Angry at the Government, BUT Are You Angry At The Right One?

The TEA party movement has been the main focus by the media in this election cycle.  The message from the media is that this is an election about anger at the government, at which government?   The focus has been on the Federal government; issues like TARP, the stimulus, and National Health Care Framework as signs that the GOVERNMENT is the problem.  The problem is not the Federal government, and it is not the market -- the problem for the average American is the state and local government.  The actions of the Federal government are so distant from the majority of American, that we do not see the impact everyday; on the flip-side, the actions of the state and local governments touch American everyday like housing and zoning, state and local pensions, and public education.

The major problems in this country are not Federal issues, for example, the housing market.  Yes, the financial industry bears some responsibility for their role in the collapse (note I say some).  However, the decision to zone areas for new home building was done by local governments.  In my home state of Arizona, home construction dominated the economic growth of the last decade.  New sub-divisions were being building every week.  The decisions for zoning by cities in the Phoenix metro area were made by the city councils competing for tax revenue, developer dollars, and prestige.  The short-term gain was important, not the long term effect.   In 2007, according to the WP Carey Business Schools at Arizona State University (ASU), 65,000 homes were built in Phoenix each year.  The thought was that the metro area would continue to grow at the 30% rate it had for the previous 5 boom years.  The problem is that assumption and the housing need were wrong.  The same fate has hit the commercial real estate market. 

Another consequence of state and local leadership decisions is the Pension crisis for government employees.  The crisis in California has highlighted the bad decision-making by local officials.  Many have tried to put the blame on the unions for the pension crisis, but there are always two participants to a negotiation.  The state and local government leaders agreed to the requests of the unions during periods of contract negotiation over the last twenty years.  Even if the threat of a strike was put on the table by the unions, the number of government employee strikes in the history of the United States can be counted on your hands.  If fact the last major police strike occurred in the 1970s, so the threat of a strike is not likely.  Many states have laws prohibiting strike for public employees, yet Republican politicians at the state and local level are trying to scare the public into thinking the union is to blame. 

My final example is education.  Yes there is a Federal Department of Education, but the standards for performance and decisions on curriculum are mainly made a state and local level.  The Federal intervention over the last decade to push policies like No Child Left Behind (NCLB) have led state and local leaders to use that as an excuse for the poor performance under their management.  The fact is that state and local leaders have failed to make real changes to improve education.  In many states, legislatures have cut the education budget in an attempt to balance budgets while not raising taxes.  In some states, they cut taxes and cut education.  

Another drumbeat of state and local leaders is the push for vouchers.  Vouchers have been a key reform issue for over a decade.  The thought is that you give a subsidy to a parent to send their child or children to whatever school they want, to ensure they will get the best education.  However, giving a subsidy to one child or one family may help that ONE child; the purpose of using taxpayers dollars for education is to help the whole of a community.  In addition, vouchers have been sold as parental choice; the parent has always had the choice to send them to a public or private school.  Vouchers are really a subsidy to the private and charter schools that do not have the same accountability to the public and community as your community public school.

In this country, we know who the President is and we can blame him for our problems or praise him for giving us hope (a lot less likely in the last 20 years). Yet, most Americans can not tell you who their City council member is or who is on the local school board.  Considering that a City Council member can determine the number of parks, police officers, firefighters, trash collection, and zoning of areas that you are in contact everyday; or the school board member who determines what school your child goes to, bus they ride, curriculum that is taught, books for the school, and the future of your child’s education – I WOULD THINK YOU MIGHT WANT TO KNOW MORE ABOUT THEM.  Since your property taxes went up, an entire housing market in disaster because of over-development and zoning, commercial real estate ghost towns because of over-development and zoning, lack of good paying jobs in your area because they went after low hanging fruit in the market, and less resources for education – why are you not mad at your state and local politicians?  They are the ones who made all those decisions in the last decade. 

Finally, two things in this election, first, the majority of incumbent governors are Republicans, not the party of the President.  It looks that majority will increase.  Second, in Arizona  Arizona has been led by a Republican legislature since 1992, almost 20 years, and has only had 6 years with a Democratic Governor.  So if you are angry about the direction of the government you see in your day-to-day life, maybe, just maybe, you need to blame your local government.