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Harmon’s Notes on the News – July 23, 2019

BY EDWARD HARMON / JULY 23, 2019

GRU should be sold to a private company

GRU’s exorbitant rates and incompetent management will always be a divisive issue. Residents cry out for transparency, voter choice, honesty, and “no taxation without representation.” If they are sincere, I can solve the GRU issues. Hear me out. GRU should be auctioned off to the highest bidder—the city would get the proceeds and then invest the funds as it wishes. It could fix the roads, enhance public safety, or hire 5000 diversity coordinators and their staffs and give them city-owned cars and  then invest what is left and use the earnings as the city wishes. Like Duke Power, the buyer would be a publicly-regulated utility, which would serve its customers as any utility does. The city would then need to be responsible to the voters for raising or lowering taxes to meet what the elected representatives determine to be correct; they could be thrown out or re-elected, but taxation would reflect what the voters in Gainesville would accept in a democratic election.  Controversy over… GRU would not be a political cow, incentivized to raise rates,  and making the city non-competitive in that respect, and used to fund the city so the city can hide the true cost of its actions. In addition, non-Gainesville residents would not be punished by what is a “commuter” tax, in which they have no voice if they are in a GRU monopoly area.

Unintended consequences

Politicians always need to consider the law of unintended consequences. The Dodd-Frank Durbin Amendment capped fees that banks can charge merchants on debit card transactions. M Many applauded this as protecting consumers, but the results have been the opposite. Banks, predictably, offset the loss of income by raising fees on checking accounts and steering customers to credit cards. A University of Pennsylvania study found the fee cap caused the number of free checking accounts to fall by 40% and the average monthly fee to increase by 70%; monthly minimum balances also rose 25%. A George Mason University study said the rule caused costs for  lower-income customers to rise $160 a year. Who did the cap help? Certainly not the poor. I would only ask that when any politician offers “free” anything or inhibits the free market system (“affordable housing,” for example), we carefully consider not only the votes being bought but consider the law of unintended consequences.

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