Category: Economy

Doubling Down on Connecticut Innovations

Because Connecticut Innovations, that quasi public agency self-charged with leading um, innovation in Connecticut has done such a great job creating tech jobs, Governor Malloy and the DECD are throwing more money at them. From the Hartford Business Journal:

 

Connecticut Innovations Inc. announced the ambitious business-development program Wednesday, one it says aims to build jobs.

The $125 million in new funding from the state was included in Gov. Dannel P. Malloy's jobs bill, which was signed into law in October, CI said.


CI says its plan is to match this state funding for each of the next five years with its existing cash and funding from its investment returns.


"CI's capabilities are essential to the success of the technology sector in Connecticut," Malloy said in a statement announcing the initiative. "Adding to their tool kit and providing more funding will allow the organization to accelerate its success in creating jobs and growing Connecticut's economy." 


Included in the plan is:




• $4 million per year for CI's pre-seed program, which offers loans to support the formation of new Connecticut technology companies. 

• $22 million per year for seed stage and Series A investments, which help entrepreneurs grow existing businesses, and for follow-on investments in CI portfolio companies.

• $6.5 million per year for a newly developed loan program, which provides growth and working capital for technology companies. 

• $7 million per year for the aggressive recruitment of emerging technology companies nationally and internationally. CI plans to work with the Department of Economic and Community Development (DECD) and other state agencies to design a relocation incentive package, similar to the governor's "First Five" initiative. 

• $4 million per year to help Connecticut companies capture more of the federal Small Business Innovation Research (SBIR) funds each year, as well as increase industry partnerships and the state's technology talent pipeline. 

•  $4.8 million per year to establish technology business accelerator hubs, which will provide support services to startups, and to create a corporate technology transfer initiative.

 

The Art of Small Business

This is a wonderful short film about two old skool businesses. If you are into paper and letterpress printing then you will enjoy this.

ink&paper from Ben Proudfoot on Vimeo.

Directed by Ben Proudfoot

Original Music by Kyle Malkin

Sound Design & Mix by David Bolen

Show your support:

Aardvark Letterpress
2500 West 7th Street
Los Angeles, CA
(213) 388-2271
www.aardvarkletterpress.com/

McManus & Morgan Paper
2506 West 7th Street
Los Angeles, CA
(213) 387-4433
www.mcmanusmorgan.com

October 2011.
ben@benproudfoot.com
www.benproudfoot.com
www.dinnerwithfred.com

It’s The Economy, Who’s Gonna Fix It?

We’re in the eleventh month and the eleventh hour of campaign 2010, emphasis on pain. All through the land every pundit has been breathlessly reporting the polls as if they matter. Call my cynical, but a poll, even as frivolous as the American Idol one, can’t change history. And history has said that whatever party controls Congress, nothing much will change till businesses start spending money in ways that make it into the workforce’s pockets.

Let’s take a trip in the wayback machine and visit with Henry Ford via the Ford Motor Company web site:

The $5-a-day Workday

After the success of the moving assembly line, Henry Ford had another transformative idea: in January 1914, he startled the world by announcing that Ford Motor Company would pay $5 a day to its workers. The pay increase would also be accompanied by a shorter workday (from nine to eight hours). While this rate didn’t automatically apply to every worker, it more than doubled the average autoworker’s wage.

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Can Government Create Jobs?

The economy has certainly drove home the idea of job creation as a campaign theme. Candidates are falling over themselves with campaign promises that they will “create jobs.” Naturally the tea party is out front and center with the idea that government can’t create jobs, with people like Linda McMahon sayign that government doesn’t create jobs, entrepreneurs do.

Maybe the third time’s a charm for Connecticut Democratic senatorial nominee Richard Blumenthal who has had a hard time offering a clear answer about government’s role creating jobs

When his opponent Linda McMahon asked him in a debate Monday night “how do you create a job,” he offered a meandering reply explaining jobs can be created “in a variety of ways by a variety of people.” He went on assert government can help preserve jobs by providing more capital to small businesses, tax policies that promote job creation and intervention by government to help promote American-made products.
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It’s The Economy, Stupid, Not The Deficits

I wish it was standard curriculum policy that a course in macro economics be required. I’d start with the political flunkies of course, but extend it all the way down to kindergarten. At least, back in the day, kindergartners were instinctively aware of the whole supply/demand curve when it came to chocolate versus whole milk, but then again those were days when those were your only choices, and child seats were unheard of.

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Chapter 11 For Politicians?

Remember David Stockman? He was the director of the Office of Management and Budget in the Regan administration most known for his budget cutting recommendations. He recently wrote an op-ed to the NYT that is worth reading.

If there were such a thing as Chapter 11 for politicians, the Republican push to extend the unaffordable Bush tax cuts would amount to a bankruptcy filing. The nation’s public debt — if honestly reckoned to include municipal bonds and the $7 trillion of new deficits baked into the cake through 2015 — will soon reach $18 trillion. That’s a Greece-scale 120 percent of gross domestic product, and fairly screams out for austerity and sacrifice. It is therefore unseemly for the Senate minority leader, Mitch McConnell, to insist that the nation’s wealthiest taxpayers be spared even a three-percentage-point rate increase.

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Should Education Be Free To Illegal Immigrants?

The NYT reports that some New York state schools are asking for social security numbers of students. The article intones that this is something of a violation of a 1980s era ruling by the Supreme Court. The grafs:

Three decades after the Supreme Court ruled that immigration violations
cannot be used as a basis to deny children equal access to a public
school education, one in five school districts in New York State is
routinely requiring a child’s immigration papers as a prerequisite to
enrollment, or asking parents for information that only lawful
immigrants can provide.

The New York Civil Liberties Union, which culled a list of 139 such
districts from hundreds of registration forms and instructions posted
online, has not found any children turned away for lack of immigration
paperwork. But it warned in a letter to the state’s education
commissioner on Wednesday that the requirements listed by many
registrars, however free of discriminatory intent, “will inevitably
discourage families from enrolling in school for fear that they would be
reported to federal immigration authorities.”

For months, the group has been pushing the State Education Department to
stop the practices, which range from what the advocates consider
unintentional barriers, like requiring a Social Security number, to
those the letter called “blatantly discriminatory,” like one demanding
that noncitizen children show a “resident alien card,” with the warning
that “if the card is expired, it will not be accepted.”

But the Education Department has resisted doing anything to address the
issue directly, in contrast with several other states — including
Maryland, Nebraska and New Jersey — where education officials have taken
strong steps in recent years to halt similar practices.

“It is the responsibility of each local school district to ensure that
it complies with all laws and decisions regarding student registration,”
Jonathan Burman, a spokesman for the department, said in a brief e-mail
message in response to a reporter’s inquiries. “Under New York’s
education law, anyone who is aggrieved by an action or decision of a
district that allegedly violates the law may appeal to the commissioner
for a review of that action or decision.”

A more fundamental question is why did the Supreme Court rule that illegal immigrant children have a right to education? For that we can look at the actual opinion and some key findings. First, not really a surprise is that the whole question of educating illegal immigrants came from Texas. Second that the gist of the argument centered on funding for the schools. The ruling:

Respecting defendants’ further claim that § 21.031 was simply a financial measure designed to avoid a drain on the State’s fisc, the court recognized that the increases in population resulting from the immigration of Mexican nationals into the United States had created problems for the public schools of the State, and that these problems were exacerbated by the special educational needs of immigrant Mexican children. The court noted, however, that the increase in school enrollment was primarily attributable to the admission of children who were legal residents. Id. at 575-576. It also found that, while the “exclusion of all undocumented children from the public schools in Texas would eventually result in economies at some level,” id. at 576, funding from both the State and Federal Governments was based primarily on the number of children enrolled. In net effect, then, barring undocumented children from the schools would save money, but it would “not necessarily” improve “the quality of education.” Id. at 577.

This is somewhat of convoluted reasoning, since the argument that the federal government, and state government supply educational dollars still boils down to the resident taxpayers funding that very same education. In Connecticut, we can see how that fairness in tax dollars from the feds and state works, cities like Stamford and Norwalk get little dollars while Hartford, Bridgeport and New Haven get many dollars. School populations, immigrant population not a factor. But that’s a digression. The egregious part is that the court acknowledged that the schools would save money, and yet claimed that it would not necessarily improve the quality of education. That is so highly speculative since in the 30 years since, there’s nothing in the record to suggest that money, more or less, results in better or  worse education.

The more interesting court reasoning is that today’s undocumented illegal immigrant may tommorrow be a legal immigrant and so:

Finally, the court noted that, under current laws and practices, “the illegal alien of today may well be the legal alien of tomorrow,” [n4] and that, without an education, these undocumented [p208] children,

[a]lready disadvantaged as a result of poverty, lack of English-speaking ability, and undeniable racial prejudices, . . . will become permanently locked into the lowest socio-economic class.

But if the purpose of limiting immigration is to avoid teeming populations of lowest socio-economic classes, then why not follow through with the immigration limitation policy through requiring that any student enrolled in schools be on the path towards obtaining legal immigrant status? The ruling then goes on to interpret the fifth and fourteenth amendments:

The Fourteenth Amendment provides that

[n]o State shall . . . deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.

But equal protection under laws should also apply to the right to be deported. Which gets to the heart of the matter here. If the right to a free education is law, then so must the right to be deported if there’s no legal immigration in the works. Meaning that the schools which ask for documentation of immigrant status cannot discriminate and prevent illegal immigrants for enrolling in schools, but that they have a duty to report the status of students that are in fact illegal immigrants to immigration authorities. Just as if they would be obligated to report any other crime.

Of course no one slice of the immigration issue addresses the fundamental issue at stake here. American policies on immigration reflect anti-immigration sentiments, making it hard for immigrants to seek a path to legal residency. Thus the pool of illegal immigrants grow when a pro-immigration policy would result in more legal immigrants and stripping the “cost” factor out of the equation. Immigration, historically is what has fueled the American economy for decades. If education is a part of that economic engine, then the policies of who and how a student gets education should certainly take into account their immigration status.

Other countries, like Canada have grasped this fact and place new immigrants in programs to address assimilation either via language instruction or citizenship. The burden of teaching new immigrants English, if they don’t speak it, shouldn’t fall on local school districts when it is the federal policy that determines immigrant status. An immigration process that includes instruction on language, laws and good citizenship would go a long way to tap into the economic benefits of immigration by encouraging assimilation into American society. Instead we hope that like Darryl Hannah in Splash, our immigrant populations will just somehow learn about all this stuff through television.

Norwalk Gets An Economic Development Focus

It seems that Common Council members want to know more about economic development. At least, that’s what portrayed in the Hour article describing last Thursday’s planning committee meeting. We look at the issues outlined in the Hour:

“I understand what they presented and the structure that it has,” committee Chairman Douglas E. Hempstead said Friday. But “it requires further evaluation of the relationship between the private company and the Redevelopment Agency — and then its relationship to the city of Norwalk.”

“I don’t want to imply an impropriety, but how do you serve two masters?” Hempstead said.

The Redevelopment Agency itself is a quasi-public organization formed 60 year ago to further redevelopment efforts in the city. Sheehan compared the formation of the NEDC in December 2009 to the agency’s formation of North Walke Housing Corp. in 1987. The housing corp. deals with housing. The NEDC focuses on redevelopment.

Not quite. Sheehan explained that the NEDC focuses on economic development, the Norwalk Redevelopment Agency focuses on redevelopment. The difference  between the two according to Sheehan, is that while the Norwalk Redevelopment Agency (NRA) can apply for grants from federal programs, like through HUD (Housing and Urban Development) it can’t apply for grants from private foundations, which typically require a non governmental 5013c as the recipient. By forming the NEDC, a non governmental 5013c can now apply for those grants. Also, Sheehan, explained the NEDC can charge fees for performing services that the NRA could not.

As 503(c)3 non-profit organizations, both may sustain themselves through interest income, service fees, rents, public and private grants and fundraising. The liability of the Redevelopment Agency itself is limited through the legally separate 501(c)3 corporations, and each has a better ability to secure private, state and federal grant funding independently, according to an overview prepared by Sheehan’s office.

“The board of directors are the five (Redevelopment) commissioners for both (corporations),” Sheehan told the Planning Committee. “It’s two distinct corporations. The parent corporation is the Redevelopment Agency.”

On Thursday night, Hempstead’s questions focused on funding.

“Where does (the Economic Development Corp.) get money to do loans?” Hempstead said. “How did it get the resources? Did the resources come from the agency, and the agency gave the resources to the NEDC?”

During its existence, the Redevelopment Agency has generated income through its issuance of loans and fees. The agency allocated $4 million — roughly half of its assets — to form the Economic Development Corp., Sheehan said.

Of course the NRA has been in the loan business for quite some time. Like this one. Or this one. Or this one.

And in Los Angeles, that Norwalk Redevelopment Agency gets loans from the City Council to build parking garages for the courthouse, something this Norwalk’s Common Council hasn’t figured out to do in decades. But I digress, using Google can make that so easy. Like seeing how the NRA used stimulus dollars, through CDBG-R funds, are used to make micro loans, per the CDBG-R criteria.

There are 20 other Economic Development Corporations in Connecticut. They all do pretty much the same thing. For example, the Orange EDC offers this:

Orange provides Tax Incentives to companies improving their properties by $4,000,000 through new construction or reconstruction of existing facilities.

Hrmm, that’s one way to increase the grand list isn’t it?

Nauguatuck’s EDC:

The NEDC provides a comprehensive range of services focused on enhancing the experience of doing business in Naugatuck. Services are available for both new and existing companies, and are offered to businesses already doing business in Naugatuck, as well as those looking to move to the community. Services include:

  • Site selection assistance
  • Enterprise Zone benefits counsel
  • Land use planning support
  • Assistance with the municipal approval process
  • Business plan review
  • Specialty business finance programs
  • Business expansion assistance
  • Industrial and commercial property inventory
  • Community development program assistance
  • Start-up business support
  • Business development programs
  • Business marketing and promotion
  • Assistance to businesses for government loan and grant programs
  • Advise on real estate reuse issues
  • Information on environmental and brownfields programs

Then there’s the Shelton, Hartford, New Haven and  Meriden EDCs.

What Ever Happened To Common Sense?

I’ve touched on this before, but it seems that government process has diverged from solving problems for the greater good and instead solves problems for the least common denominator. Let’s take child labor laws. On the surface, it would seem to be a good thing to protect children from working in conditions that would harm them. But one law maker’s harm is another’s no harm. So the generally broad interpretation of harm can include children not working during school hours. Of course forcing children to attend school is altogether another harm, but let’s skip that digression.

In last week’s Connecticut Law Tribune, (h/t Colin McEnroe) there’s an interesting article about a three generation pizza restaurant taking of the Department of Labor over, you guessed it, child labor laws.

For Michael Nuzzo, so many family memories have been made in pizzerias.

He and his brothers grew up working for their father, Fred, in the original Grand Apizza in New Haven. And now Michael operates a Grand Apizza restaurant in Clinton, where his three children, ages 8 to 13, help out on Friday nights and Saturdays. Sometimes, Fred drops in to roll dough with his grandchildren.

It’s a continuation of a family tradition for the Nuzzos, spending quality time together making pizza.

But the state’s Department of Labor saw something different. An investigator visited Grand Apizza on May 12 and told Michael and his wife, Migdalia, that state laws prohibit children under 16 from working in restaurants. No fines were levied and no enforcement action was taken against the restaurant.

But now, the sauce is flying.

The Nuzzos fired back late last month with a federal lawsuit against senior officials at the Connecticut Department of Labor alleging that the state is encroaching on the parents’ rights to raise their children.

“I want to be left alone to run my business so I can pay my mortgage and send my kids to college,” Nuzzo told the Law Tribune last week. “My restaurant is an extension of my home, and my children are welcome here any time.”

Nuzzo thinks a local gadfly is responsible for complaining to state officials. “There’s somebody in town who has got nothing better to do, and she’s always been a thorn in people’s sides,” Nuzzo said.

The story about the state’s crackdown on a small family restaurant has made national news. The Nuzzos have appeared on ABC, CNN and Fox News to tell their story, and the fight with the state already seems to be worthwhile. “It has increased business,” Nuzzo said. “We’re getting calls nationwide, and some people just came down from Boston to have a pizza and say they support me.”

Legally, the case raises some interesting questions about state labor laws, how they’re applied and how they might violate people’s civil rights.

“It’s an interesting issue from a lawyer’s perspective,” said Raymond J. Rigat, who represents the Nuzzos and runs his general practice a few doors down from Grand Apizza.

In his complaint, Rigat argues that the Nuzzo children regularly attend public school, never operate dangerous equipment at the restaurant and always are under their parents’ supervision. Nuzzo added that his children never miss school to work at the restaurant.

Rigat’s complaint seeks a declaration that prevents the Labor Department “from prohibiting the Nuzzo children from learning the pizza trade under their parents’ tutelage at the family restaurant.” He alleges violations of rights under the First, Ninth and 14th Amendments.

The legal issue, the article concludes, may be difficult for the courts to handle, because the courts can’t handle nuance. I can sort of understand that, since families, after all, have a long track record of abusing child labor in the more agrarian days. And it was only a 100 years or so when child labor in the textile industry sparked all these labor regulations to begin with. But clearly this is just another case of government lacking common sense. The process of government can’t differentiate between something bad, and something benign. Which brings us to the next news bit of interest. In Los Angeles, via the LA Times, there’s a move to streamline the application process for opening restaurants.

It seems that in L.A. it can take up to two years to get through all the permitting processes before opening a restaurant. The L.A. City government, noting the boom and bust economic cycles, figured out they needed to do something about that.

Now, developers seeking to build restaurants will be assigned case managers to help them through the process, said Raymond Chan, executive officer of the Los Angeles Department of Building and Safety.

In addition, the city has worked with the county Department of Public Health to eliminate conflicting rules among the many agencies that regulate restaurants.

“Building a restaurant involves almost all the building trades — mechanical, architectural, health, grease control, electrical,” Chan said, and each one requires a different set of inspections.

Until now, he said, inspectors from different departments would come to a restaurant construction site and demand different types of safety measures, or insist that the owner pull out materials that another inspector had insisted on using.

In one case, he said, a restaurant owner put in one type of equipment for processing and removing grease at the behest of the health department. Then, he said, the city’s Bureau of Sanitation, which handles trash removal, insisted that the part be replaced with a different type of equipment — at a cost of up to $40,000.

Ensuring that all department regulations are in sync is something really needed in Norwalk. Talk to any Norwalk business owner and they will tell similar tales of one inspecting official requiring one thing, and another requiring something else. Too often the political shorthand for streamlining government is about reducing operational costs and it’s corollary, taxes. That shouldn’t the whole sum of the argument. Operational efficiencies can cost money to implement, but they can result in higher revenues by increasing economic development. It’s too bad that at least in Norwalk, the conversation about government stays moored to the dock of taxes.

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