Archive for February, 2010
“Catholic Charities in Albany NY Now Providing Free Syringes to Addicts”
Posted by Tom in Government Regulation, Individual Freedom, Law, Morality & Religion in the Public Square, National Character, Politics, Statism on February 21, 2010
Another well-intentioned, liberal Bush idea that Obama has continued and enhanced is the Office of Faith-Based and Community Initiatives. Michael Tanner of Cato calls it Obama’s Faith-Based Boondoggle. Michael, who has video-conferneced with our Reno Hayek Symposium meeting, correctly states that, “the damage done by government co-option of private charity goes far beyond money.” His point is that the addiction of federal dollars soon distorts the purposes of the charity–by dependency, sloth and ultimate control.
The Bush/Obama program of leveraging government dollars by using low cost (sometimes free) charity workers, is better than creating another government department to accomplish some social (not religious) goal. But the point is that the charity would ultimately accomplish the same or near same goal with private dollars. In short, there is no need to spend government dollars. Excuse me, your tax dollars.
“Government funding is antithetical to the nature of charity. After all, the essence of private charity is that it is voluntary. Tax money is based on coercion. There is neither compassion nor love behind a grant of money forcibly taken from taxpayers who may have no desire to support the charity in question.”
“There is no reason for government to be in bed with private charity. Charity is thriving in America. We are the most generous nation on earth. Every year, Americans contribute more than $300 billion to charity. In addition, more than half of all American adults perform volunteer work. That time and effort is worth more than another $300 billion. And that does not include the countless dollars and time given to family members, neighbors and others outside the formal charity system. A few extra dollars from Washington add little to this amazing success story.”
The proper role of government is the crux of all political difference. Big and all-intrusive or small and limited, that is the question. Our founding fathers set up a limited federal government with checks and balances and specifically delegated powers. Roles and powers not delegated to the federal government by the people were specifically reserved to the states or to the people. The founding fathers would be shocked to see how far the federal government has evolved from their vision.
The principle of subsidiarity is an organizing principle that matters ought to be handled by the smallest, lowest or least centralized competent authority. This concept is applicable to government, management, and society. The parent, the family, the school, the church, the social group, the village, the city, the state and only then should the central authority, the federal government be competent to handle any given issue or concern. Let’s see… that would leave defense, postal service, national currency, and… what else to the federal domain? Read the constitution! You will be surprised.
Point is…if we continue to cede our obligations and our rights to the central authority, we will become dependent serfs….without moral fiber, character, or courage. That we can gather, speak, give to charity, volunteer, teach our children, defend ourselves and our families is our strength, our essence. Once ceded, never retrieved. Let charities do charitable work….yes even in healthcare!
A friend and member of our group on reading about Catholic Charities providing syringes to addicts in Albany wagged, “what’s next, condoms?” Makes me, a practicing Catholic, question– as have others–whether Catholic Charities is indeed Catholic, or for that matter, a charity!
Tom Motherway
IT’S THE SPENDING, Stupid!
Posted by Tom in Congress, Deficit, Economics, Financial Crisis, Financial Policy, National Debt, State Finances on February 20, 2010
John Mauldin’s letter this week follows last week’s Greek tragedy with the “pain in Spain” and future of the Euro. How long will the Germans support the spendthrifts?
He then again brings the same spendthrift problem back across the pond concluding with a reference to Dan Henniger’s WSJ February 18th Wonderland column, It’s the Spending, America. Dan treats the runaway spending which has only accelerated under Obama, Reid, and Pelosi. This despite economists of all stripes saying it is unsustainable. I wanted to comment on the column but couldn’t get the graphic. John Mauldin supplied it and here it is:
“We’ve been grinding toward this moment since 1932. It has always been a question of political physics just how high government could go in the U.S. before it arched over and down. Now we have Washington, California, New York, New Jersey and others all arriving at the same time of reckoning. And all for the same reason, public spending by the public sector—its politicians, its unions, its massive schools of pilot fish.”
This blog has previously railed against Dual Bankruptcies-Federal and State which will indeed occur unless the entitlement spending is reined in and reined in hard. Obama’s deficit reduction commission will wind up a side show unless Social Security, Medicaid, and Medicare are substantially cut, painful as that definitely will be.
Social Security should be means tested and stopped for the upper quartile earners after payments into the system have been returned with some small rate of interest. Cost of living increases should not occur unless the CPI growth exceeds 5% for the year. Retirement age should be lengthened for those under 50 and premiums be increased. Medicaid should be limited to cover only serious illnesses not every sniffle and scratch. Medicare should be means tested and again limited to serious illnesses not every sniffle and scratch; premiums should be increased.
Political will and guts is hard to come by these days. But is seems we should at least be able to expect the current administration to cease its expansion of spending, Obamacare being the prime example followed closely by cap and trade.
Hey, Barack, Harry, Nancy–what part of UNSUSTAINABLE don’t you understand?
Tom Motherway
Russia and the New World Order
Posted by Tom in Defense, Foreign Policy, Military Policy on February 20, 2010
Mark Steyn’s column, Keeping You Safe, in the February 20th NRO is too important not to highlight. He starts out lightly, panning the nanny state protections foisted by the western governments on their citizens.
He gets to the heart of the matter quickly: Iran is going nuclear rather quickly. Last year it had 400 centrifuges enriching uranium to 3.5%; this year it has 8,000 enriching uranium to 20%. Dirty bomb quality, yes; but warhead quality, not quite, not yet. Mark doesn’t fail to point out the brilliant intelligence agencies over paid and all too prone to failure reported two years ago that Tehran had ended its weapons program in 2003! CIA director Leon Panetta now concedes this may be wrong!
To the heart of the matter, the consequences of a nuclear Iran, Steyn is intelligent and forward thinking: “But even without launching a single missile, Iran will at a stroke have transformed much of the map — and not just in the Middle East, where the Sunni dictatorships face a choice between an unsought nuclear arms race and a future as Iranian client states. In Eastern Europe, a nuclear Iran will vastly advance Russia’s plans for a de facto reconstitution of its old empire: In an unstable world, Putin will offer himself as the protection racket you can rely on. And you’d be surprised how far west “Eastern” Europe extends: Moscow’s strategic view is of a continent not only energy-dependent on Russia but also security-dependent. And, when every European city is within range of Tehran and other psycho states, there’ll be plenty of takers for that when the alternative is an effete and feckless Washington.” This article is a must read.
Sleep safely folks, your government and Obama’s “open handed” world view is protecting you!
Tom Motherway
Yucca Mountain=Jobs and Money For Nevada
Posted by Tom in State Finances, Yucca Mountain on February 17, 2010
Kudos to John Dunn, Mike Nusbaum and Gene Humphrey for the excellent presentation on Yucca Mountain at our dinner February 16th. They along with Bill McCraley and Randy York have formed a non-profit to promote and manage their proposed “Yucca Energy Park” which would administer a Nevada Permanent Fund and manage the myriad of services and related businesses consequent on the development of Yucca Mountain as a nuclear fuel repository. Those would include nuclear spent fuel rod reprocessing, nuclear research, a nuclear power plant and related activities including R&D for alternative energy technologies. In other words their proposal is to benefit Nevada and its people by going beyond the “waste dump” pejorative of the nuclear repository, and fully developing the economic potential of all commercial aspects of nuclear energy: power generation, reprocessing, and R & D. In addition the Park concept also accommodates an R&D focus on potential/emerging alternative energy technologies.
The potential revenue to the state and its people is measurable in the Billions of Dollars, since every nuclear power rate payer now pays an assessment that goes into a fund specifically for Yucca which has accumulated over $30 Billion to date and continues by law to provide significant monies annually. The proposal is that half of the money received would go to operating expenses and the state, the other half would go directly to the rate payers in the state. The analogy here is the Alaskan Permanent Fund which derives revenue from the pipeline. In Alaska not only does the state benefit but the people directly benefit with annual dividend payments.
But just as important as the money are the jobs the project would produce. Many of the permanent jobs are high skill high pay jobs, some are maintenance and administration. The construction jobs would extend over a couple of decades. And the research positions would create a whole new area of opportunity for the university as well as private firms. So this is potentially a major diversification for the economy of the state. In short, the Yucca Energy Park is a SIGNIFICANT, HIGH QUALITY JOBS MACHINE for Nevada!
The timing of their efforts is particularly appropriate since Obama has finally decided to promote nuclear power as an eco-friendly step toward reducing reliance on foreign oil.
It is truly a pity that we have short sighted politicians like Harry Reid in Nevada–perhaps blind is a more appropriate descriptive characteristic! Harry is trying to kill what the people need most jobs and diversification of the state’s economy.
There are also positive indications in the press that states like South Carolina are considering legal action for force the federal government to proceed with the Yucca project.
We thank and applaud John, Mike and Gene for the presentation and will keep everyone posted as to the progress. If any reader wants to help with this they can (1) write, call or email the Governor asking him to move Yucca forward, and (2) contact the new non-profit by emailing me at tom@renohayek.com.
Tom Motherway
“Good News-Obama Headed to Vegas to Save Harry”
So read an email today from one of my friends. Well we wish Obama the same success he had on his trip to Copenhagen on behalf of the Chicago Olympic bid and the same success he had on his trip to Boston on behalf of Martha Coakley.
Asking Obama to come to his aid is par for the course as far as Harry’s decision making goes!
Tom Motherway
Health Care, Public Education Employment Better Than Average!
Posted by Tom in Deficit, Democrats, Education Facts & Policies, Nationalized Health Care, Nevada on February 15, 2010
Did you ever wonder why the inflation rates in health care and public education are higher than general inflation? Simple answer is that some one other than the patient or student is paying the bill. In some cases this is called welfare in others loans and in still others grants. In all cases some one else is paying.
Who is that some one else? YOU, OF COURSE! Taxpayers are paying but not consuming. So who is checking to see that health and education services are delivered efficiently? NO ONE!
Here’s the data comparing employment costs: All workers 2005=100, December 2009=111.2, 2.8% per year. Health care hospitals 2005=100, December 2009=113.3. 3.3% per year. Education services 2005=100, December 2009=113.1, 3.3 per year. See the Bureau of Labor Statistics report here.
As in the case with other third party payers, the real consumers, the patients and the students, don’t shop options and question prices and charges. The providers know this and know with certainty that they can charge what the “market” will bear. There really is no true market in the sense of competitive pricing. Where public employee unions are involved the situation is exacerbated. Salaries and benefits are raised by the politicians who are supported by the unions whose members’ salaries and benefits are raised. A vicious and unholy alliance!
So, in the case of Obamacare, the unions elect the Democrats, the Democrats raise their salaries, wages and benefits creating deficit spending and unfunded liabilities, the Democrats then claim we have a problem with the costs of healthcare so they propose to exacerbate that problem with Obamacare adding to the deficits, national debt and unfunded liabilities. Hell of a deal for the taxpayers! And a worse deal for their grandchildren!
Tom Motherway
Greece…A Prelude!
Posted by Tom in Centrally Managed Economy, Congress, Deficit, Democrats, Economics, Financial Crisis, National Debt on February 13, 2010
“Beware of Greeks bearing gifts,” sang Virgil. I fear Greece is today’s Cassandra of mythology, so beautiful that Apollo granted her the gift of prophecy yet, when she did not return his love, cursed her so that no one would ever believe her. Some gift!
John Mauldin’s Weekly E-Letter, which I highly recommend, treats the Greek debt crisis and its causes and consequences. He starts by positing the oft neglected truism of our path-dependent world. Namely, the choices you have made in the past restrict, sometimes drastically, the choices you now have before you. The “if only(s)” and “if I’da(s)” have occurred to all of us as we confront a new situation often forcing a choice of the lesser of two evils.
John traces the creation of the Euro noting the weak Euro nations like Greece got a bit of a pass and an uptick in the translation of the national currency. The local currency overvaluation meant that Greek consumers could buy products previously out of their reach. The government could borrow at lower rates. Spend they did and borrow the government did so that deficits ballooned. National debt is now 254 Billion Euros; Greece needs to borrow 64 Billion, 30 in the next few months.
Other European nations have pledged support, “but!” Germany is calling the shots but so far there is no checkbook out. Imposition of “austerity” conditions, severe ones, portend depression, serious recession, and inflation for generations. The unionized socialist nation will be little tolerant of “austerity.” Strikes have already ensued and are likely to get worse.
For Germany and France a contagion conundrum gets worse. Behind Greece standing in line are Portugal, Italy, Ireland and Spain, the lot known as PIIGS in financial markets. The solvent nations of Europe cannot afford to rescue all the laggards. Moral hazard raises its ugly head once again. Sound familiar?
Then there is the fear of collapse of the banking system. The BIS reports that the largest holders of Greek debt are the French, Swiss and German banks. This is another banking crisis in the making. And it is not just a write down of Greek debt but a mark-to-market of sovereign debt! It’s likely the accounting rules will be rewritten to soften that blow. As you would guess, money is flying out of Greece and the tax avoidance, already 30% of the economy, is accelerating.
As John points out: this is not just a Greek problem. Debt and out of control deficits are a problem all over the developed world. The US is one of the worst with Obama deficits, Obama debt and the unrecognized and never discussed unfunded liabilities. And Obama wants to ADD TO THE DEFICIT with his Obamacare proposal. He has a tin ear to reform of Medicare and Social Security first.
John Muldin concludes: “We are in the fullness of time approaching the End Game. …choices that have been made over the last decades will yield a Greek situation, where there are no good choices. And the longer the hard choices are put off, the more difficult they will become.”
Obama, Reid, Pelosi, the Democratic leftist hear but don’t listen and those of the pseudo-intellectual elite who listen don’t believe. Cassandra, your prophecies are tragic indeed. More so by the immorality toward our grandchildren and unborn great grandchildren.
Tom Motherway
Entitlement Generation’s Generation…Our Schools Train Socialists But Not Much Else!
Posted by Tom in Economics, Education Facts & Policies, State Finances, Taxation, Unions on February 12, 2010
Our great grandparents ventured from the old world to settle this new world, risking, sacrificing, and working for a better life. Our grandparents braved grueling covered wagon treks across the plains, deserts, and mountains to stretch the boundaries of this new world while scratching out a better life for their families by sacrificing and hard work even though outcomes were none too certain. Our parents fought in foreign wars to maintain the freedom and livelihood that their families enjoyed in this new world and help establish those freedoms worldwide.
Sadly we, circa babyboom generation, became complacent. Things were handed to us. We expected them. When they weren’t there we got mad. We rebelled against authority. We had “rights.” In short, we were entitled!
Why work? Why pay tuition? Job, what’s that? The state will pay it and if it doesn’t we’ll protest. Our children are entitled to the best education free. They are entitled to reduced class size and private tutoring if need be. We are the entitlement generation.
And what we are and what we have spanned is an embarrassment to our heritage.
This from the Las Vegas Sun: “UNLV students let their voices be heard on proposed education cuts. Organized walkout of classes joined by president, chancellor.” Yes, UNLV President Neal Smatresk, Chancellor Dan Klaich, and Chairman of the Board of Regents Dean Leavitt participated in the protest.
And this today from the Las Vegas Review Journal: “Desert Oasis students walk out of class to protest budget cuts.” Over 400 students walked out to protest state budget cuts to education. Of course, they won’t be punished because they got permission from Principal Emil Wozniak before the walked out!
The leftist educators and their poorly educated students are “entitlees.” They don’t know the meaning of work, sacrifice, or individual responsibility. They are the embodiment of the leftist model. How will they compete in a world where people do understand those virtues?
Sadly, we have been spending our hard earned tax dollars to support the exorbitant costs in terms of salaries, pensions, and general waste of this public unionized system. Economically, it is unsustainable.
Tom Motherway
Government Competency–An Oxymoron!
Posted by Tom in Democrats, Financial Policy, Government Regulation, Real Estate, Wall Street on February 12, 2010
Government residential real estate finance is the subject. Whether that is a proper role for government is one question; another is whether government is the dumb patsy that makes the smart guys rich. Let’s start with a video Ron Tomsic sent me yesterday, The Indymac Slap in Our Face, on the Think Big Work Small website, which tells of the profitable, rent-seeking relationship between the Federal Government and a Goldman Sachs/George Soros bank, OneWest Bank. Since these fellows are playing fast and loose with your money, please link to the video before reading on.
To verify the government locked in profit given to these Obama fat cats, I checked with Mark Toomey, our real estate finance expert. Mark’s comment:
“I’ve seen this video at least twenty times this week. Sadly, it’s pretty accurate. The $75,000 note from the consumer may reflect a judgment against the borrower for a non purchase money second and if that’s the case, I highly doubt they’ll ever collect it; more than likely, it will be included in the inevitable BK the consumer is headed toward.”
Worse yet seems to be the regulatory snafu our bureaucrats at Fannie/Freddie, the Fed, and HUD have caused with conflicting regulations the incidental benefit of which will be to keep the trial lawyers in business. Another Democratic constituency!
Mark continues: “Honestly, I think the bigger story is one the media will not pick up on for another two weeks. Residential lending has been virtually shut down in the last week now that the new GFE regulations have been fully enacted. Three dueling regulatory bodies have merged in to the perfect storm. My weekly conference call with the fixed income guys at Blackrock have turned in to a death watch of sorts; the scenario’s I laid out to them in December (ones at which we all laughed) have now come to pass, and we may very well be looking at the last decent funding month for residential mortgages nationwide. The pre-pay speeds have dropped off the table in the last ten days, and it is getting worse. Kiss getting a VA loan good bye.”
(Definitions: “GFE” means good faith estimate typically dealing with all essential and non-essential elements of a real estate closing. “Pre-pay speeds” mean the anticipated rate of pre-payments assumed by secondary market buyers of mortgage pools.)
Mark concluded with his dark Irish humor: “Greece today, New York tomorrow. Guns and gold, Tom, guns and gold.”
When government gets into businesses it shouldn’t be in the opportunities for incompetency and fraud are multiplied exponentially. The favored fat cats of the liberal left, Wall Street, trial lawyers, unions, etc. profit and all from your tax dollars! Truly a wonderful system we have.
Tom Motherway
Nevada Town Hall Meetings
This as a public service announcement from Nevada News Bureau:
Town Hall Meetings With Nevada Legislators
By Elizabeth Crum | 7:38 am February 11th, 2010
This is a public service announcement re: the Nevada Legislature’s Town Hall meetings on the state budget which will (reportedly) include public testimony of proposals for balancing the state budget plus Q&A sessions.
Day/Time: Saturday, February 13, 2010 at 9 a.m.
Southern NV location: Grant Sawyer State Office Building, Room 4401 at 555 East Washington Avenue, Las Vegas. Moderated by Senator Horsford, Assemblyman Stewart and Assemblyman Arberry.
Up north: Reno City Hall, 1 East First Street, Reno. Moderated by Senator Mathews, Senator Raggio, Assemblywoman Gansert and Assemblywoman Leslie.