California's government worker problem

Even though California's government is nearly bankrupt and must pay its bills using IOUs, its workforce continues to grow. A piece in today's LAT by Evan Halper explains how and why that happens. How the piece got published in the left-leaning LAT is a puzzle, but it shouldn't be missed. Meanwhile, California's financial meltdown continues, with union approval.

LAT: GOP a weakened party lacking consensus

A front-page piece in Friday's LAT written by Mark Barabak and Janet Hook argues that while GOP lawmakers in Washington have lots of ideas about how to stimulate the economy, they lack a leader and have not settled on a consensus plan. Besides, they are guilty of a dismal showing in last November's election and the GOP image in is tatters.

That GOP lawmakers have lots of ideas does not seem a bad thing. That they lack leaders doesn't seem that bad either. The Democrats are saddled with leaders like Pelosi and Reid, which suggests they have a bigger problem than the GOP has. Being the minority party, the GOP cannot govern. Consensus is important to the governing party, not so much to the minority party.

Query: Why did such a piece appear on the front page when it belongs on the op-ed pages because it primarily presents the opinions of the authors.

What stimulus?

The House passed the so-called "stimulus" package yesterday without a single Republican vote. Thirteen Democrats deserted their party. Judging from what is being written or said, by people such as Martin Feldstein and George Will among others, the package is in trouble.

Rightly so. Nancy Pelosi and her aides cooked up the "stimulus" package with some help from Obama people. No hearings were held, no outsider input was allowed. Arrogance ruled.

After observing Pelosi since the 2006 election, you have to begin to wonder about her IQ. Much of the stuff she has produced has been idiotic, like repetitive attempts to torpedo the Iraq war and now this "stimulus" package. (And who can forget her visit to Damascus to engage in a photo-op with Syria's dictator in a skirt that revealed her upper thigh.) Did she really think the "stimulus" package, which has only a little stimulus and mostly consists of spending only a left-wing Democrat could love, would pass muster? If she did, she's dumber than dirt.

Not that Harry Reid is much smarter.

LAT re-writes Bush history, daily

The LAT seems to have set upon an objective to discredit the Bush administration. At least a half dozen articles in yesterday's paper either were critical of things Bush did or didn't do or explained how the Obama administration planned to change something.

Expo and other losers

Home Depot yesterday announced the closing of its Expo stores, confirming a theory: When you're in a store in which employees outnumber customers, you can be sure that store will close before long. A variation: When you're in a store and that store has a lot of shoppers who aren't buying anything, that store will soon close. That was Circuit City.

The economy was to blame, some will say. Nah, both chains were poorly conceived and marginally profitable in the best of times.

Word polution

Obama's use of the word "invest" is fraudulent. Obama argues that the stimulus bill includes "investments," a large quantity of it, presumably. But most of the proposed spending in the stimulus bill is simply pork.

Unemployed

California just announced that the unemployment rate slipped to 9.3 percent in December from 8.4 percent in November. The December rate is the highest in 15 years.

So, 90.7 percent of the California workforce is still working. In the best of times, about 95 percent are. Put that way, the 9.3 percent doesn't sound so bad.

The stock market has lost about 40 percent of its value from its peak, and home values are down about that much. Who's suffering more? The unemployed or those who have lost 40 percent of their net worth?

Lexington: Law v common sense

Lexington's column in The Economist's Jan.17th issue rightly argues that we in the U.S. have too many laws, too many lawsuits and too many lawyers. Kudos to Lexington.

But the column was not without a flaw: In the end, Lexington shifted to Obama worship, suggesting Obama is a reasonable man who listens. We'll see. For the present, Obama is on television too much, he's sanctimonious and he's too sure of himself. Bush at least showed a little humility.

An affliction of the young

Barack Obama is beginning to show signs of suffering from being too young for his job. People afflicted by that tend to act too fast, to act before they understand the full significance of their actions, to fail to take into account all the factors that may affect the likely outcome of their actions, to be too sure, to fail to realize that a situation is not as simple as it appears.

John Kennedy suffered from the affliction and gave us the Bay of Pigs disaster. Bill Clinton was afflicted and produced gays-in-the-military, Hillary-care and Monica Lewinsky.

Obama is president. We can't undo the decision we all made last November 4th. We can suggest that Obama slow down. Nothing he has announced in the last two days had to be announced then. Obama could have waited 30 days, six months or a year. The announcements would have been just as effective then, perhaps more so. The actions he has taken would have been more likely to be right if taken later.

Cutbacks

Microsoft reported today that it plans to cut 5,000 jobs over the next 18 months. Intel announced yesterday it was cutting 6,000. Many others have announced cuts recently.

One thing you never hear is that government is cutting jobs.

California's government especially needs to cut but it just isn't done. California's government workers are unionized and they buy legislators by financing their elections. The legislators aren't about to fire them, which is why we always hear that taxes need to be raised.

Ditch the AMT

While Congress fiddles with the Obama stimulus bill, including tax provisions, one thing they ought to include is repeal of the AMT (Alternative Minimum Tax.) Congressional Democrats and Republicans both have long agreed that the AMT ought to be repealed but both have argued that repeal would cause too big a hole in the budget. Instead, each year Congress modifies the AMT to keep it from applying to more and more taxpayers.

Deficits are no longer a concern, apparently. The stimulus will amount to at least $825 billion and will include a lot of things that easily could be put off until later but are being considered now to stimulate the economy. Congress might as well do something useful, like repeal the AMT, with a part of the $825 billion.

Telling the truth

The LAT's George Skelton finally gets to the bottom line in his column this morning when he writes: "Moreover, they [California's Democrat legislators] haven't been willing to buck public employee unions and support fewer paid holidays for state workers and a reform of overtime abuse. And they really don't want to get into scaling back public employee benefits -- pensions and retiree healthcare -- that in a rapidly changing world far exceed the private sector's and are ticking time bombs."

Skelton has long championed tax increases as the solution to California's budget crisis. It's good he's finally telling the truth.

Obama's inaugural speech

Barack Obama's inaugural address was good, not great, the LAT argued yesterday morning. It lacked soaring rhetoric but it struck the right tone.

The LAT was disappointed that Obama spoke the following words: "Our nation is at war against a far-reaching network of violence and hatred." That won't do. The LAT rejects the idea of a "war on terror" because that was a Bush concept.

Further, Obama has chosen the wrong side of the same-sex "marriage" question, the LAT argues. And, he's wrong to include tax rebates in his stimulus plan.

Other than that, ....

Obama president now

Barack Obama is president now. The nation needs him to do well. Let's assume the nation chose well last November 4th.

Bailouts for newspapers

Geneva Overholser and Geoffrey Cowan argue in today's LAT on the op-ed page for a government bailout for journalism. Newspapers need a new business model, they rightly argue, but a government takeover or government-supplied capital isn't it. Newspapers need to find a product for which people will pay, either directly or through advertising.

Sadly, people in the newspaper business seem to see themselves as victims (of President Bush and Sam Zell, many would argue.) They write and report as victims. Editorials and columns consistently and repetitively lambaste the Bush administration, free-market capitalism, open markets, free trade, etc. Too often, news reporting is biased. The treatment of Sarah Palin and her family is a case in point. That kind of commentary and reporting appeals to a segment of the population but that segment isn't large enough to make a profitable market for newspapers.

Even if newspapers did reduce biased commentary and reporting, they still would have a business problem. But a broader appeal to readers might make their situation a little less dire.

The LAT knows better

The LAT knows race discrimination when it sees it and it sees it in some parts of the U.S. Those parts shouldn't be allowed to decide where to locate polling places. Only the feds can make those decisions for such "bad" parts of the U.S., the LAT apparently believes.

It's OK to discriminate against some people in order to end discrimination against others. That's the essence of the LAT's argument. Liberals like the LAT editorial staff know a thing or two about other parts of the country even if they never leave their computer screens, and what they know is once a discriminator always a discriminator. Each of them should find a mirror and look into it.

Regurgitate

The fawning coverage of the upcoming inauguration in the LAT and elsewhere is affecting this old fool the same way okra does.

Mark Shields on wars, drafts and tax increases

Last night on PBS's NewsHour, Mark Shields claimed that America has never fought a war, before the Iraq war, in which neither a draft nor tax increases were utilized. It isn't the first time he has argued that.

The U.S. has had an all-voluntary military since 1973. Since then, we have fought wars in the Persian Gulf and the Balkans and arguably in Somalia. Obviously, we have fought in Afghanistan and Iraq as well. Tax increases of one kind or another occur almost every year, including during the years of the wars in Afghanistan and Iraq. If Shields was referring to a general tax increase, which he probably was, we did not have that during the Persian Gulf war.

Shields shoots his mouth off a lot.

The Economist on Israel in Gaza

The Economist argues in its latest issue that Israel must end the war against Hamas in Gaza. It has already silenced Hamas's rockets. Hamas will think twice before it burrows under the border to capture Israeli soldiers or sets off rockets aimed at Israeli cities, The Economist says.

Why does The Economist believe these things? Hamas has not said it will stop terrorizing Israelis and their cities. If Hamas would, peace might be possible. If Hamas would recognize Israel's right to exist that would go a long way toward peace. Sadly, Hamas has chosen, alternately, either silence or belligerence. Hamas's behavior has not been promising.

Israel has killed about 1,000 Palestinians in Gaza so far in this war. By comparison with Russia, Syria and Hamas, Israel is a pussycat. But Israel is held to higher standards.

The Economist argues that Israel cannot afford to become a pariah state. The people it is bombing are the neighbors it must live with in peace. The war has done the cause of peace profound damage, The Economist says.

What peace? Israel has been at war with its neighbors since 1948 because its neighbors refuse to live in peace. Instead, they continue attacking Israel in one way or another, always expecting a different result than the one they always get. Israel has no choice but to defend itself.

The Economist votes left

The latest issue of The Economist contains among its "leaders" (editorials) a screed against George W. Bush and irrational praise for a man almost no one knows, Barack Obama. The anti-Bush screed, which must have been supplied by the Lexington columnist, includes the following: "He wiretapped citizens without authority, secretly permitted the use of torture and dismissed prosecutors on political grounds." A recent appellate court decision held that the wiretapping was legal; torture was not a practice authorized by the Bush adminstration, as the administration has often said; and the dismissed prosecutors were political appointees who could legally be dismissed at the presidents whim -- something many presidents have done, including Mr. Bush's predecessor, Bill Clinton.

The Economist admits that Mr. Obama is inexperienced but claims he is respectful and thoughtful. How would they know? By his speeches? To quote the Bible, "charm is deceptive, beauty is fleeting."

How charming will Mr. Obama be and how will he look in 2, 4 or 8 years?

Going for broke

The LAT says today that everyone is responsible for California's budget crisis, especially the governator, but Republicans, who oppose tax increases, are mostly to blame. The LAT makes no mention of how California stacks up against other states in terms of tax burden. No surprise there.

LAT: Avoid military adventures unless victory assured

In an editorial today, the LAT offers unsolicited advice to the new president concerning military matters. Take no chances, the LAT seems to say, and don't go it alone. Insure you've got allies.

The LAT critiques President Bush, no surprise. There is no war on terror, the LAT argues. And Bush had no allies when he invaded Iraq. (The Brits, Aussies, Spaniards, Poles and others were figments of Bush's imagination, apparently.) Bush should have been more like Clinton, the LAT argues, although the LAT apparently wasn't referring to interns under the desk in the Oval Office. The Balkan war was a proper war, the LAT suggests. The U.S. had sufficient allies there, presumably. Can you name them?

LAT sensible about tax code, but inconsistent

In an editorial today, the LAT argues for a simple tax code that does only one thing: raise revenue. Good for the LAT.

The trouble is, the LAT is inconsistent. It wants simplicity but then advocates credits for energy-efficient cars and home improvements, for education, for child care, for low-income taxpayers who work, etc. These are the kinds of things that make the code complicated. The LAT can't have it both ways.

Bush bashing

In today's LAT, Bob Woodward reports on a Guantanamo official who, he says, determined that a detainee was tortured. It wasn't the techniques used that offended the official, Woodward reports, but the frequency and excessive application of techniques that amounted to torture. (Woodward reports that the detainee sometimes had to stand naked before a female interrogator, which raises the question who was being tortured, the detainee or the interrogator.)

Woodward's reporting is straightforward and accurate, presumably, until the end, when he closes with a quote from the official, as follows: "We learned as children it's easier to ask forgiveness than it is for permission. I think the buck stops at the Oval Office."

That suggests the official believes that the president should have been at Guantanamo overseeing interrogators to insure they didn't act excessively. The official probably thinks he should have been at Abu Ghraib too.

Another voice for repeal of California's supermajority requirement

On the LAT op-ed page today, Peter Schrag, former editorial page editor of the Sacramento Bee, argues for one of the following: Brain transplants for Republicans in California's legislature, fewer Republicans in the California legislature or repeal of the provision in California's constitution requiring a two-thirds majority of legislators for raising taxes or approving a budget.

Republicans have approved tax increases in the past, Schrag points out. One was Governor Ronald Reagan; the other Governor Pete Wilson. Schrag is right about both but California now is one of the highest-taxed states in the union and expenditures have increased exponentially since Reagan and Wilson served.

Schrag supplies some interesting facts about the Democrats in the legislature but his arguments against the two-thirds requirement are not new and they are unconvincing.

Hanging offenses

LAT columnist Michael Hiltzik writes today that what America needs is a show trial in which Wall Street titans, a former Federal Reserve chairman, a former SEC chairman, former Treasury secretaries and anyone else still having a positive net worth are brought before a Henry Waxman tribunal and convicted of lying, fraud, poor judgment and bad hair, guilty or not. Hiltzik's 401(k) is down 40 percent and somebody must be made to pay.

The trial will require a prosecutor having no political ambitions, or else he or she must be a Democrat or a socialist or both. Lacking crimes to prosecute, the prosecutor must make stuff up. Judge Waxman will be helpful.

Hiltzik wants to be fair but he wants convictions more.

Keynesian economics

The LAT's Peter Gosselin today explained the economic theory of John Maynard Keynes in an unrecognizable way, describing it simply as timely deficit spending. Keynes must have rolled over in his grave.

Keynes argued that government spending is expansionary but that taxing and borrowing are contractionary. If spending equals borrowing then they cancel each other out. Maybe there's a new twist but Gosselin's isn't it.

What recession?

On Saturday at Fry's Electronics the parking lot was full and you had to be careful, otherwise you could be flattened by a shopping cart.People were hauling out televisions,computers and printers. Don't these people know the economy is poor? Aren't they unemployed?

At Stater Bros. today it was like Fry's yesterday but not as bad. The cashier said business was good and Staters is hiring.

Who do you believe, Barack Obama or your own eyes?

Hype

On today's front page, the LAT's headline reads: "Job losses highest since 1945." But in 1945 the population of the U.S. was half what it is today. So, for current year losses to equal 1945 losses proportionately, they would need to be twice those reported in today's LAT. The LAT headline obviously is hype. Why would they want to hype the jobs report? Not because they have high standards and seek to report the news objectively.

Overstatement

Is it a Democrat tendency or what? Do Democrats naturally overstate how bad things are or how good their policies will make them? Are Republicans inclined to understate except on national security issues?

Listening to Barack Obama's speech yesterday brought those questions to mind. Then Tom Daschle's testimony before Congress yesterday reinforced the curiosity. Daschle couldn't have portrayed a more negative image of health care in the U.S. and Obama couldn't have protrayed a more desperate picture of economic conditions in the U.S. and around the world. Do they believe in what they're saying or is this just salesmanship? Will they continue to exagerate or was yesterday a fluke?

What does he know?

Barack Obama claims the U.S. is in desperate economic condition and the situation is becoming more desperate. How does he know? Nobody can predict the future but Obama seems to think he can.

Obama is taking a huge gamble. If it turns out he's wrong, he will have cried wolf once too often. Even if he's right about how desperate economic conditions are, the results of his gamble could be disasterous -- the dollar may tank, the deficit certainly will mushroom, the economy may remain in the tank.

If nothing is done and the economy remains in the tank, Obama may get the blame. That's probably what he's trying to avoid.

Another voice for tax increases in California

LAT columnist Michael Hiltzik joins other LAT columnists and the editorial board in arguing for higher taxes and repeal of California's constitutionally required two-thirds majority in the legislature for passage of tax increases and budgets. He also argues for repeal of Prop. 13 and against budget cuts of nearly any variety.

Budget cuts aren't necessarily bad, Hiltzik seems to argue, but nothing California now spends money on should be cut -- like schools or welfare. A cut in military spending apparently would be OK with Hiltzik if California had a military budget.

Billions for boloney

California's governator wants $44 billion from Obama's $775 billion stimulus package. And the City of Los Angeles wants its share, according to its mayor. It's a feeding frenzy. Guess who the sharks are.

CBO projects $1.2 trillion deficit for 2009

The Congressional Budget Office is projecting a $1.2 trillion budget deficit for the fiscal year that ends in September. The projection does not take into account any stimulus measures that President-elect Obama and Congressional Democrats may propose. Which raises the question: Isn't $1.2 billion enough of a stimulus? Add to that the measures that the Federal Reserve has taken which have increased its balance sheet from $900 billion to more than $2 trillion. Surely enough has been done. Isn't it time to remain calm and let the stimulus work?

California's tax refund IOUs

The LAT reports this morning that it's getting more likely that Californians who overpaid their income tax for 2008 will get IOUs instead of monetary refunds. How much will the IOUs of a bankrupt state be worth? Not much. Will the state ever have enough cash to pay off the IOUs? Not so long as the legislature refuses to cut back expenditures sufficient to balance the budget.

Democrats in the legislature think Republicans in the legislature and the governator will be blamed for the IOUs. Therefore, they'll continue to do what they always do: try to raise taxes. They think it's a winning strategy. For them, not for California.

Regulation of financial markets

Lot's of intelligent people argue these days for additional regulation of financial markets. Former SEC chairman Arthur Levitt, Jr. is one. His op-ed on the subject appears in Monday's WSJ. Levitt argues primarily for more people on the SEC enforcement staff and better risk management.

Fair enough, but is there any evidence that more regulation will do any good. Sarbanes-Oxley has been in effect since 2002 and it didn't stop the financial meltdown that occurred last year. Some would argue it did more harm than good.

Arguably, regulators spread themselves too thin, trying to regulate too much and therefore regulating very little. Levitt argues, for example, for regulation of hedge funds. This would do what? Protect wealthy investors and some banks and mutual fund companies from doing something stupid? Weathy investors can take care of themselves -- they can afford the losses -- and banks and mutual fund companies already are regulated.

Surely everyone will agree that banks, investment banks and nearly everyone else took on too much risk in recent years, and that contributed to the financial meltdown as much as anything. One reason why such risks might have seemed acceptable could be that such risk takers were pretty sure that the federal government would bail them out if push came to shove, which is what is happening. The risk takers might have been thinking that nobody ever fails in the U.S., they get bailed out instead.

Failure is a powerful teaching tool.

The LAT editorializes against disbelief

Saturday's LAT editorial, one of them, began by citing the case of Christine Maggiore, who was infected with HIV years ago and finally died recently of AIDS. While alive, Maggiore insisted that HIV did not cause AIDS and she refused treatment both for herself and for her infant daughter,likewise afflicted, who died at age 3.

That proves, the LAT seems to argue, that people who question whether global warming is caused by human activity and whether it will lead to catastrophic consequences are just plain nuts, like Maggiore.

It's a case of accepting or rejecting scientific wisdom, the LAT argues. But the chief proponents of global warming theory are people like Al Gore, who is hardly the next Albert Einstein.

The end of a model

Some argue in the media that the era in which free-market capitalism was the model by which nations determined their economic policies has ended. Our markets have had too much freedom, they argue. What we need now is less freedom and more regulation.

But our markets have not been free. Regulation is omni-present. Look no further than Sarbanes Oxley. We have not too little regulation but too much, and it hasn't helped.

Most recently, the Bush administration, with Congressional support, and the Federal Reserve have been pumping money into banks and other financial institutions, as well as carmakers. Government money demands government regulation. Has it helped?

There's no evidence so far that it has. But deficits are up and the dollar is down, hardly evidence of success.

California's budget problem

Democrats and their supporters, like the LAT, never cease to argue that the solution to California's budget problem must include tax increases. Yet they never acknowledge that Californians already have the 6th largest state and local tax burden in the U.S., behind New Jersey, New York, Connecticut, Maryland and Hawaii --according to the Tax Foundation. If the tax burden were low in California, higher taxes might make sense.