Friday, June 29, 2012

Quick Hits - June 27, 2012

Many are in waiting and speculation mode regarding the SCOTUS decision on Obamacare and the House voting if to charge, for the 1st time in US history, the Attorney General with Contempt of Congress. Rather than focus on that - let's see the other news that is happening...

Stockton California is set to become the largest city in US history to file for bankruptcy protection.  Severely impacted by the 2008 housing collapse and the resulting massive increase of foreclosures, as well as by some  significant borrowing for a downtown revitalization project, these weren't the main reason why Stockton is being forced to look at bankruptcy.  The main reason?  Labor costs - courtesy of the public sector unions.
Still, debt financing is not the city's main cost driver. That would be labor costs, specifically retirement benefits. The city has a little over $300 million in general-fund backed debt, but an $800 million unfunded liability for pensions and retiree health benefit.

The latter, which are not pre-funded, are expected to grow by 7.5% annually for the foreseeable future. Pension costs are about 40% of what the city pays on worker salaries and are also growing. The average firefighter costs the city about $157,000 a year in pay and benefits and can retire at age 50 with a pension equal to 90% of his highest year's salary plus nearly free lifetime health benefits.

The city has laid off a quarter of its police officers, 30% of its firefighters and 43% of general city staff to pay for these generous benefits. Yet the city still faces a $26 million deficit on a $180 million budget. Soaring retirement costs mean that the gap will grow even if the city's housing crisis ebbs and revenues begin to recover. You can't build a city on debt and retirement checks.

Unions have made few concessions save agreeing to give up sick leave payouts and scale back pensions for new hires—when there are any. City officials could freeze worker pensions and reduce benefits going forward, as San Jose did via ballot initiative earlier this month. However, such a move would set off an expensive and protracted legal battle with the unions, which a city on the edge of bankruptcy can hardly afford.

I suspect that before the end of the year, Stockton may find itself no longer the owner of this dubious title - with Detroit leading a back of rust belt / progressive dominated cities that have severe fiscal challenges. The common element - the unfunded liabilities related to pension / retirement / health benefits for members of public sector unions.

Then there's the other aspect of these unions and their progressive politician allies which comes into play.... mention public sector unions, and the politicians will immediately reference the first responders - police and firefighters. Then they will reference teachers in the classroom. But left unmentioned are the real numbers that comprise members of public sector unions - the rank and file government worker.

Lost in the drama of the wait for the SCOTUS decision on Obamacare, came a court decision out of the U.S. Court of Appeals for the District of Columbia Circuit which will have major ramifications not only on the power of the federal government, but also our national economy....
A federal appeals court has upheld Environmental Protection Agency (EPA) greenhouse gas regulations, a victory for the Obama administration that’s also sure to inflame election-year political battles over the White House green agenda.
Environmentalists heralded the three-judge panel’s unanimous 82-page ruling that leaves intact EPA’s first-time regulations and authority to craft future rules to help combat global warming.

“Today’s ruling by the court confirms that EPA’s common sense solutions to address climate pollution are firmly anchored in science and law,” said Fred Krupp, president of the Environmental Defense Fund. “This landmark decision will help secure a healthier and more prosperous future for all Americans.”

The U.S. Court of Appeals for the District of Columbia Circuit upheld EPA’s “endangerment finding” that greenhouse gases are a threat to human health and welfare — a finding that provides the underpinning for regulation of emissions from tailpipes, smokestacks and other sources.

The court left intact EPA’s rules on carbon emissions from automobiles, and the “tailoring rule” that shields smaller stationary sources from greenhouse gas permitting that the EPA is using to target emissions from big sources like power plants.

Knocking down the tailoring rule might have created a chaotic, uncertain path ahead for emissions regulations by opening up massive numbers of businesses and other facilities to regulation.

Where to start with this? The concept that our courts are not apparently making decisions based on what science is valid - man-caused global warming via carbon dioxide emission? Or the use of the EPA regulatory power to gut the coal industry, significantly reducing electricity generation levels, and as a result cost tens or hundreds of thousands of jobs, driving up prices for energy, and damaging the national economy at a time when we are struggling to grow even 2% per quarter?

Then there is the overreach and increase in power being seized by the Executive Branch - which Congress needs to start to rein in...a Republican Congress.

As we move closer to the November election, the number and frequency of polls will increase. As I've noted before, the vast majority of these polls need to be taken with a few grains of salt. This is because many of these polls, done by organizations supportive of progressive politics and President Obama, are skewing the samples to try to paint a far prettier picture than reality for the President's chances of reelection.

For example, there are the Quinnipiac polls released on three key swing states. The Ohio poll shows President Obama surging to a 47-38 point lead over Mitt Romney - which is outstanding in just how much of an outlier it is. Even the pollster for the hard left progressives at Daily Kos, PPP, shows the race is tightening in Ohio as the President's lead being cut in half over the same time frame. Why the difference? Quinnipiac skews the Democrat sample by +8 compared to a +2 oversample used by PPP. Quinnipiac also applies this same oversample skew in their Pennsylvania.

Then there is the 'highly touted' NBC / WSJ poll. The most recent has President Obama leading Mitt Romney by 50% to 42% in the swing states - even though the President only has a 3 point (47-44) lead nationally - which is inside the margin of error.

Yes, there are several things 'wrong' with this poll. First, the poll is of registered voters - not likely voters. Registered voters is generally considered less accurate and less reflective of the real race. Second, as Quinnipiac did, NBC skewed the poll by a D+8 oversample.

Why do they do this? One reason is that these progressive leaning organizations are as concerned and desperate for 'The One' as his own campaign is. They see the President in trouble over the national economy, the lack of job growth, and with no real foreign policy 'wins'. About all that they can do to boost the Obama campaign efforts is to create a fantasy over his popularity. They see that time is running down for November - and the 'blame a do-nothing Republican Congress' is not gaining any real traction for people who don't have jobs.

The other reason is that these organizations continue to consider the 2010 midterm elections an outlier. That the Tea Party movement is a empty as OccupyWallStreet, the progressive counterpart, really is. Most of these polls are basing their samples on the 2008 turnout - and then tweak those a little more.  This, however, is not 2008.  President Obama is not the 'moderate' alternative to Hillary Clinton.  'Hope and Change' has given us nearly four years of harsh reality.  The man who spoke of bringing blue America and red America together - has been the most divisive President in our history.

2012 could be a lot like 2010 - because the framework is there and in place.  But I still look at this election to be far closer to 1980 than 2008.

When it comes irresponsible media bias, NBC News (and its MSNBC subsidiary) has reached the same levels as the New York Times.  However, this election cycle, we're seeing another supposed 'great' media icon completely destroy its credibility and reputation with being unable to control their bias.  This icon?  The Washington Post - the paper which made it's reputation on the basis of their reporting of the Watergate scandal that brought down the Nixon Presidency.

The WaPo's editorial board expressed their absolute outrage in an editorial castigating Associate Justice Scalia over the Justice's dissent of the SCOTUS ruling towards Arizona's SB1070 legislation which was announced on Monday.  They said....
In dissenting from a court ruling that struck down all but one part of Arizona’s law on illegal immigrants, Justice Scalia strayed far from the case at hand to deliver animadversions on President Obama’s recent executive order barring deportation of people who entered the country illegally as children. Based on nothing more than news reports, Justice Scalia opined that this policy would divert federal resources from immigration enforcement, thus creating “the specter” of a “Federal Government that does not want to enforce the immigration laws as written, and leaves the States’ borders unprotected against immigrants whom those laws would exclude.”

The outrage of the WaPo editorial board was clear in their piece - but also highly localized and directed at one of the most conservative justices on the Court. One has to wonder why the same editorial board has so little outrage over a President taking actions via executive fiat, without consulting or gaining the approval of Congress via legislation, to ignore federal laws that he, and the editorial board find that they do not like. Nor did the editorial board have much to say when the President followed the same path regarding the Defense of Marriage Act or the decision of the Administration to sue states that passed state legislation to empower the states to enforce state laws that are fundamentally identical to the federal laws on the books that the Administration has decided to ignore - like federal immigration and voting laws.

Also left unsaid from this feckless editorial board is the scandal around Fast and Furious - a scandal that shares far too many similarities with the Watergate scandal except for the addition of about 300 dead Mexican civilians and a murdered US Border Patrol Agent because of the actions of this Administration.

The Washington Post is, like the majority of other newspapers, losing subscribers and readers in an unprecedented rate. The company is also losing money. They were forced to sell Newsweek Magazine for $1 because they could no longer afford to operate it. The American consumer sees a crappy product - and they are starting to refuse to buy a crappy product. It's up to the editorial board to stop delivering a crappy product - but from this last editorial, they seem to be doubling down on their failures.

Today in History

1942 –The FBI announce the capture of 8 Nazi saboteurs who were landed in NY’s Long Island by submarine.

1944 – Allied forces in France capture and liberate the French port of Cherbourg – this would become a major logistical center for the Allied push in France.

1950 – President Harry Truman announced he is ordering US air and naval forces to South Korea to aid the democratic nation in repulsing an invasion by the communist North Korea – using US military to enforce a UN resolution calling for an end of hostilities on the Korean peninsula.

1966 – Gothic soap opera ‘Dark Shadows’ begins running on ABC-TV

1973 – During testimony before the Senate Watergate Committee, former WH Counsel John Dean testified about an ‘enemies list’ that was kept by the Nixon White House.

No comments:

Post a Comment