Stein’s Law

If there’s an iron rule in economics, it is Stein’s Law (named after Herb, former chairman of the Council of Economic Advisers): “If something cannot go on forever, it will stop.”

Detroit, for example, can no longer go on borrowing, spending, raising taxes, and dangerously cutting such essential services as street lighting and police protection. So it stops. It goes bust.

Cause of death? Corruption, both legal and illegal, plus a classic case of reactionary liberalism in which the governing Democrats — there’s been no Republican mayor in half a century — simply refused to adapt to the straitened economic circumstances that followed the post–World War II auto boom.

Corruption of the criminal sort was legendary. The former mayor currently serving time engaged in a breathtaking range of fraud, extortion, and racketeering. And he didn’t act alone. The legal corruption was the cozy symbiosis of Democratic politicians and powerful unions, especially the public-sector unions that gave money to elect the politicians who negotiated their contracts — with wildly unsustainable health and pension benefits.

When our great industrial competitors were digging out from the rubble of World War II, Detroit’s automakers ruled the world. Their imagined sense of inherent superiority bred complacency. Management grew increasingly bureaucratic and inflexible. Unions felt entitled to the extraordinary wages, benefits, and work rules they’d bargained for in the fat years. In time, they all found themselves being overtaken by more efficient, more adaptable, more hungry foreign producers.

The market ultimately forced the car companies into reform, restructuring, the occasional bankruptcy, and eventual recovery. The city of Detroit, however, lacking market constraints, just kept overspending — $100 million annually since 2008. The city now has about $19 billion in obligations it has no chance of meeting. So much city revenue had to be diverted to creditors and pensioners that there was practically nothing left to run the city. Forty percent of the streetlights don’t work, two-thirds of the parks are closed, and emergency police response time averages nearly an hour — if it ever comes at all.

Bankruptcy, which will radically cut payments to bondholders and retirees, is the only chance to start over. Yet, if a Detroit bankruptcy succeeds, other cities will be tempted to follow suit. Dozens of other large urban areas have similarly massive pension and debt obligations, with commensurately denuded services and exorbitant taxes — leading to a vicious cycle of depopulation that makes everything worse. Detroit has lost more than 60 percent of its population since 1950.

The moral hazard increases if the federal government steps in to help. The Obama administration is therefore firmly opposed to any “bailout,” recognizing both the political toxicity of the word and the fiscal consequences of a Detroit precedent that invites other cities to line up with a tin cup. Washington cannot afford a nationwide federal bailout of insolvent cities.

CCTV in the community

Won't CCTV help the police catch criminals in the Bathurst CBD?

Yes, CCTV can help the Police in their investigations; however the Police still need to carry out a range of other thorough investigative measures before making any arrests. Studies in the UK found CCTV is effective in a narrow range of situations such as preventing motor vehicle theft from car parks but it is most effective when used with a range of other strategies including better lighting and increased collaboration between licensed venues, responsible service of alcohol and better transport strategies.

Won't CCTV make the community feel safer knowing that video surveillance is being used to catch criminals?

Bathurst is a very safe community without public space CCTV. The consultation undertaken in forming the Community Safety Plan indicated that most residents feel safe in the Bathurst Community. However CCTV is currently used in the Bathurst CBD. All major shopping centres', some businesses and some Council buildings have CCTV installed. NSW Police keep a register of businesses and organisations that have CCTV and encourages those businesses to register their system with them. This footage is not being monitored in live time, there are no Police or security staff sitting in a control room monitoring people's movements 24 hours a day. Research shows that CCTV can contribute to a false sense of security and lead to people taking less precautions in terms of personal safety.

Won't CCTV help Council in its duty to protect local business and the community?

CCTV does have merit for detection and apprehension but as a stand alone method of crime prevention it is ineffective. Council takes public security very seriously and as a member of the Bathurst Community Safety Committee is an active leader in initiating a range of strategies to reduce the incidents of crime such as reviewing street lighting, and identifying low cost security improvements, better public transport options and providing a range of education and awareness programs.

Doesn't CCTV help reduce the incidents of crime across the community?

The review of CCTV across Australia and internationally shows that CCTV is not supported as an effective crime prevention measure. In Australia CCTV has been shown to be effective in detecting violent offences but is not capable of preventing offenders who are largely acting on opportunity. The most common crimes in the Bathurst CBD are the opportunistic crimes of malicious damage and non-domestic related assault. These crimes are identified as having significant links to a person's level of intoxication. Studies across the world show that alcohol reduces inhibitions and increases risk taking behaviour, consequently CCTV has little impact on crime prevention in these cases.

Don't the benefits of CCTV installation outweigh the costs?

CCTV is an issue that attracts a broad diversity of opinions. These have all been considered in the Community Safety Committee's Working Party Report. The Australian Institute of Criminology in their 2009 CCTV Report warned that some Governments have fallen into the trap of rapid installation of CCTV system as a panacea for crime and found issues including: significant costs of maintaining and upgrading the systems; in some cases an increase in crime after installation; the geographic relocation of crime; and problems with monitoring surveillance footage. A conservative estimate of CCTV installation is between $300,000-$440,000 with Councils facing an average annual bill of $400,000 for monitoring, maintenance and evaluation.

Developer building apartments at Bricker Farms

A developer from Hartville plans to build six three-unit apartment buildings in the Bricker Farms area and extend West View Drive from 15th Street to Meadow View Drive which connects to Orchard Bend Drive.

Mayor John Berlin said Kevin Price and his son approached the city earlier this year looking for areas already zoned multiple family for construction of an apartment complex. The Bricker Farms area was suggested because the zoning was already in place, the area had been planned for development and sewer lines were already there.

The city Planning Commission met Monday and approved the preliminary plat for Bricker Farms Plat No. 6 consisting of six lots, a 60-foot right-of-way named West View Drive running 797 feet from its terminus to West 15th Street, sanitary sewer, water line, storm sewers and water detention area.

According to the meeting agenda, the plat was part of the overall development plan of the Bricker Farms subdivision located between Shady Lane and North Ellsworth Avenue and Orchard Bend Drive and West 15th Street in the city. Price attended the meeting and talked about the project.

Berlin said he has already purchased the property for the development and plans to install 797 feet of street and install a water line. The area already has sewer service available.

A three-unit apartment complex will be built on each of the six lots for a total of 18 units which will be rented at market rate, according to the mayor. Two of the units on each lot will have two bedrooms, one bath and a single-car garage and a third unit on each lot will have three bedrooms, two baths and a two-car garage.

Berlin said he's starting with this area, but there is another area near there that he also plans to develop in the future.

"It's nice to see somebody putting an investment into town," he said, noting it's not in a Tax Increment Financing zone and the developer didn't ask for any special deals or tax breaks.

Berlin likened it to the days when people had land and wanted to develop it, paying for the streets and utilities themselves. He said it's something he hasn't seen in Salem for a long time.

"I'm very happy for him and for the city to have the development. Maybe some new people will move in," he said.

The development will include curbs, sidewalks and Street Lighting, too. He said Utilities Superintendent Don Weingart attended the meeting to ensure the plan included the proper size of water main, with an 8-inch main to be installed.

Planning & Zoning Officer Patrick Morrissey said the next step will be submission of the construction drawings, which will have to be reviewed by an engineer, then construction of a street which meets the requirements and submission of the final plat for approval by the city Planning Commission. No action is required by city council.

Berlin said Price has also developed an apartment complex outside of Damascus and one in nearby Alliance in this area.