and the echo-boomers age into middle-age with relatively modest healthcare needs. In another 50 years healthcare will likely tick up again as Millennials age further.

Indianapolis will continue to be a convention town, as another Convention Center expansion will have happened. Indianapolis will now regularly host large conventions for political parties, the NRA, and the sort of events we view as “just slightly” out of our league today from a capacity and hospitality stance. New hotels will continue to flow into Downtown.

Statewide policy

Indiana’s Legislature will have finally moved on from social issues like gay marriage, but will still be fixated on abortion and immigration. Indiana will likely continue to slide in the direction of less regulation and low taxation, but will compensate by raising more fees and use-taxes. Expect an increase in the gas tax by a bunch, likely within the next 2-5 years from today, and tied to inflation as Speaker Bosma has proposed. Just as electric cars take over more. I’d expect the gas tax to go up in 2-5 years and then a special “electric surcharge tax” will be placed on electric car charging to make up the difference going forward.

Indiana’s Legislature will continue to exert heavy control on Indiana’s municipalities, much to their chagrin. There will also be a push towards improving quality of life, noting that it’s not enough to be good for business if no one wants to live in your state. But this will focus heavily on communities with money. Expect Indianapolis, Fort Wayne, and Evansville to do well here, plus Hendricks, Hamilton, and Boone Counties. Rural decline will continue to heavily decimate the Hoosier hinterlands, placing them in America’s new ghettos: rural, lacking in services, and priced out of useful healthcare, transportation, and high-paying jobs.

Mitch Daniels in his return third term in 2020 will be able to stem the tide for a while, but by 2030 we’ll view rural residents as burdensome and unable to deliver value for the State.

Higher education will continue to be a sore point for Indiana as Hoosiers will still be priced out of it. I don’t expect changes in the pricing of higher education for another generation.

Places currently in economic decline will be largely abandoned. Muncie, Tipton, Seymour, and the like will resemble present-day Gary. Anderson and Kokomo may be able to stem this tide by throwing transit subsidies into Indianapolis’ orbit. Westfield’s gain in residents, for instance, will be Kokomo’s gain in industry.

Very rural counties today, like Cass, Washington, Greene, etc. will decline even further into a barely-self-sustaining entity that is mired in drug abuse, prostitution, underemployment, and anger.

The overarching conclusion: the more things change, the more they stay the same.

Trump supporters have a point

Yesterday Doug Masson and Aaron Renn had a spirited discussion about Trump supporters on Twitter. Broadly about whether supporters know what they’re doing and if Trump is reasonably the person most likely to make their lives better.

This hearkens back to my post earlier this week about progressivism vs. conservatism and how Republicans have failed to share a vision that actually makes people sit up and listen. Trump is closest to articulating it, even if he mostly says nothing concrete. He’s at least reciting and admitting problems, where others aren’t. The bar was set very low and he set it slightly higher by at least talking about some things.

What are those things?

  • Loss of manufacturing jobs
  • Quick and steady diversification of the population
  • Relatively heavy tax burdens with no clear benefit from expenditures

I’ll leave it at those three because this is the Internet and you have other things to read. My point here is Republicans have largely failed to articulate meaningful solutions to these problems. And people who scoff at Trump supporters as expendable pawns must recognize that’s not very supportive or nice, either.

There hasn’t been much articulated well enough for people with limited time to understand. So it doesn’t get talked about. Things are reduced to petty issues and problems that no one really cares about.

I say this from experience, because while Aaron has talked to his dad in New Albany about why he supports Trump, my dad also no doubt supports Trump a few miles up the road in Salem. Why would someone do that? Because Trump at least re-states the problem that impacted him greatly: “The jobs are all in Mexico and China”, “The neighborhood isn’t as nice anymore”, “There’s too much drug violence”, etc.

To a guy like my Dad and many Trump supporters, things distil very neatly:

  • “My job went to China. Therefore, if we just make it so companies can’t offshore so easily, my job will come back and things will be fine again.”
  • “Drugs are everywhere. We know it’s from Mexico. If we could just shut the door on that, things will be fine again. Plus, they took jobs, too, so why do we even need to care about them.”
  • “My insurance was fine at my last job. If we could just bring that back, things will be fine again.”

“Make America Great Again” isn’t about race or gays or whatever for most people (I said most, not all. We’re being too simplistic when we paint with that big a brush). It recalls that time 20 years ago when rural communities had factories that paid well because profits were high and things were great for themselves. People are selfish beings, let’s not gloss over that. But also American. Guys like my dad genuinely just want the opportunity to work, provide, live securely and just be left alone.

The truth is we have all kinds of jobs available. Just not in those rural spots anymore because rural places don’t offer much anymore. They lack things new American manufacturing can only find in cities: big airports, highways, broadband, bigger talent pools, etc.

All this is to say Republicans aren’t acknowledging those problems. If you’re somebody who left high school and started making $20/hr with the promise that things were going to be great forever, and suddenly it’s not because companies have to make common sense decisions about their own well-being, you’d be mad, too.

I know someone is reading this and saying, “Yeah, well, it’s systemic.” Sure, there are things that are a problem. And Republicans have largely ignored that, too.

  • People like my dad didn’t develop a desire for education. Because they didn’t need to for 50 years.
  • These same kinds of people don’t have much access to educational opportunities (libraries, adult learning, etc.) even if they wanted to.
  • The work they’re offered to “retrain for” is often so wildly out of line with what they know and makes government programs look out of touch. My dad loaded trucks for 35 years. Now you want him to go back to school, do a bunch of fractions and basic algebra at the age of 58 and be, what, a nurse practitioner?

No, Trump supporters aren’t stupid. Ignorant of some things, yes, but they’re not stupid. They feel like you might feel if, in 20 years, the Internet just vanished in a span of 5 years.

To be clear, I don’t think Trump has much of a clear vision for what, exactly, he’d do to help people. I don’t think anyone does, and that in and of itself is the Republican vision: “In a land of personal freedom and liberty, you have the right to do as you please. In many cases, that’s going to involve a lot of work.” And by “lot of work”, that’s learning all about fractions and algebra and technology and the Internet and a bunch of other stuff you never had to deal with before.

Can we all admit how terrifying that must feel? Can we all agree that is like saying to you, dear reader, “Sorry about your job and that you have no money anymore. I guess you can become a brain surgeon now.” Yes, that sounds ridiculous to some degree, but you get the point, right?

At this point they just want to know what to do and they want someone who will just tell other people (like Mexico) to screw off. “What’d you ever do for me? Nothing. So screw off.” Obviously Mexico does provide value to us through all sorts of imports and exports, but again, put yourself in their shoes for a minute.

What could Republicans articulate that might help? I’m not entirely sure there’s much, largely because a large swath of those people are between a rock and a hard place physically and emotionally. You can’t take someone who’s barely literate and make get them into spreadsheets in a year. Or two. Or maybe ten. They don’t have that much time.

Democrats have a very clear, “We’ll just pay for everything now” response to this. Which is pretty darn clear about what that means: healthcare, college for your kids, retirement, we’ve got that covered. Republicans ought to be strengthening the things that can make people empower themselves (more on that in another post). Because to guys like my Dad, “I don’t want you to just give me these things. I want to be able to provide for myself like I always used to.” It’s demoralizing, for better or worse.

Additionally so when you’re told to pay for these things your taxes have to go up. To a group of people who live in places without access to broadband Internet, or little to no library service, or weak cellular coverage, or a tiny hospital or 1 or 2 doctors, and what money you do makes goes to the Federal Government for things you’re never going to see a benefit from. That’s rough. So we don’t get to be confused why they’re angry. It’s obvious, and you would be, too.

My dad doesn’t need free college. Even if he wanted to go he can’t because what’s he going to do? Drive 2 hours to IU Bloomington every day? Drive 90 minutes to Ivy Tech to enroll in one of a few programs? At that point he doesn’t need an education, he needs gas and a new truck. Are we just going to pay for that, too? My dad just wants the government to “bring some factories in” (his actual words). Which it can’t do. So he’s always going to be upset about that. Like if, in 20 years, you and I were voting for the guy who would “turn the Internet back on”.

The best we can do to insure against this in the future is making sure people recognize the new deal: “Things will change. You will have to adapt. So learn to be adaptive and don’t stagnate. People, like businesses, will fail hard and slow if you stagnate.”

Indiana needs a huge tax credit for actually living here

I wrote not long ago that the best way to grow a society and economy is to invest in the people that live there and by treating them as not only people, but as assets more vital than roads or any other infrastructure. One such idea I had recently was a tax credit for actually deciding to live here.

When we think of brain drain, we think of a young kid who goes to college, graduates, and looks around and thinks, “I don’t want to be here anymore”, and so they leave to someplace else, presumably the coasts or Chicago or some other large city. Which means that a state pays taxes into a university system to subsidize the cost of educating someone who then just picks up and leaves with that good (the education). We get all the expense and none of the benefit.

People assume that this happens because the kinds of jobs a person could or would want aren’t available in the state. For example, someone that wants to be an anthropologist isn’t going to go out to the anthropology factory and get a job in Indiana. And don’t just say people need to work in more in-demand fields. If that were the case no one would ever major in anything but healthcare, law, and technology. There’s more to a society than that. The world needs writers, content creators, artists, teachers, police officers, etc.

But I think there’s a bigger reason people leave, and that’s because Indiana is a generally terrible place to live. The weather sucks, there’s not much to look at most of the time, and if you’re college educated, you probably went through school and your “opinions about things” have changed because that’s what happens when you spend a bunch of time around diverse people who don’t think or look or behave the same way you and your family and your friends did back home. So when you graduate and pop out into the world a lot think, “These people are the biggest bunch of backwater yokels I’ve ever met.” In a lot of cases, they’re right, and people’s feelings and opinions evolve to the point that their past self just seems downright mean. Doug Masson wrote about his evolving opinions on one such topic.

So you have a chicken-and-egg problem. You want graduates to stay, but you have nothing to keep them here and in fact, you’re probably repelling a lot of them away. Enter the Republican’s favorite stick:  a tax credit!

If a person lives in Indiana all or most of their life, they go to a school in Indiana, and graduate, why not say, “Hey! That’s great! From now until the next 15 years we’re going to give you a tax credit of 10% of your income up to $250,000. So, a college graduate earning the state’s average salary of $47,500 a year would save $4,750. Maybe it doesn’t have to be 10%, we can debate the number. But it needs to be a hearty chunk of change.

This serves a lot of purposes people universally like: it keeps more money in the hands of people, it incentivizes people to go back to school and gives them a clear-cut guaranteed benefit in earnings (something that’s hard to guarantee now), it also incentivizes people to earn more money and advance themselves, and it provides a huge carrot for people to come out of school, see the savings, and stay put. It can reverse brain drain problems, keeps our investments here in-state, and as we catch up and exceed other states for college graduates employers will inevitably take notice.

How can we pay for it? Perhaps those companies that see all of our educated individuals might be willing to pay a premium for access to that? It’s treating people like the assets they are, not the sort of misfit expense a lot of people see others as today. People are what gives a place its values, and an increase in diverse assets in Indiana would be a good thing for everyone.

Someone has to explain why gross income is a thing

Let’s pretend for a moment that you’re a baker. I own the bakery, you work for me and I ask you to make a cake. I might say, “I need you to bake me a cake. Make it two layers, with frosting, sprinkles and pretty icing along the edges.”

You say, “OK! Great!” And you get to work. You get all of your ingredients ready and at arm’s reach. You have just enough to make what you need to make a really great cake. But just as you start to work I say, “Oh, but I’m going to need one of those eggs, half of your sprinkles, about a cup of sugar and half a pound of flour. I hope that’s okay. I need it so I can give some smaller cakes to some kids down the street.”

“Oh, okay.” You say. “But, that won’t make for a very good cake for them. And it means I won’t have enough for the cake you requested.”

“Hmm. Well. Just make a cake anyway.” I say. And so you do and it turns out like crap. And the smaller cupcakes I make for the other kids are crap, too.

Now you’re thinking, “Yeah, you’re insane. I can’t make a cake if you take away any of of my ingredients!” Maybe you can do without the sprinkles, but that’s hardly anything in the grand scheme of the cake.

But this is what the government does all the time with benefits and services — it looks at your “gross income”, as opposed to what you actually have to, you know, use. Things like health insurance and other non-government benefits even look at gross income for tax purposes. In this case, the baker had his gross, in that he did have all the ingredients he needed to make a really great cake. But I came by and took some for the benefit of others, a noble goal, but now we’re left with crap. Neither of us gets a good cake now.

Now you’re thinking, “Oh Justin, he wants to have his cake and eat it, too.” Well, yes, actually, I do. Shouldn’t everyone strive for that? I’ve not even been bitten by this problem, either, it just strikes me as dumb.

When I worked at the State and my boss told me I was getting a raise the first thing that popped in my mind was, “Great! Now how much do I really make?” I don’t give a shit if I make a $50,000 dollars a year if I only get to take $30,000 of it home with me to actually spend on food and rent.

Someone has to explain to me why gross income exists. It shouldn’t, because it adds confusion and obfuscation to already complicated matters, which is precisely how you trick people into doing the wrong thing (see: the phone companies).

I wish I could say I had a solution to this problem, but I don’t. My best idea is that you have to do away with tax withholding and send people a bill twice a year — like property taxes. They get their income and they can do whatever, but they have to be prepared. And they would know precisely how much they pay in taxes each year. You show me a guy who has tax withholding and I’ll show you a guy who has no clue how much he pays in income taxes each year.

The existing system is going nowhere positive, but again, this strikes me as dumb. I imagine gross income exists because politicians and companies needed a way to artificially inflate people’s earnings to make them sound like they make more than they really do.

I’m not even ranting about lowering or raising taxes. It’s just that one component to it seems designed from the very beginning to be a way to screw people.