March 2010
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The Socialist Republic of Florida by Matthew Falconer

Matt Falconer is a local Orlando, Florida developer of some note and is running for Orange County mayor this fall. His book looks at Florida government from an “evil” developer’s point of view. This allows him to relate personal experiences and the frustration of dealing with government over the decades.

I have meet Matt once or twice and e-mail him once in awhile pretending we are buddies taking advantage of the fact that he is running for local office. He e-mails me back politely on occasion surly scratching his head wondering who the hell I am. Politicians God bless em. They do put up with a lot of crap come election time.

The forward is from Richard T. Lee of milk fame, one of the congressionally favor industries receiving billions in artificial price floor supports, caught me off guard. Having the corporate welfare queen write the forward to an anti government tax book was probably not the greatest idea. Fortunately he has a new book out and a second chance at redemption.

Mathhew Falconer

The first thing that sticks out in The Socialist Republic of Florida is Mr. Falconer’s looks at just the Florida economy explaining the boom and bust of the 2000’s. Quite shocking to the rest of us who are familiar with Alan Greenspan’s infamous 1% Fed Funds rate, Fannie and Freddie, the Community Reinvestment Act, Sarbanes-Oxley, foreign dollars flooding onto our shores and all the assorted macro issues with what is referred to as the “housing bubble”. Not to mention illegal immigrants buying up huge housing stocks in Central Florida and then exiting when the going got tough. Quite a bit to leave out of the book but in a way it’s a blessing because it allows the reader a more “micro” look at the state economy.

The first portion is about economic tax distortions caused by Florida’s homestead exemption that fixes property taxes for primary property owners leaving secondary home owners and commercial business exposed to the mercy of government officials. This is typical government thinking because the voters don’t get hit with a direct tax on their personal property. They get taxed with lost economic activity in their communities due to business failures and uncompetitive commercial properties. This can be seen in the huge commercial business buildings all around Central Florida partially or totally empty with no clients. A lot of these are not old out of date strip malls that are at the end of their life cycle but relatively new
10 years old or less structures that should be in their peak utilization years today. Here in the swank suburbs of Winter Springs we have several of these structures sitting unused begging for tenants. The point being that government economic distortions in the marketplace are not some abstract geek concept but real world policies that have devastating effects on the quality of life for our communities.

Simply put if $5,000 is taken away from the tax bill of a private residences and added to the local hardware store the hardware store has to lower profits, cut wages, cut staff, cut something to pay the bill. With the Internet and competition from competing chains the ability to pass the cost on consumers is limited by how sensitive consumers are to price. At the retail level the answer to that is VERY sensitive. So for most commercial enterprises they have to absorb part or all of a tax hike in property and related taxes. Because of the inability to pass cost on to consumers it becomes a contest to stay in business with eventually the death of marginal businesses. This is nothing new. Take a drive around Canada sometime. What do you see? Very limited competition, a couple of food and tire chains, a few specialty shops and a lot of blandness. Some would say like the Canadian people. Some in government see no problem with losing marginal competitors but those are real people losing their life dream. Those marginal competitors give consumers another choice. We lose competition and diversity when local and regional businesses go under.

The Socialist Republic of Florida

Mr. Falconer stumbles on the solution but bypasses it in favor of a “Taxpayer Amendment for Florida.” The amendment spells out a bunch of gobble gook that the average voter will never understand and the average politician could bypass in a New York minute. The solution is to limit taxes on property, all property to 1.35%. Put that on a statewide ballot. It will pass. And then put on a ballot an amendment eliminating all other local taxes except the gas and sales tax. You want to bring the cost of local government up front and personal to the average citizen? Force local governments to put the cost onto every purchase a citizen makes at the gas pump or grocery store. I guarantee you local governments will not be so caviler about expanding the scope of services if they have to add another 5 cents at the pump.

Why do the media cover gas prices and ATM fees so much? It’s something people deal with every day. It’s out there for all to see every time they drive anywhere. Use the same concept for local government taxes. When people in Seminole County see Volusia County pay 5 cents less for a gallon of gas and a penny less in retail sales taxes they are going to become involved in local government real quick demanding some answers. Simply put scrap the bloviating and expose inefficient operations by forcing local governments to display their cost to everyone on a daily basis. And yes some exemptions and waivers would need to be granted for special merchant situations on a case by case basis. By closing local taxing options, including impact fees, and exposing the true cost of government to the public on a daily basis people will demand and be very sensitive to price fluctuations.

Matt with supporters at local rally

Mr. Falconer exposes some local government waste like the City of Orlando buying Segway scooters and hiring people to drive them around town giving tourist tips and directions for lost souls from bland places like Canada. Pretty crazy and normally I wouldn’t believe him except I live here and he’s not lying. Really he’s telling the truth. This “rent seeking behavior” where government spends money to kill a budget on completely stupid crap has reached a boiling point here in Florida and the nation. The Tea Party has emerged at a powerful political force because of millions of Segway projects all across America.

Education, police, fire inefficiencies are explained. Mr. Falconer correctly points out the pension system for local governments cannot possibly be honored in the long run but offers up a “pay as you go” plan similar to a 401K plan. This will create a conflict between government workers and taxpayers without solving the real problem. The real problem is people get lazy in their government jobs. They lose their ability to be competitive in the private sector and sponge off the taxpayers their whole life. If you want to change the system you have to address this problem. Pass a constitutional amendment where no one can be employed by the state or local government longer than 12 years. No exceptions at all levels of government including elected officials. I know this would be a hard sell but it would eliminate the pension problems as well as the lazy slugs looking to suckle the government tit their whole working lives. Government workers attitudes would change dramatically if they knew their job was temporary and they would be working in that dreaded private sector sooner or later. You want change? That’s real change.

Instead of a traffic light and a designated crossing area Winter Springs got a $5 million dollar pedestrian bridge that is lightly used by the public

Mr. Falconer talks about the absurdity of government boards and their zoning requirements. Basically a bunch of do gooders trying to be productive on someone else’s dime. Zoning boards making goofy recommendations to developers like having buildings close to sidewalks to encourage pedestrian traffic to the shops. He points out that 99% of people in Florida drive and restricted parking access limits consumers and many of these new developments fail.

There is also something else he fails to mention but believe me it will happen. In Winter Park there is a new shopping development on Orlando Avenue right next to the sidewalk. Thousands of cars pass everyday. Cars get in accidents. When they do sometimes they stay on the road and other times they will end up on the sidewalk or into that nice expensive development just a few yards off Orlando Avenue. It’s a disaster waiting to happen and someday it will happen. Hopefully no one will be killed because of this government insanity but it just shows the complete lack of common sense these government officials have. If you want to be stupid and make a ass out of yourself there are better ways to do it than putting peoples lives at risk just because you think the peasants should be confined to half a square mile in the city. Appallingly stupid and disturbing.

Beautiful new private office building not less than a mile from pedestrian bridge unused with no tenants.

Mr. Falconer is one of the few higher income people to understand the relationship between taxes, lawyers, regulations and blue collar wages. Most “educated” upper income people believe income is related to education and to a certain degree they are right. For most Americans without a degree wages are directly tied to their employer’s ability to make a profit. The more an employer has to pay out in workman’s compensation, compliance cost, court cost, and the millions of other cost the less money there is for compensation. Kudos to one of the rich guys for recognizing the slugs in government and legal profession living off the sweat of the productive citizens.

I have seen this first hand in construction over the years. Back in the 1980’s I was the private inspector 12 story high rise, Orlando City Hall, as well as others. Back then the project had one inspector. The threshold inspector was required to do soil density testing, rebar inspection, form inspection, mold concrete cylinders, check the shoring holding up the forms for the elevated decks, break concrete cylinders, do daily reports, write structural request for further information (RFI’s) and fax as well as explain the changes to the structural engineer and deliver any paperwork or construction testing materials to the main office. The only time the inspector was given help was if there was an elevated slab concrete placement and the inspector could not physically be in two places t the same time. Other than that the inspector was on his own. And I can personally attest to the fact that Orlando City Hall (1989 phase) was an easier project than the 33 story Sun Trust right across the street was in 1987. Sun Trust (formerly Sun Bank) was twice as brutal and dangerous.

Our FDOT super duper $5 million pedestrian bridge on a beautiful 70 degree Saturday afternoon.

Generally inspectors had to be certified with the private Southern Building Code Congress International but it wasn’t the law. A lot of times a company with the inspection contract would simply pick out a smart guy known not to be involved with drugs and give him a set of multi-million dollar plans and just expect the guy to figure it out. Believe it or not most did. The ones who didn’t were kicked off the job usually because of a tip from the contractor to the inspection company. Contrary to popular belief most contractors want the job done right the first time. If there are problems in the future contractors love the phrase “but I did it exactly like the plans showed!” So the inspectors learned real quick or were demoted back to simpler tasks.

On the City Hall project a city inspector would come on the job once in a while and proclaim all was well or pick out some minor problem and spend weeks addressing it in meetings with the contractor. To the private inspector and contractor this was like some side circus played out to appease the city egos across the street. The real drama was being played out everyday in the sweltering 95 degree heat 80 feet up in the air. Never once did I see a city inspector up there long enough to check a post tension cable. Inspection is tough work if you do it right.

Now city, county and state inspectors have people to do all the physical work for them. They stand around job sites for hours waiting to do an inspection. They get paid well with job security and benefits. Political correctness has creped into the inspectors life since so little is required of them. Anyone can do the job now so why not get the “right” inspectors with the right political views in place to receive government checks. If you did a survey of the Turnpike, FDOT, Orange County, City of Orlando I would guess 70% or more of them are Democrat and the number is rising as the politically incorrect ones are shown the door. The job has gone from physically and mentally demanding to being the right fit for the affirmative action profile.

Down in Miami a Turnpike Enterprise Project Manager was in charge of a project for years. The contractor had been screwing up the paperwork for years and the private inspectors assisting the turnpike inspectors were in and out of the project with no continuation of a designated private inspector which the Turnpike “Project Manager” should have insisted upon. Clearly the responsibility to maintain consistency of the project would fall on the Turnpike Enterprise inspector. Unfortunately this inspector was often at bars and failed to keep up with the paperwork, missing contract requirements. Sometimes not even notifying the proper private inspection firms the contractor was performing work. To make a long story short a complete and utter screw up. So what to do?

Believe it or not the Turnpike called in inspectors from Orlando to cover the job for this jerk and then over a month or so blamed them for the screw ups. In one instance the Turnpike authority was so desperate to make themselves look good and private inspectors bad they had several government inspectors stand around a work trailer while others were trying to work and be productive. The government inspectors standing around made fun of some other government inspector sitting down pretending to work because the inspector believed in Islam. I swear to god this happened. The idea was to make fun of the Islamic guy and hope the private inspectors would join in the religion bashing so they could report the incident to the government and fire some private guys to obscure the fact the Turnpike had completely blown it’s assignment. It was strait out of the novel 1984 by George Orwell. Who cares about the job when there is politically bad thought out there to be demonized. Of course traditionally guys always went into construction because they were NOT politically correct but this is where the government has taken the inspection industry in the last 25 years. Lazy politically correct slugs that do nothing but push paperwork around (badly in the case of the Turnpike Authority), flap their lips and collecting a check while others do the real work.

Mr. Falconer covers communist goals of promoting the UN, promiscuity, media control, destruction of the family unit and so forth. What he fails to see is the real motivations behind Marxism in journalism, government and the upper middle class. Only the useful idiots truly believe the goals of communism. Most upper class people stay married and don’t have children out of wedlock. They promote communism simply because it’s the best way to promote their carriers. If you are a lawyer it’s nice that the black community has an almost 70% out of wedlock birth rate and 28.6% of black men end up in jail. It keeps you rolling in the cash. There is never a shortage of criminals flowing in and out of the justice system.

If you are a journalist its easier to get emotional responses to “justice” stories and a lot less complex than explaining why not allowing across state line health insurance sales creates oligopolies and higher cost. Just put the brain into neutral and go for the emotion as well as the higher paycheck. Really why would any reporter want to take the hard road of explaining complex problems like Fox News John Stossel? John has to research and explain problems. It’s hard work. Why not just do a Chris Mathews and get some uninsured guy on with cancer and blame the government? Sure takes lot less work and gets better ratings.

The true motivation of the communist at the top is simply that they are cold hearted bastards that exploit stupid people for their own personal gain. Obama loves capitalism as can be seen in his expensive King Louis XVI taste. He just doesn’t want the peasants enjoying those same benefits. What communist truly want is just enough servants to sustain them in their life style of luxury while keeping the countryside clear of development so as to enjoy it when taking excursions out of the big city. Pretty much the same as the bully in high school who wanted to screw all the girls and beat up any guy who tried to get some. People need to recognize this behavior in government Mr. Falconer describes and be rude. In high school the best way to take down a bully was to break his nose. The same tactics need to be displayed to government bullies. Get in their face, be rude and take them down a few notches. Kick some ass. Whenever you see some communist government crap freak out and cause a scene.

Some of Mr. Falconer’s solutions are common sense like privatization of services. Again his Declaration of Taxpayers Independence is long winded and well intentioned. But it fails to get to the heart of the matter. The problem is people can make careers out of government service. Smart people who will figure out ways to get more money from taxpayers. Government workers need to be limited to a total of 12 years service in their lifetime. Government service should be a temporary employment situation at best. 12 years and then you are gone. 12 years gives enough time for even the most complex functions to be performed. And then it’s over and back to the private sector.

The second thing is to get government cost out in the public domain every day. Gas tax per gallon and sales tax are everyday things that will keep the cost of government permanently in front of the publics eye. Any local government wanting to increase its scope of services will not be able to hide behind taxes on business. Opps there it is! Exposed!

All these reforms could be done with a few amendments to the Florida constitution. Simple amendments. Amendment 12 “All new state and local employees shall not be employed longer than 12 years.” Government arrogance, pensions, attitude solved. Keep it simple and with some luck something positive will come out of the looming economic melt down.

I wish Matt the best of luck. Government needs more people like him with the intelligence and distrust of government to do good things for the average taxpayer. God speed.

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