The city of Costa Mesa plans to lay off more than 200 employees and outsource 18 city services by the fall.
The layoffs would cut the city's municipal workforce by 43%. The City Council approved the layoffs in a 4-1 vote late Tuesday night, despite nearly unanimous opposition from the audience.
City officials said pink slips will go out in the next six months. The mayor blamed years of missteps by city staff and rising pension costs.
About 203 city employees will be receiving the six-month notice in the City Council effort to correct the budget.
City officials have crunched the numbers and determined that more than 200 Costa Mesa employees � or 43% of Costa Mesa's municipal workforce � could be laid off through outsourcing.
Of the 472 full-time positions, 203 city employees, give or take one or two, will get pink slips notifying them that they could be laid off in six months, said Administrative Services Director Steve Mandoki.
Tuesday's move is part of a dramatic restructuring of a city that faces potentially skyrocketing pension costs in the coming years.
Costa Mesa's own projections show that in the next few years, it will be expected to pay more into the state's public pension fund, CalPERS. It's a situation being replayed up and down the state: When the CalPERS pension fund was flush in the early 2000s, Costa Mesa did not have to pay much to the state to cover its employees' retirement costs. Now that CalPERS investments are hurting, cities have to cover the difference.
That pattern looks to continue for at least the next five years, city officials project.
Laying off hundreds of employees and their accumulating pensions by the fall would help to balance the city's budget in years to come, council members reason.
"We're going to run out of money sometime this year if nothing changes," said Councilman Eric Bever.
Costa Mesa Half-Way There
The best way to deal with public employees and their overly generous pension contracts is to not have public employees at all.
I commend Costa Mesa for a huge but incomplete step in the right direction.
Other than a small number of elected officials and a few administrative assistants, the correct number of public employees is zero.
This movie is probably one of my top ten must-watch this year. Zack Synder is one of the best visual story teller directors in our time. I love 300 the movie, one of my most favorite film. I have a feeling that Sucker Punch will be along the same line visually, except more girls. If you never seen the trailer, watch below.
Here is a book cover:
Here is one of the review, video included from Amazon Sucker Punch book's review "This art book is way thicker than I expected. It's 256 pages in a wide format hardcover. Nice. Zack Synder's previous films (300, Watchmen, Legend of the Guardian) have a thing for CGI and this latest one is not exception. This art book (and film) is like a pop culture hurricane. There girls with guns and blades, robots, orcs, castles, machine gun welding giant samurais, dragons, zombies, orcs, castles, theater and brothel. All these are from the vivid imagination of the lead, Babydoll."
The visuals in the book is a mixture of photos and art. I like how they exaggerated anime-like drawings, conceived in such a way as to reveal the primary personality and characteristics of each of the all-female team of protagonists. Each of the main female characters get several pages devoted to images of them taken from the movie. Substantial treatment is also allocated to the physical environments and to minor characters such as the World War I soldiers who figure in the film. But honestly guys the book and the film has everything we ever dream of whether it will be good or bad. Even if the movie turns out bad, it will still be greatest of the bad bunches. Come on, hot girls in Japanese school girl outfit (I don't know how it is relevant but I guess it's the creator's vision?), giant robots, Nazis, Zombies, Samurai, Medieval knights and Dragon are all in the movie? How many time we will ever get to see that. Probably not ever, until now.
This has to be one of my most favorite Mech robot in the world. A PINK bunny? really?
Tons of cool concept and eye candy images. From what I have see, it looks sweet. I hope I will get my book sometimes early next week. Peace!
Caroline Baum has an excellent column on Bloomberg today regarding money multipliers and a Goldman Sachs projection of what Republican budget cuts may do to the economy.
There were so many things in her post I wanted to reference that I asked Caroline if I could use her entire post. She graciously replied "Let 'er rip".
Take �fiscal stimulus,� for example, the idea that the government can step in to fill the void when the private sector isn�t spending and boost economic growth in the process.
Economists have been debating the pros and cons of fiscal stimulus since the 1930s, when John Maynard Keynes diagnosed the problem as one of inadequate private investment and prescribed public spending, financed by borrowing, as the cure.
The discussion hasn�t advanced very much in eight decades. Sure, economists have devised elegant mathematical models that purport to show that $1 of government purchases translates into -- take your pick -- no increase in gross domestic product (the multiplier is zero, according to Harvard�s Robert Barro) or $1.50 of GDP (a multiplier of 1.5, according to Berkeley�s Christina Romer, who was chairman of President Obama�s Council of Economic Advisers when the $814 billion stimulus was crafted in 2009). They haven�t really proven anything.
Keynesian economics went into hibernation in the latter part of the 20th century following an array of stimulus failures on the part of both Democratic and Republican administrations in the 1970s. The only thing the spending stimulated was stagflation.
In the 1980s, inflation came down, the Berlin Wall came down, economists thought the volatility of the business cycle had come down, and the notion of government as the solution went out of vogue. Keynesians All
All it took was a good financial crisis for the Keynesians to come out of the woodwork.
The debate over fiscal stimulus went viral last week (at least in the geek world) with an economic forecast from Goldman Sachs Group Inc. (GS), a counter from Stanford University economist John Taylor (he of the Taylor rule), and an addenda from Goldman yesterday.
The Goldman gang projected an economic drag (that would be the opposite of stimulus) on GDP growth of 1.5 to 2 percentage points in the second and third quarters if House-passed budget cuts of $61 billion for the remainder of fiscal 2011 become the law of the land.
Asked about the Goldman forecast Tuesday following testimony to the Senate Banking Committee, Federal Reserve Chairman Ben Bernanke demurred.
�Our analysis doesn�t get a number quite like that,� he said. �Two percent is an enormous effect.�
He could have added: �especially when the rest of government is growing.� Wrong on Everything
�Total government spending is up 6.7 percent in 2011 from 2010,� Taylor told me in a telephone interview.
Defense spending is rising, as are non-discretionary outlays for programs such as Medicare and Social Security that are on automatic pilot.
The proposed cuts would reduce non-defense non-security discretionary spending, a teensy share of the federal budget, back to 2008 levels.
In a Feb. 28 blog post, Taylor said Goldman�s analysis was �wrong.� He criticized it for failing to consider the beneficial effects that expectations of lower future deficits and smaller tax increases would have on the economy. He criticized the methodology for relying on the same �large multiplier theory� used to justify the 2009 stimulus. And he criticized the assumption that proposed spending equates with actual spending, which trickles out over time.
Aside from that, Mrs. Lincoln, the Goldman analysis was spot on.
�Alchemists and Quacks�
This fundamental disagreement among professional economists about whether government spending helps or hurts represents the state of the art, or science, today. In what other science do practitioners design a treatment plan based on inconclusive proof that the medicine does any good?
There are no control studies in economics, no way to hold everything else constant to determine the impact of one variable, no way to falsify conclusions that models spit out. Financial Times columnist John Kay, writing yesterday about risk modelers, referred to them as �alchemists and quacks.�
A bit harsh, perhaps, but he�d probably hold macroeconomic models in the same high regard.
Whenever oil prices spike, modelers instantly project how much the increase will subtract from GDP growth. No mention of why prices are rising. Is it the result of a supply shock, which results in higher prices and reduced quantity demanded, or an outward shift in the demand curve, which equates with higher price and quantity demanded? There is a difference.
Known Knowns
In microeconomics, which is the study of how individuals and firms interact in specific markets, certain truths are self-evident. Which doesn�t mean economic planners can see them. Governments across Asia right now are using subsidies and price controls to ease the pain of higher oil and food prices even though their actions will exacerbate the crisis.
Goldman countered Taylor�s critique with a clarification. The projected 1.5 to 2 percentage point hit to GDP was to the quarterly annualized growth rate, not to the level. Thanks for that.
As I said before, we entered the 21st century with macroeconomics still looking for an Age of Enlightenment.
Five thousand years ago in ancient Egypt, medics used leeches to suck the blood of ill patients, believing the practice could cure everything from fevers to food poisoning.
Today�s physicians have largely forsaken bloodsuckers for modern medicine. It�s about time macroeconomics emerged from the Dark Ages as well.
Caroline Baum, author of �Just What I Said,� is a Bloomberg News columnist. The opinions expressed are her own.)
Dark Ages Indeed
I am wondering "How many times does an economic model have to be discredited before it is discarded?"
This idea that government spending can stimulate the economy is total nonsense. If it worked, we would see something more than 2.8% economic growth for a deficit of $1.4 trillion dollars.
The Fed purchasing Trillions of Fannie Mae and Freddie Mac bonds did nothing for housing, nor did several rounds of housing tax credits.
Government spending accounts for an ever-increasing share of GDP. Moreover, the only reason GDP is up at all is that by definition, government spending adds to GDP. The multiplier is actually negative. It takes an increasing amount of "stimulus" spending just to say in the same spot.
Taylor Model Nonsense
Taylor criticizes the Goldman multiplier model and rightfully so.
However, his own economic model is fatally flawed. He believes all the Fed needs to do is go on autopilot, hiking or lowering interest rates in accordance with the Taylor Rule.
In economics, a Taylor rule is a monetary-policy rule that stipulates how much the central bank would or should change the nominal interest rate in response to divergences of actual inflation rates from target inflation rates and of actual Gross Domestic Product (GDP) from potential GDP. It was first proposed by the U.S. economist John B. Taylor in 1993. The rule can be written as follows:
In this equation, is the target short-term nominal interest rate (e.g. the federal funds rate in the US), is the rate of inflation as measured by the GDP deflator, is the desired rate of inflation, is the assumed equilibrium real interest rate, is the logarithm of real GDP, and is the logarithm of potential output, as determined by a linear trend.
Unmeasurable Economic Gibberish The idea that interest rates can be set by mathematical modeling when the variables themselves are subject to debate as to how to measure them is preposterous.
Take the CPI for example. I believe home prices should be in the CPI. They used to be.
Somewhere along the line some theorist decided "owners' equivalent rent" (OER) was a more valid concept. What is OER? It is the amount one would pay himself if renting a house from himself. It is the single largest component of the CPI. The measure of inflation from 2002 to now would be wildly different if one used actual home prices instead of OER.
Which model is more accurate? Look at the Fed's chasing-its-tail actions hiking in baby steps on the way up, then lowering interest rates to zero when the economy collapsed.
ECB President Jean-Claude Trichet, a Keynesian Clown Too
Just today, Jean-Claude Trichet is talking about hiking rates in Europe.
�There is a strong need to avoid second-round effects,� Trichet said, calling for moderation from wage and price setters. The ECB is �prepared to act in a firm and timely manner.� This whole idea of pass-through inflation and second-round effects is yet more Keynesian claptrap. If someone pays more for gasoline, they have less to spend on clothes. It is as simple as that, but not to those purposely hiding behind economic models and their multiplier effects.
Alchemists and Quacks Galore
Making decisions on flawed models is bad enough in closed economic society.
Errors in every model are exacerbated by the fact we have a global economy subject to economic pressures of all kinds from countless places.
Financial Times columnist John Kay, writing yesterday about risk modelers, referred to them as �alchemists and quacks.� There are no control studies in economics, no way to hold everything else constant to determine the impact of one variable, no way to falsify conclusions that models spit out.
On that basis, the analyst from Goldman Sachs, Taylor, Bernanke, Krugman, Greenspan (and countless others) are all quacks.
Why Model at All?
There are no control studies because it is impossible to do them.
The real world is constantly changing, while mathematical models, Goldman's and Taylor's alike sit there as unmeasurable economic gibberish, when every component is subject to measurement errors and debate about what needs to be measured in the first place.
End the Fed
The free market could not possibly have done a worse job in setting interest rates than the perpetual chasing-their-own-tail central bank tactics that continually create boom-bust bubbles of ever-increasing amplitude in both directions.
If central bankers knew where interest rates should be we would not be in this mess, or at least the mess would be smaller. For further discussion about what the Fed does and does not know, I strongly encourage you to read the Fed Uncertainty Principle.
Ironically, the one thing the Fed never mentions and the ECB seldom mentions is money supply.
Here's the deal: Inflation is a direct result of the cheapening of money. Strike that, inflation IS the cheapening of money and central bank policy in conjunction with fractional reserve lending is the cause.
Central bankers do not talk about such things because they are at the root of the problem.
The solution of course is to not only get rid of the Taylor rule, but to get rid of the Fed, the ECB, and central bankers around the globe.
A large number of people have recently come out in support of extortion, bribery, coercion, and even slavery. They don't realize it, but I can make a rock-solid case.
Here is a partial list of prominent names willing to support or ignore slavery for political reasons.
Paul Krugman, a Nobel prize winning economist and writer for the New York Times
Bill Maher, an extremely popular stand-up comedian and host of HBO Real Time with Bill Maher
Stephen Colbert host of Comedy Central's The Colbert Report
Harold Meyerson, a columnist for the Washington Post.
Yves Smith author of the site Naked Capitalism and one of the most popular economic bloggers country
Rick Ungar, a writer for Forbes magazine.
Of course, no one on the above list has actually stood and said "I support slavery", yet they all do. I will build the case piece by piece, ending with a charge of slavery from two different angles, from the point of view of the employer and the employee.
Meyerson supports collective bargaining as a "right". I suggest something different.
Collective Bargaining is Extortion
Collective bargaining is not what its name indicates. In fact, it means exactly the opposite of what you'd guess. Collective bargaining refers to the obligation of an employer to recognize the elected representatives of a group of workers and his further obligation to negotiate with those representatives. This last part is what makes 'collective bargaining' extortion.
Under collective bargaining laws, employers have to recognize an elected union and have to negotiate with them.
Over time, the repetitive process of extortion, coercion, and bribery (shown in the above videos), results in politicians taking bribes (votes or cash) in return for legislation unions want. No one speaks for the taxpayer any step of the way.
Businesses do not have a choice other than to move their business to another state. Then when they do, the workers cry foul. Those businesses unable or unwilling to move are slaves to the system.
The right to terminate the employer-employee relationship is a fundamental right of both employer and employee. Employment should be mutually beneficial to employer and employee and open to termination by either when it becomes non-beneficial (limited of course by any voluntary contractual agreements).
Collective Extortion
Meyerson's comparison to Egypt is 180 degrees reversed. Those Madison protesters were not fighting for democracy but rather to preserve a system of collective extortion.
Unions threaten, bully and bribe their way into power and want more every step of the way.
She approaches the situation from the angle that public union workers are not overpaid, citing self-serving studies by union sympathizers at the Economic Policy Institute.
Her most preposterous claim is "The one group in which public sector workers are modestly more highly paid is non-high-school graduates, which one assumes include sanitation workers and janitors. Even then, the premium is not large."
For starters, no one in the private sector gets benefits like those in the public sector. Those who did (GM, Ford, Airlines) all went bankrupt.
Job by Job Comparison
Union apologists frequently claim that stats that show union workers make no more than their exact non-union counterparts. In some cases that may be true, but when so, it's primarily because of prevailing wage laws.
If states have to pay a "prevailing wage" and that "prevailing wage" is a union wage, then by definition non-union wages will be as high, by mandate. Is that a valid comparison?
Prevailing wage laws not only rip off taxpayers, they also discriminate against businesses who can do the job better, for less money.
Education Red Herring
The most frequently used reason for the preposterous claim that public workers are underpaid is an assertion that public workers are better educated.
Please consider prison guards, transit workers, police, janitorial services, etc., most with nothing more than a high school education plus a little training. Many of those groups have 6 figure pensions.
Nonetheless, let's pretend for a moment public sector workers are better educated. Certainly teachers are likely to be better educated than the average person in general. I will grant you that, and there certainly are a lot of teachers.
However, what would those degrees be worth in the private sector? What is an English degree worth? Art? Poetry? PE?
Let's now consider highly educated persons working for the BLS on unemployment statistics. What are those employees really worth given a Gallup survey produces comparable results for free?
Do we need the Department of Education? The Department of Energy? The BLS?
Look at all the highly educated people in the department of education. Then look at US test scores. Then look at the failure of "No Child Left Behind".
Should the Department of Education exist at all? The Department of energy? HUD?
Why?
I would fire every one of them tomorrow, regardless of their education.
All of the people in those bureaucracies may very well be highly educated, but how many of them do anything useful that the private sector would not do better, faster, and cheaper?
To be fair, I am quite sure that there are a small percentage of workers who would make far more in the private sector. However, many of them, if not most of them would struggle to find a job at all.
We should cast them all free. Then we can see what they are worth. Instead we tax everyone to death via a combination of income taxes, sales taxes, and property taxes on the assumption public workers are worth more.
Public Unions Have Bankrupted Cities and States
State pension plans are $3 trillion in the hole, and that does not count city and county plans that are likely another $3-5 trillion in the hole. Public unions have bankrupted hundreds of major cities. The day-of-reckoning is upon us.
Gina Raimondo, a Rhodes Scholar and treasurer of Rhode Island is one of few politicians willing to admit the true score. While most politicians cite underfunded liabilities of $1 trillion, the true score is $3 trillion on an actuarially sound methodology. And that is just for state pensions. It does not include cities.
GINA RAIMONDO: Today, Rhode Island has a $5 billion unfunded liability, which is the highest unfunded liability per capita of any state in the country.
In 1998, our budget was paying $145 million into the pension. This year, we will be $335 million. And five years from now, it will double again.
PAUL SOLMAN: In Rhode Island, as elsewhere, the root cause is plain and simple: Governments gave workers benefits instead of raises, salting away a pittance to pay for them.
GINA RAIMONDO: So, I could promise you today, in 25 years, when you retire, you will have a very rich benefit. And by the time you come to collect, I'm long gone. I'm no longer in office.
PAUL SOLMAN: But without dramatic changes to the pension system, Rhode Islanders face dramatically higher taxes and/or austerity.
GINA RAIMONDO: This problem of the pension, Rhode Island faces it; every state in the country faces it.
The unfunded pension liability nationwide is a $3 trillion problem. TARP, we were prepared as a country to put aside $700 billion. The bailout of Fannie and Freddie was $400 billion. They all pale in comparison to the enormity of this financial challenge.
And marginal change won't fix it. Tinkering won't fix it. Pretending we don't have a problem won't fix it. Looking in the eye of this enormous financial problem honestly and recommending fundamental changes to a system, I believe, is the solution.
Union members say it would be unfair to renege on promises. Actually it wouldn't. The reason is the contracts are fraudulent. Benefits were "guaranteed" via a process of extortion, threats, bribery, and coercion.
There is no legitimate need to honor fraudulent contracts. Secondly, it is less fair for those just out of college with low paying jobs and no chance of huge benefits to bear the brunt of the burden.
Nor is it remotely fair to tax high income wage earners for this purpose. If there is a tax on high wage earners, it should go towards reducing the deficit, not to a collective group of extortionists.
Proposed Pension Underfunding Solution
My solution would be to tax public union benefits above a certain amount at an extremely high penalty rate of say 90%. Those taxes could be fed back into the pension system to guarantee wages and benefits for those under the threshold.
The vast majority of union member should support my plan because it would guarantee their benefits. Should it come down to a bankruptcy or default situation instead, a bankruptcy court may not be as beneficial to those on the bottom of the totem-pole as my proposal.
Colbert Report and HBO Real Time with Bill Maher
Both Stephen Colbert and Bill Maher have had numerous segments lately in support of public unions. I think Colbert is one of the funniest guys on the planet. It is one of the few shows I enjoy watching.
However, the following union-suck-up was out of character as to how challenging he normally is on guests.
In the above clip, Randi Weingarten, the president of the American Federation of Teachers, talks about "people's rights" and Colbert not only goes along with it, but feeds her powder-puff pitches all along the way.
The fact of the matter is there are indeed rights, such as the right to not belong to a union and still have a job, the right to not have union dues go to things you do not support, and the right to start a business and hire who you want as long as you do not discriminate by race, religion, etc.
In one recent episode of Real Time, Maher said he does not understand the negative sentiment towards public unions.
Perhaps Maher would "get it" if HBO bumped his show off the air with a statement "I am sorry Bill. You have a popular show, but we need to cut programming. Based on union seniority rules your show is next to go".
Unger makes the preposterous claim that public unions pay their own way via deferred compensation.
Unger is another one who simply does not understand exponential math and what it means when pension benefits need to accrue at 8% a year to stay solvent. Nor does he seem to understand how deep in the hole these pensions are, and that unions getting in bed with politicians is the problem.
Enormous numbers of public union workers can retire at age 55, collecting more years in benefits than they ever worked, especially if they are in the public safety sectors. They make more in retirement than they do working.
Unger has no idea how much one would have to contribute to collect the benefits actually promised. However, that point is actually moot because ....
Public Union Members Contribute Nothing
Regardless of what public union workers or their supporters claim to contribute, they actually do not contribute a dime. Their salaries are taxpayer funded. Taxpayers pay those benefits.
Think of it as a highway robber holding you up at gunpoint, demanding your wallet, and then claiming he funded his retirement with it.
Once again, to be fair, most public workers do some work. However, pay scales are totally distorted by extortion, bribery, and coercion compounded over the years.
And, as I have pointed out, many of those jobs should not exist at all. In those cases it is exactly like highway robbery.
Executive Pay Distributed
One seriously misguided economic blogger went through a hypothetical example that took $150 billion in bonus money of executives to $500 to every man woman and child in the country. Supposedly that would fix things.
Here are a couple simple questions:
Exactly how would giving everyone in the country $500 fix a $6 trillion (or whatever) pension hole?
Exactly how would it fix the problem of union extortion, bribery, coercion?
Preposterous Math
Numerous union apologists cite preposterous math that says TARP recipients got $12 trillion. They fail to point out those were loans not gifts. To be sure, taxpayers are on the hook for AIG, Fannie and Freddie, GM and numerous other things but it is absurd to present this as if was a gift of $12 trillion.
Even if it was, how would it excuse bribery, coercion, and fear-mongering by public unions? Since when do two wrongs make a right?
Even FDR Understood the Problem
Public unions get into bed with management and politicians and work out sweet deals for themselves at taxpayer expense. No one looks out for the taxpayer. Even FDR understood the problem.
All Government employees should realize that the process of collective bargaining, as usually understood, cannot be transplanted into the public service. It has its distinct and insurmountable limitations when applied to public personnel management.
The very nature and purposes of Government make it impossible for administrative officials to represent fully or to bind the employer in mutual discussions with Government employee organizations.
Particularly, I want to emphasize my conviction that militant tactics have no place in the functions of any organization of Government employees.
A strike of public employees manifests nothing less than an intent on their part to prevent or obstruct the operations of Government until their demands are satisfied. Such action, looking toward the paralysis of Government by those who have sworn to support it, is unthinkable and intolerable.
To Krugman, this is all about Republicans trying to stick it to Democrats.
The ultimate irony in Krugman's rant is that he is willing to overlook extortion, bribery, coercion and slavery as long as it suits his purpose.
Such is the "Conscience of a Liberal".
Bear in mind, he did raise a second issue, as have other bloggers, about language in the bill that would allow Wisconsin to "sell any state-owned heating, cooling, and power plant or may contract with a private entity for the operation of any such plant, with or without solicitation of bids, for any amount that the department determines to be in the best interest of the state."
Krugman is entirely correct on that provision. There is absolutely no excuse for un-bid contracts of that scope. That "un-bid" provision should be stricken from the proposed law.
Union Intimidation Tactics Harm Public Safety
Last week I received an email from the wife of volunteer firefighter Chris Olbu. Chris is a firefighter in the state of Washington. If ever there was a set of true public servants, it is volunteer fire department workers.
I salute public hero Chris Olbu, and all those in his shoes.
Olbu also works for Boeing, as a firefighter. He does not want to be in the union, but he has to be in the union to work for Boeing in his current position. Moreover, as a result of being in the union, he can no longer be in the volunteer fire department for his city.
To get employment Chris has to be in a union he does not want to be in.
Chris has to pay union dues for causes he does not support.
The International Association of Fire Fighters (IAFF) union (not Boeing), forced Chris to resign from the volunteer fire department.
His resignation harms public safety
Chris is a Slave
Notice the cascade of events. Chris has no choice as to whether or not to belong to a union. To get a job at Boeing as a firefighter he has to belong to a union. This came about in the usual way of course, which is to say extortion, bribery, and coercion.
As a result of that involuntary servitude, the International Association of Fire Fighters (IAFF) is now telling Chris what he can or cannot do with his free time.
I am looking for free legal assistance from lawyers in the state of Washington willing to pursue this case for Chris, all the way to the Supreme Court of the United States if necessary. I am also looking for similar volunteers in other states for those in a situation like Chris.
Corporations are Slaves Too
Boeing would gladly hire Chris as a non-union employee, but it can't. Instead Boeing is pondering moving various operations to states that do not support slavery.
There is one other point as well. Promotion in unions is not based on seniority but rather longevity. No matter how much better Chris may be at his job, he will always play second fiddle to anyone with higher seniority.
Both corporations and talented employees suffer at the hands of slavery.
President Obama is the Slave Master
Please consider the following quote heard recently at a tea party in Denver.
... They are trying to distract you to make you think that what they are all about is the right thing. In reality you�re just a pawn to them, a pawn that the Democratic Party and Barack Obama are using to keep them in power. This is a form of slavery. Liberals are enslaving themselves. Barack Obama is their slave master and they are doing his bidding for him. They don�t see it that way but that�s how it is.
Was it a white racist who said that?
No it wasn't. It is the man waving the Gadsden flag in the following image.
That is Leland Robinson, 51, a Denver native. He was hounded and harassed in Denver by an aggressive woman in a purple SEIU shirt who told him ...
"You�re an entrepreneur, so you don�t work. You don�t know what work is until you get into an educational area. � You�re uneducated, unethical, immoral, and you don�t know what life is. That�s your problem. Why don�t you go behind that fence where you belong? Why don�t you go back with your own kind?�
Another woman in red made further racial comments "I asked you a question: Do you have any children? That you claim, that you claim."
A bystander asked "What did you mean when you said does he have any children that he claims?"
To which the lady in red replied: "Because he�s such a free spirit and an entrepreneur, I would assume that he�s not supporting children."
Paul Krugman, Bill Maher, Stephen Colbert, Yves Smith, Harold Meyerson, Rick Ungar, and countless others are all willing to overlook slavery because it suits their political and socialist agenda.
The blatant hypocrisy of it all is they accuse others of playing politics.
Challenge to Stephen Colbert
I would like to see Leland Robinson or Chris Olbu on the Colbert Report to discuss these issues, and I would gladly take on Bill Maher myself.
Numerous Problems
To be sure there are numerous other problems. The budget deficit is $1.4 trillion. We waste far too much money on warmongering. I would slash military spending an enormous percentage if I could decide.
We certainly have a situation of income inequality. The root of that problem is perpetual Fed bubble blowing with bank bailouts after every crisis. Too big to fail needs to stop, and it needs to stop now.
The irony of executive pay and banker bailouts is they are a result of Fed policies, not a result of lack of regulation. The solution is to end the Fed.
Unfortunately, people want to tie numerous problems together. I have received many misguided responses from people saying they would support reining in the unions if we would put bankers in jail.
However, attempts to turn this into a collective finger-pointing exercise or stacks of red herring issues cannot and will not fly. The key point is regardless of what one thinks of Walker's motivation, the fact remains he is on the right side of the issue.
Please play the following video to the end. It's depicts an extremely important concept about liberty.
The Philosophy of Liberty is a flash animation created by Kerry Pearson based on the prologue of Ken Schoolland's book, "The Adventures of Jonathan Gullible: A Free Market Odyssey".
It's a basic summary and introduction to the theory of individual rights.
"It certainly presents basic economic principles in a very simple and intelligible form. It is an imaginative and very useful piece of work."
--Milton Friedman, Nobel Laureate in Economics
Slavery is the Issue
The motivation of Governor Walker or any other governor, is not the issue here. Slavery is the issue, and forced union membership and forced collective bargaining are nothing more than slavery imposed via campaigns of extortion, bribery, and threats, for the benefit of the slave masters.
Somehow things are so twisted that slavery is now seen as a "right" even though collective bargaining and forced union membership robs businesses of their rights to hire, robs workers of their right to seek employment, and robs workers of their right to do what they want with their free time.
There is no excuse for slavery no matter how hard union apologists try, or how many red herrings they throw. To end this form of slavery, we need a set of national right-to-work laws, an end to collective bargaining by public unions, and an end to Davis-Bacon and all prevailing wage laws.
Cash strapped states are furious with Amazon.Com over sales tax collections. Several states passed laws or have sent Amazon bills. Amazon's response in every case so far is to leave the state.
Amazon to close Texas distribution center amid sales tax fight
Online retail giant Amazon.com will close its suburban Dallas distribution center amid a dispute with the state over millions in uncollected state sales taxes, The Associated Press reported Thursday.
The AP obtained an e-mail Thursday sent to Amazon employees by Dave Clark, the company's vice president of operations.
Clark wrote that the center in Irving will close April 12 because of the state's "unfavorable regulatory climate."
Last year the Texas comptroller's office sent Amazon a demand for $269 million in uncollected sales taxes, plus penalties and interest, from 2005 through 2009.
The state contends that Amazon.com is responsible for the sales tax it has not collected on online sales made in Texas.
The state is seeking money from Amazon because its distribution center in Irving.
Under a 1992 U.S. Supreme Court decision, that physical presence means Amazon potentially could be required to collect sales tax on transactions in Texas, according to legal experts.
Amazon, which reported $34 billion in sales last year, has also been the target of numerous lawsuits filed by other states seeking sales taxes on online purchases.
Amazon officials have not commented publicly on the tax bill from Texas, but the Seattle-based company said in a securities filing last year that it intended to fight the demand.
Amazon filed a lawsuit against the state last month, demanding that it produce the audit that it used to arrive at the $269 million figure.
In his e-mail to staffers, Clark said Amazon also is scrapping plans "to build additional facilities and expand in Texas, bringing more than 1,000 new jobs and tens of millions of investment dollars to the state."
Comptroller Susan Combs has estimated that the state loses $600 million a year from untaxed online sales. The comptroller's office said last year that it has sent demands for payment to other online retailers similar to what it sent Amazon.
ACLU, Amazon face North Carolina tax collectors in Seattle court
North Carolina tax collectors say they want Amazon.com to turn over the names and addresses of customers in their state and a description of all purchases so they can get the sales-tax money they're owed.
But the American Civil Liberties Union argues that if Amazon is forced to comply with North Carolina's data demands, Internet users would start to think twice about buying controversial books, music and movies, violating their constitutional rights to free speech.
Amazon, which is being audited in North Carolina, says it has provided massive amounts of data about sales to state residents since 2003, including the city, county and ZIP code to which an item was shipped, the product code and total transaction price, but it did not turn over names and addresses.
Amazon says disclosure of such data would have a chilling effect on people's willingness to buy books, music and other "expressive works" that might reveal an intimate fact about them. The ACLU agrees, saying the seven Amazon customers it represents include an elected official in Asheville, N.C., who is an atheist.
"The intervenors have bought books about divorce, atheism, personality disorders, cancer and numerous politically charged issues," said ACLU lawyer Aden Fine. "It's no surprise the intervenors want to keep that information private and free from government scrutiny."
North Carolina is one of several financially strapped states that have made more of an effort to collect sales tax from online purchases in the past two years.
While the recession has hit many stores hard, Internet-only retailers continue to grow as shoppers become more comfortable buying online. North Carolina argues that because many online shoppers never pay sales tax, Amazon enjoys an unfair advantage over bricks-and-mortar stores. (North Carolina merchants collect state and local sales tax of 7.75 percent in most counties.)
Under a 1992 U.S. Supreme Court ruling, North Carolina cannot force Amazon to collect its sales tax if it doesn't have a physical presence in the state.
Amazon has no offices or warehouses in North Carolina, so state lawmakers last year decided the company's relationships with local marketing affiliates amounted to a physical presence. Amazon responded by severing ties with its North Carolina affiliates, a move it also made in Rhode Island and Colorado.
A few days after Amazon filed its lawsuit, North Carolina offered a deal to Internet retailers, saying it would give them until the end of August to sign an agreement to begin collecting sales tax on products sold to state residents. In return, the state would not come after them for years of back taxes, penalties or interest, and it would not demand data about customers who bought from them.
Of about 450 e-commerce companies that received the offer, 24 entered into an agreement with North Carolina, said revenue-department spokeswoman Beth Stevenson. The state estimates it will lose $162 million in uncollected sales tax from online purchases this year.
Meanwhile, U.S. Rep. Bill Delahunt, a Democrat from Massachusetts, has introduced federal legislation that would allow states to require online retailers to collect sales tax regardless of whether they have a local presence.
You probably are aware that online vendors � such as Amazon � do not charge sales tax to customers outside their home state. You also know that this has created much the controversy with the states, ever eager to tax to anything that moves within their borders. To be fair, if a person went a sticks-and-bricks store to purchase an item, the transaction would be sales taxable. It is the intermediation of the internet that presents the problem. And it is a problem. For example, I recently purchased an item from Britain. Would it be reasonable for that vendor to charge me Kentucky sales tax, as I live in Kentucky and the transaction would otherwise go untaxed?
NC went after Amazon, requesting records of Amazon�s transactions with North Carolina residents. Think about this for a moment. The state is forcing a company to release its records about you. You are not involved in the litigation; heck, you are not even aware of the litigation. The privacy concern here is staggering.
The American Civil Liberties Union joined in a lawsuit against NC, and very recently NC settled the case. The state agreed to pay almost $100,000 in legal fees and ceased its action, but it reserved the right to go against Amazon and/or its customers in the future.
North Carolina had previously gone after Amazon for sales tax on the argument of economic nexus. This means that a company has �nexus� with a state if it derives a financial benefit from commercial transactions within that state. This is an interesting argument, in that a variation of that argument would subject me to New Zealand taxes for ordering the Lord of the Rings video trilogy. In Amazon�s case, NC argued that the economic nexus was provided by the affiliates, which are blogs or other online sites that provide links to products and/or offer coupons. I listen to online radio, for example. If a particular song captures my ear, I can click on the site, find out the artist and likely have a link to purchase the artist�s CD. That is an example of an affiliate.
North Carolina continued to chase Amazon for taxes before those affiliate ties were severed, resulting in the settlement mentioned above. Do you see any winner in this story?
U.S. District Judge Marsha Pechman ruled last October that the North Carolina Department of Revenue had overstepped its boundaries with its request for personal information, and noted that there is "no legitimate need" for them to have such information.
"The fear of government tracking and censoring one's reading, listening and viewing choices chills the exercise of First Amendment rights," said Pechman.
According to Rudinger, Amazon was not part of the settlement, and it was unclear whether Amazon's lawsuit regarding the state's audit was pending on appeal.
In addition to Amazon, the North Carolina Department of Revenue is also facing lawsuits from many online travel companies such as Travelocity.com, Travelscape, Hotels.com, Trip Network Inc. and Orbitz due to the state and counties' tendencies to "arbitrarily change the contracts" they have with hotels in North Carolina.
As states grapple with increasingly squeezed budgets, one simmering battle -- trying to collect sales taxes from retailing behemoth Amazon has heated up considerably over the past year. The jury's still out on how much money states like Rhode Island and North Carolina (which is thick in litigation with Amazon over this very issue) will get from online sales-tax initiatives. But Texas has issued its own bill to Amazon -- to the tune of $269 million.
Not Really Doing Business in Texas?
The issue of uncollected sales tax runs deeper in Texas because Amazon maintains a distribution center in Irving (close to Dallas-Forth Worth International Airport), which it opened in 2006. Two years later, the Texas comptroller's office launched an investigation into Amazon's bifurcated status.
The company defended its lack of sales tax collection by saying Amazon doesn't actually own the distribution center. It's owned by a subsidiary, Amazon.com KYDC LLC, which is technically based in Kentucky. Assigning the distribution center to a different holding company, by Amazon's logic, means it doesn't have nexus there -- and that's why it feels it's off the hook.
Of course, Texas disagrees, having estimated it loses $600 million a year from untaxed online sales. With a bill sent to Amazon, that opens the door to long-expected litigation between the two parties as well as to the possibility that other states will jump on the collection bandwagon. It may also hamper the retailer's plans to open several more distribution centers around the country because the prospect of sales tax collection may prove too much -- and too costly -- of a headache.
Amazon Threatens to Leave 10,000 California Affiliates
Amazon.com Inc. (AMZN), the world�s largest online retailer, has threatened to sever ties with more than 10,000 affiliates in California amid a dispute with the state over proposed taxation of Internet purchases.
Four state proposals aimed at forcing Seattle-based Amazon to collect taxes from residents may be unconstitutional and lead to job losses, Paul Misener, Amazon�s vice president for global public policy, wrote in a letter to the California Board of Equalization.
Amazon�s affiliates put ads for the retailer on their websites and then get compensation when shoppers click through and buy items. Californians could still shop at Amazon.com, though state businesses would miss out on the ad sales, potentially hurting tax revenue, the company said in the letter. When other legislatures passed similar provisions, Amazon terminated its affiliate relationships and then collected no sales tax for those states, according to the letter.
Amazon and California tussled over the tax issue in 2009, when the state considered a similar measure. Governor Arnold Schwarzenegger vetoed the bill after Amazon said it would terminate the affiliate relationships, according to the letter. That same year, Amazon cut ties with affiliates in Rhode Island, North Carolina and Hawaii over tax disputes.
I am an Amazon affiliate in Illinois. I make 30 cents or something when someone buys a book on my recommended reading list. It does not cost anyone a penny.
Indeed, if someone would rather that 30 cents go to Amazon instead of me all they have to do is remove the tag "mishsglobalec" from the link. Note that 30 cents is a made-up number because it varies by price and I do not even know the percent. My recent statement shows a total of $246.62. I wonder how many books that is.
Will getting rid of 10,000 Amazon affiliates in California accomplish anything? If so what, and in what timeframe?
Consider my blog for example. Will I change my recommended reading list or stop pointing to Amazon? The answer is no. Amazon provides a good service and fast execution in my opinion. I am not using Amazon for the money. Others may be, but how much would it matter?
The following text and images courtesy Lacoste + Stevenson Architects for their Reg Bartley Oval Ground Staff Facilities and Public Amenities in Rushcutters State Park NSW, Australia.
The refurbishment of the Reg Bartley Oval Grandstand at Rushcutters Bay in Sydney required restoration of the existing grandstand and the construction of new public amenities and ground staff facilities. The brief included demolition of three buildings that surrounded and attached to the grandstand, cutting it off from the street and parkland behind.
The design strategy was to restore the existing structure�s prominence in the parkland and create better physical and visual connections around it. In order to minimize the impact of the new additions, they are placed directly behind the grandstand and divided into 3 smaller buildings instead of one building, reducing the overall bulk and scale. The new buildings are set off the grandstand with a passageway between them.
Connection between the new and the old is on the first floor via a steel mesh walkway that lightly bridges the four buildings allowing light to filter below. The ancillary buildings are clad in the same weatherboard profile as the grandstand and with the heights of the new buildings aligning with the grandstand; they echo the scale and expression of the grandstand.
The ground floor of the three new buildings houses the male and female public toilets and a storage room. At high level, the timber fa�ade into each of these rooms is perforated with a flower pattern allowing natural light and ventilation into these spaces, casting flower patterns around the rooms. The ground staff facilities on the top floor are also animated with perforations and views to the sky and trees through round skylights.
I mentioned earlier this week that I�m DONE with the decluttering of the basement�this is huge for me peeps. HUGE. Every year for the past few years, I spend what seems like half the year decrapifying this space.
This time, it only took me a whole year. :)
For reals. Seriously. A YEAR.
One thing I have learned on my decrapification journey is that ridding your home of STUFF is not something you can do just once every twelve months. At least in our house � it�s a constant process.
Now our home is a bit different than most. I mean, I tend to gather stuff faster than the average person. It�s the nature of my �job� � being a home decor blogger. Add to that a thrifty home decor blogger, and it just spells T.R.O.U.B.L.E.
It physically pains a thrifty blogger to leave that perfect such-and-such or so-and-so at their local Goodwill because if I see it, leave it and walk out without it, OHDEARLORDIMIGHTNEEDIT!!!
Like, tomorrow! Or next week. Or next year?
Or something like that. :)
Sheesh. It is intense people.
But over the past year, I was increasingly over the STUFF. I wanted our house back. I wanted empty shelves back. And I was tired of seeing wasted money sitting around.
I got really intense with it late last summer when my father-in-law passed away. As we went through his house (for weeks), I found my tolerance for our unused, unappreciated stuff was less and less.
I decided then that I only wanted items in our house that 1.) we found useful (and currently USED) 2.) were meaningful to us or 3.) we loved (things that were passed down, or that we truly enjoyed).
If it didn�t meet one of these three, it was gone. Our biggest problem area has always been our basement. It�s just a prime landing spot for junk, obviously.
I�m happy to announce I have gone through and organized every. little. bitty. thing in the space now. It�s done.
This spot holds extra pantry and entertaining items, tools, craft supplies, electronics and my stash of decor stuff. Those plastic shelves are awesome! I think they run about $20 each and really hold up great.
The area to the left of my craft room will be our future movie viewing spot:
Hubs envisions a very large flat screen on that long wall. I see some gorgeous built ins. ;)
We used to have a massive weight system in that space:
And it had turned into a perch for STUFF. We never, ever used it. EVER. For months and years, we kept it, thinking we�d use it again.
We didn�t. :)
(In our defense, there were a few problems that needed to be fixed. We kept saying we�d fix them. We didn�t.)
And then I decided it didn�t meet our criteria � so it was GONE. I called a company to see how much they�d charge to take it down, and it was $250. PuSHAW. I figured I could totally do that myself � so I did.
I spent a few days with a socket wrench and took that baby down. It felt SO GOOD.
We didn�t use it, didn�t love it, so why keep it? Yes, I know it was an investment at one time. But I�d rather it go to someone who would use it, rather than sitting in our basement, acting as a coat rack.
Over the last few months, I�ve moved the majority of the Bub�s toys down to this space:
His DIY train tables are a perfect play surface and there�s plenty of floor space (covered with a carpet remnant). It�s so nice to have a spot dedicated to the toys!
The plastic shelves make an appearance in this area too:
We keep the kitty litter in the spot behind these (under the stairs), so to keep that area as separate as possible, I stapled some cheap muslin up on the studs behind the shelves.
I also hot glued a fun polka-dot fabric to the backs of the shelves:
It helps to keep the toys put and it�s just a dash of cute. :)
We already have some great lighting in the basement, but there�s a few spots that need a little extra. I�ve found these plug-in lights at most hardware stores:
They ROCK. Ours hold up to a 150 watt bulb. It�s fantastic for extra light! (They run about $7 each.)
One of my favorite changes in our basement is hubby�s office. It used to look like this:
Actually, it usually looked like a pit of despair. The floor was always covered with fake snow, ornaments, fall leaves and Easter basket filler. :)
Both walls were filled with storage bins, and eventually I realized it was a waste of great space. After MUCH purging, I moved them to the end of the basement instead:
I�m hoping to get some fantabulous shelving to organize these even more. It is ridiculous that shelving makes me so giddy. :)
Now that former bin-filled space is hubby�s office:
It�s actually a really cozy space! As cozy as cement walls and floors can be anyway. I like to think of it as loft-like. ;) Hubs writes music, so he LOVES this spot. It�s far enough away so that he doesn�t bother us with the music and we don�t bother him.
When I said I went through every little thing in this space, I�m not kidding. I can�t even believe how many paint cans we had:
Insanity!!
Even though I had purged the holiday stuff last Christmas, I still had a pile of STUFF that I hadn�t organized:
My tower of junk had fallen, so it gives a little extra drama to the madness. ;)
And I even went through each and every CD and floppy disk from up to ten years ago:
I spent hours at the computer going through files. I was determined to get it ALL done.
I took the last of the purge upstairs over the weekend and I was SO HAPPY when I saw the amount of storage stuff I didn�t need anymore:
Over the past year, I kept count of the large storage bins I�ve sold or given away. It was right at 17. Seventeen big bins � and I didn�t keep ONE. That doesn�t even count all of the baskets, small bins, shelves�whatever. All of them are gone!
I didn�t want the temptation.
From now on, if I can�t fit an item the storage we have, then something has to go. My hope is to never buy another storage bin again�forever and ever AMEN.
:)
I snapped that picture above and texted my girlfriends to come and get free storage stuff�and even after one showed up and took a bunch of them, I still ended up finding more to add to the pile:
And then more:
I was on a roll. :) I gave a bunch to friends, and the rest was donated or taken to consignment.
Obviously, we still have lots of things. I like things. Pretty things, shiny things, thrifty things. I�m just not going to let them take over our home anymore.
So now, our foyer looks like this again:
It�s the first time in months I haven�t had a Goodwill pile by the front door. It feels good. :)
And our problem area, the spot where STUFF went to die�is now organized and ready for the (hopefully this year, crossing my fingers, pretty pretty please!) finished basement:
Whew. Just�WHEW. It nearly beat me people. But I overcame the clutter. :) Now�if I can just keep it in check!
So that�s the tale of my biggest decrapification yet. It didn�t happen over a weekend. Or a month�or even a few months. But it happened. And that�s all that mattered.
A consulting firm founded by economist Nouriel Roubini said there could be close to $100 billion of municipal-bond defaults over the next five years as state and local government-debt problems damp the U.S. economic recovery.
That figure would by most estimates represent a significant increase over defaults in recent history, but it doesn't appear to be as dire as a prediction last year by analyst Meredith Whitney.
The report, by David Nowakowski and Prajakta Bhide at Roubini Global Economics and released to clients Monday, says state and local debt problems aren't "systemic" in nature, nor will they "infect the financial system." The authors of the report declined to comment.
Most of the defaults will occur among special government projects and revenue-generating entities that aren't considered viable, it says. "Defaults will continue to be isolated events."
The Roubini report says that relying on the history of low default rates in the municipal debt market is "Pollyannaish."
"Avoiding a crisis will involve real austerity that has only partially been implemented thus far," the report states.
Pollyannaish but not Systemic?
I do think there is a systemic concern in regards to pension funding. State public pension funds are $3 trillion in the hole and that is a systemic concern in and of itself. I do not have an estimate for city and county public pension plans but that could easily be another $3 trillion in underfunding.
Cities and states are without a doubt insolvent as I type. Oakland, Detroit, Miami, San Francisco, Los Angeles, Houston, Cincinnati, Newark, and countless other cities big and small are insolvent.
It is unclear if Roubini Global Economics considers those pension problems as a separate issue. I will see if I can get an answer.
Otherwise, my assessment is similar, at least for now. I do not think we see a massive wave of defaults on bondholders. The biggest defaults will affect pension plans (assuming nothing is done), not bondholders in general. Promises that cannot be met won't, and public pension plans are near the top of the list.
Nonetheless, the defaults that do occur will rattle the municipal bond market and deservedly so.
The issue is banks have gone straight to direct issuance of loans to municipalities, bypassing the bond market. Banks are lending straight to municipalities at rates as low as 3.85% for 21 years. Those terms are begging for trouble.
Here is my comment from the above link.
Fed or FDIC Should Stop this Fraudulent Scheme Now
The Fed or FDIC should step in right now. There is no way banks can secure cost of funds for 21 years for 3.85%. Moreover, the risk of default is hardly zero, and banks will not be first in line should default happen.
I think borrowing-short and lending-long is fraudulent. How can you lend something for 21 years when you only have the right to use it for 3, 5, or 7?
Please see my discussion for more details.
FDIC Shock Testing
In response to that post, I received an interesting Email from "ABO" a Bank Owner and CEO regarding new FDIC shock testing exams.
ABO writes ...
Hello Mish
You nailed it on the CDs. I just got done with an FDIC exam and they requested shock testing 400 basis points up and nothing down. Hard to go below zero.
In terms of 5 to 7 year CDs a 15 year GNMA is probably a better way to go. Don't buy them at a premium and look at average life of 4 to 5 years. They are zero risk based as well.
Anyway nice job I could not agree with you more.
Last week a Bloomberg columnist asked for details regarding that stress test. Unfortunately, not only are the findings confidential, but so are the questions.
However, I do have a bit more to add from a second email exchange with ABO.
Shock Testing Now Includes Munis for First Time
ABO Writes ...
The reports and content are confidential, otherwise I would be happy to help you. They also asked us to audit the Municipal bond portfolio for quality as well. That was also a first.
What I told you is 100% accurate. Previously we used a model of 300 basis points up or down. That was the threshold of the shock test. The change certainly makes sense in that not much chance of rates going down by 300 basis points.
I would like to see the US Treasury shock testing for 400 basis points! By the way we are a very high quality bank with no problems so the request was not about us. We sort of live in the good old days of banking with excess capital and a 50% loan to deposit ratio with no wholesale funding. I am a strong liquidity guy as well.
I asked ABO for a contact at the FDIC so I can raise my concerns directly. I do not have a response on that yet.
is the target short-term nominal interest rate (e.g. the federal funds rate in the US), 
is the rate of inflation as measured by the GDP deflator, 
is the desired rate of inflation, 
is the assumed equilibrium real interest rate, 
is the logarithm of real GDP, and 
is the logarithm of potential output, as determined by a linear trend.
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