Milwaukee Biz Blog

We need real reform in the financial markets. This reform should include how we regulate and how we audit and enforce these regulations.

Reform will not prevent another crisis that we have just witnessed or the S&L/Mutual Savings Bank crisis some three plus decades ago or frauds such as Madoff's. But reform can catch these problems before they get out of hand, which will reduce the impact on our economy.

• First, we must restore confidence to the secondary mortgage market. Liquidity in mortgages provided by the secondary market is essential to our economy. Banks and S&Ls should not be holding mortgages for long periods of time and should have a market to which they can sell.
  Require escrow for real estate taxes and homeowners insurance for all homes where the home buyer does not have a 20-percent down payment.
• Require that the buyer have a 20-percentcash down payment or that another entity, such as a mortgage insurer, the VA, FHA or Farmers Home Loan Agency, is covering the 20-percent difference between appraisal and mortgage.
• Forbid financial institutions from lending borrowers their 20-percent down payments.
• Ensure that income and assets listed are verified.
• Ensure that appraisals are realistic
• License all appraisers and mortgage brokers nationally, or at the very least, create a standardized system for appraisers and mortgage brokers, including the personnel of any firm issuing paper to be sold on the secondary market.
• Strictly regulate mortgage insurance companies. There have been too many incidents where these firms have had conflicts of interest (using subsidiaries as collateral) or have made risky business decisions that affect their contingent liability funds.
• Require that all use the standardized underwriting and forms issued by Fannie Mae and Freddie Mac.
  Make full disclosure and other paperwork simple to understand. Reduce this paperwork to one or two pages that are understandable.
• Where possible, require that homeowners with less than a 20-percent down payment receive counseling so that they have a budget and so the mortgages they receive are fair, that charges required of them are reasonable and that the property they are buying is worth what they are paying.
• Restrict such practices as "interest only mortgages," balloon mortgages or variable mortgages with teaser rates.

In regards to regulation of the financial industry, it is important to separate the audit and enforcement functions from the influence of politics and business as much as is possible. Politics influences enforcement.

 

A recent example was the firing of Gary Aguirre, an Securities & Exchange Commission (SEC) attorney lauded for his excellent work. He was fired because he wanted to interview John Mack for allegedly giving inside information to Pequot, a hedge fund. (I could have used examples from both Democratic and Republican administrations).

The New York Stock Exchange, the Nasdaq, the Federal Reserve Bank and the SEC did little to go after abuses on Wall Street. For years, Eliot Spitzer was a lonely crusader against Wall Street abuses.

"Self-regulation" by the industries themselves has been not been successful. The Federal Reserve failed to stop abuses in the banking industry through its audits. Their "objective" is to protect banking, but too often this means avoiding confrontation by the few banks that control most of the country's assets.

My suggestion is to create an independent agency that has many features of an inspector general or the General Accounting Office. Fund their budget for seven years at a time. Give a single 10 or 12-year year term to its leadership. Forbid its civil servants from becoming lobbyists or working in the industries they have regulated for five years.

This will not be perfect, but it will go a long way in isolating political influence on the agency.

Furthermore, I suggest that we separate regulation and oversight by an industry's function. Credit, life, health and property-casualty insurance companies manage risk; banks, S&Ls and mutual savings banks lend money. Mutual funds and annuities deal in collective investments. Money managers, hedge funds, financial advisors and stock brokers manage money or offer advice.

Multiple and contradictory regulations need to be reduced, but there should continue to be competition in enforcement. National tests, continuing education and licensing should be national. Licensing by states based on the national model should continue.

 

Bob Chernow is a futurist who predicted the S&L/mutual savings bank crisis, the future of mortgage backed bonds and the recent sub-prime crisis. He works in the financial industry. His opinions are his own.

The budgets of both Milwaukee Mayor Tom Barrett and Milwaukee County Executive Scott Walker highlight the need for better financing options for local governments in Wisconsin.

Realtors are never happy with increases in property taxes, because they directly impact a buyer's ability to purchase a home. The mayor and county executive have made some hard decisions in prioritizing their respective programs and services that are funded for 2010 in the face of cuts in state shared revenue.

With regard to Mayor Barrett's budget, we hope the common council can improve up on the mayor's proposal and save taxpayers additional funds while preserving core services by continuing to look for efficiencies in their operations, including privatizing some services where financially justifiable.

At the county, County Executive Walker has delivered another austere budget that addresses the chronic problem of pension contributions that is only exacerbated by the economy and increases in demand for services. The Greater Milwaukee Association of Realtors (GMAR) urges the county board to find better ways to fund county services without increasing the overall levy more than the county executive's proposal.

The state's decision to cut shared revenue highlights the need for Wisconsin to re-examine how local government is funded. The GMAR supports the Wisconsin Way's initiative to provide a comprehensive evaluation of current government financing and offer sound alternatives that will help taxpayers, and homeowners.

Mike Ruzicka is president of the Greater Milwaukee Association of Realtors (GMAR), a 4,000-member professional organization dedicated to providing information, services and products to its members to help them help their clients in buying and selling real estate.

Last year, I was among the first to say the economic sky was falling, and I took some grief for it at the time when others said the fundamentals of the economy were fine.

Now, I'm going to take another flyer, one that may or may not make it look like I know what I am talking about: I think the worst of this recession may be behind us, and I think an economic recovery will begin soon.

You may ask yourself, how can this be? I mean, the U.S. economy experienced its most violent contraction in a generation during the fourth quarter, with real gross domestic product (GDP) plunging at 6.3 percent, according to the U.S. Commerce Department

Going back to last year, the first sign of economic angst on my radar was the fact that houses in my neighborhood, which once were selling as soon as they were put on the market, were no longer being sold.

Then the housing market collapsed outright. Three houses in the neighborhood were foreclosed upon. However, in recent weeks, two of those foreclosed homes now have new owners, and the third is suddenly seeing a lot of traffic of prospective buyers.

That anecdotal observation aside, some fresh economic data this week may also be telling us that we may be on the cusp of a rebound:

• National sales of new homes rebounded 4.7 percent in February, according to the Commerce Department, after hitting a record low in January. Sales of new homes rose to 337,000 in February.
• Applications filed to refinance an existing mortgage rose an unadjusted 41.5 percent last week from the week before, after an announcement by the Federal Reserve Board caused fixed-rate mortgage rates to fall, according to the latest Mortgage Bankers Association (MBA) survey.
• Mortgage applications filed to purchase a home were up a seasonally adjusted 4.2 percent from the week before, the MBA said.
• The stock market is showing signs of life. The Dow Jones Industrial Average is on pace to post its third consecutive week of solid gains.
• The demand for machinery and other capital goods rose in February, driving orders for durable goods up 3.4 percent. The monthly rise was the first in six months.
• Production of automobiles in Detroit actually increased 24 percent in February from the previous month. Consequently, General Motors Corp. told the feds it will not need the latest round of bailout cash infusions. GM is finally getting a handle on its legacy costs, with 7,500 union workers agreeing to accept buyouts.
• On the technology front, the Nasdaq Composite Index soared so high this week that it erased all of its losses for the first three months of the year.

I am not alone in believing the start of economic recovery is just around the corner.

"With regard to the economy, we believe there are faint signs of light at the end of the tunnel," said Paul Kasriel, director of economic research for Chicago-based Northern Trust Corp., which has an office in downtown Milwaukee. Kasriel is the recipient of the Lawrence R. Klein Award for Blue Chip Forecasting Accuracy. "In sum, although the economy remains mired in a severe recession, we have seen nothing of late to dissuade us from our forecast of recovery getting underway in the fourth quarter of this year. In fact, what we have seen of late increases our confidence in the forecast."

Bruce Bittles, chief investment strategist for Robert W. Baird & Co. Inc., wrote in his "Market Commentary" bulletin Thursday that he is standing by his prediction that the economy will begin turning around by the end of the summer.

"Supporting our view for improving conditions in the economy later this summer has been the impressive performance by the stock market over the past two weeks. Since its intra-day low of 666 on March 6, the S&P 500 has rallied more than 23 percent. The Dow Industrials are now on pace to post a monthly gain for the first time since August 2008, and the S&P 500 is on pace for its first 5-percent monthly gain since 2003," Bittles said.

Bittles says spring is in the air, in more ways than one.

"Just as the seasons turn as we count the calendar months, the darkest days of this economic winter may now be yielding to an emerging spring - a time of uncertain weather (data), but also a time for cultivating if there is to be any hope of harvesting," Bittles said.

Sara Walker, senior vice president and investment officer at Associated Wealth Management in Milwaukee, is not ready pop any champagne corks just yet, but she is hopeful, nonetheless.

"'Flat is the new up' could be the best way to describe recent economic reports and the stock market's reaction to them. After being in the depths of despair just 12 trading days ago, the financial world is looking quite a bit sunnier," Walker said. "The main reason for a more encouraging outlook is that some very recent news is less bad than it has been! Investors look forward, and recent news reports indicate a glimmer of light on the horizon. Our outlook is for this recession to continue until late 2009, but with improvement each quarter over the prior quarter because of improved confidence."

The job market is a lagging indicator that won't bounce back until the stock market, the banking system and the housing sector are stabilized, economist Michael Knetter, dean of the University of Wisconsin School of Business, told us at the Northern Trust Economic Breakfast in January.

To be sure, we know more layoffs are coming. Thousands of them, no doubt. The path to recovery won't be a straight arrow.

We will know that a recovery has arrived when the BizTimes Daily starts reporting more stories about companies hiring new employees than stories about companies laying off employees.

For now, all we can do is exhale and hope we're on the right path.

 

Steve Jagler is executive editor of BizTimes Milwaukee.

A new study at the University of Wisconsin-Milwaukee released Wednesday claims to dispel some popular myths about the recent condo boom in downtown Milwaukee.

UWM's Center for Urban Initiatives and Research (CUIR) conducted the study, "Milwaukee's 'Condo Boom': 2008 Survey of Perceptions and Perspectives of Condominium Owners," between October and December, collecting responses from 804 city condo owners in downtown, a portion of the east side, and the Third and Fifth wards.

Here some parts of the study and some commentary from someone (me) who works in the Historic Third Ward:

• "Surprisingly, the results indicated that condo owners in these parts of the city are not mostly retirees and young singles. We found that while the popular assumption about who is behind condo growth had some merit, condo owners in this area were on average middle-aged professionals, many of whom have children."
  Comment: How many have children? How many is "many?" I can't remember the last time I saw a child in the Third Ward. Or a playground. Or a baseball field. Or a soccer field. Or even a daycare center. Where are these children?
• "Also, the notion that visiting Chicagoans or others from out of state are fueling the Milwaukee condo boom is not well-supported. Only a small fraction of owners primarily reside outside the Milwaukee area. Most owners use their condo as their primary residence, and the vast majority of resident owners previously resided in Milwaukee or its suburbs."
  Comment: In this time of economic duress, maybe the city should consider imposing a new Flatlander fee.
• "The average respondent has owned his or her condo for 3.3 years, and 44 percent of respondents are first-time homeowners."
  Comment: In today's credit crunch, the first-time homeowners are becoming harder to qualify for mortgages.
• "The average (median) age of respondents is 44 years old, although there are two somewhat distinct clusters grouped around the age ranges of 27-30 and 53-58 … Twelve percent of all households surveyed were retired households, in which at least one person was retired, at the time of their condo purchase."
  Comment: Actually, that is about what I would have guessed. No myths busted here.
• "More than 90 percent of respondents identified themselves as white or Caucasian, and fewer than 10 percent identified themselves as people of color."
  Comment: How shocking. White people live in expensive downtown condos.
• "Household Income. One-quarter of respondents fell into the $100,000-$150,000 income category, the category with the largest number of respondents."
  Comment: Again, what myths are we dispelling here?
• "Despite the desirability of the urban setting and lifestyle Milwaukee offers, some respondents expressed concern over issues endemic to city life such as noise (24 percent) and parking (15 percent)."
  Comment: Let's see. You move to the city and then you complain about noise and parking. No violin music for you, pal.
• "When asked to reflect on their original purchase decision, 80 percent of respondents said they would buy their condo again. A majority (57 percent) said they expected to still be living in their condo five years from now."
  Comment: Hope they like their condos, because they won't be able to sell them any time soon.

 

I wish the survey would have asked a couple more questions … Something along the lines of: "Do you have a very large dog that is cooped up all day in your condo? And when you take that dog running or walking early in the morning or later in the evening, do you fail to clean up after your pet does his duties on the sidewalk?"

Steve Jagler is executive editor of BizTimes Milwaukee.

At first glance, Tuesday's announcement that $39 million in federal funds will be available to help redevelop foreclosed properties throughout the state seemed like a great idea.

After all, the funds are intended to be used to stabilize neighborhoods and stem the decline of values of neighboring homes. The effort is part of the Neighborhood Stabilization Program (NSP) within the U.S. Department of Housing and Urban Development (HUD).

"Foreclosures have a devastating impact on neighborhoods and the state’s economy and we must do all we can to not only prevent foreclosures but also help rehabilitate impacted neighborhoods," said Gov. Jim Doyle. "These Neighborhood Stabilization funds will allow us to take our statewide foreclosure efforts to an even higher level."

The NSP grant can be used to acquire land and property; to demolish or rehabilitate abandoned properties; and/or to offer down payment and closing cost assistance to low- to -moderate income homebuyers.
The program also seeks to prevent future foreclosures by requiring housing counseling for families receiving home buyer assistance.

The grant was a part of a $3.92 billion announcement by HUD that went out to all states and to communities hardest hit by foreclosures.

That's all fine and good. However, I think the fluidity and the depth of the nation's financial crisis is perhaps rendering the practical applications of some of the government's programs futile and obsolete.
The NSP was designed to help people qualify for loans to move into homes that already have been foreclosed upon.

Think about that for a moment. Isn't that a bit like installing a security system after the home has been robbed? Or installing sprinklers after the home has been burned?

Or installing a sump pump system after the home has been flooded? Or installing a fence around a barn after the horses have all run out?

One other point. In current market conditions, good luck trying to find a bank that will provide a mortgage to a homebuyer who needs federal assistance to make a down payment or cover the closing costs.

Perhaps a better use of federal resources may be in helping people stay in their homes in the first place. Perhaps the funds could be used to help homeowners buy out their subprime mortgages early and get into traditional, stable, more manageable, 30-year, fixed-rate mortgages.

Perhaps that would provide some real relief on Main Street.

 

Steve Jagler is executive editor of Small Business Times.

Solar and wind energy may become primary components of our nation's alternative energy sources in the future. But how do we use this energy efficiently? What happens to the energy that is generated during non-peak usage periods?

For example, wind power generated at non-peak hours such as 3 a.m. can be wasted unless an efficient storage system is used. Conversely, solar energy is obviously not generated at night, yet some level of energy is still required to power homes and businesses. How do we store that energy so that it can be used when the sun isn't generating power?

The answer is energy storage systems which are available right now to commercial and even consumer usage. In fact, state-of the-art energy storage systems are currently on display at the Future House USA exhibit at the Beijing Olympics.

To think that we can effectively use solar and wind energy without some sort of energy storage is inconsistent with the purpose of renewable energy. The question, then, is how to use these alternative energy sources efficiently, allowing energy to be stored for use when it is most needed. That's where energy storage comes in to the picture.

Energy storage systems enable users to use energy when they most need it, while avoiding waste during off-peak hours when it is generated. This maximizes the use of wind and solar power and other alternative energy sources.

But energy storage has applications beyond the use of solar and wind power.

In electric utility applications, energy storage systems can be used to reduce the load on sub-station transformers and even fossil fueled generating stations that are working at maximum capacity during times of peak demand. This enables the utility to defer costly capital upgrades by charging the energy storage device at night and using that stored energy during these peak times and thereby reducing the work load on both the sub-station and generating stations. 

If current discussion is correct on the estimated $1 trillion that will need to be spent to upgrade the transmission and distribution infrastructure in the United States to be able to support the growing demand for energy and to accommodate proposed renewable energy generation, then the need for energy storage is even more urgent and compelling.

Energy storage can also have household implications. The Future House USA project currently on display at the Beijing Olympics is a Zero Net Energy structure, meaning it generates its own energy off-grid. The project uses a zinc bromide energy storage system to store solar energy generated during the day for use when the sun is not available to generate power.

Future House USA incorporates five elements: energy efficiency, indoor air quality, water consumption, storm water management and construction recycling in order to achieve a design to maximize the homes energy efficiency, environmental compatibility and sustainability. This design has achieved a ZNE home, generating and utilizing all of its own energy. Energy storage is a key element in achieving ZNE.

Our nation's energy independence will require renewable, green energy sources. But without the ability to store that energy, much of it will be wasted.

We simply can't afford that waste, particularly when there are viable solutions available today.

 

Rob Parry is the chief executive officer of ZBB Energy Corp. of Menomonee Falls.

The past few months have seen much debate over the 27th Street exit on Interstate 894 as part of the Wisconsin Department of Transportation’s reconstruction and expansion project of I-94 from the Mitchell Interchange to the state border.

The debate is an important one, impacting people's homes and businesses. With much at stake, the debate has become understandably heated. The problem with heated debates, however, is that often times facts get fried.

First and foremost, there is a belief that as a result of this plan, the 27th Street exit will be closed completely. This statement is misleading and fails to tell the whole story.

While it is true that the exit to 27th Street along westbound I-894 for traffic coming from the south will close under current WisDOT plans, all other access to South 27th Street will remain as it does today. As the Small Business Times reported in the BizTimes Real Estate Weekly bulletin, “Southbound traffic coming from the downtown area and eastbound traffic coming from the west would still be able to exit at 27th Street.” Businesses and homes along 27th Street will remain completely accessible to those exits.

This is an important point, because the access points that will remain open to 27th Street are those most heavily traveled. According to information from our city engineer, approximately 16,000 vehicles exit I-894 via S. 27th Street every day, but only 1,500 of those cars – less than 10 percent - utilize the exit that would be closed.

This means the vast majority of vehicles that currently use the 27th Street exit to reach the homes and businesses along this corridor will still be able to under the current plan.

Second, I cannot support a plan that destroys people's homes. The alternate proposal WisDOT considered in an effort to maintain full access at South 27th Street would have required the demolition of ten single-family homes and two 8-unit apartment buildings.

Forcing people from their homes and reducing the city’s property tax base are not alternatives I can support. That is why I have - from day one of this project - urged the state Department of Transportation to design a freeway that not only improves safety and the flow of traffic, but one that avoids the destruction of people's homes.

Which leads to the third and final point: the City of Milwaukee has been engaged throughout this process and has consistently urged WisDOT to produce a plan for 27th Street that is fair to business owners and residents in the area. My commissioner of public works and my city engineer made this point in a letter to WisDOT on Aug. 21, 2007, and in conversations throughout the 27th Street debate. My message has been perfectly clear: keep 27th Street fully open, AND don't destroy people's homes.

Any suggestion that the City of Milwaukee has not fought for this issue is either unfair or uninformed. I understand that when people's businesses and homes are involved, debate can become heated and facts can get fried. But cooler heads must prevail.

As mayor, I will continue to push WisDOT for a plan that keeps all of 27th Street open AND saves people's homes. Those who agree should stand with me.

Tom Barret is the mayor of Milwaukee.

There is finally national concern in the news today about rising foreclosures in the housing market. Unfortunately, this is last year's news.

I wrote about the rise in residential foreclosures in December 2006 and touched upon it again in January 2007. Crain's Chicago Business finally wrote something about it in July 2007. Most of the national business news channels hadn't really featured this until late in 2007. Why's this suddenly an issue? It has been an issue for more than a year for many people.

One of my former students is now in real estate. He says it's busy even though there are so many problems in the mortgage market. He says there are several factors worth investigating:

What happens when the bank takes all the escrow money to cover the shortfall and nobody else gets paid?
Trying to get rich by buying foreclosures is nonsense. Most homes in foreclosure haven't been maintained for years.

Plus, most are sold without inspection or a guaranty of clean title.

What happens to the tax income the government gets when property values go down? Do developers who can't unload the condo glut get government bailouts?

He is right about buying foreclosures. Forget the midnight real estate programs on TV that hype buying foreclosures.

If you think you're going to get a pristine house that has been in foreclosure, guess again. Sure, there might be a few exceptions, but don't hold your breath.

What's next? Smaller property taxes?

What about new assessments of houses? Every government agency figures it's going to get an increase due to the larger assessment they always get from property taxes.

Newsflash to all government agencies and school districts: start looking at trimming your budgets by 10 percent to 20 percent for the next couple years. Can't do it? I guess your degrees in administration are not as good as you profess. Just like there is profit and loss, budgets can go up and down. They don't just go up and up.

Don't say there's no room for cuts. A recent article on school districts said some superintendents are making more than $300,000. Does that sound reasonable to those who have lost jobs at major corporations in the last five years? I don't think so (especially when you see the extra car allowance for these people at $12,000 a year). What are they leasing? Maserati Quattroportes?

There's a lot of fat in those budgets. Start cutting - and don't start with the music courses. Start with administrative perks that have gotten bloated over the years as well as the multiple superintendent positions.

Compare yourself with executive management at a corporation to justify your perks. Many corporations have cut back. Have you? What about those that crank out mediocre products? They are either bought out by a competitor or go out of business. They don't keep getting funded every year by a tax levy. They are out the door.

Many districts are mismanaged and administrators are going to find out the well has run dry in their districts. Properties are losing the values that overzealous tax assessors have assigned to them.

There is one house north of Racine, in a small suburb called Wind Point on Lake Michigan that was foreclosed. The bank or the real estate agent thought they could get a huge return on it. They put it on the market for $595,000 more than a year ago. Though it wasn't worth it, they thought it would command that price because it was in an affluent neighborhood.

The taxes on the property just went up several thousand dollars. The assessor thinks it's worth a lot. That house is now $410,000 without one serious offer on it. Looking at it more than a year ago, I said it should sell close to what the mortgage is on it. That would be somewhere in the upper $300,000s. It's time to adjust the taxes down.

There are still a lot of houses getting into the foreclosure process. Most Chicago-area suburbs that were looked at a year ago still have many houses going into the foreclosure market.

In comparison to about a year ago when I wrote the first column about foreclosures increasing, look how things have progressed.

Junk is going to be discounted while quality items are going to remain high priced. With cars, you don't see 0 percent financing on a Lexus, Infinity or other vehicles in demand. Maseratis that sell for $120,000 are going out the door faster than they are coming into the dealers.

Will there be a lot of new houses and condos for sale at bargain-basement prices? Don't count on that. Builders will take less money, sure, but they won't give houses away. As for condos, some buildings will become apartments until the market bounces back. This is happening already.

Many are hyping real estate courses to take and books to buy that discuss foreclosures.

Most foreclosure properties will be trashed before they get to the market. While you might get them inexpensively, what are the costs to fix them up? Who's going to pay a premium once they are put back on the weak market? It sounds like the formula for success has a couple flaws.

To recap 2007, the housing market, new-car market and the general consumer economy have reflected what we have been pointing out here for several years. The economy may be a bull market for some, but for many, it has been a bear market since Sept. 11, 2001.

Carlinism: Quality is quality. There never is a fire sale on quality.

 

James Carlini is an adjunct professor at Northwestern University. He is also president of Carlini & Associates in Chicago. He can be reached at james.carlini@sbcglobal.net or (773) 370-1888. This column originally appeared at www.midwestbusiness.com, a media partner of Small Business Times.

Dear readers: It's time to bring you updates on two recent blogs I wrote.

Update No. 1. The adventures of John Jazwiec
As you may have heard, the Milwaukee Police Department has been informed by attorneys representing RedPrairie Corp. president John Jazwiec that he no longer wants to pursue his complaint about an alleged home invasion.

If you recall, Jazwiec sent an e-mail to Mayor Tom Barrett on Oct. 1, detailing an alleged Sept. 27 incident, in which Jazwiec said a gunman invaded his home on Milwaukee's east side and held him and his family hostage, before stealing some computers and a cell phone. Jazwiec told Barrett he had not contacted the police about the incident. Jazwiec said he and his neighbors in the 3100 block of Marietta Avenue had agreed they "can't trust the mayor or the police."

Jazwiec told Barrett his next step will be "the de-annexation process and our large per capita tax revenues which we can then use to fund police, schools, and real paved roads."

Police began investigating when neighbors expressed concerns about the incident after Jazwiec had sent e-mails to other East Side residents. Jazwiec then left town on a business trip to London.

On Thursday, Milwaukee Police spokeswoman Anne Schwartz said, "I have been informed by detectives investigating allegations made by John Jazwiec that Milwaukee Police have been contacted by Mr. Jazwiec's attorneys and they have informed us Mr. Jazwiec no longer wishes to pursue the matter originally reported to police regarding an alleged home invasion … The case is not closed, because his wife still reported a crime."

When informed about Jazwiec's latest stunt, Milwaukee Ald. Michael D'Amato issued the following statement:
"Several weeks ago John Jazwiec, chief executive officer for RedPrairie and a resident of Milwaukee's 3rd Aldermanic District, loudly reported that a crime was committed at his home that included his family being held hostage by a gun-wielding assailant.  At the time, many of us raised questions about his claims because of the bizarre behavior of Mr. Jazwiec.
"This morning Mr. Jazwiec's attorneys contacted the Milwaukee Police Department indicating that he wanted them to stop pursuing this case. Mr. Jazwiec reminds me of a spoiled little boy who throws a tantrum trashing his parents' home in order to get attention, then just wants it all to go away when his father comes home. If only life were that easy.
"In fact, Mr. Jazwiec's actions have unnecessarily besmirched the reputation of one of Milwaukee's finest and safest neighborhoods. Many residents have genuine concerns about crime in their neighborhood that seem to have taken a back seat to Mr. Jazwiec's sensational claims. They deserve not only an apology, but also the truth about exactly what happened that night at Mr. Jazwiec's home, if anything.
"I plan on meeting with both the MPD and the City Attorney to request that they assess Mr. Jazwiec for the total police costs incurred during this episode. Public safety is the number one priority for the citizens of Milwaukee. Police pursuing sensational claims about incidents that may have never occurred reduces their ability to follow-up on real crime. I believe it is unfair that the taxpayers of the city of Milwaukee carry the burden of the cost of the investigation of these spurious claims."

Update No. 2: Downtown parking meters
They say you can't fight city hall. Well, of course you can. Heck, you can even make suggestions, and they listen. And sometimes, they even take action!
A few weeks ago in this space, I wrote a blog that was very critical about "Luke," the new digital parking meter system that was recently installed in downtown Milwaukee. Yes, I fully realize that this was not the most pressing or urgent issue facing civilized society. Maybe it's right up with there with the great Milwaukee Fonzie statue debate.

Regardless, the blog inspired follow-up comments from several people, some of whom agreed, but many of whom were critical of my take on Luke. The critics said the new parking meters were easy to operate and were an upgrade over the garden variety, coin-plugged meters.

Of course, those critics missed the point. I wasn't complaining about digital parking meters. I wasn't even saying that the digital meters were difficult to operate. I was merely complaining that there were absolutely no directions to explain to anyone that the digital meters even existed. There were only numbers on signs next to parking spaces. There was no context as to what the signs meant or what a law-abiding motorist should do.

How can you feed a parking meter, if you don't know one even exists? Nothing directed people to go find the nearest digital box with a "P" on it.
The blog simply suggested that the city should place stickers on the signs, telling people to look for the nearest "P" box, where they could pay for parking.

Well, guess what? The signs now have stickers, telling people to look for the nearest "P" box. Actually, the stickers read, "Note space number. Pay at any meter designated with 'P.'"

Cecilia Gilbert, permits and communications manager for the Milwaukee Public Works Department, said the blog, along with input from the good folks at the Milwaukee Downtown Business Improvement District #21, prompted her agency to react.

"I do know that we did get a report. Milwaukee Downtown - we had engaged them in disseminating information about the Luke. They saw people staring at it, looking blank. They had suggested stickers," Gilbert said.

So, our civilization takes another step forward.

Of course, we'll see how much we still like our fancy-pants "Luke" when it's zero degrees, the wind is howling at about 30 mph, there's two feet of snow and we have to walk an extra block or so to a distant parking meter, remember our sign number, take off our gloves and fumble for the right change or pull out our wallets and stick in our credit cards. And then wait for the receipt.
Maybe then we'll understand why "Cool Hand Luke," the character played by Paul Newman who inspired the name of the new parking meters, kicked off the heads off of those confounded things in the first place.

Steve Jagler is the executive editor of Small Business Times.

As the legendary Ricky Ricardo used to say, when John Jazwiec gets back from his trip to London in a couple of weeks, he's going to have "a whole lot of 'splainin' to do."

Jazwiec, who is the president of RedPrairie Corp. in the Town of Brookfield, lives with his family on Milwaukee's east side.

The Milwaukee Police Department has launched an investigation after … Well, rather than try to describe it, I'm just going to paste here the text of an e-mail Jazwiec allegedly sent to many residents in his neighborhood and to Mayor Tom Barrett. The subject line of the e-mail that police are investigating says, "Taking Action," and the e-mail says it was sent from Jazwiec. Here's the text of the e-mail, dated Monday, Oct. 1:
"I am the resident that had an armed man walk in my house with a police badge. He held the my family (wife, myself, and two young daughters) hostage. We did not have any cash and had recently lost our debit cards. So I bargained with him to take computers and iphones to pawn. He left and thankfully we are safe. Because we were not sure it was not an inside job we did not dare go to police headquarters. The 3100 block of Marietta is not taking this standing down. We met Friday and agreed that we can't trust the mayor or the police. We instead are going to hire a private agency to walk our block. We will also be prominently showing signs on the block what we are doing it in lieu of a demanding a rebate on our taxes which by the way are going up 3.3%. Talk is cheap. This will get in the press I promise you. And our block is one that lazy criminals will just avoid. Anyone else want to 'outsource' beat control? Next step - the de-annexation process and our large per capita tax revenues which we can then use to fund police, schools, and real paved roads.
John Jazwiec
President of Redprairie"

Rumors of the bizarre alleged incident spread throughout the east side and eventually to the Milwaukee Police Department.

"We did try repeatedly to investigate. But he (Jazwiec) wouldn't cooperate," said Anne Schwartz, spokeswoman for the police department.

Jazwiec finally officially reported the incident to police by phone Tuesday, but then left town on his trip overseas, Schwartz said. Police plan to question him in depth when he returns, she said.

Concerns in the neighborhood prompted Milwaukee Alderman Michael D'Amato to send his own e-mail to his constituents. D'Amato chastised Jazwiec for not cooperating with police. Here's text from D'Amato's e-mail:
"There are serious questions as to the veracity of this report at this point. Apparently this gentleman (Jazwiec) was far more interested in contacting the press than he was the MPD. Crime is a serious concern to us all and is something the MPD, the Mayor and I take very seriously. While there has been an uptick in crime in our neighborhood over the past several months, the police have reacted with an increased presence and have made a number of arrests. Despite these incidents OUR NEIGHBORHOOD IS SAFE. DO NOT be afraid to walk outdoors and encourage others to join you. DO NOT lock yourselves in your home and call police immediately if you see something suspicious. Like you, I live in this neighborhood with my spouse and children. I will continue to walk the streets, bike to the store and enjoy the company of my friends on my porch.  I’ll also lock my door and warn my children to beware of strangers. Do not allow a single man with a remarkable story convince you that this is not a great, safe and united neighborhood."

Schwartz issued the following e-mail to concerned residents:
"Milwaukee Police have no evidence that an incident described by a resident in the 3100 block of N. Marietta has occurred. The resident has refused multiple attempts by Milwaukee Police to investigate the incident he is alleging. Milwaukee Police have attempted to contact this resident through his business, by telephone and by appearing in person at his residence as recently as today, October 2, 2007. Milwaukee Police can not investigate an incident that has not been reported to us. If residents in the area have safety concerns, they are encouraged to contact District 5 Community Liaison Officer Ray Robakowski (935-7258) or District 5 Captain Tony Smith (935-7250). Officer Robakowski can assist with the formation of a block watch and can provide information on any criminal activity that has been reported to police. The Milwaukee Police Department appreciates that we all want to live in safe neighborhoods and we commend the residents of this East Side neighborhood in their concern for each other. We also want to assure these residents that if a crime trend is developing in any particular neighborhood, we will provide them that information at the District community meetings."

A spokeswoman for RedPrairie said she could not comment on the incident. She said Jazwiec had departed for London Tuesday and was not available to comment.

In the past, Jazwiec has complained about the state's business climate and government. He first spoke voiced his criticisms as a keynote CEO panelist at the Northern Trust Economic Trends Breakfast in January 2006. To view a Web cast of that speech, visit www.biztimes.com/site/videos/sbtimes_et/jazwiec.

Steve Jagler is executive editor of Small Business Times.