Wednesday, December 12, 2012

Quick Hits - December 11-12, 2012

Barack Obama was campaigning in Michigan on Monday - and chimed in on the (then) pending vote before the Michigan House on two 'right to work' bills scheduled for Tuesday.  It's an interesting example not only of projection as well as a blatant canard, but where ideology trumps reality...

What we shouldn’t be doing is trying to take away your rights to bargain for better wages and working conditions. … These so-called right-to-work laws, they don’t have to do with economics; they have everything to do with politics. What they are really talking about is giving you the right to work for less money. … We don’t want a race to the bottom. We want a race to the top. America’s not gonna’ compete based on low-skill, low-wage, no workers’ rights — that’s not our competitive advantage. … It’s also what allows our workers to then by the products that we make, ’cause they’ve got enough money in their pockets.
What a 'pot meet kettle' moment - as so much of the President's approach towards 'fundamentally changing' the country have nothing to do with economics and everything to do with politics and ideology.  Projection is making the accusation towards one's opponents of taking actions that one is already doing - justifying those actions because 'the other side is doing it'.

The canard comes immediately afterwards - 'giving you the right to work for less money'.  Welcome to one of the big lies.  'Right to work' doesn't deliver lower wages - in fact, in right to work states, wages are higher than in the union / progressive dominated states.

Remember the SEIU's Wednesday before Thanksgiving march on LAX (Los Angeles International Airport) intended to disrupt travelers on the busiest travel day of the year in order to highlight the 'plight' and poor treatment of union employees by the companies providing services at the airport?  Over a thousand SEIU thugs were bused into the area because none of the employees 'victimized' by the company participated.  One reason none of the employees participated was that earlier in 2012, a majority voted to withdraw and decertify their union.  Once they tossed the SEIU out - their wages increased.  Not only did their wages increase, as the company passed on the benefits of their lower costs, but the workers also gained from not having to pay union dues - worth at least a day's pay.

Michigan moved towards 'right to work' laws for the same reasons that Wisconsin embraced 'right to work' - to address the major fiscal issues that resulted from public and private sector unions and their grab for power and wealth.  Since Wisconsin took these steps in 2010, the state's fiscal picture has changed.  The state is no longer moving in the wrong direction with a deepening fiscal crisis.  The state budget deficit is gone and school districts across the state are no longer held hostage by union greed.  Red ink has disappeared in most of those districts - and services / programs for students once cut are being restored.

Unfortunately, the unions, and their political allies (progressive democrats), responded in a manner similar to that done in Wisconsin - by calling out the thugs and advocating / embracing violence in an effort to intimidate  people to opposing 'right to work' legislation.  Unsurprisingly, the Goebbels-like mainstream media propaganda forces also joined in the attacks on the 'right to work' legislation, hiding and minimizing the violence being perpetrated by union thugs, and pulling out all rhetorical stops in lying about 'right to work' legislation.

The Washington Examiner, writing today about the union thugs and the violence they launched, was one of the few media outlets that attempted to honestly and accurately portray what 'right to work' laws really do...
Right-to-work laws do not ban unions. They merely ensure that workers can no longer be coerced to pay them. They also create workplace conditions under which even union members are no longer a captive audience, forced to bow to whatever decisions the union leadership makes.

And that’s what the union leaders fear most.
Teachers across Michigan called in sick to protest the House vote on the 'right to work' legislation - resulting in the cancellation of classes for over 26,000 students.

The irony with this is telling - as the teachers, and their powerful union, own much of the problems the state is facing with unions thanks to their collective bargaining agreements and union rules which limit the accountability of teachers, rewarding effective teachers, eliminating ineffective teachers, and drive up costs for school districts as taxpayers find themselves not funding education - but union coffers.  In Michigan's largest city, Detroit, itself on the verge of bankruptcy after three plus decades of progressive political leadership, only 7% of the 8th graders are proficient in reading.  Courtesy of the progressive political mindset - these results call for rewarding the teachers and the union as opposed to putting the needs of the students first and asking why are so few are proficient at reading.

As Michigan's House passed a 'right to work' bills affecting both private sector unions and public sector unions, largely by 58-51 party-line votes, pro-Labor Democrat progressives on the floor of the House threatened 'blood' will be spilt because of the actions taken by the democratically elected Legislature.  Not long after than threat - union thugs tore down and vandalized tents on the Capital grounds occupied by supporters of the 'right to work' legislation and assaulted a Fox News contributor, Steven Crowder for the simple act of exercising his free speech rights to speak in favor of 'right to work' legislation.

This is, unfortunately, no different from the violence perpetrated by union thugs in Wisconsin, Ohio, Indiana, and in other states when the people, and their elected representatives, consider or enact legislation intended to rein in the power and corrupting control that unions have on politics.

The same nimrods who spout off about 'tolerance' and 'rights' are the first to demonstrate that they are really liberal fascists - the modern day brown shirted thugs who believe they have the 'right' to destroy and assault those who oppose their agenda.

Yet much of what we hear from the progressive mouthpieces who marginalize and justify the thuggery of unions are arguments about how important unions have been and the role that they paid in the past.  No one denies that the labor movement at one time was needed and doing the right thing to protect the rights of workers from unscrupulous business leaders and dangerous work environments. Their efforts to focus the argument on this is nothing more than the use of fallacies to deflect the debate around the actions and values of unions today and their excesses.

Unlike in the past, we have in place laws at the federal, state, and local levels which are designed to protect the rights of workers - whether they are in a union or not.  On top of the numerous laws, we also have a litigation system that also holds employers accountable for their actions.  Workers have the freedom to leave a job that they do not like - and find a new job that offers more.

With all of this, one has to ask themselves just what value do unions really provide for the majority of their workers beyond the political clout and power to advocate their hard left political ideology?

We are constantly increasing our spending for education - yet despite the tens of thousands per pupil we spend - we are not improving the level of education of these students. Each year fewer graduate high school or have the basic levels of proficiency to get and hold jobs or attend college.  In the majority of colleges, much of the first year is spent on remedial studies to bring students up in skills to be able to function at the college level.

Collective bargaining agreements force school boards to purchase the health insurance used to provide this benefit to teachers and the administrators from the union itself - which it then marks up substantially above free market rates.  This greed means fewer dollars are available for school boards for real educational programs.  These funds, along with the dues collected by forced membership (in non-right to work states), are in turn used as political contributions to promote pro-union progressive democrats - who when elected then 'repay' the unions by offering even more favorable (to the unions) collective bargaining agreements.

This is the corrupt cycle that Wisconsin, in 2010, and Michigan, yesterday, voted to end...and launched the violent reaction by the union brown shirts.  At least those states are taking steps to end that cycle and restore their states to a path of fiscal responsibility that respects the taxpayer.  In California, now approaching 40 years of progressive political leadership, the problem - and the state's fiscal crisis - are approaching the point where bankruptcy is nearly here and a middle class exodus is underway.

In 2011, 100,000 more residents left CA for other states than it gained.  This was the first year where the state, in this category, had a net loss of population.  Prior to this, California with its weather, natural resources, and opportunity, was a destination.

The reason for this exodus has to do with the progressive political agenda at work throughout much of the state.  The state remains in a fiscal crisis - despite the passage of Proposition 30 which hikes $6B in taxes to address a $16-$25B budget deficit.  The state consistently spends far more than it brings in via revenues.  The progressive dominated legislature is at war with business - consistently ranking the state as not only the worst run in the nation, but also one of the most anti-business states in terms of their taxation and regulatory policies.

As it passes higher taxes - more people and businesses leave.  In my area, our economic development company spends its time touting how many businesses it has persuaded to remain (57 in 2012) than it does touting how many businesses it has persuaded to come to our community.  We don't talk about 'jobs created' but about 'jobs saved'.

Recently I talked about how the State Comptroller noted that state revenues continue to fall well behind the overly optimistic estimates built into the current state budget.

AB32 is the name of California's 'Cap and Trade' legislation intended to 'prevent' climate change and 'protect' the environment.  In the legislation, auctions were set-up to bring in revenues to fund climate change prevention, protecting the environment, and more recently, targeted by our Governor, to help fund the $100 billion high speed rail network boondoggle.  Oh, and also provide revenues to help reduce the budget deficit.

Unsurprisingly, the first cap and trade auction was a complete bust - delivering only 14% of the promised revenue to the state.
While they count on money from the auctions, California officials have imposed new costs on businesses, raised utility rates and put the state’s industrial products at a competitive disadvantage so that it can set an example for the world on how to reduce global temperatures. Democratic officials argue that the new green-energy model will energize the state’s business climate, but even the Air Resources Board admits that the state will suffer from what it terms jobs “leakage.”

The “leakage” might be a “floodage,” according to Dave Roberts, who reports for the website CalWatchdog. A study sponsored by pro-business groups estimates that the state will have 262,000 fewer jobs in 2020 because of the climate-change law. Roberts also cited a Boston Consulting Group finding that as many as 51,000 jobs might be lost due to refinery closings alone. California farmers and food processors are concerned that the rising state-mandated production costs will cause job losses as low-cost Chinese and Mexican processed-food imports take some of their business.
So, in addition to passing 'climate change' legislation that will result in the loss of a quarter of million jobs over the next 7 to 8 years and making California products less competitive in the marketplace, we're only bringing in a fraction of the additional revenues needed to keep the state from spending 30 cents on the dollar more than it brings in....and that is before we spend one years state budget on a high speed rail network that not only we don't need - but has no viable business plan.

What is California spending its money on?

We are spending most of our money on salaries, retirement payments, and healthcare benefits for government workers - nearly all of whom are members of public sector unions.

Progressives in this state, like those at the national level, never stop telling us that we have a revenue problem.  In reality, like at the national level, the problem is not revenues - but with the massive overspending that takes place.  Overspending on salaries of a bloated government, on the excessive retirement and benefit payments that come from politicians 'repaying' their union supporters via overly generous collective bargaining agreements.

Since 2005, in California, the compensation level of government employees has increased by more than 100%!

The numbers are even larger in California, where a state psychiatrist was paid $822,000, a highway patrol officer collected $484,000 in pay and pension benefits and 17 employees got checks of more than $200,000 for unused vacation and leave. The best-paid staff in other states earned far less for the same work, according to the data.

Mohammad Safi, graduate of a medical school in Afghanistan, collected $822,302 last year, up from $90,682 when he started in 2006, the data show. Safi was placed on administrative leave in July and is under investigation by the Department of State Hospitals, formerly the Department of Mental Health.

Another perk of public workers in Cali? $200,000 in accrued vacation pay:

The disparity with other states is also evident in payments for accumulated vacation time when employees leave public service. No other state covered by the data compiled by Bloomberg paid a worker more than $200,000 for accrued leave last year, while 17 people got such payments in California. There were 240 employees who received at least $100,000 in California, compared with 42 in the other 11 states, the data show. New Jersey Governor Chris Christie calls such payments “boat checks” because they can be large enough to buy a yacht.

Topping the list was $608,821 paid to psychiatrist Gertrudis Agcaoili, 79, who retired last year from the Napa state mental hospital after a 30-year career. Agcaoili said in a telephone interview that it was her right to take the payment.

Can California afford to pay those wages? Of course not:

Across the U.S., such compensation policies have contributed to state budget shortfalls of $500 billion in the past four years and prompted some governors, including Republican Scott Walker of Wisconsin, to strip most government employees of collective-bargaining rights and take other steps to limit payroll spending.

The result isn’t only a heavier burden on California taxpayers. As higher expenses competed for fewer dollars, per- pupil funding of the state’s public schools dropped to 35th nationally in 2009-2010 from 22nd in 2001-2002. Californians have endured recurring budget deficits throughout the past decade and now face the country’s highest debt and Standard & Poor’s lowest credit rating for a U.S. state.
This is why the claim pushed so often by Governor Jerry Brown and the other progressives that tax hikes are needed for students is such a canard.  If California would follow the model of Wisconsin or Michigan in adopting right to work laws, limited the power / corruptive influence of public sector unions, took a private sector based approach towards limiting the size and scope of government, and a more common sense approach towards public sector employee compensation, and the state would have not only a balanced budget, but also plenty of money for education.  State tax revenues, even after an across the board 10%-20% tax rate reduction, would increase because the state's economy would grow.  A rising tide lifts all boats.

But to undertake these steps - those in leadership positions have to have the state's well-being, the general 'good' in the forefront of their thoughts.  That is not the case with either the union leadership or the progressives that dominate the state's elected officials and legislature.  As 'The American Interest' noted as it talks about California's pampered public employees - -
“How bad is California’s public employee compensation problem? If nurses collecting $1 million in overtime pay and highway patrol officers making $500,000 are any indication, ‘bad’ doesn’t cover the half of it. . . . Public sector unions in states like California have squeezed every fringe benefit out of the state government you can imagine, from ‘arduous-duty’ pay, to bonuses for ‘the complex workload and level and knowledge required to receive and respond to consumer calls.’ These are not the demands of people who have the state’s well-being in mind.”

The nation is rapidly catching up to California in terms of fiscal irresponsibility - courtesy of the ideological progressive agenda of Barack Obama.  He and his fellow progressives continue to insist that the nation has a revenue problem - when it's plain to see that we have a spending problem.

In the current 'talks' around avoiding the 'fiscal cliff' just three weeks off, the President is insisting on a 'balanced' approach of tax increases and spending reductions to ensure 'fairness' - ie taxing the 'wealthy' more.  He is demanding $1.6 trillion in new revenues over the next decade in order to address the deficit / national debt challenge.  But even that is a lie.

75% of the proposed tax increases the President is demanding are slated to go to NEW SPENDING - not reducing the deficit or the debt.

If that is the case, then why does the President, his team, and the mainstream media continue to shovel the lie that the President is pushing for increased revenues in order to 'reduce' the deficits?  He's the most proliferate spender since the days of the Second World War.  We're spending 24% of our GDP - and with all of this spending, the economy barely is managing 1% to 2% annual GDP growth.  [The latest estimates for the 2012 4th Quarter GDP is a barely growing 1%.]  Real unemployment continues to exceed 11% - and that's not counting the effects of the millions who are underemployed.

I note that many reports in the press continue to push towards blaming the GOP for the failure of an agreement around the 'fiscal cliff' - just as the above cartoon by Michael Ramirez highlights.

Reports are coming from the GOP Congressional leadership that they are telling the members of the GOP caucus to plan on working through the Christmas break -and that January will also be a very busy time.

The problem is - Speaker John Boehner is approaching these talks in entirely the wrong way.  We know the President is not interested in a solution - just the opportunity to inflict massive political damage on the GOP.  We also know the President is not being honest - at all.  So the answer is to not play the President's or the MSM's game.

What the GOP needs to do in the House of Representatives is pass a bill to address the fiscal cliff and the spending / debt crisis we face.  Pass one bill - send it to the Senate and go home to enjoy the holidays.

What should be in this bill?

  1. Make the current personal income tax rates for everyone permanent.
  2. Really fix the AMT so that it does not affect middle class or those earning less than $300K / yr.
  3. Set a Corporate Tax Rate at 25%.
  4. Lock in Capital Gains and Dividend Tax Rates at 15%.
  5. Stop DoD sequestration.
  6. Roll back all discretionary non-defense federal spending to FY2007 levels plus inflation and population growth.
  7. Set a $50,000 maximum itemized deduction limit for wage earners making more than $1M per year.
  8. End the 2% temporary Social Security payroll tax reduction.
  9. Eliminate the Estate Tax.
Then in January, take up legislation to:
  • Reform Social Security, Medicare, and Medicaid.  They are between 50 and 75 years old and need modernization.
  • Reform the Tax Code to eliminate loopholes and broaden the base.  Everyone has to pay something - that is 'fairness'.
  • Halt the implementation of Obamacare until annual GDP growth is 4% or more and the total national debt is less than 80% of GDP.
  • Pass a FY2014 budget - set a model to achieve a balanced federal budget in no more than 5 years.
Pass those and send them to the Senate.  

Then use every chance possible to highlight that the GOP led House has taken steps while the President and Democrat majority controlled Senate have done nothing / are sitting on the bills from the House.  Put the President and his Senate sycophants on the defensive.  

The Chief Executive Officer of General Electric, Jeffrey Immelt, who also is the Chair of the President's Jobs Council - tasked with working with the WH to promote job growth, and interestingly hasn't met since early this year, has looked around the world and found a political / economic model that works and generates 'economic success'....

Immelt declares that 'state-run communism' actually works and points to the People's Republic of China as an example of economic success.

I wonder if the US, to achieve a similar level of success emulating the PRC, will have to also invoke a police state and murder between 50 million and 80 million of its citizens?


Another leftist standing on his 'principles' is making news in Europe.  Gerard Depardieu, the French actor, has decided to flee France and move to Belgium in order to avoid French President Holland's new 75% income tax rate on the country's wealthy as well as a new tax being imposed on the assets of the wealthy.

Egyptian President Mohamed Morsi has declared martial law ahead of the country's constitutional referendum to adopt a new constitution based on Islamic Shari'a law - eliminating women's rights, free speech, and bringing back slavery.  The declaration, which provides additional powers for the country's military to make arrests, is empowering the Islamists within the Egyptian military and reducing the reach and power of more secular military officers.  If the new constitution passes, I fully expect Morsi to re-establish the dictatorial powers he gave himself and then reversed.

Barack Obama has decided to reward Morsi's declaration of martial law by agreeing to send the Egyptian military 20 brand new F-16 fighter jets.

Feckless no longer describes the Obama foreign policy.  Dangerous.  Irresponsible.  Naive and inept - all of these seem to fit better than just feckless.

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