Memo to Slick Jeffie and Tricky Dickey: "If the financial record is so great, why not just post the actual numbers?"

Mark Cassidy asked a very good question.

The Floyd Democrats say that the Floyd Republicans are lying about Gahan increasing New Albany’s long term debt load.

Instead of just saying “It ain’t so”, why don’t the Dems just publish the long term debt obligations when Gahan took office 8 years ago and the debt obligations now?

Huh?

Jeff Gillenwater wrote a very good answer:

If the financial record is so great, why not just post the actual numbers?

How much has the City’s annual budget increased since Gahan and a majority Democratic City Council took office?

How many tens of millions of dollars of additional long term debt has the City incurred during that tenure?

When will it be paid off and where is the money to do so coming from?

Where, on a scale that actually goes up to AAA, does the A+ financial rating actually fit?

It seems odd to accuse others of lying when you won’t provide any actual figures or evidence yourself. As local political leaders, you agree that all those numbers should be transparent to the public, right?

And, in fairness, any current office holder, candidate, or party supporter is welcome to provide those numbers to the public as well. I assume you all know them, because otherwise you wouldn’t be supporting the city’s current direction, right? I’d hate to think so many people were encouraging secrecy before an election.

Ma, the mayor's lyin' 'bout his budget again: "Quality of life begins with honest communication, something that just doesn't figure in Gahan's accounting."

David White is running for mayor in the May 7 Democratic primary. I'm voting for him, and you should, too. Visit the David White for Mayor page at Facebook.

As a preface, we have all been here before. In the four months since NAC last commented about this, we've learned that New Albany Housing Authority funds originally earmarked for 1:1 housing replacements are being used to stockpile commercial properties. Indiana's Board of Accounts is taking seriously the documentation of citizen activists living near Mt. Tabor Road (where'd that money go?), and the breathtaking extent of Jeff Gahan's pay-to-play campaign finance donations has become at least partially apparent

But today a fresh and steaming new round of budgetary boasting was splattered on social media by the Genius of the Flood Plain's outreachers, complete with Made by Tricky Dickey hash tags. It's a minor miracle these lies didn't originate with the City's official feed, which typically (and wrongly) functions as an ill-disguised propaganda dispenser for the mayor's whoppers.

In 2015, Jeff Gillenwater penned two incisive commentaries dismembering Gahan's frequent (and spurious) claims to being the "balanced budget mayor." They're worth repeating as a rejoinder to Gahan's dull repetition of false facts.

It should be added that since Bluegill's thoughts were written in 2015, Gahan has instituted his own signature annual sewer rate increase, hijacked a whole community (public housing putsch), committed even more future budgetary resources to riverside amenities, and pushed through the city hall relocation at a total expense in excess of $10,000,000.

I'm leaving out a few things, but we'll get to them eventually. I've updated a few items, and left the rest of it alone. It's as true today as it was four years ago.

Take it away, Jeff.

---

Jeff Gahan likes to say that he has balanced the budget because it makes it sound as though he's somehow managed to run the city more efficiently. He's not as keen to put real numbers to that claim, though, for good reason.

As provided by the Department of Local Government Finance, the state agency that oversees local budgets, here are those actual numbers-- New Albany's annual budgets from 2011 - 2018. Gahan took office in 2012.

2011 - $14,665,386
2012 - $18,738,682
2013 - $20,084,675
2014 - $22,600,514
2015 - $24,300,565
2016 - $24,832,363
2017 - $25,154,022
2018 - $26,270,834
2019 - circa $27,000

Understandably given the large annual spending increases, the district tax rate has increased under Gahan each year as well.

Even with city government spending approximately $13,000,000 more per year now than it did before Gahan took over, those tax increases did not cover his tens of millions of dollars of additional spending on special and often seasonal projects like the aquatics center. Several of those parks projects alone, over $30 million, were financed with Tax Increment backed bonds, borrowed at interest against projected future tax revenues for the next 20 years. Many New Albanians 45 or older will likely be retired or perhaps even deceased before taxpayers manage to pay off just a single Gahan term as mayor.

And, as Gahan himself says, he's not done yet.

There's little reason to believe a third term would be differently focused, more efficient and practical, or more open and inclusive. As Roger Baylor says, transparency should not be a last resort. We shouldn't be reading about million dollar golf course deals months after the fact but we are. If, like many New Albanians, you're not comfortable with a mayor who tells you he's "balanced" the budget when he's substantially increased it or that he's paid off debt from previous administrations when he's taken on much more for comparatively frivolous projects and corporate subsidies, please vote accordingly.

Quality of life begins with honest communication, something that just doesn't figure in Jeff Gahan's accounting.

---

Jeff Gahan says he's balanced the budget but the truth is he's significantly increased the budget, nearly doubling it. He says he's gotten us out of debt because former Mayor England's sewer rate increases - rate increases Gahan argued against - have paid off some sewer bonds but he doesn't mention his own borrowing, which has left us with increased not decreased debt levels.

Worth noting is that much of that debt is going toward paying off multimillion dollar projects that were awarded sans public bidding processes and, at least in some cases, have led to campaign kickbacks.

Now that we've taken on 20 years of debt to pay for them, Gahan says parks are a priority for quality of life but did not mention them at all when running for office. We're also now finding out about his administration taking options on Uptown area real estate and pursuing eminent domain actions on riverfront property but he's again not mentioning any of it in his campaign-- just like he didn't mention spending a million dollars on the golf course to the redevelopment commission or city council before he did it.

If anyone points these facts out too often, they're banished from campaign and party social media spaces. If people value transparency and honesty at all, they can't support this. If they do support it, they've really no right to complain in future about any political deceit. They will have chosen to tie their own blindfolds.

The really telling part is that, as Gahan and Floyd County Democrats block social media access to more and more people, they never actually deny what those people have said.

They can't.

They just don't want people to know about it. The truth makes them look bad so secrecy and lies begets more secrecy and lies. If incumbent and new Democratic council candidates won't speak up against such misleading tactics now, there's no reason to think they will if elected.

It's damning for the whole party.

---

As an addendum, NA Confidential has been unable to confirm whether New Albany Mayor Jeff M. Gahan or anyone working in the city's administration is under federal investigation or indictment for corruption, bribery or racketeering. It is standard policy of the U.S. Justice Department to refuse to confirm or deny the existence or non-existence of investigations or subjects of investigations. A similar policy exists at the F.B.I.

Balanced budget claims? "Many New Albanians 45 or older will likely be retired or perhaps even deceased before taxpayers manage to pay off just a single Gahan term as mayor."

Yesterday a new round of boasting was launched by City's Hall's social media outreach, which in practice functions as an Elect Jeff Gahan Mayor for Life propaganda dispenser.

In 2015, Jeff Gillenwater penned two incisive commentaries dismembering Gahan's frequent (and spurious) claims to being the "balanced budget mayor." They're worth repeating as a rejoinder to Gahan's dull repetition of false facts.

It should be added that since Bluegill's thoughts were written in 2015, Gahan has instituted his own signature annual sewer rate increase, hijacked a whole community (public housing putsch), committed even more future budgetary resources to riverside amenities, and pushed through the city hall relocation at a total expense in excess of $10,000,000.

I'm leaving out a few things, but we'll get to them. I've updated a few items, and left the rest of it alone. It's as true today as it was four years ago.

Take it away, Jeff.

---

Jeff Gahan likes to say that he has balanced the budget because it makes it sound as though he's somehow managed to run the city more efficiently. He's not as keen to put real numbers to that claim, though, for good reason.

As provided by the Department of Local Government Finance, the state agency that oversees local budgets, here are those actual numbers-- New Albany's annual budgets from 2011 - 2018. Gahan took office in 2012.

2011 - $14,665,386
2012 - $18,738,682
2013 - $20,084,675
2014 - $22,600,514
2015 - $24,300,565
2016 - $24,832,363
2017 - $25,154,022
2018 - $26,270,834
2019 - circa $27,000

Understandably given the large annual spending increases, the district tax rate has increased under Gahan each year as well.

Even with city government spending approximately $13,000,000 more per year now than it did before Gahan took over, those tax increases did not cover his tens of millions of dollars of additional spending on special and often seasonal projects like the aquatics center. Several of those projects, over $30 million, were financed with Tax Increment backed bonds, borrowed at interest against projected future tax revenues for the next 20 years. Many New Albanians 45 or older will likely be retired or perhaps even deceased before taxpayers manage to pay off just a single Gahan term as mayor.

And, as Gahan himself says, he's not done yet.

There's little reason to believe a third term would be differently focused, more efficient and practical, or more open and inclusive. As Roger Baylor says, transparency should not be a last resort. We shouldn't be reading about million dollar golf course deals months after the fact but we are. If, like many New Albanians, you're not comfortable with a mayor who tells you he's "balanced" the budget when he's substantially increased it or that he's paid off debt from previous administrations when he's taken on much more for comparatively frivolous projects and corporate subsidies, please vote accordingly.

Quality of life begins with honest communication, something that just doesn't figure in Jeff Gahan's accounting.

---

Jeff Gahan says he's balanced the budget but the truth is he's significantly increased the budget, nearly doubling it. He says he's gotten us out of debt because former Mayor England's sewer rate increases - rate increases Gahan argued against - have paid off some sewer bonds but he doesn't mention his own borrowing, which has left us with increased not decreased debt levels.

Worth noting is that much of that debt is going toward paying off multimillion dollar projects that were awarded sans public bidding processes and, at least in some cases, have led to campaign kickbacks.

Now that we've taken on 20 years of debt to pay for them, Gahan says parks are a priority for quality of life but did not mention them at all when running for office. We're also now finding out about his administration taking options on Uptown area real estate and pursuing eminent domain actions on riverfront property but he's again not mentioning any of it in his campaign-- just like he didn't mention spending a million dollars on the golf course to the redevelopment commission or city council before he did it.

If anyone points these facts out too often, they're banished from campaign and party social media spaces. If people value transparency and honesty at all, they can't support this. If they do support it, they've really no right to complain in future about any political deceit. They will have chosen to tie their own blindfolds.

The really telling part is that, as Gahan and Floyd County Democrats block social media access to more and more people, they never actually deny what those people have said.

They can't.

They just don't want people to know about it. The truth makes them look bad so secrecy and lies begets more secrecy and lies. If incumbent and new Democratic council candidates won't speak up against such misleading tactics now, there's no reason to think they will if elected.

It's damning for the whole party.

Kunstler: "The condition of the country is pretty awful as we turn the corner onto 2017."

It's been a while since we checked in with Clusterfuck Nation, where James Howard Kunstler chronicles precisely that.

Here are a few of Kunstler's observations in vastly truncated form. Set aside 25 minutes, pour a nice coffee or stiff drink, and enjoy the ride.

Spoiler alert: We're doomed, folks.

---

Forecast 2017: The Wheels Finally Come Off

American Notes

If by some magic any new industrial capacity were built, much of the work in it would be performed by robotics, not brawny men in blue shirts, and certainly not at the equivalent of the old United Auto Workers $35-an-hour assembly line wage. We have not faced the fact that the manufacturing fiesta based on fossil fuels was a one-time thing due to special historical circumstances and will not be repeated. The future of manufacturing in America is frighteningly modest. We’ll actually be lucky if we can make a few vital necessities by means of hydro-electric or direct water power, and that will be about the extent of it. Some of you may recognize this as the World Made By Hand scenario. I’ll stick by that.

Similarly for “infrastructure” spending touted by the forces of Trump as the coming panacea for economic malaise. I suspect most people assume this means a trillion-dollar stimulus spend on highways and their accessories. Well, that also assumes that we expect another fifty years of Happy Motoring and suburban living. Fuggeddabowdit. We’re in the twilight of motoring anyway you cut it, despite all the chatter about electric cars and “driverless” cars. We won’t have the electric capacity to switch over the Happy Motoring fleet from gasoline. The oil industry itself is already headed for collapse on its sinking energy-return-on-investment. And our problems with money and debt are so severe that the motoring paradigm is more prone to fail on the basis of car loan scarcity and unworthy borrowers before the fueling issues even kick in. Every year, fewer Americans can afford to buy any kind of car — the way they’re used to buying them, on installment loans. The industry has gone the limit to help them — seven-year loans for used cars! — but they have no more room to maneuver. The car financing system is broken. Bear in mind the original suburbanization of America back in the 20th century — along with its accessory automobiles — must be regarded as the greatest misallocation of resources in the history of the world. So, a rebuild of all this stuff would represent more and possibly even greater malinvestment. We could have applied our post-WW2 treasure to building beautiful walkable towns and cities with some capacity for adaptive re-use, but we blew it in order to enjoy life in a one-time demolition derby. Life is tragic. Societies make poor choices sometimes, and then there are consequences.

Designated Bag-Holder

The American people have been punked by their own government and their central bank, the Federal Reserve, for years and the jig is now up. In 2017 both will lose their authority and legitimacy, a very grave matter for the survival of this republic ... had Hillary Clinton won the election, at least the right gang would have had to take the blame — the people in charge for the past twenty years. Instead, Donald Trump has been elected Designated Bag-Holder.

About That “Big Fat Ugly Bubble” and its Consequences, Part 1: History Lesson

The USA ran out of growth capacity around the turn of the millennium because we ran out of affordable energy to run our techno-industrial economy. It was hard to see this with seemingly plenty of oil available. And, of course, the computer tech fiesta was blossoming, but for all that glitzy stuff to attract dwindling real capital, other old stuff had to go, and did go, and when all was said and done the computers did not generate much wealth or social value. In fact, the diminishing returns and blowback of computer tech were arguably more damaging than beneficial to society and its economy. Look at where the middle class is today. Computer tech gave the magical appearance of growth while actually undermining it. By affordable energy I mean energy with a greater-than 30-to-one energy-return-on-investment, which is the ratio you need for the kind of life we lead.

Debt was the meat-and-potatoes of the Fed’s wizardry, but the “secret sauce” of Fed magic was fraud, in the form of market interventions, manipulations, regulatory negligence, and just plain systematic lying about the numbers that defined the economy. It amounted to nationalized financial racketeering. Under the consecutive Grand Vizierships of Greenspan and Ben Bernanke, control fraud (using official authority to cover up misconduct) was perfected by banking executives, eventuating in the mortgage securities fiasco of 2008, which took down the housing market and the economy. (That housing market, by the way, was made up mainly of suburban houses, the sine qua non of the greatest misallocation of resources in the history of the world.)

About That “Big Fat Ugly Bubble” and its Consequences, Part 2: 2017, the Year of Living Anxiously

Get this: the Fed is completely full of shit. It is terrified of the conditions it has set up and it has no idea what to do next. The “data” that it claims to be so dependent on is arrantly fake. The government’s official unemployment number at Christmas 2016 was 4.6 percent. It’s a compound lie. The 4.6 percent does not include the 95 million people out of the workforce, most of them able-bodied, who have simply run through their unemployment benefits and given up looking for work. Nor does it figure in the fact that roughly 90 percent of the new jobs created are part time jobs, many of them held by people working several jobs (because they have to, to pay the bills). Nor does it detail the quality of the jobs created (minimum wage shit jobs.)

Why Trump Can’t Pull a Reagan

Today, the US is in a box and Trump comes on the scene with nowhere to move. Too much debt can only be managed if interest rates are kept low. Everybody and his mother around the world is dumping US Treasuries. With a bear market in bonds on, the Fed as buyer of last resort will have to sop up whatever comes on the market to keep the interest rate from rising above three percent on the ten-year, and even that may not prevent it. Trump’s vaunted infrastructure stimulus plan will be impossible to carry out without the Fed monetizing the necessary debt. So stimulus implies bigger deficits, which means more bonded debt that nobody wants to buy. The result will be inflation and accordingly further upward pressure on interest rates. Higher interest rates, in turn, will negatively impact economic activity, lowering tax revenue, inducing larger fiscal imbalances and greater instability.

Trump may never even get the stimulus he seeks. The Republican controlled-congress has vowed not to increase the national debt. How can Trump fulfill his pledge to cut taxes and bring on stimulus without hugely increasing the debt? If there is war over spending between Trump and Congress, Congress is likely to win, since they control the fiscal purse strings. Of course, Donald Trump cannot abide not winning. Hostilities between them may become permanent early in Trump’s term and bring on even more dangerous paralysis of governance.

Desperate Measures

One of the other big and dark trends of the past year has been the move of governments around the world — and among the economist / necromancers who advise them — to ban cash from the scene in order to herd all citizens into a digital banking system that will allow the authorities to track all financial transactions and suck every possible cent of taxes into national coffers. It would also be an opportunity for the bank-and government cabal to impose negative interest rates (NIRP) on bank accounts so that money herded into the digital system could be surreptitiously “taxed” by charging account holders just for being there (against their will). It’s a little hard to see how that might happen just now in a broad rising rate environment, but it would be the natural accompaniment to banning cash — and renewed aggressive QE (QE forever!) might do the trick.

It’s hard to see the US government banning cash as clumsily as India did, but they have other ways to herd the multitudes into the black box of all-digital banking.

Wild in the Streets

The public is just plain pissed off, and remains pissed off after the Trump Victory. Their anger has been fermenting for decades as their economic prospects dwindled and they began to understand how it all worked against them. The battered middle class might have gotten a temporary thrill from the election, but an awful lot of them are still out of work, or working at the humiliating shit-jobs that replaced their old lost jobs in the old real stuff economy. Worse is coming their way in 2017. Theirs is a true existential crisis.

That may be the moment when President Trump and his militarily-weighted cabinet appointees opt for martial law. What a goddamned mess that will be. There is no civilized country on earth with as many small arms per capita than the USA, and despite the fearsome appearance of militarized police forces, you cannot overstate how much deadly mischief a small number of pissed-off people can make with automatic rifles, rocket-propelled-grenades, Semtex plastic explosive, and other fun stuff. It could morph easily to a literal war on bankers and Wall Street in particular, especially if Ice-Nine goes into effect. Bear in mind that a lot of veterans of the endless Middle East wars belong to this suffering economic class, and they actually have some training in the warrior arts.

Their political counterparts in the Democrat / Prog coastal elite, hardcore Hillary, PC-and-unicorn crowd are moving through their post-election Kubler-Ross Transect-of-Grief from denial to anger too. So both sides are quite pissed off and primed for conflict. The Left will certainly do everything possible to oppose Trump and try to make him look bad, whether it’s in the public interest to do so or not. They will throw every monkey-wrench possible into the machinery of governance, up to and including the (mostly Democratic Party weighted) Federal Reserve hierarchy, whose interest rate “dot plot” could be truly a plot to exact revenge on Trump. Of course, that would blow up in their faces since proportionately the coastal elites own much more stock than the Trumpenlumpenprole red-staters, and they could be wiped out in a significant market crash triggered by rising interest rates. But that’s the thing about political rage: it’s the opposite of rational.

There’s no sign that the Democrat / Progs have recognized that their poisonous identity politics played a significant role in their electoral defeat. They will not abandon that endeavor in 2017. They will double-down on it. And as that happens, the Democratic Party will go the way of the Whigs in 1856 — with a whimper, not a bang. God knows who or what will replace them as a credible opposition to Trumpist crypto-Republicanism, although Trump himself stands a good chance of leading that party to oblivion, too, if my forecast of a big financial blow-up comes to pass.

The Oil Quandary

The pattern nicely describes the dynamic advanced by Joseph Tainter in his seminal work, The Collapse of Complex Societies: namely that over-investments in complexity lead to diminishing returns. That is, as you keep making your systems extra-hyper-complex, you get less value back for doing it, until you get to the point where there’s no benefit whatsoever, and then the system implodes. And that is exactly what has happened with oil and the economy that was engineered to run on it, and the financial system that evolved to manage the wealth it used to produce.

Vagrant Thoughts on Geopolitics

As I write just before New Year’s Eve, President Obama is trying to start World War Three with Russia as a parting gift to the voting public. I’m among the skeptics who think that the “Russia Hacks Election story” is a ruse to divert the public’s attention from the stupendous failure of the Democratic Party to win, as expected. Rather, Wikileaks should get the Pulitzer Prize for revealing so much about the nefarious workings of the Clinton Foundation and the Democratic National Committee.

Regular readers know I didn’t vote for Trump, that I heaped considerable abuse on him in the campaign commentaries. But I didn’t take any comfort in the nostrum about being “better off with the Devil you know (Hillary) than the one you don’t know (Trump).” Both candidates were awful, and the condition of the country is pretty awful as we turn the corner onto 2017.

If you’ve gotten this far, I commend and admire you hugely for your remarkable patience. Have a happy 2017 everybody, and don’t let our Trumpadelic president get you down.

Guest column by Nick Vaughn: "We all want New Albany to succeed."

As a prelude to Nick's first guest column at NA Confidential (let's hope there are others), read about his non-profit venture.

A BRIGHTER FUTURE: BrightNA seeks to help break the poverty cycle, by Daniel Suddeath (News and Tribune)

NEW ALBANY — Community Montessori High School senior Nick Vaughn narrowly lost in the May New Albany City Council District 6 Republican Party primary. He had a plan to start a work program to benefit disadvantaged residents, and though it won't be implemented yet in a governmental platform, Vaughn has launched a nonprofit aimed at ushering low-income families out of poverty.

It's been a pleasure to get to know Nick these past few months. Here is his submission, and we thank him for it.

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Vaughn: We all want New Albany to succeed. 

Now that this election season is over and the dust has settled, it is time to analyze the outcomes and results, and also look to what should happen in these next four years.

I am not writing this to make a partisan stand against anyone, I am frankly tired of partisanship, locally, statewide, and nationally. Instead, I intend this to be an honest analysis of the issues facing New Albany and what needs to be done about them. I am not advocating for a Republican way to do things or a Democratic way to do things, neither left nor right. I am only advocating for the correct way to do things.

First, we must realize that there are only two options: up or down. We can continue down this path of spending, or our elected officials can take the morally correct action and begin to pay down our enormous debt, cut back on non-essential spending, and begin to make up for the crippling amount of job loss incurred with Sonoco and Pillsbury (among others) leaving New Albany and laying off hundreds. 

Is the current budget balanced? Yes, but at the cost of the people. The budget has increased by 58% over the past four years mainly due to the gross amount of bonded debt our city is incurring. 

Is our financial rating an A+? Yes, but that’s not our ceiling. An A+ financial rating would be a good thing in most cities, if it wasn’t a degradation. To explain, financial ratings are based on the creditworthiness of a business, city, etc. and its likelihood to default. Our rating has gone down because our creditworthiness has decreased due to the amount of bonded debt we have incurred.

Next, poverty. Never has there been a more pressing issue facing our city or our nation. Poverty is a terrible burden set on individuals, and unfortunately our current way of addressing this issue creates a cycle of poverty. Because our city officials have not even begun to address the issue of poverty, nearly 25% of our citizens go to sleep hungry at night with no hope of that changing anytime soon. 

That being said, things can change. I am officially extending my helping hand, if wanted, to our Mayor. My non-profit BrightNA could be a big help to our city if given the proper amount of support.

Finally, being humble in defeat is one thing, being humble in victory is another. The results have been tallied and the victors announced. We are all in this together now so it is no time to be vindictive or hamper progress due to petty political issues. 

We might be of different political parties, but we all want the same goal: we want New Albany to succeed. Now more than ever, we need New Albany to succeed. With all of the progress and business development in Jeffersonville, we need leaders who can unite a city and bring us forward. 

We are at a crossroads, we can either capitalize on the unique aspects of our city, or we will be left behind by our ever expanding neighbor.

"The French are right: tear up public debt – most of it is illegitimate anyway."

I love social elites ... as long as they're properly cooked.

The French are right: tear up public debt – most of it is illegitimate anyway ... Debt audits show that austerity is politically motivated to favour social elites. Is a new working-class internationalism in the air?, by Razmig Keucheyan (Guardian)

As history has shown, France is capable of the best and the worst, and often in short periods of time.

On the day following Marine Le Pen's Front National victory in the European elections, however, France made a decisive contribution to the reinvention of a radical politics for the 21st century. On that day, the committee for a citizen's audit on the public debt issued a 30-page report on French public debt, its origins and evolution in the past decades. The report was written by a group of experts in public finances under the coordination of Michel Husson, one of France's finest critical economists. Its conclusion is straightforward: 60% of French public debt is illegitimate.