NY Public Pension Costs Set to Triple

It shouldn’t surprise anyone.  Public watchdog groups have been pointing this out for years.  I pointed it out when I ran for Comptroller in 2005.  I even saw Mayor Bloomberg mention it – once.  Public pension costs are probably the single most impotant item creating the structural deficits in New York’s state and local governments.  The simplest analysis showed it many years ago.  But our polticians are so grossly and criminally irresponsible that they’ve continued to pile up more and more costs even as late as last year.

This article in the NY Times online illustrates the problem – as if this is news.

“It’s alarming, eye-popping and unthinkable,” said Stephen J. Acquario, executive director of the New York State Association of Counties. “To manage that liability in the face of this deep decline in government revenues is going to be a challenge,” he said. “Where is this money going to come from?”

Where will the money come from?  Taxpayers – are you listening for the huge sucking sound?

Now – who’s up for government health insurance?

NYC Congressional Delegation in Minority in Opposing Federal Reserve Audit

NYC Congressional Delegation in Minority in Opposing Federal Reserve Audit

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Senate coup restores sweet gridlock to Albany

Senate coup restores sweet gridlock to Albany

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A Large and Uncomfortable Fact

George Orwell once noted that at any given moment there is a general tacit agreement not to discuss some large and uncomfortable fact, and the sad fact is there’s such an agreement out and about concerning a gold standard versus a paper standard. Trust me, believing in a gold standard makes me the lunatic on the trade floor.

In a recent episode of The American Conservative, Philip Delves Broughton gives a good example of this ongoing trend. In Banking on Beijing, he speaks of his opinion regarding China’s economic situation, specifically their central bank’s rather poorly diversified investing acumen, given form in their sitting on all those US dollars, I forget the number, I’ve been drinking, but it’s definitely way over $1 trillion.

Mr. Broughton (Mr. Delves Broughton?) correctly notes that “China’s huge dollar reserves are merely a symptom of an economic fix of its own making”, as China is a country, like the US, blessed with a currency backed by paper and they were creating gobs of it to keep the value of their currency artificially low compared to the US dollar, not an easy thing to do with Greenspan and then Bernanke creating US dollars like mad little hamsters.

Mr. Broughton notes that while for a time it seemed to work, it was a “Ponzi scheme” and again I agree with him. Yet, he fails to give the same compliment towards what His Country Tis Of Thee’s central bank was doing – the exact same thing. If China’s policy of creating money like mad to keep it artificially low, to create inflation per the Federal Reserve’s slogan, is a “Ponzi scheme”, what about Bernanke & Friends?

Under a gold standard, China couldn’t have been able to screw itself into the ground because you must use something, gold, as money under a gold standard, something that is not counterfeitable.

And China wouldn’t have had to create gobs of its own money under a gold standard anyway, because if the Federal Reserve had been under a gold standard, too (and adhered to it honestly) there wouldn’t have been an orgy of reckless consumer madness in the first place to give them all those US dollars.

But the thought of anything but a paper standard doesn’t exist anymore. The intellectual debate over our monetary system does not even include it. It is not even respectable, people laugh at it off the cuff. Mr. Broughton is of that mind, asking “and realistically, where else is China going to go?” So paper it is.

Ending the article with “had China pursued a different strategy over the years” Mr. Broughton goes on to list his preferred options, not one of which included stopping the political elite from counterfeiting, to put the world currencies back under gold, to put shackles on all the counterfeiting.

Whether or not being on a gold standard will bring an end to booms and busts and cheating is doubtful – history says no – but history says the same thing about paper.

So what gives gold the gold, so to speak, what puts her first in my mind?

Economic justice.

Counterfeiting is a crime for a reason – it’s flat out stealing. It makes life harder for all of us to allow stealing. So if we are going to see life’s booms and busts and greed and human flaws anyway, at the very least we can be honest as possible about it.

Unintended Consequences: How Government Gets Everything Wrong

My left-liberal (as opposed to classical liberal) friends tell me to shut up when I harp on how Government can’t do anything right.  They tell me it’s a worn out cliche.  It’s a cliche for a reason.  It’s true.  Think about it. I’ll bet you can’t name a single thing that the government gets right.  And by “right” I mean it does it as well or better than the alternative – which is of course free human beings making their own decisions ( a sneaky way of saying “free markets”).   Go ahead – name one. I’m waiting…..

Remember it wasn’t so long ago that Congress preferenced Ethanol and caused a net increase in fossil fuel usage and disruptions in food markets.  Surprise! They did it again.  Here’s a post on the always informative  DownSizeDC.org  that points out unintended negative consequences of Congress meddling in energy markets via tax preferences. 

Prior to Congress deciding it could use tax policy to re-engineer America’s energy use from on-high, the paper industry had been 70% fueled by something called black liquor, a natural by-product of the paper making process. In other words, the paper industry was inherently energy efficient, until Congress got involved.
 
The Energy Policy Act of 2005 authorized a 50-cent per gallon tax credit for mixing gasoline or diesel with an alternative fuel. To get the credit, paper companies began to mix diesel with their black liquor. In other words . . .

• The government is paying the paper industry to use a less efficient, environmentally-destructive fuel!

The cost of this scam could reach $8 billion this year. [Source: The Nation]

Even the New York Times reports conclusive evidence.  Of course The Times doesn’t see it as evidence of Government incompetence.   The Times  acquired it’s new office space by getting government to take it by force from small businesses via eminent domain.   I’m not surprised they are reluctant to bite the hand that feeds them. Cozy arrangement.

Check out this Times post with comments by Doug Tatum, co-founder and chairman emeritus of Tatum, an Atlanta-based consulting and executive search firm that specializes in helping growing companies with finance issues.

 Entrepreneurs have a limited amount of bandwidth, and they have to quit wasting their time chasing the impossible. They need to think about how they can change their business model to become profitable. That’s where the capital to grow will come from

Finance growth with profits?  What?  That’s so pre-Obama.   That would mean something like cutting taxes would be better for the economy than massive stimulus packages.   But of course few in Government have ever turned a profit in the free market so they wouldn’t know about that.   Bam has of course made millions from his book sales. But profiting on his Presidential campaign isn’t really that close to a free market activity in today’s two flavors of one party system.   Also cutting taxes would mean that regular working people and entrepreneurs would make the decisions about where the money got spent and that would mean Government can’t determine the winners and the losers.   Quaint notion.

Tatum continues:

Banks have become cautious about what they have on their balance sheets. They still don’t know what their portfolios are worth. That means they’re waiting for the next shoe to drop, which could be the commercial markets. I talked to the C.E.O. of a community bank who told me that they have the regulators telling them when and where they can lend money. So while you might have politicians saying, ’Lend, lend, lend,’ the regulators are holding the banks back.

Banks becoming cautious and refusing to lend when Congress tells them to?  Didn’t Congress tell them to lend to sub-prime home buyers and sell the paper to Fannie Mae?  How did that work out for them?  But it’s OK because the banks aren’t THAT stupid – well not any more.  They can ignore Congress because the regulators make them.  So Congress can continue to pander and not worry that the banks will actually take their disastrous advice – again.

It’s amazing to me that people can continue to cling to the idea that Government decisions can ever outperform free market decisions.  But most people don’t know much economic history or economic principles.   And the history and principles they do know are fed to them by the Government propaganda machine – organizations like the New York Times.

The truth is out there for anyone who wants to learn it.   If you don’t know – here are two great places to start :  www.Mises.org  and www.independent.org  .

Melt the Switchboards on the Fed’s Hidden Tax

If there is one issue that both the left and right would miraculously agree on is the abolition of the Federal Reserve. From Ralph Nader to Milton Friedman, to even former Fed Chairman Paul Volcker, the Fed has heard its share of intense criticism and scrutiny. That’s because it is ultimately and directly responsible for one tax the rich and poor alike end up paying – inflation. And it’s a well-hidden tax at that.

The Federal Reserve’s policies and its somewhat difficult to understand process of creating money, which at times seems to be out of thin air now that we are officially off the gold standard, is an issue which is rarely addressed in the media. That’s because it’s hardly understood by most. Which is why it’s so difficult to prove whether the Fed’s inflationary machinations are caused with malicious intent, or simply unintended consequences that arise from convoluted economic policies.

What is more interesting than this quasi-public/private institution’s process of creating and ultimately controlling our money supply – by depositing cash into member banks and then charging the banks for this newfound money by directly dictating the discount rate at which they repay the Fed (not to be confused with simply setting interest rates which it targets by selling or buying Treasury bills) or something like that – are the conspiracy theories that abound regarding the Federal Reserve.

Was John F Kennedy assassinated because of his tampering and questioning of the Fed? Hmm. Or what about Abraham Lincoln whose assassination is attributed to earlier money lenders led by the Rothschilds? You know, the five Jews that secretly run the world and may (or may not) happen to run every bagel shop in the country.

But certain facts are well, certain. The Federal Reserve was created in 1913 as was the birth of the income tax we’re stuck with every paycheck. And it’s to the chagrin of other critics such as former 2008 presidential candidate Ron Paul that the Federal Reserve continues to exist. It was not for nothing hundreds gathered at an “End the Fed” rally this past weekend in the Financial District led by Congressman Paul’s Campaign for Liberty organization to do just that.

Though ending the Fed anytime soon is highly unlikely, this Monday April 27 is the day to “melt the switchboards” by calling Congress at 877-851-6437 and insisting your Senators and Congressional district representatives push forward HR 1207, a bill that will finally audit the Federal Reserve. It may (or may not) resolve John F Kennedy’s assassination, but it will most certainly force open the books to this private institution that somehow answers to no one, even every time it raises a tax nobody should have to pay.

Let’s Confiscate Congress’s Pay

I just got today’s Monday email from Libertarian HQ.  Seems Alan Grayson, Congressman from Florida

went so far as to go on national television and claim the Constitution gives the President’s administration the right to forcibly confiscate money from people the administration feels didn’t “earn” it!

I have an even better idea.  How about if the people have the right to confiscate the paychecks of people WE feel didn’t earn it – like Congress.  According to PollingReport.com  a website that gathers results from many different pollsters Congress hasn’t been doing it’s job to their employer’s satisfaction since – well – NEVER! – OK at least since 2005 the earliest data presented.   In fact during that time period Congress only made it as high as 40% a small handful of times.   It’s true Congress’s approval is up from teens and 20’s of the Bush administration.  I wonder if that’s because the honeymoon isn’t quite over yet or because the regular working stiffs  just like feeling they are sticking it to those greedy Wall Street types. 

 

Yes Congressman Grayson,  pandering to the lowest instincts of the downtrodden will get you a little lift in the polls.   You have to do SOMETHING to deflect the blame.  You don’t want the people to realize that CONGRESS (along with the Federal Reserve and the Bush Administration) is responsible for  destroying the economy.

Insert Gratuitous “No It’s Not the Onion” Line Here

The U.S. Senate is reviewing the selection process for college football’s BCS championship. I agree with Karol at Alarming News on this one: The more time they waste on crap like this, the better, because it means they’ll have less time to screw with the important stuff.

Notice on rear of Departure Card, People’s Republic of China

Important Notice
 
1. Aliens who do not lodge at hotels, guesthouses or inns shall, within 24 hours of entry, go through accomodation registration at local police station.
 
2. Aliens shall not be employed in China without permission of the competent authorities of the Chinese Government.
 
3. Aliens who reside or stay in China shall carry with themselves their passports or Residence Permits for possible examination.
 
4. In case of emergency, please dial 110 to seek help from police.

Query–Is this any different than the isolationist, anti-immigrant policy  put forth by the conservatives right here?

Tax Foundation Says Households will Foot $144 Billion Under Cap-and-Trade

American Households Would Face Annual Burden of $144.8 Billion Under Cap-and-Trade System

 

With climate change legislation becoming a top congressional priority in recent months, a new study shows that a cap-and-trade system curbing greenhouse gas emissions would place an annual burden of $144.8 billion on American households. The average annual household burden would be $1,218, which would be approximately 2% of the average household income.

In Tax Foundation Working Paper No. 6, “Who Pays for Climate Policy? New Estimates of the Household Burden and Economic Impact of a U.S. Cap-and-Trade System,” Tax Foundation Adjunct Scholar Andrew Chamberlain explains that this burden would be disproportionately borne by low-income households, those under age 25 and over 75 years, those in southern states, and single parents with dependent children. The bottom 20 percent of income earners has an annual cap-and-trade burden that is equal to 6.2% of their household cash income. The second quintile has a burden equal to 3.2% of household cash income, the third quintile 2.4%, the fourth quintile 2.0% and the top quintile 1.4%.

Read the news release. Download the report.