Public-Sector employes and Unions are bleeding our country dry… creating a two-tiered system where those in the Public sector enjoy salaries, benefits, and leisure time far in excess of their private-sector counterparts.  From the City Journal:

The old deal seemed fair: public employees would earn lower salaries than Americans working in the private sector, but would receive a somewhat better retirement and more days off. Now, public employees get higher average pay, far higher benefits, and many more days off and other fringe benefits. They have also obtained greatly reduced work schedules, thus limiting public services even as pay and benefits shoot ever higher…

The story doesn’t end with the imbalance in pay and benefits. Government workers also enjoy absurd protections. The Los Angeles Times did a recent series about the city’s public school district, which doesn’t even try to fire incompetent teachers and is seldom able to get rid of those credibly accused of misconduct or abuse. Misbehaving teachers are sometimes kept from teaching, but they may spend years, even a decade, getting paid while they fight attempts to fire them…

The media have finally started to take notice… News reports have also focused on scandals at CalPERS, the California Public Employees’ Retirement System, which has faced record losses after making risky leveraged investments in bizarre real-estate deals. (The government pension system encourages such risky behavior: with defined-benefit systems, union members stand to gain if the investments go well, while taxpayers shoulder the burden if they don’t.) Meanwhile, the Los Angeles Times reported on a politically connected insider who received $53 million in finder’s fees from CalPERS, raising questions of pay-to-play deals.

But the real scandal is a two-tier society where government workers enjoy benefits far in excess of those for whom they supposedly work. It’s past time to start cleaning up the mess by reforming retirement systems and limiting the public unions’ power. If we don’t, California’s financial problems will become insurmountable.

via Plundering California by Steven Greenhut, City Journal 23 November 2009.

News Snippit of the day:

“Highway-construction companies around the country, having completed the mostly small projects paid for by the federal economic-stimulus package, are starting to see their business run aground, an ominous sign for the nation’s weak employment picture.”

But… I though Obama’s stimulus package was specifically designed for (how did he put it?) SHOVEL READY jobs?!  I guess when Obama meant “shovel-ready” jobs… he didn’t mean what we all THOUGHT he meant.  Kind of like when he told us all about healthcare REFORM… that wasn’t what we thought it meant either…. or when he said that it would be crazy to give Khalid Sheikh Mohammed a full civilian trial… I guess he didn’t really mean that either.  Or maybe when he said he’d get the troops out of Iraq… maybe he meant something else there too…

If I didn’t know any better, I’d say I was being lied to.

Just wanted to RE-TWEET this blog post over at the American Enterprise Institute.   You wonder why our economy hasn’t turned around??  Well, it might be that nobody in the Obama administration has any experience in the private sector… and doesn’t have a clue how it works.  Here’s the Graph:

via Help Wanted, No Private Sector Experience Required « The Enterprise Blog.

I found this little gem in James Taranto’s “Best of the Web Today”.  When discussing Obama’s ‘unprecedented’ whining about the “mess” his predecessor left him… Taranto responds:

The blame-Bush mantra, of course, is an echo of Obama’s own rhetoric. So how do we renew and restore ourselves? Maybe by waiting till 2012 and electing a president who has the capacity to lead rather than pre-emptively make excuses for failure by whining about the “mess” he “inherited.”

Amen brother.  via ‘You’ve Taken the Words Out of My Mouth’.

During what I believe was my second year in law-school, a student reluctantly asked one of my favorite instructors to repeat an explanation to a particular issue — noting that he or she did not want to beat a dead horse.  My instructor, being the very patient and good-natured guy that he was, responded:  ”I would call in a missile strike on a dead horse”.

In some ways, that is exactly what I feel like with this blog post:  it’s nothing new, but when the causes of the mortgage crisis are articulated so clearly and simply… I’d feel remiss in failing to bring it to your attention.  So without further adieu, here is Peter Wallison in the Wall Street Journal:

When the crisis first arose, the left’s explanation was that it was caused by corporate greed, primarily on Wall Street, and by deregulation of the financial system during the Bush administration. The implicit charge was that the financial system was flawed and required broader regulation to keep it out of trouble. As it became clear that there was no financial deregulation during the Bush administration and that the financial crisis was caused by the meltdown of almost 25 million subprime and other nonprime mortgages—almost half of all U.S. mortgages—the narrative changed. The new villains were the unregulated mortgage brokers who allegedly earned enormous fees through a new form of “predatory” lending—by putting unsuspecting home buyers into subprime mortgages when they could have afforded prime mortgages…

There was always a problem with this theory. Mortgage brokers had to be able to sell their mortgages to someone. They could only produce what those above them in the distribution chain wanted to buy. In other words, they could only respond to demand, not create it themselves. Who wanted these dicey loans? The data shows that the principal buyers were insured banks, government sponsored enterprises (GSEs) such as Fannie Mae and Freddie Mac, and the FHA—all government agencies or private companies forced to comply with government mandates about mortgage lending. When Fannie and Freddie were finally taken over by the government in 2008, more than 10 million subprime and other weak loans were either on their books or were in mortgage-backed securities they had guaranteed. An additional 4.5 million were guaranteed by the FHA and sold through Ginnie Mae before 2008, and a further 2.5 million loans were made under the rubric of the Community Reinvestment Act (CRA), which required insured banks to provide mortgage credit to home buyers who were at or below 80% of median income. Thus, almost two-thirds of all the bad mortgages in our financial system, many of which are now defaulting at unprecedented rates, were bought by government agencies or required by government regulations…

[I]t was government policy [as opposed to greedy mortgage lenders] for these poor quality loans to be made.

Feel free to read the whole thing here.

The American Spectator blog just released a very troubling assessment of Obama’s economic projections.  Turns out, they’re worse than we thought:

[W]hile President Obama is fond of promoting what he calls a “new ethic of responsibility”—in fact he named his first budget, for fiscal 2010, “A New Era of Responsibility”—that is a misrepresentation of his actual budget plan.

For each of Obama’s years in office, the deficit is projected to be larger than any year during Bush’s terms.

In spite of his rhetoric, President Obama bears most of the responsibility for the red part of the bar in fiscal 2009, which includes, among other things, some auto bailouts and $31 billion of additional funding for the omnibus bill, the share of the stimulus funding spent in that fiscal year…

Each month that goes by the president adds spending to the deficit. The August 2009 projections for instance, do not include any of the president’s healthcare reform spending and they assume that the “temporary” stimulus spending will not be prolonged past fiscal 2011. Finally, they also assume that the economy will recover soon and that it will grow enough to generate increasing tax revenue, in spite of the president’s plan to impose new taxes and regulations on the private sector.

In other words, the deficit will likely continue to deteriorate beyond the current projections.

It is one thing to argue how we should spend money we have… it is another thing completely to argue that a financial collapse caused almost entirely by problematic borrowing is to be mended by RECORD BORROWING.  Whatever Obama’s economic plan may be…. to call it “responsible” is almost Orwellian.

via Making Bush Look Like a Piker — The American, A Magazine of Ideas .

I’m getting that sinking feeling that we’re all screwed.

• Barack Obama accused of making ‘Depression’ mistakes
• China Alarmed by US Money Printing
• Adam Smith Would Not be Optimistic in Today’s Economic World

Some of the relevant quotations from these 3 passages:

Barack Obama is committing the same mistakes made by policymakers during the Great Depression, according to a new study endorsed by Nobel laureate James Buchanan… His policies even have the potential to consign the US to a similar fate as Argentina, which suffered a painful and humiliating slide from first to Third World status last century, the paper says.

There are “troubling similarities” between the US President’s actions since taking office and those which in the 1930s sent the US and much of the world spiralling into the worst economic collapse in recorded history, says the new pamphlet, published by the Institute of Economic Affairs.  In particular, the authors, economists Charles Rowley of George Mason University and Nathanael Smith of the Locke Institute, claim that the White House’s plans to pour hundreds of billions of dollars of cash into the economy will undermine it in the long run. They say that by employing deficit spending and increased state intervention President Obama will ultimately hamper the long-term growth potential of the US economy and may risk delaying full economic recovery by several years.

“If they keep printing money to buy bonds it will lead to inflation, and after a year or two the dollar will fall hard. Most of our foreign reserves are in US bonds and this is very difficult to change, so we will diversify incremental reserves into euros, yen, and other currencies,” he said.

Robert J. Samuelson isn’t a right-winger… which makes his criticisms of the stimulus all the more useful (politically).  It has FAILED its original purpose… there is NO DENYING IT at this point.

It’s not surprising that the much-ballyhooed “economic stimulus” hasn’t done much stimulating… The program crafted by Obama and the Democratic Congress wasn’t engineered to maximize its economic impact. It was mostly a political exercise, designed to claim credit for any recovery, shower benefits on favored constituencies and signal support for fashionable causes.

There are growing demands for another Obama “stimulus” on the grounds that the first was too small. Wrong. The problem with the first stimulus was more its composition than its size. With budget deficits for 2009 and 2010 estimated by the CBO at $1.8 trillion and $1.4 trillion (respectively, 13 and 9.9 percent of gross domestic product), it’s hard to argue they’re too tiny. Obama and congressional Democrats sacrificed real economic stimulus to promote parochial political interests. Any new “stimulus” should be financed by culling some of the old.

Here, as elsewhere, there’s a gap between Obama’s high-minded rhetoric and his performance. In February, Obama denounced “politics as usual” in constructing the stimulus. But that’s what we got, and Obama likes the result. Interviewed recently by ABC’s Jake Tapper, he was asked whether he would change anything. Obama seemed to invoke a doctrine of presidential infallibility. “There’s nothing that we would have done differently,” he said.

via washingtonpost.com.

It turns out that when you raise taxes on businesses… you push American jobs overseas.  Here’s Steve Ballmer yesterday:

June 3 (Bloomberg) — Microsoft Corp. Chief Executive Officer Steven Ballmer said the world’s largest software company would move some employees offshore if Congress enacts President Barack Obama’s plans to impose higher taxes on U.S. companies’ foreign profits.

“It makes U.S. jobs more expensive,” Ballmer said in an interview. “We’re better off taking lots of people and moving them out of the U.S. as opposed to keeping them inside the U.S.”

If we don’t provide a competitive tax environment for our businesses here in the U.S. then we will continue to loose jobs well into the next decade… far outpacing the 2.5 million jobs the stimulus supposedly ‘created’ (or was it 2.5 million saved?  who knows.)  The fact of the matter is that Obama has done NOTHING to reduce business costs…  NOTHING… even when those businesses are laying people off right and left.  In fact, he wants to RAISE the costs of doing business.

This is nothing more than economic ignorance on display.

via Ballmer Says Tax Would Move Microsoft Jobs Offshore (Update3) – Bloomberg.com.

Here’s a little gem I found on Yahoo News:

Describing the $787 billion stimulus package, President Obama evokes the 1950s construction of the interstate system, conjuring images of highways, bridges, and orange cones…

But as projects are chosen, it’s becoming clear that the program may amount to little more than an infrastructure face-lift. Owing to the need for speed and to institutional obstacles, most stimulus transportation projects are small and localized. “Here and there, people will notice things,” says Robert Poole, director of transportation policy at the libertarian Reason Foundation. He cites repaired potholes and new streetlights. “But I don’t think the country as a whole will say, ‘Wow, transportation is so much better,’ ” Poole says…

An even bigger problem, experts say, is how that funding is doled out. Decisions are often politicized and are rarely coordinated between levels of government. Transportation dollars are traditionally spread thinly, “like peanut butter,” says Robert Puentes, senior fellow in the Brookings Institution’s metropolitan policy program. “We don’t do cost-benefit analysis in this country.”

America may not have a clear vision for its transportation system, but infrastructure advocates, not to mention Americans who have ever sat in stalled traffic or bumped over a pothole, hope that will change.

If I didn’t know any better, I’d say that last sentence was a brilliant piece of literary sarcasm.  Unfortunately, that bit of humor was probably lost on the author.

via Obama’s Stimulus Projects Won’t Amount to Major Infrastructure Overhaul – Yahoo! News.

One of the fundamental economic and monetary protections we have in this country is in the area of secured, prioritized loans.  In fact, we have an entire area of law devoted to secured interests in property and how these interests take priority in bankruptcy proceedings.  This amounts to the RULE OF LAW.  THESE RULE PROTECT INDIVIDUALS… THESE RULES ARE SET IN STONE… ARTICLE 9 OF THE UCC… at least, they were, before Obama started dictating who the auto industry’s winners and loosers were going to be.

Recently, a number of Republican lawmakers have gotten concerned about the way in which the rule of law is being ignored and subverted by the Obama administration… and rightly so.   For those of you who care about being protected from the power of the federal government… who care about the rule of law… you should also take note of what is happening:

WASHINGTON, May 22 (Reuters) – Four U.S. Republican lawmakers have complained to Treasury Secretary Timothy Geithner that a plan to restructure automaker General Motors Corp (GM.N) subverts the rights of bondholders, according to a letter from the lawmakers obtained by Reuters on Friday

A proposed restructuring favors the claims of the United Auto Workers union “over the rights and claims of the company’s diverse group of bondholders, who collectively hold $7 billion more in General Motors debt than the UAW’s health trust and are equal members of the creditor class,” the lawmakers said.

“Bondholders must have a seat at the table during negotiations in how the company would be restructured,” said the letter to Geithner from Representatives Jeb Hensarling, Eric Cantor, Mike Pence and Pete Sessions.

“We are extremely concerned that in the name of restructuring General Motors, the Presidential Task Force on the Auto Industry … has begun waging what some believe amounts to a war on capital: contractual rights of investors are being trampled by the government under the rationale of ‘extraordinary circumstances,’” the lawmakers wrote.

Kudos to Jeb Hensarling, Eric Cantor, Mike Pence and Pete Sessions.  Way to stand up for those being trampled by the Obama administration.

via US House Republicans back GM bondholders in talks | Reuters.

If you are visiting this blog you have, no doubt, searched for my name in Google and are looking on the web for more information about me and my online presence. While this blog is primarily a collection of articles I wanted to share with my readers (and usually some of my additional thoughts), it also includes many examples of my creative and technical work.

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best,
Joel