A Fall-Back Remnant: Advent of Municipal Wealth Funds

Determinism applied to politics follows a linear premise. Small evolves into big. Feudalism caved for kings and rule by the Holy Roman Emperor. This was considered progress. The small cells of feudal lords succumbed to multicellular empires, which supposedly transitioned Europe from Dark Ages to a Renaissance. It is supposed we can plot a course from there on a graph to find where we're headed, and deduce from the trends how we get there.

This is a flawed framework, for the core premise is flawed, as well as many details. For one thing, there was no concrete Renaissance. In trying to find one event or even the collective achievements of a generation to mark the epoch, one comes up empty. Indeed, finding either a cause or an effect doesn't seem feasible. None of the painting innovations of Jan Van Eyck, who died in The Netherlands in 1441, seem connected to the massive Gothic works of the High Middle Ages. The Dutchman's innovations bore us Botticelli, born in 1445, and the painting side of da Vinci, born in 1452. But in no way does it follow that the supposed deterministic evolution of governing bodies gave us Renaissance painting. For one thing, the Italian painters flourished in city-states.

Empirically and axiomatically, the framework of Marxian thought isn't a sound structure. Everything we have, everything we've inherited, still springs from individual minds. We work cooperatively in many tasks, but in no way does it follow that we're following an evolutionary chart as a political organism toward an eschatological utopia.

Despite this, and despite founding principles in the compact our nation was founded on, despite a multitude of tragic examples in the Twentieth Century of ultimate failure, we find ourselves back in an age where a command economy- this time where "Finance Czars" reign- is again fashionable.

Our erstwhile classless society is class-conscious, and smells blood.

Our new overlords have bribed us with monetary expansion and debt over-leveraging, and as they create an environment where capital is allocated to the shiftless, and production is intimidated, contracts aren't honored, and traditional incentive structures are artificially turned on their head.

The political organism, call him Leviathan, is again centralized. Capitalism has died where it once flourished like no place on Earth, and to say so is denigrated as "fear-mongering", the fashionable universal stamp to all dissent. In the age of Leviathan's unity, dissent is divisive.

Why, yes, dissent is divisive. It so happens that dissent and division happen to be companions to all who value individuality. Alas, the individual navigates through dire straits today. The enterprising, bread-winning, building side of the individual is being smothered in the liberty-crushing reign of Leviathan's current handlers. These fellows, manipulating a tradition of liberty, promise an expansion of freedom in one area. And as these freedoms are mostly related to mere fornication, exercising them pose no threat to their real ultimate power.

The individual, temporarily bound in a straitjacket, still has a "divisive" ally to turn to; Federalism itself. Perhaps the reader has heard of the nascent state sovereignty movement. In summary, this effort introduces texts that echo the 1798 Kentucky and Virginia Resolution penned by Jefferson and Madison. This is wonderful for the legal sphere. These documents just might right Constitutional Law.

But municipalities will play a peculiar role. Right now, municipal bonds of many towns appear insolvent. This grave over-leveraging resulted from poor assumptions from city managers regarding revenue streams. Unfortunately, this meltdown is taking shape as investors wish to turn to muni bonds to avoid the 2010 expiration of tax cuts.

A dreadful yet inevitable outcome I foresee is the rise of what I call municipal wealth funds. These are smaller township varieties of sovereign wealth funds run by nations like the city-state of Singapore. The explosions of sovereign funds are an inevitable result of state privilege, and municipal funds will dynamically expand for the same reason. Once, the boom begins, no town will manage to resist. Every town frustrated at sluggish returns from industrial parks and tax break offers spurned by businesses will jump into the entrepreneurial game themselves. Many will fail to segregate the business from politics, and there will be scandal. There will be disaster. And for sure, private enterprise will be squeezed out. But at least it won't be controlled by D.C. Or even Austin.

So, Paris, I bring you this before the boom, the bust. You can open the box first, or temper your haste and ride the box of horrors passively.

The mechanism isn't fixed. Townships will experiment with incestuous land-grants (industrial park space granted to the city enterprise), more muni bonds, and, at the center, initial public offerings of shares traded on Wall Street. Raising private capital is the next obvious recourse for cash-hungry cities that have driven so many away through tax hikes, licensing fees, and toll levies, before turning to impossible debt loads in the vain hope that building spiffier schools would attract a bigger tax base.

Go corporate, young Paris! Build high-tech industry. Attract geeks. They'll frequent the Hastings, build brainy charter schools to raise geek kids, attach a wing to the junior college to develop proper geek adults, and form role-playing clubs to properly organize geek recreational pursuits.

It's a modest proposal. Perhaps Swiftian. Perhaps practical.