Ganesh Harinath

It doesn’t take a genius to tell you Harrisburg is facing real financial trouble.

During the last two public city council hearings, some have argued we should file for bankruptcy while others claim we must sell our few profitable assets. Unfortunately, there is no magic bullet. Instead, we must look to a variety of measures to use the assets we have to create revenue over time.

Interestingly, Harrisburg does have an excess of supply: in this case, underutilized real estate. When property sits blighted and condemned, with buildings literally falling down, there are clearly more buildings than are needed: otherwise, why are these buildings not maintained and/or legally occupied?

In fact, it turns out there are opportunities to create revenue from this inventory. According to the Harrisburg Young Professionals’ 2009 Annual Survey, as many as 1 out of every 5 professionals who do not live in the city “looked but did not find a good place.”

This means demand for housing in the city is not being met by the current supply of homes and apartments. Harrisburg needs to attract investment to meet this demand. Harrisburg needs tax abatements.

Tax abatements are a deferral of tax increases that are automatically imposed when someone invests in their property (renovations or new construction).

Tax abatements defer new taxes and gradually phase them in over time. They are a common sense solution to curtail population loss and stimulate demand for city living in a city with the highest property tax rate in the region. This happens by making residency affordable for homeowners, which in turn generates revenue for the city through future tax collections – revenue that otherwise would not be created.

Tax abatements are needed to increase the city’s tax base. Per US Census data Harrisburg’s city population has been cut in half the past 60 years: a strong indicator of the falling value of downtown property. Increasing the city’s population lowers the cost of services for all residents. By allowing tax abatements on property in the city, we facilitate investment in the thousands of housing units needed to attract prospective home-owners into the city.

Critics argue tax abatements are just welfare for rich developers. I beg to differ. It is commonly understood that the high property taxes in the city, if unabated, would depress property prices and render any new investment impracticable. Developers cannot invest without the ability to recoup their costs and make some amount of profit. They only make a profit if the cost of building or renovating a property is less than its selling price. They assume the risk while we are poised to receive the tax revenue. In the meantime, blighted land is replaced by livable and workable space.

Some question whether tax abatements aid seniors who have lived in their home for several years. I say they’ll benefit. When vacant or under-developed properties surrounding a home increase in demand due to the decreased production costs, property values of surrounding homes improve.

With tax abatements, older residents would have the chance to make improvements to their home with no immediate tax implications (increasing their asset’s worth). This is in addition to existing measures exclusively designed to assist older generations, like the Property Tax/Rent Rebate Program and Pennsylvania Property Tax Expanded Relief for Seniors.

Others argue that at the end of the tax abatement period, Harrisburg will lose residents. In reality, those people are missing the point. Harrisburg has already lost tens of thousands of residents. Tax abatement seeks to improve existing properties and build new ones, thereby adding to the future tax base. The goal of the tax abatement program is to collect the tax revenue generated from present or future property owners.

If a building is vacant and boarded up, if a parcel of land is undeveloped, if fewer than half the homes on a street are occupied, then there is an excess of supply and/or a dearth of demand. This is the case in virtually any part of the areas surrounding my neighborhood of Olde Uptown. Blame it on the schools; blame it on the high taxes; blame it on the rain [as we were instructed to do in the late 80s]; but accept this as reality. No amount of wishing, hoping, or even lip-synching is going to change the fact that we are surrounded by horrendous land that generates no real benefit to Harrisburg’s economy.

We all want the city to succeed. The revitalization of Olde Uptown is a paramount example of this type of successful transformation. With tax abatements, a better tomorrow is within reach – but only if we act today.

Ganesh Harinath is a renter in Olde Uptown, Harrisburg, where he works as an independent marketing communications professional. He earned his BA from UCLA, and his MBA from Penn State University. ganesh@ganeshharinath.com

This op-ed was printed on June 27, 2010, and can be linked to here.

Earlier this week, McDonald’s solidified their foothold in the digital realm with the announcement of the addition of Rick Wion to their TMT. Mr. Wion is the first Social-Media Chief for the global corporation, and will primarily direct the US social media efforts.

Less important than Mr. Wion’s credentials and title (all of which attest to his current role ) are his capabilities in the digital realm. As one of the largest brands on the planet, McDonald’s has a unique opportunity to immediately cut through the noise of the online space and begin creating brand ambassadorships and virtual relationships with their loyal followers. As something of a McDonald’s loyalist myself, I am excited for their move in this direction.

The corporate strategy involved in this maneuver has undoubtedly informed Mr. Wion’s movements; needless to say, McDonald’s has their work cut out for them. This space is theirs to lose, and it would not be difficult to do so. Mr. Wion’s instructions to his business segment include the mandatory ‘region identification’ on Twitter handles as well as the culling of the ever-influential mommy-blogger segment. As most active social media marketers can tell you, there are fewer segments more polarizing than the mommy-blogger, as evidenced by a few notable instances .

All in all, Mr. Wion has his work cut out for him – but in a good way. This is not a greenfield initiative, but rather an opportunity to solidify market share through an existing channel. The market is out there; McDonald’s has answered the call. What companies should follow McDonald’s lead? Do you think McDonald’s is really breaking ground, here, or just proving their size by being a late-stage adapter on this front?

A secondary advertisement that I found fairly intriguing is that of Wheat Thins Artisan. The juxtaposition of a child with these adults as well as the inherent “devalue” proposition of their competition’s powdery, flaky, neon-like cheese substance is a pretty convincing push mechanism toward the Wheat Thins Artisan offering. The commercial itself is a pitch about the adult-ness-icity-ism [my ‘word’ not theirs] of choosing snacks, essentially eschewing the notion that dusty crackers are suitable for adults and embracing the contrary notion that as we get older we need to update or maturate our selections and choices. In the truest testament to brand essence, it becomes less about the product and more about how you feel when you are interacting with it; the logical enthymeme here it not at all dissimilar to Old Spice’s and Nivea’s responses to Axe and Tag Body Sprays, irrespectively.

Do you think this advertising strategy will pay off in the long run?

There’s a lot going on in Iran right now. Current President, Mahmoud Ahmadinejad, defeated main reformist candidate Hossein Mousavi and two others. In the meantime, Iran’s supreme leader, Ayatollah Ali Khamenei, has declared Ahmadinejad the clear winner and has asked all Iranians to unite behind his leadership. Personally, I’m more than a little ignorant on the socio-political structure in Iran, so I’m not in a position to criticize the Ayatollah’s role as a one-man supreme court; but I do find it perplexing – to say the least. If any of you can link to an interesting [re: succinct] article that can sum up this dynamic, I’d be much obliged.

The part about this struggle that is ‘sexy’ is the aforementioned victory has been downtrodden amidst speculation that widespread corruption, ballot-stuffing and general shady activity is the true cause of the purportedly maligned election results. I’m not a political scientist, but given the overwhelming mounds of data, I am inclined to raise an eyebrow in suspicion. For more information, check out this chronology that I found pretty enlightening.

Web 2.0 has played a vital role in our understanding of the events as they have unfolded, and that is really the point of this article. On June 16, reporters were restricted from reporting from the streets of Iran, essentially terminating any connection to the truth the western world hoped to maintain. Unlike Tiananmen Square, however, gonzo journalism has taken to the PDA, and YouTube is littered with videos of rally supporters and folks of Persian descent decrying the current milieu and eschewing the populist regime. It seems that instead of scouring for a window into the plight of the Iranian citizen, we are instead deluded by an influx of personal 45 second micro-tales and crudely shaped vignettes.

In a time when firms are continually attempting to rationalize spending efforts and shore up ROI, the direct reach and impact of social media rears its timely head. If Twitter and Facebook can lead a counter-cultural revolution, what can they do for the DJIA? All I know is that we can ‘easily’ show our support via the Twitter version of a red ribbon lapel: a green-tinted avatar .

After all, we are each humans first and marketers second. Well, at least so much so are those of us lucky enough to be counted among the latter.

In an economy with stringent factors affecting every aspect of our purchasing, consumers begin to examine the intrinsic value of an offering as part of a greater effort to distinguish whether or not said offering is worth a specific chunk of available, finite resources. This is where the scarcity in decision making, proliferated through general economic theory, comes into play for marketers. Understanding fully both the consumer concept and the consumer willingness to pay is tantamount to increasing bottom line sales and creating lift. The creative marketer in the depressed economy does their best to sell the intrinsic value of an item. This hearkens back to the ever-popular push vs. pull model in general marketing.

One particular company that does a pretty interesting job of appealing to business-minded consumers is eHarmony.com: an online retailer, of sorts, specializing in what amounts to a BPO [business process outsourcing] of finding a love interest. The current advertising scheme in question incorporates the notion of “secretly having someone else [do the work] for me,” which, assuming a base-level of ability in the referential, is a highly succinct definition of BPO.

The effectiveness of this advertising strategy is readily apparent: it simultaneously appeals to business-minded people and it also skews perception. In this case, the skew is from the normative / popular culture perception of online dating as something for people who “can’t date normally” toward the infinitely more enticing utilization of the world of personalized shoppers, babysitters, car washes and tax professionals: doing the things for you that you could do for yourself had you the time, expertise, inclination or patience.

As people’s savings are failing to bridge the gap, eHarmony is setting their targeting and positioning such that it speaks to professionals with a modicum of business savvy and arguably a little more cash on hand to spend on luxury goods. In this case, love is a luxury not everyone can afford. It turns out that when it comes to business, even love can take up a spot on the balance sheet. Sorry J-Lo, looks like your love does cost something [as if Ben didn’t already know].

Regardless of your personal take on internet dating, BPOs, and American-born Puerto Rican divas, one has to take note when creative spins begin to affect brand positioning. I know I’ll be interested to see how and where eHarmony pushes this line of thought. What do you think?

I ran across a really fascinating article on NPR earlier this month, and it really got me thinking about the state of marketing & advertising. More to the point, the article put a finger on a lot of the shifting thematic elements I’ve noticed in advertising over the last couple of weeks, specifically starting in January [i.e. just after Christmas]. For obvious reasons, consumers are becoming increasingly price-sensitive as the M1 influx has precipitously declined [unfortunately, this decline did not lead to an increase in M2, as the effective interest rate has all but denigrated our currency’s value]. In light of this consumer shift, recession marketing has once again reared her ugly head, casting a dull, pallid glow on the pulchritude of the golden arrow.

We’re a little more broke, so the way we buy things has changed. Makes sense to me, and I’m sure to you, too. What is less obvious is the way this will alter consumer behavior for years to come. For any of us who have relatives that survived the Great Depression, we understand that their way of looking at the world is much different than that of their children, and their children’s children. Now we, as progenitors of the current economic milieu, face the market with our own unique perspective. What will be first to fall by the wayside? Will it be taste? Economics says ‘yes’ – we will find substitutable goods to take the place of the items we currently love but can’t fit into our ever-shrinking shoestring budget.

This TV is HD, and has all the bells and whistles I need, but is made by a generic brand; savings to me of 35%.

These crackers are made by my supermarket grocer, but taste enough like the other ones I’ve been enjoying for years; savings to me of 15%.

In fact, the average consumer will begin to nickel and dime themselves out of many goods, finding more economically friendly [i.e. cheaper] alternatives. The challenge to marketers is to increase their brand recognition and perceived accessibility by aligning themselves with what consumers need and want most: in this case, value.

Value means a lot of things to a lot of people. Yet, one of the more convincing of these lexicon entries comes along with the notion of Dignified Deprivation [and just like that, I’ve finally arrived at my titular point]. Companies need to help consumers get what they want, while convincing them they’re not ‘less of a person’ for needing something that costs – in many cases – a nickel or dime less. Generic soap doesn’t mean you care less about your kids and their hygiene, it means you care an awful lot about making sure you can buy them the things that matter when it matters.

Marketers, more than ever before, must now focus on finding out what those things that matter truly are. If price-sensitivity is a given, toward what aspect of the product will consumers find their highest sensitivity? Any good MBA can plot the information on a matrixed 3D graph, but only a strategically minded professional can take the sensitivities of an anxious public and ensure their needs are met, while their egos are not bruised in the process. If this requires a re-tooling of the value proposition to ensure alignment with consumer consciousness, then so be it. My hope is that marketers will begin to use technology, such as social networks and Web 2.0 products, to crowdsource the innately important attributes and focus their efforts accordingly. Will companies succeed? Stay tuned to your local advertising to find out – after all, we all need to enjoy a commercial now and then.

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It is understandable that politicians must speak in platitudes at times, in order to get their points across without committing to future plans of action, or binding themselves in an implied consensual agreement with their audience. That being said, this fact annoys me. Granted, I am in a unique position at this stage in my life, so there are some things that I want to hear; and there are some things that I need to hear. As our new President gets adjusted, learns the intricacies he will need to master to do his job efficiently, and begins to shape his policies, it is my hope that he will begin to make more direct statements that will help those attentively listening understand his action plan.

In the spirit of keeping informed, I’ve reproduced a speech from President Obama, below. I’ve only included excerpts; the speech, in its entirety, can still be found on the Wall Street Journal website.

The speech was sourced from WSJ.com, from an article dated January 8, 2009.

—

We start 2009 in the midst of a crisis unlike any we have seen in our lifetime – a crisis that has only deepened over the last few weeks. Nearly two million jobs have now been lost, and on Friday we are likely to learn that we lost more jobs last year than at any time since World War II. Just in the past year, another 2.8 million Americans who want and need full-time work have had to settle for part-time jobs. Manufacturing has hit a twenty-eight year low. Many businesses cannot borrow or make payroll. Many families cannot pay their bills or their mortgage. Many workers are watching their life savings disappear. And many, many Americans are both anxious and uncertain of what the future will hold.

Starting on a high note is over-rated, I suppose.

I don’t believe it’s too late to change course, but it will be if we don’t take dramatic action as soon as possible.

This is all subjunctive, but I appreciate the optimism here.

This crisis did not happen solely by some accident of history or normal turn of the business cycle, and we won’t get out of it by simply waiting for a better day to come, or relying on the worn-out dogmas of the past. We arrived at this point due to an era of profound irresponsibility that stretched from corporate boardrooms to the halls of power in Washington, DC. For years, too many Wall Street executives made imprudent…

I truncated this paragraph because we’ve all heard it before. The statement’s got a lot of validity, but here is where I differ slightly with our President. As greedy and pointed as the actions of analysts in the financial industry may have been, they would not have been possible without the ignorance of the average investor/buyer. This is not a remediation of their onus, but rather a simple truth – in this instance, it seems that one truly was born every minute. If you accept a dollar from me with the explicit possibility that I will charge you twice as much interest next year as I am charging you now, and you know you cannot afford to pay me at the current rate [let alone at the higher rate], you probably shouldn’t be borrowing money from me. This is essentially what the ARM is/was, and the average home-buyer either abrogated this fact, or chose not to question from whence the manna came.

Now, the very fact that this crisis is largely of our own making means that it is not beyond our ability to solve. Our problems are rooted in past mistakes, not our capacity for future greatness. It will take time, perhaps many years, but we can rebuild that lost trust and confidence. We can restore opportunity and prosperity.

Again, truncated – but we have also heard this. The optimism is great, and I am hoping he will elucidate as we continue.

That is why I have moved quickly to work with my economic team and leaders of both parties on an American Recovery and Reinvestment Plan that will immediately jumpstart job creation and long-term growth.

Dude, that’s awesome. Tell me more about this plan.

It’s a plan that represents not just new policy, but a whole new approach to meeting our most urgent challenges. For if we hope to end this crisis, we must end the culture of anything goes that helped create it – and this change must begin in Washington. It is time to trade old habits for a new spirit of responsibility.

Go on.

There is no doubt that the cost of this plan will be considerable. It will certainly add to the budget deficit in the short-term. But equally certain are the consequences of doing too little or nothing at all, for that will lead to an even greater deficit of jobs, incomes, and confidence in our economy.

As a marketer, I can fully appreciate a delayed ROI.

Only government can break the vicious cycles that are crippling our economy – where a lack of spending leads to lost jobs which leads to even less spending; where an inability to lend and borrow stops growth and leads to even less credit…

I’m intrigued to hear about the notion of increased government from a liberal. But, I’m willing to flesh out the argument to see if it bears fruit.

That is why we need to act boldly and act now to reverse these cycles… That work begins with this plan – a plan I am confident will save or create at least three million jobs over the next few years. It is not just another public works program. It’s a plan that recognizes both the paradox and the promise of this moment – the fact that there are millions of Americans trying to find work, even as, all around the country, there is so much work to be done. That’s why we’ll invest in priorities like energy and education; health care and a new infrastructure that are necessary to keep us strong and competitive in the 21st century. That’s why the overwhelming majority of the jobs created will be in the private sector, while our plan will save the public sector jobs of teachers, cops, firefighters and others who provide vital services.

Where’s the beef? I thought we were talking about a plan just a second ago…

To finally spark the creation of a clean energy economy, we will double the production of alternative energy in the next three years. We will modernize more than 75% of federal buildings and improve the energy efficiency of two million American homes, saving consumers and taxpayers billions on our energy bills. In the process, we will put Americans to work in new jobs that pay well and can’t be outsourced – jobs building solar panels and wind turbines; constructing fuel-efficient cars and buildings; and developing the new energy technologies that will lead to even more jobs, more savings, and a cleaner, safer planet in the bargain.

To build an economy that can lead this future, we will begin to rebuild America. Yes, we’ll put people to work repairing crumbling roads, bridges, and schools by eliminating the backlog of well-planned, worthy and needed infrastructure projects. But we’ll also do more to retrofit America for a global economy. That means updating the way we get our electricity by starting to build a new smart grid that will save us money, protect our power sources from blackout or attack, and deliver clean, alternative forms of energy…

Again, I don’t know how I or my peers will benefit from these changes.

Finally, this recovery and reinvestment plan will provide immediate relief to states, workers, and families who are bearing the brunt of this recession. To get people spending again, 95% of working families will receive a $1,000 tax cut – the first stage of a middle-class tax cut that I promised during the campaign and will include in our next budget. To help Americans who have lost their jobs and can’t find new ones, we’ll continue the bipartisan extensions of unemployment insurance and health care coverage to help them through this crisis.

So if I am not married, I will not get any tax cuts? If I help support my family, but do not have a wife, I guess I’m out of luck..?

I understand that some might be skeptical of this plan.

[Raises hand.]

Our government has already spent a good deal of money, but we haven’t yet seen that translate into more jobs or higher incomes or renewed confidence in our economy. That’s why the American Recovery and Reinvestment Plan won’t just throw money at our problems – we’ll invest in what works.

Frankly, I do like the bold name of the plan; it’s better than calling it a bail-out, or a hail-mary. Ostensibly, it is both.

Instead of politicians doling out money behind a veil of secrecy, decisions about where we invest will be made transparently, and informed by independent experts wherever possible. Every American will be able to hold Washington accountable for these decisions by going online to see how and where their tax dollars are being spent. And as I announced yesterday, we will launch an unprecedented effort to eliminate unwise and unnecessary spending that has never been more unaffordable for our nation and our children’s future than it is right now.

As a self-proclaimed technocrat, I think this makes a lot of sense. And as a business person with public finance experience, I like the idea of accountability. I have concerns, though, that this will actually happen. Time will tell.

We have to make tough choices and smart investments today so that as the economy recovers, the deficit starts to come down. We cannot have a solid recovery if our people and our businesses don’t have confidence that we’re getting our fiscal house in order. That’s why our goal is not to create a slew of new government programs, but a foundation for long-term economic growth.

I agree that we have to make smarter investments. Part of that should be educating the average investor so we can prevent something like this from happening again.

No longer can we allow Wall Street wrongdoers to slip through regulatory cracks. No longer can we allow special interests to put their thumbs on the economic scales. No longer can we allow the unscrupulous lending and borrowing that leads only to destructive cycles of bubble and bust.

We have the SEC and SOx; rather than create new bodies, we should just learn to maximize the potential of the ones we have. Why go buy a new car when you can just give your old one a paint job. Let’s not go nuts, here, guys; system refresh isn’t always the answer.

It is time to set a new course for this economy, and that change must begin now. We should have an open and honest discussion about this recovery plan in the days ahead, but I urge Congress to move as quickly as possible on behalf of the American people. For every day we wait or point fingers or drag our feet, more Americans will lose their jobs. More families will lose their savings. More dreams will be deferred and denied. And our nation will sink deeper into a crisis that, at some point, we may not be able to reverse.

This is the truest part of the entire speech, and I couldn’t agree more.

That is not the country I know, and it is not a future I will accept as President of the United States.

I appreciate the spirit of this statement, but I dislike it, proper; read it a few times, and I think you’ll see what I mean.

It will not come easy or happen overnight, and it is altogether likely that things may get worse before they get better.

Oh, more good news.

I know the scale of this plan is unprecedented, but so is the severity of our situation.

Desperate times…

We have already tried the wait-and-see approach to our problems, and it is the same approach that helped lead us to this day of reckoning.

Libertarians, eat your hearts out.

That is why the time has come to build a 21st century economy in which hard work and responsibility are once again rewarded.

Has anyone ever worked a government job? Or anyone have a friend who does? This statement made me laugh.

That’s why I’m calling on all Americans – Democrats and Republicans – to put good ideas ahead of the old ideological battles; a sense of common purpose above the same narrow partisanship; and insist that the first question each of us asks isn’t “What’s good for me?” but “What’s good for the country my children will inherit?”

Very JFK of you, Barack. I hope it works better, this time around.

More than any program or policy, it is this spirit that will enable us to confront this challenge with the same spirit that has led previous generations to face down war, depression, and fear itself.

I guess spirit is really all we have to go on at this point, given that no clear action plan has been laid out in this speech, or since. I am frustrated by the lack of determined, direct statements; which brings us back to where we started. I sincerely hope, for all our sakes, that Obama has the skills [and advisors] to get us out of this quagmire.

Thank you, God Bless You, and may God Bless America.

I will be updating this site with some frequency.

My goals are simple: keep friends and colleagues up-to- date with my current activities; entertain and delight the masses with introspective responses to current events and modern goings-ons.

If you have any comments or insights on anything discussed on this site, please feel free to comment or contact me to discuss.

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