Aaron M. Renn

All Things Aaron

Principles of Privatization – Part 3: Uses of Funds

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Continuing my look at privatization transactions, this installment focuses on appropriate uses of funds. Some types of privatization involve paying a third party to deliver an outsourced service. If, by outsourcing, you are able to save money and get better service, great. If you are able to realize recurring savings from this, then you can put that money to use in many potential ways: special projects, new services, tax cuts, or making up for cost increases elsewhere. I'm going to focus on non-recurring revenue, the type realized from … [Read more...]

Principles of Privatization – Part 2: Value Levers

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Continuing with my series on privatization of government services, today I look at the question of how privatization creates value. You can also read part one on the types of transactions. While a few people just don't like the government doing things on principle, most of the time privatization - again, undertaken by both Democrats and Republicans - is touted has having benefits to the tax payer. There are three basic ways this can happen: new revenues, reduced cost, or improved service. New Revenue Many governments are attracted to … [Read more...]

Principles of Privatization – Part 1: Taxonomy of Transactions

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This post kicks off a multi-part series on the principles of privatization. Cities and states across America have been looking at various types of privatization programs to save money or raise money in a tough economy. This has been surprisingly non-partisan, with proponents and opponents scattered across both parties. Democrat Mayor Richard Daley is a huge fan, as is Republican Gov. Mitch Daniels in Indiana. Democrat Gov. Ed Rendell pushed a toll road privatization. The Republican administration in the city of Indianapolis is looking at … [Read more...]

The New Economy Counter-Trend, or The Shrinking Amenity Gap

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A Chicago icon is in danger as Prairie Avenue Books, a huge architectural specialty bookshop, is on the verge of closing. Among its problems: people are coming in to browse then buying for cheaper on the internet. I've been to Prairie Avenue (which is actually on Wabash Ave.) and it is definitely worth a trip. The atmosphere is more library than bookshop, which I guess is part of the problem. This story powerfully illustrates the force of the changing economy and some of the lesser known effects of the internet and globalization. We hear a … [Read more...]

Indy: Good Economic Development – Internet Marketing Cluster

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This is the last in my two-part mini-series on good economic development in Indianapolis. As I said, there's a reason that Indy is the fastest growing large metro area in the Midwest and is one of the best performing economically. It's not all just good luck. This one focuses on Indy's internet marketing cluster. This is a group of nearly 70 companies locally that are focused on the marketing space, totaling over 1,000 employees. This includes companies that are both profitable and rapidly growing such as Exact Target (which recently raised … [Read more...]

Building Suburbs That Last #3 – The Mother of All Impact Fees

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I consider the suburban decay facing inner ring suburbs across America, especially those of the 60's and 70's vintage built on a modern suburban pattern, as one of the key challenges facing urban leaders over the coming decades. I outlined a lot of the case in my review of the book "Retrofitting Suburbia". Why is this happening? One big reason cities tend to fall into decline is that they accumulate huge unfunded liabilities, and those liabilities attach to the territory, not the people. This lets one generation of residents rack up huge … [Read more...]

End Property Tax Collection in Arrears

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Jim Meredith over at Archizoo bemoans the state of retail overbuilding in America and looks at ways to prevent it. These range from "certificates of need" as some states require for hospital expansion to new zoning standards. Take a look for yourself. This reminds me that I've been remiss in following up on my "Buildings Suburbs That Last" series. So look for more installments of that shortly. This post isn't per se about that, but does talk about how we discourage overbuilding. In some states - and I don't have a full list, but know it … [Read more...]

Cleveland: What’s Wrong?

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Along with Detroit, Cleveland is the poster child for major Midwestern urban decline and a favorite punching bag for the national and international media. But Detroit's travails are easy to understand. Anyone can look at and attribute them to the auto industry and poor race relations. The reality is more complex, but at least Detroit lends itself to a narrative. Cleveland is a different story. What happened in Cleveland to cause this? Even I cannot come up with a "grand unified theory" of Cleveland, which those of you who read this blog know is … [Read more...]

Building Suburbs That Last #2 – New Urbanism and Parcelization

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This is the latest installment in my series on "Building Suburbs That Last". Essential background reading is in my review of Retrofitting Suburbia. To reprise, the trouble facing America's aging suburbs is likely to be one America's top urban challenges of coming years. As suburbs age and fall into decay, they are abandoned for rejuvenated center cities or newer edge suburbs. As I previously asked, who is going to buy a beat up used car when you can get new car with a warranty for cheaper on the fringe? Nobody, which is why we see older … [Read more...]

Chicago: Reconnecting the Hinterland, Part 2B – On Innovation

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"When I am weak, then I am strong." - II Corinthians 12:10"A prophet is not without honor, but in his own country, and among his own kin, and in his own house." - Mark 6:4 The is the last in my series on reconnecting Chicago with its natural city-region in the greater Midwest. But it really has nothing to do specifically with Chicago, or even the Midwest. It deals, rather, with innovation generally. I discussed how companies were outsourcing offshore, with a big driver being labor arbitrage. But as with all trends, labor arbitrage … [Read more...]