Parallels

In the course of researching a rebuttal to this Telegraph story, I was absolutely gobsmacked by the parallels between the Steel Industry of the 1970's and the auto industry of today.

During the 1970s and 1980s, the U.S. steel industry came under increasing pressure from foreign competition. Manufacture in Germany and Japan was booming. Foreign mills and factories, built with the latest technology, benefited from lower labor costs and powerful government-corporate partnerships, allowing them to capture increasing market shares of steel and steel products. Separately, demand for steel softened due to recessions, the 1973 oil crisis, and increasing use of other materials.^[9][42] At this critical juncture, free market, anti-union policies, and deregulation, especially under President Ronald Reagan, came into play. Free market pressures exposed the U.S. steel industry's own internal problems, which included a now-outdated manufacturing base that had been over-expanded in the 1950s and 1960s, hostile management and labor relationships, the inflexibility of United Steelworkers regarding wage cuts and work-rule reforms, oligarchic management styles, and poor strategic planning by both union and management. In particular, Pittsburgh faced its own challenges. Local coke and iron ore deposits were depleted, raising material costs. The large mills in the Pittsburgh region also faced competition from newer, more profitable "mini-mills" and non-union mills with lower labor costs.^[42]

Beginning in the late 1970s and early 1980s, the steel industry in Pittsburgh began to implode. Following the 1981–1982 recession, for example, the mills laid off 153,000 workers.^[42] The steel mills began to shut down. These closures caused a ripple effect, as railroads, mines, and other factories across the region lost business and closed. The local economy suffered a depression, marked by high unemployment and underemployment, as laid-off workers took lower-paying, non-union jobs. Pittsburgh suffered as elsewhere in the Rust Belt with a declining population, and like many other U.S. cities, it also saw white flight to the suburbs.^[43]

Emphasis mine. It was a potent cocktail of union, corporate and governmental errors along with free market pressures that the American steel and auto industries were unable to overcome that led, in the end, to the demise of those industries.

Where the parallels diverge comes in how the cities of Flint and Pittsburgh handled the paradigm change. Where the city of Pittsburgh reinvented itself from Steel City to High Tech Haven...

Present-day Pittsburgh, with a diversified economy, a low cost of living, and a rich infrastructure for education and culture, has been ranked as one of the World's Most Livable Cities.^[48]

... the city of Flint is tearing whole neighborhoods down...

The government looking at expanding a pioneering scheme in Flint, one of the poorest US cities, which involves razing entire districts and returning the land to nature.

Local politicians believe the city must contract by as much as 40 per cent, concentrating the dwindling population and local services into a more viable area.

...and the Obama Administration wants to bring this plan to a neighborhood near you! The reason for this is an obvious one - the cities in question are in decline....

"Places like Flint have hit rock bottom. They're at the point where it's better to start knocking a lot of buildings down," she (Karina Pallagst, director of the Shrinking Cities in a Global Perspective programme at the University of California, Berkeley) said.

Flint, sixty miles north of Detroit, was the original home of General Motors. The car giant once employed 79,000 local people but that figure has shrunk to around 8,000.

Unemployment is now approaching 20 per cent and the total population has almost halved to 110,000.

The exodus – particularly of young people – coupled with the consequent collapse in property prices, has left street after street in sections of the city almost entirely abandoned.

The Telegraph tap dances around many of the reasons for the flight - lack of jobs, high unemployment etc - but they never get to WHY these jobs are leaving.... usually a government climate that makes it next to impossible to attract and maintain businesses (hello Minnesota). I mean a publicly traded company is ultimately responsible to it's shareholders. If the shareholders are not making money then the company has two choices - move to a climate where it is cheaper to do business (off-shoring) or go out of business! It's that simple.

But Mr Kildee, who has lived there nearly all his life, said he had first to overcome a deeply ingrained American cultural mindset that "big is good" and that cities should sprawl – Flint covers 34 square miles.

Look I'm not saying that Flint should be forced into doing something that won't work for them. If shrinking the size of the town works for THEM then by all means, they should do it. Where I do depart with the idea is that this is something that should be forced on other cities due to FEDERAL MANDATE! Pittsburgh re-invented itself without federal involvement - that's fantastic - but how do you Pittsburghers will react to the Federal government coming in and telling them that their jobs and neighborhoods are being torn down because the Federal government thinks their city is "too big"? We should not be using Flint's cookie cutter on everyone else. Let the cities of Baltimore, Pittsburgh, Memphis, Detroit and the 46 other "targeted" cities decide what's best for their citizens. If it is reinvention ala Pittsburgh, reduction ala Flint, a combination of the two or some other outside of the box solution - it has to be up to the city and the county...not the Federal Nanny State.

PayWhat?????

So President Obama announced his PayGo plan. The media reaction has been less than laudatory - almost (dare I say it) critical of a PayGo plan that does NOT Pay as you Go.....

The AP said - “President Barack Obama on Tuesday proposed budget rules that would allow Congress to borrow tens of billions of dollars and put the nation deeper in debt to jump-start the administration’s emerging health care overhaul. The “pay-as-you-go” budget formula plan is significantly weaker than a proposal Obama issued with little fanfare last month. It would carve out about $2.5 trillion worth of exemptions for Obama’s priorities over the next decade. His health care reform plan also would get a green light to run big deficits in its early years. But over a decade, Congress would have to come up with money to cover those early year deficits.”

So he proposes a "pay as you go" plan that OK's billions of dollars in borrowing...how is that paying as you go?

The Washington Post reports that Congressional DEMOCRATS are pointing out the borrowing loopholes -

And while the proposal found favor in the House, it faced serious obstacles in the Senate, where several key senators said they would oppose it.

"I'm not for waiving PAYGO for $3.5 trillion of items, much of which I think ought to be paid for," said Senate Budget Committee chairman Kent Conrad (D-N.D.). "I don't think at this point we can afford not to pay for those very large expenditures."

Coming one day after Obama vowed to shovel money from the economic stimulus package out the door even more quickly, yesterday's call for fiscal rectitude also drew catcalls from Republicans.

"The president continues to display a frightening ability to say one thing, yet do the exact opposite," said Rep. Tom Price (R-Ga.). "It's frankly insulting that a president who is on a path to bankrupting our government would try to play the role of fiscal hawk."

One independent analyst put it more bluntly when she said "This is like quitting drinking, but making an exception for beer and hard liquor," said Maya MacGuineas, president of the bipartisan Committee for a Responsible Federal Budget.

Meanwhile that ultra conservative rag the New York Times had this to say about the "PayGo" proposal.

During the first four months of his administration, President Obama has committed roughly $1 trillion in federal spending – a $787 billion economic recovery package, and $350 billion in money to bail out the nation’s banks. But on Tuesday, Mr. Obama was talking about saving money, not spending it.

Speaking from the East Room of the White House, the president announced he is sending legislation to Congress to restore the 1990s era “pay as you go’’ law, known as Paygo. The law, in effect from 1990 to 2002, required that any new entitlement spending or tax cuts be offset with by entitlement increases or tax cuts.

“The ‘pay as you go’ principle is very simple,’’ Mr. Obama said. “Congress can only spend a dollar if it saves a dollar elsewhere. This principle guides responsible families managing a budget. And it is no coincidence that this rule was in place when we moved from record deficits to record surpluses in the 1990s - and that when this rule was abandoned, we returned to record deficits that doubled the national debt.’’

But critics of Paygo say it is not simple at all. Brian Riedl, a budget analyst at the conservative-leaning Heritage Foundation, said the Paygo law required Congress to make across-the-board cuts in entitlement spending at the end of any year in which the Congressional Budget Office found that Paygo requirements had not been met. He said lawmakers responded each time by passing another bill, waiving the Paygo requirements.

“Paygo is a gimmick,’’ Mr. Riedl said.

Emphasis mine. CBS - a long time cheerleader for the President explains why this PayGo proposal is a gimmick...

But briefing reporters, White House Budget Director Peter Orszag conceded some of PAYGO’s limitations. It doesn’t cover discretionary spending.

“PAYGO only applies to the mandatory side of the budget and to revenue,” said Orszag. That means entitlement programs such as Medicare and revenue programs like taxes. It’ll cover the compulsory health care plan the president wants Congress to pass – but over five or 10 years. In a single year, the plan may exceed PAYGO limits.

In addition, about 40 percent of the federal budget, programs for education, energy, the military, etc., would not be covered by PAYGO, said Orszag. A different set of Senate and House rules apply to those programs, he said.

As for existing deficits and the National Debt, which today stands at an all-time high of $11.39 trillion, PAYGO has no effect, other than to slow its growth by restraining some government spending. Orszag says the government is already in a deep economic hole and PAYGO is intended to stop further digging.

Except as CBS pointed out it does NOT stop further digging. If it did, it would cover ALL aspects of the federal budget, not just small portions of it.

If President Obama were really sincere about the need for PayGo he would have never proposed all of the billions of dollars in deficit he has proposed, nor would he have signed the pork laden "stimulus" bill or any of the bail out bills. No - President Obama is not serious about PayGo - he is only throwing this out now as a bone to the Tea Party Movement. He is tacking back to the political middle because he understands that many voters are disappointed with the growth of government spending.

He's just another politician who campaigns on what the voters want to hear - only to ignore (or pay lip service to) those voters once he gets into office. I hate to say I told you so but.....

Deja Vu All Over Again

Monday night we had a bunch of folks over to the Logical Household for dinner. A lot of interesting conversations, but the one that really interested me was listening to a group of folks who had lived their early working lives during the early 1970's. Now I was still blissfully unaware of how bad things were as a teen-ager (oh sure I heard the news stories and heard my parents worry about how to make ends meet) but these folks were working or just marrieds and starting families during that time and the stories that they told about the hyper inflation and high interest rates were eye-opening. Mostly due to the similarities to today. Then I read this.....

Here we stand more than a year into a grave economic crisis with a projected budget deficit of 13% of GDP. That's more than twice the size of the next largest deficit since World War II. And this projected deficit is the culmination of a year when the federal government, at taxpayers' expense, acquired enormous stakes in the banking, auto, mortgage, health-care and insurance industries.

With the crisis, the ill-conceived government reactions, and the ensuing economic downturn, the unfunded liabilities of federal programs -- such as Social Security, civil-service and military pensions, the Pension Benefit Guarantee Corporation, Medicare and Medicaid -- are over the $100 trillion mark. With U.S. GDP and federal tax receipts at about $14 trillion and $2.4 trillion respectively, such a debt all but guarantees higher interest rates, massive tax increases, and partial default on government promises.

But as bad as the fiscal picture is, panic-driven monetary policies portend to have even more dire consequences. We can expect rapidly rising prices and much, much higher interest rates over the next four or five years, and a concomitant deleterious impact on output and employment not unlike the late 1970s.

This is not a blame Bush or blame Obama thing....BOTH administrations have had a hand in this mess - and then there is the FED.

What this IS about, is the fact that this country is in need of an economic wake up call! We need to quit spending beyond our means and we need to setting priorities. What is the priority...keeping Medicare and Social Security solvent or Universal Health Care? Because I am telling you now if we try to do everything we will fail at doing them all because there are not enough resources. It's that simple.

Defining A Lobbyist

My good friend Gary Gross sent me a link to this story on Redstate.

The Connecticut Office of State Ethics (OSE) is poised to investigate and penalize the Diocese of Bridgeport for having the temerity to exercise at least four of the five sections of the First Amendment (religion, speech, assembly, petition).

The story begins earlier this year when Connecticut State Senator Andrew McDonald proposed legislation (S. 1098) that would have forced the Catholic Church, contrary to the church’s doctrine, to relinquish control of parish finances (for those from congregationalist traditions who may not be aware of the organization of Catholic Churches, the Catholic Church, by doctrine, is very hierarchical, with Bishops responsible for all the parishes within the bishopric, and those Bishops reporting on up the line, ultimately to the Vatican. Unlike most protestant demoninations, local parishes exercise little governing control. This is not merely an issue of secular control but one of theological doctrine deeply entwined in the Catholic Church’s views on the role of clergy, the papacy and the church in fulfilling God’s mission). Naturally the church opposed this incursion into its governance and doctrine, with the Bishop urging Catholics to contact their legislators and the Church supporting a mass rally in the state capital.

So the state struck back...

Get that - the STATE introduced a bill that would have forced THE CHURCH to change how it runs it's business. Just another case of how the so-called "separation" of church and state is only there when it is convenient to the state. Now you know why the Danbury Baptist Association was worried...

...From the American Spectator story by Lisa Fabrizio:

It seems that our Diocese of Bridgeport — which in March was forced to marshal the faithful to defend itself from unconstitutional government interference — was notified by the Connecticut Office of State Ethics that it is under investigation for possible violations of the state’s lobbying laws.

Emphasis mine. Remember - the First Amendment reads...

Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the government for a redress of grievances.

Congress in this cite also includes the state legislators who must make law that will pass Constitutional muster....

To the Bishop's credit he is not taking this lying down.

Following the surprise introduction of Bill 1098, a proposal that singled out Catholic parishes and would have forced them to reorganize contrary to Church law and the First Amendment, our Diocese responded in the most natural, spontaneous, and frankly, American, of ways: we alerted our membership - in person and through our website; we encouraged them to exercise their free speech by contacting their elected representatives; and, we organized a rally at the State Capitol…

On April 23, 2009, the Diocese received a letter from Thomas K. Jones, Ethics Enforcement Officer for the OSE, stating that it was “the subject of an Office of State Ethics evaluation,” which was “being conducted to ascertain whether the Diocese had violated [Connecticut General Statutes Sections] 1-94, 1-95 and 1-96 by failing to register as a lobbyist in Connecticut, by failing to submit all other appropriate lobbyist filings, and by failing to follow all applicable registration procedures.”

The OSE claims the Diocese acted as a “lobbyist” by: participating in a March 11, 2009, State Capitol rally against Raised Bill 1098 (the unconstitutional attempt to reorganize Catholic parishes contrary to Catholic teaching and tradition); making statements on its website urging its members to contact their elected representatives to oppose Raised Bill 1098; and making statements on its website urging its members to contact their legislators to oppose another bill, Raised Bill 899 (regarding same-sex marriage).

It is interesting to note that the House and Senate sponsors of this bill are both gay.....

How this investigation plays out will be telling not only for the Church but also for ANY grass roots activist group out there. Are you a dog club that wants to lobby against Breed Specific Legislation - you could be charged as being lobbyists! Are you a Scout troop looking to advocate for more state parks - careful kids you could be lobbyists as well!

This is just one more example of big government that has totally gotten out of control. It is far past time for the voters to issue a stern reminder to their elected legislators that they work for US and not the other way around.

Oh and for the Church - it is time to wake up and realize that what government does effects us as well!

Your Home Is Not Your Own UPDATE

An update on this post that I put up the other day. San Diego County representatives are saying that the visit stemmed from a parking complaint.

The county official said Jones has got it all wrong and tried to explain the curious line of questioning the county had for the pastor.
Jones said he has been hosting weekly Bible studies in his Bonita home for the past five years, but it wasn't until last month that someone complained about the sessions and county code enforcement went out to investigate.
Every Tuesday night about 15 people drive to Jones’ Bonita home to eat dinner and discuss the Bible. They usually park on Jones' property, he said, but sometimes that parking spills out into the cul-de-sac.
Last month, someone filed a complaint about the number of cars.

OK - I can understand the concern about parking and road access - especially as it may impact emergency access to the neighborhood - however, one has to wonder why the complaining neighbor didn't just come over and talk to the pastor and his wife about his/her concerns.....

10News asked the county official about the officer's line of questioning.
"Did the officer actually do that? Is that part of the requirements to ask those questions?" Reporter Joe Little asked.
"Obviously, I wasn't there, so I can't tell you exactly what was said. However, what our officer was trying to do is establish what the use is so that we know what regulations to actually utilize," explained Chandra Wallar of the county's land use and environment group.
Wallar said it's the officer’s job to determine what kind of event is hosted at Jones’ house to decide what part of county code the event falls under.
"The Bible studies are one that's probably in a very gray area," Waller said.

Gray area???? Here is a hot tip for EVERYONE involved....apply a little common sense here. First off if the Bible study draws 15 people one must assume that at least a few of the visitors are (like the pastor and his wife) married couples driving together! That drops the number of cars by (and I'll be generous here) a third - say 5 cars. Now the pastor and his wife don't drive so that is a 6th car. Based on the picture attached to the story, it looks as if you could fit 3 possibly 4 cars in the driveway. That means we are looking at 5, maybe 6 cars parked in the street. Any of us who lives in a neighborhood with people who have folks over know that 5 or 6 cars is really not a whole lot. Yes it can be an inconvenience at times, but it is usually never a public safety hazard. Now from the other side of the coin, if parking at the pastor's neighborhood is at a premium - why not ride share????? There is a common sense issue that does not involve calling the police OR the county zoning office! All one needs to do is talk to your neighbor - tell the pastor of your concerns. Is that not a logical solution to the "problem"?

Either way, this county employee over-reacted calling a home Bible study a zoning violation. That IS a gross over-reach and another example of out of control government.

Your House Is Not Your Own...

I preface this by saying that I have not been able to find any mention of this outside of WND and whole bunch of blogs, but if there is any modicum of truth to this story anyone who holds regular meetings in their homes (be it 4H, the Sierra Club or a church) should be concerned.

A San Diego pastor and his wife claim they were interrogated by a county official and warned they will face escalating fines if they continue to hold Bible studies in their home.

The couple, whose names are being withheld until a demand letter can be filed on their behalf, told their attorney a county government employee knocked on their door on Good Friday, asking a litany of questions about their Tuesday night Bible studies, which are attended by approximately 15 people.

As I was working on this, I got another email on this story. Fox News reported on the story as well so it has been confirmed. According to the interview, the Pastor and his wife, who have weekly Bible studies with friends, were told by a county employee that it was a "zoning" violation to have more than 10-15 people in your house at one time!

Again, this should trouble anyone who has every had a Tupperware party or a Mary Kay Party of a weekly book club meeting in their home. Big government can dictate to you how many people you can have come visit you in your home!

Well isn't that special.....

Details, Smetails....

As the details of the so-called stimulus package starts to trickle down to communities, many local officials are already starting to lower the expectations within their own communities.

While a much-talked about $8.19 billion federal stimulus package is still in the works in Washington, D.C., how might the money promised in the bill impact cities, schools and the county?

While there are many possibilities and ideas out there, local officials say there are also many questions...

Savage City Administrator Barry Stock is known for his conservative budgeting style, so when asked if the stimulus package will have any local impact, he promptly shakes his head back and forth and frowns as he says “nope.”...

Prior Lake’s public works director, Steve Albrecht, said the city is not banking on a whole lot of money coming from state agencies via the stimulus package, but he’s “cautiously optimistic” about city-related projects getting funding via Scott County....

Burnsville-Eagan-Savage School District’s Business Manager, Mark Stotts, is waiting for the final details to come out before he starts counting on the extra capital...

While Prior Lake-Savage Area School District officials are hopeful a federal stimulus package passes the U.S. Senate in the coming weeks, Director of Business Affairs Margo Nash says the district isn’t counting its chickens before the eggs hatch...

Shakopee Schools Superintendent Jon McBroom isn’t setting his hopes too high...

Why are these local administrators so pessimistic about the prospects of the "stimulus" money. Because they know that the money is not going to projects designed to stimulate the economy. Instead the money is going to things like...

• $50 million for the National Endowment for the Arts
• $380 million in the Senate bill for the Women, Infants and Children program
• $300 million for grants to combat violence against women
• $15 billion for boosting Pell Grant college scholarships
• $650 million for digital-TV coupons;
  
• $90 million to educate “vulnerable populations”
• $1 billion for the Census Bureau
• $89 billion for Medicaid
• $850 million for Amtrak
• $55 million for Historic Preservation Fund
  
• $7.6 billion for “rural community advancement programs”
  
• $150 million for agricultural-commodity purchases
• $79 billion for State Fiscal Stabilization Fund

There is some spending in there that some have targeted as wasteful but it is questionable. Building projects do hire people, building projects do stimulate the economy....to a point.

That is why this "spendulus" package needs to be completely scrapped. Educating people about the GOVERNMENT MANDATED conversion to DTV is not going to create a single job. The NEA does not hire tradesmen or build houses. The money for Amtrak may save a few jobs, but that money could be better used in creating inner city jobs, don't you think? Instead of historic preservation, how about putting that money into much needed roads and bridges? Heaven knows Scott County is not the only county in this country with road needs!

My plea to the President and to the Senate is scrap this bill...get rid of the garbage and do it RIGHT - not fast! That really is what is best for the country.

Stimulating Nothing

Here is some more information that the negligent US media has decided to with hold from their readers and viewers.

It is all very well for President Obama to vent his anger on all those US bankers who continued to claim billions of dollars in bonuses while expecting Washington to bail them out after the sub-prime mortgage scandal brought the banks to their knees. But conveniently overlooked has been the curious part Mr Obama himself played in the sub-prime debacle.

At the heart of it was a 1995 amendment to the Community Reinvestment Act which legally required banks to lend money to buy homes to millions of poor, mainly black Americans, guaranteed by the two biggest mortgage associations, Fannie Mae and Freddie Mac. And no one campaigned more actively for this change to the law than Mr Obama, as a young but already influential Chicago politician.

It was this Act which, more than anything, helped to create the US housing bubble, well beyond the point where it was obvious that hundreds of thousands of homeowners would be likely to default. And in 2005 no one more actively opposed moves to halt Fannie Mae's reckless guarantees than Senator Obama, as he was by then. As the official records show, no senator received more donations from Fannie Mae than he did (although Hillary Clinton ran him close). Thus no US politician arguably did more to promote the sub-prime disaster than the man now expected to pick up the pieces, Rather like Gordon Brown, really.

Now in all fairness to the President, he was not the only one who was pushing the HARDEST against reform of Fannie and Freddie. That dubious honor goes to Representative Barney Frank. However, in the Senate there was no bigger defender of Fannie and Freddie than Senator Barackc Obama.

This is the major reason why I was against the banking bailout, the auto industry bailout and now the stimulus packages. These massive expenditures of taxpayer money are being done with no oversight - no strings, no protections to the US taxpayer were written into these laws. It was FREE MONEY and these industries were all for getting free money. But we all saw what happened when the President tried (rightly so in my opinion) to attach some common sense strings to the TARP money. Both Goldman Sacs and Wells Fargo have announced that they will be REPAYING the TARP money that they got. As the Goldman Sacs CEO pointed out "We would like to get out from under that..." (that being the CEO compensation cap). It has gotten to the point where other banks are rejecting government aid as a quick fix to their recent losses.

The moral to this story is there is no silver bullet, no magical cure to the economic straits we find ourselves in today. What we are in today, is part of the natural cycle of the economy. One of the biggest natural parts is this...the higher the highs, the further you have to fall when the fall eventually comes!

The best thing that the government can do to "fix" the economy is to STOP PANICKING! Panic is not going to fix this - only a calm, cool, reasoned (and reasonable) actions are going to turn this around. The average voter out there realizes this. When will these supposedly intelligent politicians figure it out?

THIS is Our Future

This is Minnesota's future if we do not heed the warnings of the ALEC-Laffer report that I wrote about earlier.

BOCHUM, Germany - Thousands of people marched through this west German city Tuesday to protest Nokia Corp.'s decision to close a factory, and a German official warned the move could weigh on Nokia's image and business....The plant closure, which likely will result in the loss of 2,300 jobs, was announced last week and has infuriated German unions, as well as politicians....Nokia has cited the German location's lack of competitiveness as the main reason for closing the plant and said labor costs in Bochum were nearly 10 times those at a Nokia plant in Romania. But that point has irked officials in the region, who argue that labor accounts for a small proportion of overall manufacturing costs.

Emphasis mine...Out of control labor costs, out of control taxes, out of control utility costs, out of control government regulation in business...it all leads to businesses running OUT OF YOUR STATE! Is that really what Minnesotan's want?