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It’s the Economy, Stupid…


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Some interesting snippets on matters of the economy at the end of the week.

Reuters lets us know that the economy in the fourth quarter of last year grew a tad stronger than was initially thought.

(Reuters) – The U.S. economy grew more quickly than previously thought in the fourth quarter…

Gross domestic product rose at an annualized rate of 3.1 percent, the Commerce Department said in its final estimate, revised up from 2.8 percent.

Several thoughts on this, first of all, even though 3.1% growth isn’t particularly anything to write home about, it’s better than 2.8% so you’d think that the Administration would be crowing about it.  After all, it’s moving in the right direction.  So why’d they release the news on Friday?  Maybe it could be the rest of the information in the article, ya think?  What could be wrong?  Well…

Read more…

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Hi. I’d like to introduce you to reality.


BackhoeSo, the public employee unions and their lap cats the Democratic Party have drawn a line in the sand with a back hoe.  Union membership and representation is a God given right and since Thomas Jefferson was a union organizer the right to organize and hold the American taxpayer hostage is somewhere in the Constitution.  And I can guarantee that there is no shortage of judges who will have no trouble finding said “right”.  In the meantime, the Wisconson Democrats have discovered that if the Democrats have somehow been unable to either win or fix enough elections to hold majorities in state legislative bodies, they can leave the state and there will be no negtive consequences from the country club Republicans – including the Tea Party variety – and they can play the issue for the front pages and for time.  The bottom line here is simple, the Democrats and the unions are at war.  Republicans are just simple.

My bet is that Democrats and unions will “win” on the issue of contracts, wages, benefits and pensions.  Please note the scare quotes.  They’re gonna “win” in court and in the short term, in the court of public opinion.  The reason they’ll win in court is because the judiciary is stacked, roughly right up to the SCOTUS, where eventually they’ll lose.  Eventually.  Public opinion will sway their way because they are a lot like Chinese water torture, constantly repeating lies until people believe them.  People will believe them because for the most part, they are products of the US unionize education system and can’t do independent research or put two rational thoughts together in the same month.  So, the Unions “win” and keep their money.  Democrats “win” and keep their number one source of funds, taxpayer money passed through the hands of union members to their bosses to the DNC.  I used scare quotes because, while they will almost certainly be able to work the courts and the voters for a while, they won’t beat the fundamental laws of mathematics and economics.

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What a difference a “D” makes…


…and that would be “D” as in “D”emocrat, not “d” as in “d”ay.

Remember back a couple of years when oil prices went over a hundred dollars a barrel and gas prices broached $4 a gallon. You will also remember the screeching from Democrats and their media slaves about how George W Bush and Dick Cheney were profiting from the suffering of American families who were paying big prices at the pump. In March of 2008 the Washington Post ran a story – one of thousands, so yes, I’m cherry-picking but it’s not much different than of the ilk they published on this subject – where they made the following note…
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A Lesson in Winning at Hardball.



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The PEOPLE won one yesterday. And it is potentially a huge win. The score is now People 1, Public Employee Unions 0.

And thank you John Kasich the new Republican Governor of Ohio. That’s right, Ohio. A union stronghold state, and they booted public employee unions.

Republicans, and it must be noted that they were split on this issues, won a big victory in Ohio with the state Senate passing SB05, a bill that basically strips public employees of most collective bargaining rights.  The bill now goes to the Ohio House where Republicans hold a solid majority and then on to the Governor for his signature.  Cleveland.com describes the highlights of the bill this way…

The bill redefines what contract terms public workers can collectively bargain with their employer. Wages can still be negotiated. Health care benefits, pension pick-ups and other provisions, however, will be off the table. And management can decide to negotiate other terms, including safety forces’ equipment.

The bill also bans public workers from striking, establishes penalties for striking — including jail time — and establishes a new system for resolving labor disputes. Instead of binding arbitration, the employer’s legislative body, such as a city council, would decide whether to side with a union or management.

A merit-based pay system would be established . If workers are laid off, length of employment could not be the only factor under consideration.

This is a great start and needless to say, unions and Democrats (sorry for the redundancy) are apoplectic over this.

“This law is not only unjust, it is unconscionable,” Sen. Nina Turner, a Cleveland Democrat, said. “But it is also un-American. It strips middle class Americans of their rights.”

Hardly Senator Turner.  It’s just a decent start at leveling the playing field and putting the ball into the hands of the people who have to pay for the contracts that up until now have largely gone un-reviewed and unnoticed and are going to run the state, as well as the cities and towns on Ohio, into either bankruptcy or the Ohio river.  The parts of this particular law that have the ability to begin to be game changers include the following provisions:

  • Ban strikes by public workers, including teachers.
  • Establishes penalties, including jail time, for strikers.
  • Eliminates binding arbitration.
  • Puts the legislative body responsible for finding the money to pay for contracts in charge of contractual decisions.
  • Merit pay.
  • Benefits are off the table.

Let’s make no mistake about this win folks.  It, in itself, is no game changer.  It’s still the bottom of the first inning of what will be a very long game.  Labor and Democrats won’t take this lying down (they will lie about though), the war is just beginning and it’s not like the Republican Party is solidly behind either Governor Kasich or the idea of neutering public employee unions.  Six Republicans in the Ohio Senate joined Democrats and we ended up with a one vote win.  But “W” is a “W”, just ask Obama.  Governor Kasich and the Republican leadership – who could give lessons to their Washington DC counterparts – had to play real hardball to win this victory.  In order to get the bill out of committee and to the floor for a final vote they had to address a problem very much like the problems faced by Conservatives in the US Senate with the swing vote against the bill in committee was “Republican” Bill Seitz from Cincinnati.  Cleveland.com notes that the Republican leadership took matters in hand and replaced Seitz on the committee with a pro-sanity Republican, Sen. Cliff Hite, of Findlay.  The bill was then voted out of committee and to the floor on a 7-5 vote.

So, I’m pleased to start the day on a positive note and I trust Governor Scott Walker and the Wisconsin Republicans are taking note of the win in Ohio.  This can be the start of a roll-up for Republicans and for the people who have to pay the bills.  Republican administrations in several states are looking hard at similar legislation, including Iowa, Pennsylvania and Florida.  It’s time to build a real head of steam and take out the trash.  And just so there’s absolutely no misunderstanding, the picture to the right is the leftovers from a union demonstration in Wisconsin and yes, I am absolutely equating pubic employee unions to trash.

Here Come the War! Here Come the War!



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Order on the battlefield in the Congress!
Here Come the WAR!

And we’ll lead off with my vote for the most fatuous comment of a still infant 2011…

(Reuters) – President Barack Obama is willing to make difficult choices on spending cuts when he unveils his budget next month, a senior aide said on Sunday.


OK, that Reuters lede.  Let’s keep in mind the real world.  Democrats held pretty much bulletproof majorities in both houses of Congress – especially in the House of Representatives where spending bill must start – for the last two years.  And what don’t we have, nearly four months into the new fiscal year?  Well thanks for asking!  And the answer would be “a budget”.  So, House Republicans will now get to have the most fun you can have fully dressed, they get to assemble a budget for the remainder of this fiscal year.  And guess what?  It’s THEY who will actually make the “difficult choices on spending cuts” not BozoThePresident.  And if there is any question in your mind about that, let the second paragraph of the Reuters article put your mind to rest.

But White House economist Austan Goolsbee said it was important not to “skimp” on important investments like education.

In other words, gentle reader, BtP and his ilk are going to continue to fund the leeches at the US Department of Education, propping up the NEA, one of the Democrats biggest funding sources and a mainstay in their Marxist base.  Keep in mind that we have 64 new Republican House Members, most of whom ran on a “cut spending NOW” platform.  Reuters lays out the sides in the war, BtP and the Marxists on one side, Republicans on the other.

A fight is looming as Obama prepares to unveil his annual budget proposal in mid-February. Republicans who won control of the House of Representatives in November elections have vowed to roll back federal spending to 2008 levels, with exceptions for the elderly, U.S. troops and veterans.

So, we may be looking as having sacred cow for dinner.  Department of Education, EPA look out.  Here comes the mob.  Republicans in the leadership are starting to lay out rubber mats so the carpets don’t get too bloody, although I’d suggest that blood stains on the carpets are a good reminder for the future.  From the Washington Times Darryl Issa lays down a challenge and a Republican adviser drops the bomb.

WASHINGTON (AP) — The GOP’s top House investigator in the new Congress is putting the White House on notice that he’s going to be aggressive in going after what he considers wasteful spending by the Obama administration.

Rep. Darrell Issa, California Republican, is set to lead the House Oversight and Government Reform — and gain the chairman’s subpoena power.

Mr. Issa suggested on “Fox News Sunday” that the White House should hire more accountants — not lawyers — to deal with requests for information from the Republican-led House. He said it’s “more of an accounting function than a legal function.”

And the bomb…

“Where the rubber will hit the road will be on the debt limit,” said John Feehery, a Republican adviser and former top House aide. “What kind of budget concessions will Obama agree to in exchange for keeping the government functioning?”

Unfortunately, Republicans have long enough memories to recall President Clinton neutering Newt over the government shutdown.  So do Democrats.  There’s also the history that says that every time it comes to a nose-to-nose with Democrats, it tends to be the Republicans who blink.  We’ll see.  Boehner etal did manage to get the most of Bush tax cuts extended in the Lame Duck.

Attention Republican Leadership, we’re out of time.  It’s time for you to man-up and do the hard work.  And cutting the rate of increase in spending pretty much won’t make it anymore, it’s time for real cuts.  Actually, it’s time to start eliminating Cabinet Level departments like the Department of Education that doesn’t “educate” anybody and just feeds NEA dues into the Democratic Party from unsuspecting taxpayers but I understand that is an impossibility with BtP in the Oval Office.  But you can take an axe to departments like the EPA and in the process put a stop to their efforts to regulate the economy into a full blown depression and let BtP know in no uncertain terms that he’s not going to be able to press his Marxist agenda with regulators, by-passing the Congress.

So suck it up and get with it.

Categories: Fiscal Conservatism

It’s a war folks. A REAL war…

December 28, 2010 1 comment

No prisoners!

And to quote Lawrence of Arabia, “No prisoners!”  Because there will be none.

The Christmas Day editorial in the New York Times lays out the battle ground and Al Qaeda isn’t one of the combatants.  In fact, in this war Al Qaeda poses no threat.  This time it’s face off between the folks who think government knows best and the peasants should pay for it and, of course, the peasants who pay.

It actually looks like The Times is having a “Come to Jesus” moment – appropriate for Christmas Day – with respect to spending by governments.  The interesting part is that it’s not federal spending that is driving the train wreck, it’s the states.  This is happening for a couple of reasons.  First of all, many states have constitutional amendments that require a balanced budget.  Secondly, states can’t print money, although I’d quibble about that one with their ability – and that of municipalities – to issue bonds.  And those puppies are a who ‘nother story.  Think mortgage/housing times ten.  But we’ll save that for another day.  The bottom line for today is that the states and cities have spent themselves into a big hole and The Times is calling for a bigger backhoe.  Here are some lowlights from the article…

For most of this year, the state of Illinois has lacked the money to pay its bills. Some of its employees have been evicted from their offices for nonpayment of rent, social service groups have laid off hundreds of workers while waiting for checks, pharmacies have closed for lack of Medicaid payments. Faced with $4.5 billion in overdue payments…
[…]
Starved for revenue and accustomed to decades of overspending, many states have been overwhelmed. They are facing shortfalls of $140 billion next year. Even before the downturn, states jeopardized their futures by accumulating trillions in debt that they swept into some far-off future.

But that future is not so distant, and the crushing debt has made recovery far more difficult to achieve. As The Times reported, Illinois, California and several other states are at increasing risk of being the first states to default since the 1930s.
[…]
The most immediate cause of the states’ problems is the decline in tax revenue caused by the downturn, just as the demand for services has increased.
[…]
Many conservatives have said the revenue decline is a good incentive for states to cut their spending. That is precisely what almost all states have done, because they are legally barred from running deficits. State spending fell by 3.8 percent in the 2009 fiscal year and 7.3 percent more in the 2010 fiscal year, the only significant declines since at least the 1970s, even as the cost of education and health care rose.
[…]
But cutting spending will not affect the heaviest burden: the accumulated debt that comes from passing off the biggest problems to future generations. States and cities have nearly $3 trillion in outstanding bonds, and more than $3.5 trillion in shortfalls to pensions. Promised health benefits alone are more than $500 billion.
[…]
states are going to have to acknowledge that more effective, targeted tax increases are inevitable, and can be achieved if they are structured properly. Governors also must explain to voters that they have cut spending. The nation’s richest taxpayers just got a windfall in the federal tax deal extorted from President Obama by Republican senators. States should not shy away from asking for more help from those most able to pay.
[…]
states are going to have to acknowledge that more effective, targeted tax increases are inevitable, and can be achieved if they are structured properly. Governors also must explain to voters that they have cut spending. The nation’s richest taxpayers just got a windfall in the federal tax deal extorted from President Obama by Republican senators. States should not shy away from asking for more help from those most able to pay.

OK, so I hope you’ve got a good picture of the battle lines. Please note that The Times makes passing reference to “cutting spending” but the concept of reducing the size and reach of government is nowhere to be found in the discussion. And you can bet your last nickle that the talking points for this editorial came straight from the staff lounge at the DNC. There is no discussion of the hundreds of billions spent by the states every year because the federal government abrogates it’s responsibility on immigration law.  Hopefully, thanks to men of courage like Representative Lamar Smith, that will begin to be addressed in the 112th Congress.  There’s barely a peep from The Times – one line thank you – that collaboration between elected officials and unions is a major part of the problem, and even in that admission they can’t miss an opportunity to take a pot shot at Chris Christie.  And the real crime in this editorial is the pap about windfall tax deals “extorted from President Obama”.  Just who the hell does the New York Times think pays the taxes.  Keep in the back of your mind that in addition to the following chart on personal income tax, the US has the highest corporate tax rate in the developed nations. According to the National Taxpayers Union, the tax distribution looks like this…

Personal Income Tax paid in 2008 by Adjusted Gross Income

% by AGI AGI Threshold % Tax Paid Incremental Tax %

Top 1%

$380,154

38%

38%

Top 5%

$159,619

59%

21%

Top 10%

$113,799

70%

11%

Top 25%

$67,280

86%

16%

Top 50%

$33,048

97%

11%

Bottom 50%

less than $33,048

100%

3%

Percentages have been rounded.

OK, so the US currently has the highest corporate tax rates in the real world and when it comes to personal income tax, the the people who actually produce the most pay 70%+ of the taxes collected and half of the people who file pay essentially zip.  And let’s not forget that Democrats are continually whining about a lack of progressiveness in our tax system.  And that we don’t collect enough taxes.  And nary a word is said from the left about spending too darn much money even though The Times even gets that part – see the blue quote above.  And yes, it’s blue for a reason.

I do have some strategy for fixing this, but this particular diary isn’t the place to haul that out.  This diary is simply to put us on notice that it’s finally Game ON!!  We’ll see where it goes from here, but one thing I can guarantee you, there will be blood in the streets.  Let’s hope it’s just political blood, but I wouldn’t be surprised by much of anything when push comes to shove.  There is one thing that neither The Times nor the Democrats get, and that’s an important thing.  At the local level when taxpayers are asked to pay more, they say “NO” about every time.  Even, and especially in deep blue states.

OK Jan Brewer, time to put up…

December 19, 2010 3 comments

Jan Brewer

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Since you’re a politician, I won’t bother with the “shut up” part…”

I’ve been whining about Jan Brewer, well it seems like forever. My complaints are pretty simple.

  • She was SoS before being elevated to Governor upon Janet Nappy’s move to DC.
  • While she’s is a competent manager/administrator, she’s over her head in a job that requires leadership.
  • Her initial response to budget shortfalls was “raise taxes”.
  • Her current budget is mish-mash of tax increases (Prop100), one time fed $$ and small cuts.
  • The budget she got through the legislature last year, I projected would be riddled with problems because it didn’t address the structural problems in financing the state.

OK, here we go again. The AZ Republic has the beginning of the wailing that will reach the level of pain in no time about the budget problems we’ve got in the Grand Canyon State. Hmmm. Grand Canyon. That’s an apt analogy to our state’s fiscal condition.

Lawmakers must erase an $825 million deficit in this fiscal year’s budget, compressing a year’s worth of cuts into a few months.

Well, that would be Strike One

Federal stimulus money runs out at the end of the budget year on June 30, adding to a hole of about $1.4 billion.

Ummm, Strike Two

GOP Gov. Jan Brewer and the Republican majority in the Legislature have ruled out tax increases, and other options for balancing the budget are nearly tapped out.

Need I say it? OK, I will. When a politician rules something out…

But there is some room for hope, but it will require someone to step up and provide some serious leadership. It won’t be Brewer. And let me be really clear right now. Jan Brewer got thrust onto the national stage last year with the advent of SB1070, a law she had nothing to do with drafting, had absolutely no say or impact in getting passed and left her constituents wondering if she’d sign it until the moment she actually did sign it. It’s obvious to me, crusty old opinionated fart that I am, that her political advisers managed to convince her that her only shot at winning the primary (there were three opponents and it was close in February, very close, and Brewer had big negatives because of her “performance” on the budget) was to sign SB1070. She did. And she read her lines well for the national media in the aftermath. But now cometh reality. The elephant in the room. The budget.

Brewer dug a deep hole for us last time around with the use of Prop100, a “temporary” sales tax increase – three years, runs out in 2013 – and the use of $1.4B in “stimulus” money. I’m sorry, but I’ve got to depart from the subject at hand once again. Arizona’s economy is a wreck. Not as bad as our neighbor to the west, but it’s a wreck. We get $1.4B in fresh printing press output from the Feds and does she put it to work helping businesses make real jobs? No. She gives it to the education department as a prop. Chris Christie or Mitch Daniels she ain’t.

Oh well, back on track. We’ve got a big problem and it’s actually bigger than the article lets on because they don’t bother to note that the Prop100 tax increase will go away in two years. Bottom line, we need structural reform in Arizona government. And here’s the interesting parts…

“What we are walking into is major structural-deficit reduction,” said House Speaker Kirk Adams, R-Mesa. “This is no longer a $5 million solution here or a $10 million cut there. It’s a $1 billion decision.”
[…]
…Brewer and legislative leaders have indicated they will have to target education and health care – the two biggest pieces of the budget.
[…]
The Legislature also has 37 new lawmakers, and they will have to quickly learn the intricacies of the state budget.

So, bottom up, I hope to God that those new lawmakers don’t take lessons from our current leadership who were happy as clams last time around with no structural changes, increased taxes and federal play money.

Next, as far as education is concerned, the state university system needs quality time with an axe. Way too much money is spent on administration and we need serious increases in tuition. Hopefully, if students (parents?) end up paying significantly more for their education the product will improve. And a good start would be to eliminate every department/major that uses the words “Studies” or “Science” in their title. Those degrees only qualify budding activists to go to grad school so they can do research on various classes of victims at the expense of the US Department of Education. And then there is health care spending. It’s going to be interesting to see what gets done about that at the state level given the current mess at the national level. Our legislature will be operating in somewhat of a real vacuum when they deal with it, and make no mistake, deal with they must.

Finally, the Speaker of the AZ House is calling for structural reform. We’ll see. And then, there’s the standard pap (yeah, I’m a cynic) on taxes…

And because these leaders want to cut taxes to get Arizona’s economy rolling again…

Again, we’ll see. And let’s not forget “the children”. The Republic is starting the drum beat about those people who will be “hurt” by the drastic cuts necessary at the state level if we don’t woman-up and raise taxes on the rich (my interpretation of their wording)…

The school nurse is becoming an endangered species.

State parks have closed, or are limping along thanks to local donations.

And nearly 100 Arizonans lost medical transplant coverage.

And then there’s the standard one-off’s of individuals who are being devastated by the current level of inadequate cuts. I won’t bother putting them here, you can read the article. Have a barf bag handy. The medical transplant issue has already made headlines in the New York Times, so you just know the coverage will be national and it will be amazing. The one line item I hope is NOT touched is the purchase of one spine for Governor Brewer. The cynic in me thinks that will be the first to go however.

Oh well. You can bet we’ll be following this.