Unlike some newspapers, we don't bury corrections on page D-47. We post them right up here at the top. A few days ago, I posted this item criticizing a local TV news reporter for implying that that one reason we don't know how good or bad the holiday shopping season was is the rapid growth in the giving of "gift cards" - those credit card-like payment cards that are really just fancy gift certificates. I said that was silly because, with gift cards, "the retailer has already made the sale. The money is in the bank. They're just waiting for you to pick out the merchandise."
That's true - but wrong.
According to Robert Musil, who seems to know about these things: And there has been a huge increase in the popularity of gift "certificates" and "cards", which are not accounted for until they are redeemed for merchandise. That all means that the holiday retail season now runs well into January. Nobody will know if there was a "lump of coal" left for the retailers this year until around February 1.
He's right, of course. At many retailers, when someone spends most of a gift card's balance, the remainer is returned to the customer in cash. The money is in the bank, but can't be accounted for until later. I don't know if the TV reporter knew that - or just blundered into the truth - but I should have done a little more research.
I found Musil's comment on gift cards in his long dismemberment of a recent column by the New York Times' Paul Krugman. It's worth reading.
Steaming hot commentary on journalism, Tennessee, politics, economics, the war and more...
- Name:Bill Hobbs
- Location:Nashville, Tennessee, United States
The Memphis Commercial-Appeal reports on plans for a new reservoir in rural Carroll County, and speculates the new lake could be a catalyst for economic development in the economically distressed county.
I don't know if a fake lake can turn around the economic fortunes of a county, but I hope they're right. And if 10 years from now we look back and see lake-driven economic progress in Carroll County, the fact that the feds delayed the project for 20 years because of a myriad of environmental over-regulation will be all the more sad. Think of it: economic progress delayed for a generation of people because of concerns over wetlands.
After nearly two decades of studies and fruitless proposals, state and federal officials recently approved a Clean Water Act permit authorizing a reservoir along Reedy Creek, near U.S. 70.
For an object lesson on the merits of reservoirs, officials had to look only about 20 miles to the south, to Lexington, where Beech Lake and other reservoirs have attracted visitors and home-builders. "The development around those lakes is phenomenal," McBride said. But major funding and environmental obstacles stood in the way of the project. First, the right site had to be found. Officials looked at 11 potential reservoir locations, but most were deemed unfeasible because they would flood large wetland areas or have poor water quality. The Reedy Creek site was chosen primarily because it involves the least amount of wetlands. Still, it faced objections from environmental regulators. The dam, to be composed of 400,000 cubic yards of fill, will flood 9 miles of the creek, dramatically altering the aquatic habitat, and inundate 119 acres of wetlands.
The U.S. Environmental Protection Agency, noting the damage, said in comments filed with the Corps of Engineers there was "lack of apparent need for this project." As EPA pointed out, Carroll County is only about an hour's drive from one of the largest reservoirs in the Southeast, Kentucky Lake.
That's the EPA for you - putting wetlands ahead of people! (And you just thought the purpose of the EPA was to protect the environment for the people who live in it!)
Local officials, in response, described the reservoir project as their best hope for improving the county's tax base and economy. Golf course developments, they said, aren't nearly as successful in luring development. The Clean Water Act permit was approved only after local officials offered an ambitious and complex plan to mitigate the environmental impacts. The mitigation plan includes the restoration of some 300 acres of wetlands that had been converted to crop fields and the preservation of 81 acres of existing swamp. Even more importantly, 2 miles of a local stream that had been routed into a flood-control canal will be put back in a meandering channel.
Religion of Peace® Update
This story of murder and mayhem brought to you by Islam, the Religion of Peace®.
A suspected Muslim extremist, cradling his hidden gun like a baby under his jacket, slipped into a Southern Baptist hospital in Yemen on Monday and opened fire, killing three American missionaries and seriously wounding a fourth, officials said.
It's Getting Late
Michael Ledeen says we need to moving faster to affect regime change in .... Iran. I agree. It's time the U.S. let the people of Iran unequivocally that if they rise up against their Islamofacist rulers, we'll support them with whatever it takes to assure their victory and the transition of Iran to a democracy.
I'm Guessing Both
Reader Stanton Brown sends this story from the Los Angeles Times, headlined "Many States Face Gloomy Budget Choices," along with a comment:
Note that there is no mention of incredibly bloated budgets during the flush years. This story is an example of either blatant propaganda or mind-numbing incompetence.
The answer is probably both: The reporter took in propaganda from the National Governors Association and a variety of government officials who can't fathom cutting spending and would rather raise taxes and increase spending, and in his incompetence failed to consider alternative data and viewpoints.
It Adds Up To Incompetence
I've said for years that journalists generally suck at math - and regularly expose journalists' math incompetence on this blog. I recently noted the work of Donald Luskin exposing either bias or incompetence at the New York Times in reporting on whether CSX had paid corporate income tax under the leadership of CEO John Snow, President Bush's choice to become the nation's next Treasury Secretary. Now there is academic research backing up my contention that journalistic coverage of business and other stories where basic math is involved is often filled with errors.
A content analysis of the Vancouver Sun newspaper and a math quiz administered to journalism students at the University of B.C. revealed that both working reporters and journalism students have waded in - and they are drowning in the numbers. They have difficulty performing simple mathematical calculations, they struggle to contextualize data and they disengage their critical faculties when it comes to numbers. It is not that the math that they must use is rocket-science - in fact most involves no more than elementary or high school math - it is simply that they refuse to ask, "Does this make sense?"
Lessons From California
Remember how you were told that an income tax would be a more reliable source of revenue for the state of Tennessee? Consider the lessons of California, says Orlando Sentinel columnist Peter A. Brown.
California's political leaders have been living in a financial fantasy land. Not only did they spend like drunken sailors, but they assumed that the bar would never close. California's economy would be among the world's six largest if it were a nation. It faces a projected budget deficit of almost $35 billion in the next 18 months. To put that in perspective, California's government spends about a sixth of the total outlays by states nationally, yet its deficit is more than a third of the total of the other 49 states.
All states now face tough times, but California's per-capita deficit dwarfs the others. Other mega-states, such as Florida and Texas, with less-generous government programs, proportionately smaller work forces and no income tax, are much better off. Their income is based on sales taxes, which might not be progressive, but their revenues have been more reliable.
That has certainly been true in Tennessee, which would now be suffering a major fiscal crisis rather than a minor revenue shortfall if the state had adopted an income tax three years ago, as the governor wanted.
Big Brother in Tennessee
Think you have a right to privacy in your medical decisions? You don't, at least under a new Tennessee law that will put the government in charge of monitoring your use of prescription drugs.
According to this AP roundup of new state laws:
Tennessee is requiring pharmacies to report prescriptions to a central data base, where a committee will seek to detect patterns of drug abuse. "We hope ultimately to be able to identify patients early on and prevent them from getting into an abusing situation," said Baeteena Black, executive director of the Tennessee Pharmacists Association.
The new law, effective Jan. 1, 2003, was developed by the Tennessee Board of Pharmacy and will establish a controlled substance monitoring program in Tennessee through establishment of an electronic controlled substance database housed in the Department of Commerce and Insurance within the Board of Pharmacy.
The law, called the Controlled Substances Monitoring Act of 2002, states:
The purpose of the database is to assist in research, statistical analysis and the education of health care practitioners concerning patients who, by virtue of their conduct in acquiring controlled substances, may require counseling or intervention for substance abuse, by collecting and maintaining data as described in this part regarding all controlled substance in Schedules II, III and IV dispensed in this state.
In other words, government snoops will be watching your medical decisions, second-guessing your doctors and deciding you need "counseling."
The snooping will be administered by a "multidisciplinary Controlled Substance Database Advisory Committee made up of fourteen representatives from the Board of Pharmacy, the Board of Medical Examiners, the Board of Nursing and various health-related boards in the Department of Health," according to the TPA. Please note, there is no representative on the board who is an expert in privacy rights.
It is expected to take 12 to l8 months to get the database fully operational. Incidentally, the law makes no provision for you to know what records the government is keeping on your prescription drug use.
The Tennesseee Pharmacists Association lobbied for the new law. All of the sudden I don't feel so bad about Tennessee's 142,000 pharmacists being hit with a $28.4 million tax increase - the doubling of the professional privilege tax to $400 in June 2003.
Another Frist "Scandal" Debunked
InstaPundit is doing yeoman's work at peeling back the layers of an alleged mini-scandal involving incoming Senate Majority Leader Bill Frist and finding there's no there there.
At the very least, claims that Frist was acting secretly in support of the language are contradicted by the speech -- on the Senate floor -- supporting the language. And claims that this was some sort of sleazy corporate bailout would seem to be contradicted by the words from the Rosalynn Carter - Betty Bumpers Campaign. Unless the Vast Right Wing Conspiracy has gotten really, really vast.
This earlier Instapundit post has more details, and explains how the liberal media is spreading false information either intentionally or because of shoddy work.
Pencil It In
You've heard the cliche about how a lie can travel around the world before the truth gets its sneakers laced up? Well, the blogosphere is changing that. Almost as soon as the New York Times recycled the ridiculous "Sharp Pencils" story from Bill Frist's 1994 Senate campaign, I responded with an insider's view of how that story was covered at The Tennessean, where I worked at the time, and how most reporters were embarrassed by the silly notion that Frist's comments were in any way racial.
My comments were later reported by Instapundit, Kausfiles and the Wall Street Journal's OpinionJournal.com "Best of the Web" feature, and now by columnist Jonah Goldberg. Although the NYT routinely sets the tone for political coverage nationally, and most other papers and TV news follow its lead and recycle its stories, the NYT's mention of the pencils incident got almost no traction.
Other than on a few whiny Left-wing blogs, the pencils story has been smudged out.
I just added a blog by this Aussie to my list of fine blogs. Check him out. Good stuff. Also -belatedly - added Pejman Yousefzadeh's blog to the list. Pejman, who writes often for TechCentralStation.com, writes mostly about terrorism, war, the Middle East and Iran. And does so very well.
What's to Blame for Oregon's Budget Woes?
As Tennesseans look back at the almost-over Sundquist administration and remember how the administration blamed Tennessee state government’s budget gap on the state's lack of an income tax (rather than on over-spending), it's instructive to look at the situation in Oregon. Why? Because Oregon doesn't have a sales tax. It has only an income tax. It is the flipside of Tennessee. Thus, you would think that it would have no revenue problems at all. We were told, after all, that the sales tax was the problem and the income tax was the cure.
So, Oregon has no budget problem, right? Wrong, says the Portland Oregonian newspaper.
Rising unemployment, business failures and plunging stock prices have driven down the state's income tax collections. The amount has fallen far short of paying for the roads, school support, prisons and other government services in the 2001-03 budget. As the shortfall worsened, lawmakers held a record five special sessions to fill what became a $2 billion hole in the $12.3 billion budget. Cutting spending is one of the main ways they've kept the budget in balance, as the law requires. That has kept officials busy for most of the year deciding how to strip more than $900 million by the time the budget period ends June 30, 2003.
It seems the income tax is to blame for Oregon's budget problems. It is not alone. In fact, many states that have income taxes have worse budget problems than Tennessee did in the past three years, and far worse than the minor revenue shortfall Tennessee is now facing. As I've said before, Tennessee dodged a bullet by not adopting an income tax.
A Different Perspective
What do America's socialists have to say about all those states raising taxes to balance their budgets? They don't like it - but not for the same reasons as conservatives.
The impending attacks on public services by the Democrat in California and the Republican in New York, whose reelection in each case was backed by major trade unions, underscores the basic agreement of the two capitalist parties when it comes to making workers pay for the economic crisis. With the assistance of the broadcast and print media, these politicians were allowed to wage their successful campaigns for reelection while keeping silent about their plans—undoubtedly already being developed during the election period—for a frontal assault on the living standards of the working class.
Socialists, of course, would prefer a sneak attack on the living standards of the working class, slowly undermining the economy through increased regulation, taxation, central planning and such - all the while telling you it's "for the children" and "for the working class" - until we have the high taxes and chronically high unemployment and much lower living standards of Western Europe.
We'll Not Kow Tow to the French!
I love it when Victor Davis Hanson tells the truth via satire:
The administration also announced that it would veto any U.N. resolution that allowed the French to retaliate against Libya for the Bastille Day destruction of the Louvre that cost the lives of 3,000 French citizens and destroyed an icon of French power and culture. President Bush reiterated that the United States would not take part in any "preemptory" action against the people of Libya as part of allotting "collective" guilt for the Louvre massacre.
Hanson's more recent essay looks at post-war Iraq.
The results will have ramifications that make those in Afghanistan pale in comparison — and perhaps change both the complexion of the present war and the Middle East itself in ways we can now scarcely imagine. Current polls reflect widespread dislike of the United States in the Middle East. But what will such surveys reveal in six months, when an odious Saddam Hussein is removed and something follows far better than both him and the other autocrats in the region? Look at the change in Kabul for the answer. In the post-Saddam chaos, a daily staple of news reports will be tours of Saddam's Ceausescu-like palaces and exposés of material excesses that would make Imelda Marcos blush - along with horrific tales from survivors of his gulag and glimpses into his labyrinth of torture. It won't be a pretty picture.
More interesting is Hanson's take on how the war will impact the American Left:
The American left has missed yet another train as it was leaving. Currently it is reeling from an array of staggering developments that in the post-Cold War era threaten to leave it as discredited as segregationist Republicans were during the civil-rights movement. Anti-Semitism is suddenly more commonly a phenomenon of the academic Left than of the old, white, Neanderthal Right. Multiculturalism and cultural equivalence have been refuted by the ghoulish nature of the Taliban; the more the world learns about the "alternative" universe of Saddam Hussein and kindred Middle Eastern regimes, the more it shudders in horror.
Censorship, catcalls at lectures, and the stealing of newspapers are not Mr. Ashcroft's doing but now also a hallmark of the campus Left - mostly ignored by timid college presidents. Amnesty International and the United Nations mollify rather than oppose odious regimes. Pacifism does not work in a world where the World Trade Center is incinerated. The hysterics of a Chomsky, Vidal, Mailer, or Said - never really refuted by the more responsible Left - were proved harebrained by the rapidity and economy of the American victory and the benevolent nature of the Karzai government in Afghanistan.
Exaggerating the collateral damage from the most precise weapons in military history, inflating by magnitudes of ten and more civilian casualties, spreading ad hoc conspiracy theories about pipelines, oil, and Texas corporations, raising doomsday scenarios of global anti-Americanism and nuclear hysteria in the Middle East - all that is about the extent and quality of the current anti-war exegesis, itself mostly discredited by its previous and completely wrong predictions concerning Afghanistan.
So in the few days that are left, in the calm before the storm, the Left should scramble to reclaim its moral currency by condemning our enemies and disassociating itself from appeasement. If it does not, the 2004 elections may well resemble 1972 or 1980 in their lopsidedness. The shrillness of Kerry more and more resembles a 1972 McGovern or 1980 Carter.
Sounds good to me.
Those Peaceful Palestinians
The leader of the militant Palestinian group Hamas says Israel will be destroyed within 25 years. The leader is one Sheik Ahmad Yassin, a Muslim and member of Islam-The Religion of Peace®. Yassin (rhymes with "assassin") made the prediction in front of "thousands of supporters at a rally in Gaza," reports ABC News Online:
The spiritual leader of Hamas says suicide attacks against Israel will continue and the Jewish state has less than a quarter of a century to live. The aging activist gave a speech to more than 30,000 supporters in the Gaza strip. He urged his followers to continue the holy war against Israelis.
The Australian Broadcasting Corporation, which operates ABC News Online, may call Yassin a "spiritual leader," but I don't. There is nothing spiritual nor holy about sending youngsters strapped with explosives to kill innocent civilians in pizza parlors, on buses and at Passover seders.
Speaking of the Religion of Peace®, some of its adherents in Chechnya just killed a bunch of people in two spectacular truck bomb attacks.
Suicide bombers drove two trucks packed with explosives through cordons protecting the headquarters of Chechnya's pro-Moscow government Friday and then detonated them, killing at least 46 people and wounding 70 more, the Russian government said. Viktor Shkareda, deputy head of the Emergency Situations Ministry in southern Russia, said 46 people were confirmed dead in the blast and 70 wounded. Rescuers were finding fragments of other bodies as they scrabbled through the heaps of broken concrete and shattered glass, officials said.
Both drivers are believed to have died in the blasts. Well, at least it's not all bad news.
No-Brainer Headline of the Week
From ABC News Online: Majority of Israelis favour US offensive in Iraq
As war with Iraq looks increasingly imminent, can the U.S. really fight two wars at one time? Or did the Clinton administration so hollow out the military in the 1990s that a move to liberate Iraq could open the door to North Korean adventurism? DefSec Donald Rumseld says we can. And we may have to as the North Koreans are very publicly restarting their nuclear weapons program and rattling sabers toward an appeasement-oriented South Korea.
And now the United Nations says North Korea is violating the terms of the 1953 cease-fire that ended the Korean War.
The North Korean army has brought light machine guns into the Demilitarized Zone, the United Nations Command on the Korean Peninsula said Friday -- a violation of agreements signed in 1953 at the end of the Korean War. A U.N.C. Military Armistice Commission investigation revealed that the North Koreans had brought into the DMZ automatic weapons, the kind that can be operated by crews. They were observed transporting, setting up and manning Type-73 light machine guns on six days between December 13 and December 20.
The two-war scenario is edging toward reality. Rowan Scarborough of the Washington Times looks at the critical question: can the U.S. successfully handle two simultaneous conflicts if we have to?
The United States is in the midst of a major military buildup in the Persian Gulf for what could well be an invasion this winter to oust Saddam from power. If North Korea attacks South Korea while the United States has troops invading Iraq, the Pentagon would be faced with a whirlwind of decisions. Some domestic units are designated for war in both the Pacific and Gulf theaters. Gen. Tommy Franks, who would direct an invasion of Iraq, might have to relinquish some of his requested 250,000 troops to block the North Korean advance. This could prolong the war against Iraq and increase U.S. casualties...
Pyongyang has picked this time to announce the resumption of its nuclear program as the United States is involved in a crisis in the Gulf to test Mr. Bush. One scenario is that Mr. Bush is forced to order air strikes on North Korea's nuclear facilities to prevent the quick assembly and use of nuclear weapons. North Korea, whose communist regime has brought famine to the country, may respond by invading South Korea.
North Korea has more than 1 million troops stationed near or on the border with South Korea. The warning time for an attack is measured in hours, not days. The United States has a "trip wire" force of 37,000 troops in South Korea and another 60,000 sailors, Marines and airmen in the region. They, and the well-trained South Korean army, would need reinforcements almost immediately to protect Seoul from a massive artillery barrage and occupation.
"In fact, the force in place is little more than an emergency 'stopper' that is supposed to hold until reinforcements arrive," said a Navy officer. "But the forces in Japan, Okinawa and the United States are already too shallow and will be further reduced for Iraq. I see no way they could take the offensive and win even if they could hold."
Things may get really dicey really fast really soon. But the alternative - letting psychos like Saddam Hussein and Kim Jong-Il build nuclear weapons - is beyond unthinkable.
UPDATE: THe Memphis Commercial-Appeal says North Korean nukes are really a problem for China to solve.
Owens in 2008?
Is Colorado Gov. Bill Owens laying the early groundwork for a presidential run in 2008? He's going to start a conservative think tank, reports the Rocky Mountain News.
Gov. Bill Owens and his closest advisers this month founded a conservative think tank dedicated to the study of limited government, lower taxes, the environment and "strong families." The Center for the New American Century is hoping to pull in at least $500,000 from its first fund-raiser - the inauguration dinner and ball that kicks off Owens' second term.
"The Center for the New American Century promotes the ideas and values that will shape a free and prosperous America in the 21st century," reads a card enclosed with inauguration invitations. Owens will serve as chairman of the non-profit organization's board.
For more on Owens, click here and here and here and here and here and here.
New York Times columnist Paul Krugman, an economist, shows his left-of-center leanings in a column today looking at the future of the economy.
Finally, there's the desperate plight of the states. New estimates by the Center on Budget and Policy Priorities show that state governments are facing their worst fiscal crisis since the 1930's. Since Washington shows no interest in helping, states will be forced into desperate expedients. Taxes, mainly taxes that fall most heavily on the poor and the middle class, will go up. Spending on education and, especially, health care will be slashed, with the heaviest toll falling on struggling low-wage workers and their children.
In Krugman's left-of-center world, reducing spending is always bad. But the alternative, taxes on "the poor and the middle class," are bad too. Poor Krugman. Can't have it both ways, Krugman. If you want government to have a lot of money to spend, they have to take it from a broad cross-section of their populations - which means, yes, higher taxes on the middle class and even the working poor.
Krugman continues: "Aside from the resulting suffering, the efforts of states to balance their budgets will be a significant drag on the economy, probably several times larger than the boost from the administration's so-called stimulus program."
Krugman can't quite bring himself to say it clearly - it is not "efforts of states to balance their budgets" that will be a drag on the economy, it is the big tax increases that many states will use to balance their budgets that will be a drag on the economy.
Spending cuts help the economy, long term, by reducing upward pressure on taxes. States that resort solely to spending cuts to balance their budgets this year and in the coming years match spending to revenue without raising taxes will, inevitably become lower-taxed states in comparison to states that raise taxes to balance their budgets. And lower-taxed states generally enjoy stronger economic growth.
This is Amazing
If, that is, it really works.
The Alaris Media Network "intends to deduce demographic information from the radio stations drivers are listening to and then display advertising aimed at them based on income, sex, race and buying habit data. He said the idea was not to single out individuals, but drivers en masse," reports the New York Times. For instance, if a preponderance of rush-hour drivers are tuned to a radio station known to have affluent or educated listeners, then the advertisements at that time would be aimed at them."
Speaking of Bad Business Journalism
Mimi Bliss, a competent television news reporter for WSMV-Channel 4 in Nashville, did the traditional day-after-Christmas shopping story for the local news program Thursday night and hit all the usual notes about post-Christmas sales and crowded malls, but one part of her story seemed a bit off. Bliss said that the holiday season shopping totals wouldn't really be known until after January 1, because of post-Christmas shopping. But then she implied that one reason for the season's numbers not to be tallied yet was the rapid growth in the giving of "gift cards" - those credit card-like payment cards that are really just fancy gift certificates. If she'd thought about it long enough, Bliss wouldn't have made that implication. Because with gift cards the retailer has already made the sale. The money is in the bank. They're just waiting for you to pick out the merchandise.
It's alright to get your wrecks-and-fires coverage from TV - I just wouldn't bank my financial future on their business coverage.
Don't Believe Everything You Read
Especially if it's in the New York Times, which reported - falsely - that CSX paid no federal income tax during the years 1998-2001, based on calculations by the labor-backed Citizens for Tax Justice. The claim has been thoroughly debunked, says Donald Luskin, author of the book The Conspiracy to Keep You Poor and Stupid.
Luskin says CTJ's figures "arbitrarily focus on the amount of taxes physically paid during arbitrary regulatory reporting periods, rather than the much larger amount of taxes accrued on the company's books to be paid in the future when they become legally due." He continues:
The full reality is that CSX's profits are taxed as fully as anyone else's -- indeed, in that one year of the last four when taxes were physically paid, they exceeded 100% of profits for that regulatory reporting period. Did the New York Times do any original research into CSX's financial reports to verify or qualify the claims of Citizens for Tax Justice, whom the reporters themselves admit are biased? No, they just reported those claims as facts, and absolved themselves of responsibility as they absolved themselves of hard work -- by noting the source and (sort of) disclosing potential bias. Job done. Time to go home for Christmas, or "remember the neediest," or whatever New York Times business reporters do with all the spare time that is freed up by not having to report facts.
Luskin explains how the "inaptly named" Citizens for Tax Justice arrived at its misleading contention - designed to undermine President Bush's choice as his new Treasury secretary, CSX CEO John Snow - here.
The Citizens for Tax Justice press release has deliberately ignored CSX's deferred taxes as though they don't exist, in order to create the misleading impression that the company has found a way to never pay any taxes. Very simply, this is a lie of omission. But nonetheless, a lie.
Luskin's site has been added to my list of good websites.
Incidentally, Nashville's daily paper, The Tennessean, is on the warpath against Snow, though I doubt he knows or cares. And their beef has nothing to do with the false allegation that CSX paid no corporate income taxes (though you can easily imagine them tossing that into a future anti-Snow editorial). You can read the paper's anti-Snow editorial for yourself, or save some time by reading the short version below, courtesy of the handy HobbsOnline Tennessean Editorial Translatoramatic:
"You can't trust John Snow. Because he's rich."
I have to agree with Glen Reynolds and Radley Balko on this one:
Tiger Woods’ refusal to be a pawn for leftist activists is an important breakthrough in America’s long and tired arm-wrestling with race. His silence is in itself a powerful statement. It says that we might finally be nearing the day when merit and achievement can transcend color, sex and demographics. It says that achievement in itself is a form of "giving back" to the "community." Most importantly, it secures the "rights" of successful people of color to be able to think for themselves -- they needn’t think and say only what self-appointed civil rights leaders tell them to.
Holiday Sales Update
Retailers continue to complain about holiday sales being up by only a small percentage. But consumers will benefit big-time:
"U.S. retailers, reeling from a lackluster holiday season that is forecast to be the weakest in more than 30 years, may ring in the new year with steep markdowns on clothing, accessories - and profit forecasts," reports the Washington Post.
Four Day School Weeks
I've blogged in the past about the small but growing trend of school districts - mostly in rural communities - shifting to four-day school weeks (with longer school days) and finding it enhances academic performance and saves money. Here's a story on the trend from the Washington Post. I'll have more comment later after I've had a chance to read the whole story - and when I'm at home rather than blogging from the Comcast kiosk at over-crowded CoolSprings Galleria mall. Here's one interesting quote from the story:
Last week, Colorado Gov. Bill Owens issued a report card on each of the state's public schools. The results showed no difference in student achievement between four-day and five-day systems, the state said.
A reader sends a link to this column by Sen. John Kerry and notes, accurately, that if a Republican had suggested the same thing, "The headline would read "GOP Attacks Social Security Again!"
Our Friends, the Saudis
Our friends, the anti-Christian, racist, anti-semitic, terrorist-funding Saudis.
The Real Racist Roots of the Lott Affair
It's worth remembering that Trent Lott got his start in politics by working for a pro-segregationist Democrat congressman. It's also worth remembering that Strom Thurmond ran for president in 1948 as a "Dixiecrat" - and the Dixiecrats were a spinoff of the Democratic Party. It's also worth noting, says Charles Paul Freund, senior editor of Reason, that one of the Democrats's most honored former presidents, Woodrow Wilson, was a racist who made segregation of blacks federal policy.
Wilson's historical reputation is that of a far-sighted progressive. That role has been assigned to him by historians based on his battle for the League of Nations, and the opposition he faced from isolationist Republicans. Indeed, the adjective "Wilsonian," still in use, implies a positive if idealistic vision for the extension of justice and democratic values throughout the world. Domestically, however, Wilson was a racist retrograde, one who attempted to engineer the diminution of both justice and democracy for American blacks—who were enjoying little of either to begin with.
Obviously, Southern hopes that Wilson could force blacks into servility were always delusional. Nevertheless, Wilson's Jim Crow presidency remained an available model for segregationists and supremacists who came later. Thurmond and his fellow Dixiecrats didn't necessarily require a model of triumphalist racism, but the point is that in Wilson they had one. The Lott Affair has been treated as if its origins lie in 1948; they don't. The past isn't dead, said Mississippian William Faulkner. "It's not even the past." He might have added that the past we attempt to grapple with usually isn't even the real past.
When Up is Down
It was another record year for retailers this holiday shopping season, but that's not the story you'll hear from the mainstream press. No, you're gonna hear gloom-and-doom stories like this one from the New York Times, which moans about how retail sales were up just 1 percent over last year.
Statistics from the International Council of Shopping Centers show that holiday sales increases in the last three years have steadily shrunk — from a 9.5 percent increase in 1999 to just a 4 percent gain in 2000 and a slim 2.3 percent jump last year.
The paper notes the rise of online shopping and a very high level of discounting, but doesn't make three important points:
1. Much of that online shopping now takes place at websites owned by retailers, so even though sales at retail stores may have risen just 1 percent, the retailers didn't lose.
2. Discounting - which benefits consumers by helping them spread their dollars farther - also reduces the retail sales total by lowering prices. The real key is units sold - did the stores sell more stuff this year than last year? Yes, they did, at lower prices.
3. This was the best year ever for retailers - and, thanks to that discounting, for customers too.
Let's get this straight: 1999 was the best year in history for retailers. But then came 2000 and it was 4 percent better. And then came 2001 and it was 2.3 percent better than 2000. And this year is expected to be one percent better than 2001. So 2002 is now the best year in history for retailers - despite the sluggish economy.
Yet, the retail industry is poor-mouthing it like sales were down. They weren't. Sales were up.
UPDATE: Retailers continue to complain. But consumers will benefit big-time.
Only $35 Billion
Check out the ScrappleFace's satirical report on Internet sales taxes. Funny stuff.
States like California, so well-managed that it's only $35 billion in the red this year, have proven to be good investments for taxpayers, the spokesman added. And Americans seem eager to pump in more cash. "It's one of the great privileges of citizenship to know you are supporting high-quality state government programs in a state you may never even visit," the source said. "It's like UNICEF or the Salvation Army. It's a feel-good experience you never quite out live."
The Real Racists
ScrappleFace, a parody blog, offers up a biting satire that exposes the real face of racismin American politics. Hint: It ain't the Republican Party that divides by race and tells African Americans they aren't as capable as whites.
Trent Lott and the Future of Federalism
UPI's Jim Bennett looks at the Lott controversy and what it means in the context of the growing strength of conservatism as a governing force.
The real indictment of Lott is twofold: first, that he foolishly exposed the Republicans to opposition attempts to pin the narrow definition of the Right on the party; and secondly, that in trying to correct the damage, he demonstrated that he was not capable of making a principled defense of decentralism, nor that he had any idea of how to reach out to African Americans except to endorse, unconvincingly, the failed agenda of state centralism.
Genuine decentralism, or in the American context, genuine federalism, is not the defense of petty tyrannies against wider ones. It is the defense of civil society on all levels, of the state against the Federal, the community against the state, the group against the community, and the individual against the group. There are a variety of tools that may be used in this, and sometimes the power of the wider entity must be used to balance a smaller tyranny. Like many useful tools, such power must be used only with great caution, but sometimes it must be used never the less. The Constitution and Bill of Rights were written to provide such uses, and such cautions.
Federalism and decentralism are central to the political problems of the coming decades. If the Republicans are to realize their big-tent vision, they must convey their dedication to and understanding of these principles of decentralization and civil society to the American people. Lott's comments seemed to indicate he understood none of this, and that for him, States' Rights was no more than a ritual formula. He lost the opportunity to take the party forward on this issue. Now perhaps his departure has renewed the party's opportunity to make its case.
Instapundit is pointing out this item from Mickey Kaus noting that David Firestone, the New York Times reporter who dredged up the silly Sharp Pencils Incident from Sen. Bill Frist's past and used it to passively accuse Frist of being a closet racist got it wrong about which Ford complained about the quote. It wasn't the ultra-smooth U.S. Rep. Harold Ford Jr., but his race-baiting daddy. Comments Kaus: "Inspires confidence in Firestone's deep understanding of Tennessee politics, doesn't it?"
Instapundit is also pointing out this story about how Washington Sen. Patty Murray's pro-Osama comments aren't generating the same controversy in the mainstream media as Trent Lott's pro-segregation remarks did - although the Internet and talk radio are blazing with anger over Murray's remarks praising the terrorist leader. And here is a good response to Sen. Murray's idiotic remarks.
Frist Attack Update
AP reporter Karin Miller does a decent job explaining the allegedly race-tinged parts of incoming Senate Majority Leader Bill Frist's record, though she does recycle the silly Sharp Pencils Incident and seems to come down on the side of it being a racial incident.
U.S. Rep. Harold Ford, D-Memphis, who is black, said then that Frist "insulted the African-American community. Knoxville minister Harold Middlebrook, who headed the Tennessee Baptist Convention, said "they didn't make those statements in white communities. They only made those statements in our community. When they make those comments in our community, it becomes racist."
At least Miller notes that the Belle Meade Country Club, where Frist resigned his membership in 1994, is no longer an all-white club. Not even the New York Times bothered to mention that the club is no longer exclusionary, although Belle Meade Country Club now accepts minority members. Frist's resignation from the club is not evidence of some closet racism on his part. Just the opposite. In fact, it is not hard to see how the resignation of such a prominent member of the country club - Frist - because of its exclusionary policy, may well have helped push the club to alter its ways.
But the Center for Public Integrity strives mightily to spin the pencils incident as a racial remark, in part by paraphrasing what Frist said. And the Center's article mentions the Belle Meade Country Club but doesn't mention it now accepts African Americans and other minorities as members.
Frist also enraged black clergy and others during the campaign with allegedly racist remarks made in the closing days of the contest against incumbent Sen. Jim Sasser. The remarks surfaced after a November 1994 bus tour the Frist campaign took through a predominantly black neighborhood in Jackson, Tenn. As the bus pulled into the community, a young campaign volunteer reportedly told passengers, "We're getting deeper and deeper into the jungle here."
Of course, Frist did not make that remark - a young campaign volunteer did. But the Center for Public Integrity does its best to smear Frist as racist for words someone else said.
Frist himself reportedly asked for some of his campaign’s pencils to give to children in the neighborhood. But, Frist allegedly wanted unsharpened pencils, fearing that he might be “stuck” or stabbed.
No, Frist did not "allegedly" want unsharpened pencils. He directly asked for unsharpened pencils and his fear was not that he would be "stabbed" by a member of the audience, but that he might be "stuck" by a sharp pencil point as he handed them out.
There was nothing racial in the remark in any way. But the Center for Public Integrity really wants you to think there was.
Robert Kagan wonders why those who supported military intervention in Iraq in 1998 are opposed to it today, when nothing has changed except the person who occupies the White House.
As Kagan puts it: Yesterday's liberal interventionists, in Bosnia, Kosovo and Haiti, are today's liberal abstentionists. What changed? Just the man in the White House. Intellectual consistency, even for great thinkers, is no match for partisan passions.
Actually, Kagan is wrong about that in one respect. Conservatives who supported the use of force in 1998 still do today. It is only the Left that is intellectually and morally inconsistent on this issue.
Oh well. At least the Russians - and the French! - finally agree with the U.S. on what needs to happen vis a vis Iraq. And the Aussies are on board.
Take a few minutes to read this from Australia, writte by Peter Howson, a former member of the Australian federal government under four different leaders.
Revolutionary Islam is on the march and is able to cause great suffering and devastation through the use of random terror. The Christian liberty we have inherited, and upon which our civilisation and material existence is based, is under immediate and dire threat. So far our bishops have been silent or have given aid and comfort to our enemies by admission of guilt.
The lesson of the rise of Hitler in the 1930s, and of the Bolshevik takeover of tsarist Russia in the 1920s, is that we must respond to those who seek to dictate to the world with a vigorous and militant defence of our faith and our civilisation – and we must do so at the early stages of attack so as to save lives and suffering. Church leaders should focus intently on the real evil in the world and on the consequences that would follow from any pretence it can be justified by our sins. They should not hold back because some will see that as an attack on another religion. If they fail in this task, they will become increasingly irrelevant, and the decline of the Anglican Church in Australia will proceed apace.
For too long bishops and archbishops in Australia have been preaching against Western triumphalism and Christian arrogance. Yet today one would be surprised to find triumphalism and arrogance within the church. Bin Laden and Bashir have thrown down their challenge. We must fight across all fronts – religious, cultural and economic. But, regrettable as it may seem to some in the church, the exercise of military power is also essential. This battle will not be quickly or easily won. But if we are to win it, the Christian church must join in the militant defence of our common Christian heritage.
A Salute to Cell Phones
Some Tennessee legislators want to ban younger drivers from using cell phones while they drive. Others, like Rep. Henri Brooks of Memphis, want to ban use of cell phones for all drivers, reports the AP.
Representative Henri Brooks of Memphis wants to go even further, requiring all drivers with cell phones to use a hands free system. But Brooks says an outright ban of phones in cars may be necessary.
One thing's for sure. When the General Assembly opens each session with the Pledge of Allegiance, Rep. Brooks is fully capable of holding her cell phone. With both hands.
The Tennessean reports that legislators have discovered lotteries are "big bidness." There's this one priceless anecdote from the story - priceless for what it says about the reporter.
Between touring the major vendors, lawmakers stopped at a downtown Atlanta convenience store, picked numbers on an $8 million Lotto South jackpot and bought holiday-themed scratch-off tickets. For many, that was the easy part. After scratching off his $5 ''Merry Money'' ticket, state Rep. Johnny Shaw, D-Bolivar, realized he didn't know how to tell if he won. ''I got to figure out how to do this,'' he said, chuckling. Rep. Charles Sargent, R-Franklin, bought $10 in tickets and won $4. ''A bad return,'' he surmised.
To surmise means to guess, deduce or infer. I doubt Rep. Sargent had to infer that spending $10 to get $4 was a bad bargain. Perhaps only the journalist had to think hard and guess that such a trade might be a bad deal. But, then, lots of folks go into journalism because they suck at math.
Meanwhile, Sen. Steve Cohen, prime sponsor of the constitutional amendment allowing the creation of a state lottery in Tennessee, also shows how bad he is at math:
''We knew how many states,'' he said of the 38 states that have lotteries, ''but when you see how many tickets are produced ... I mean, it's a billion-dollar business coming to Tennessee.''
No, Sen. Cohen, it is no that at all. It is a predatory business coming to Tennessee to take much of that billion dollars out of the productive Tennessee economy by convincing dunderheads to surmise day after day, week after week, month after month, that trading $10 for $4 or less or nothing at all on the beyond-miniscule chance they might get more is a good bargain, and so divert their money away from productive uses such as, oh, buying food for their family or another book to help their toddler learn to read, and use it instead to buy a piece of paper, scratch on it a bit and toss it in the trash and curse their "luck" when they should be cursing you.
Here's what Howard Owens has to say on Trent Lott, Condi Rice, and the future of racism in American politics.
If a Trent Lott was going to be smacked down today, it would have to be his own peers - white men - who would do it. The leadership on the minority left has become so concerned with protecting its own power that those leaders are only interested in protecting the status quo, and that status quo involves promoting overtly racists standards, such as affirmative action. Since Lott's remarks did not openly threaten their agendas, his comments meant nothing to them (not until they saw they could get some press by condemning Lott). But conservatives grasped early on that if Lott's comments went unchallenged, the remarks would have a subtle but profound impact on extending the stereotype of white male conservatives - that we are closet racists.
The same conservatives who drummed Lott out of office will embrace Rice exactly because she can run on the content of her character and not on the color of her skin. We have, I am saying, moved that far beyond racism. You cannot succeed in American politics by making race an issue, and you'll fail if you try. And, let's face it, George W. Bush is a big reason that has happened.
The GOP is still the bastion of middle class white males, and it is the party of choice for most conservatives. With GWB in power and leading the charge, he has strengthened the hand of all like-minded conservatives. It's not that they are more emboldened to speak out; it's that their condemnations of racism and rhetoric supporting a color-blind society are amplified through a powerful bullhorn in GWB. And Bush does give them cover, because those who might disagree with the modern conservatives (notice, I'm not using the odious term, "compassionate conservatives"), will too quickly find themselves on the wrong side of the divide over race.
Why We Fight
Regular readers know I'm a fan of Victor Davis Hanson. Here is a link to his latest.
But why would any in the Middle East follow such a pitiful band of cutthroats? Fear, for starters — the terrorists can murder newspaper editors, government officials, or military officers who oppose them. Despair plays a role too among the Arab dispossessed. Over 300 million in the Middle East live under regimes that are corrupt and tribal, dysfunctional autocracies without elections or the rule of law. With rising populations and failing economies, despots can only defer reform by using their state-run presses to vent tension against those more successful, such as Israel and the West. Hating the Jews is old stuff for the weak and envious, and so apparently is despising the country that gives you Star Wars, 757s, and vaccinations. A mass, crybaby adolescence has infected the Middle East. At first this pathetic, passive-aggressive view of the West intrigued Americans, then it disturbed them; but now it has become not merely tedious, but downright repellent to us. There are root causes for the spread of terror, but they are entirely self-induced.
Kill The King
Figuratively speaking, that is. Frank Cagle continues to agitate for Republicans in the Tennessee House of Representatives to work with dissident Democrats to oust the General Assembly's Jimmy Soprano, Rep. Jimmy Naifeh, from the speaker's chair.
There are enough votes in the House that prefer someone as speaker other than Naifeh. It isn't just his income tax bill last session. It is dissatisfaction with things in general. East Tennessee Republicans have grown used to being ignored and short-changed by the speaker and his henchmen. But now Middle Tennessee Democrats are catching on that Naifeh's rural West Tennessee mafia is shafting them as well.
This is a golden opportunity for House Republicans to get together with like-minded Democrats and change the status quo. If they vote for Naifeh and give away this opportunity there is a growing network of conservatives around the state that will make sure they pay a price for it. If it is too much to ask that Republicans band together and put forth a candidate then there is an alternative. Do nothing on the first ballot. At least have the courage to abstain. It's not exactly a Profile in Courage. But it's a start.
A good start, I'd say. But I doubt the Republicans will find the courage to do it.
My guest column in the Memphis Commercial Appeal today offers up the Colorado model as a solution to the twin problems of tax reform and the public's lack of faith in their state government.
Several recent studies by good-government groups lead to the reasonable conclusion that many Tennessee elected officials are more beholden to their own interests, or to the influence of special-interest lobbyists who fund their campaigns, than they are to the interests of the average taxpayer. Locking taxpayers out of the Capitol during the income tax debate, and saying the state open meetings law doesn't apply to lawmakers, didn't help.
Even if the legislature were to pass tough new ethics laws, though, that still would not be enough to restore public confidence and persuade skeptical Tennesseans to accept tax reform. But there is a way: Combine real reform with a "taxpayers bill of rights" amendment to the state Constitution similar to Colorado's, and put the latter on the ballot.
The Los Angeles Times' Ron Brownstein avoids the tired sniping at Sen. Bill Frist over sharp pencils, country club memberships and family wealth and instead writes an intelligent profile of Frist with an eye on the future and Frist's impact on healthcare policy.
For Democrats, Frist presents a challenge much like House Speaker Rep. Dennis Hastert (R-Ill.), the mild-mannered insider who succeeded former speaker Newt Gingrich, and Bush himself: All present largely conservative policies in a moderate tone much more acceptable to swing voters than the harder-edged voices who dominated the GOP in the immediate aftermath of their 1994 congressional takeover.
In contrast to Lott, Frist embodies a newer generation of Southern Republican politicians who attract white voters with conservative positions on taxes, social issues and national security and generally believe that any association with racial intolerance could alienate moderate swing voters.
Mark it down: The Lott Debacle will turn out to be a big win for the Republican Party.
I have a guest column running in the Sunday Memphis Commercial Appeal, on the subject of Tennessee's tax structure and how to reform it - and revive the public's faith in their government at the same time. If you get the dead-tree version of the C-A, it's supposed to run on the front page of the Viewpoint section.
UPDATE: It is now online here.
From one Fief to Another
Gov.-elect Phil Bredesen has picked Gerald Nicely, the former head of Nashville's Metropolitan Development and Housing Agency, to head the much-maligned Tennessee Department of Transportation (a/k/a the Department of Asphalt).
The Tennessean reports: The agency had become a "fiefdom" unresponsive to Tennesseans, he said. Nicely pledged to change that.
How ironic. Nicely knows a thing or two about fiefdoms. Under his rule, MDHA was a fiefdom unresponsive to Nashvillians (unless the Nashvillians in question were powerful, connected local developers).
Frist Attack Update
I'm blogging this from the Comcast Internet sales kiosk at CoolSprings Galleria. Check out this coverage and comments of the liberal media's biased attack on Sen. Bill Frist. By the way, the mall I am at - south of Nashville in the suburb of Franklin - doesn't seem particularly busy for the final Saturday before Christmas. But I still have some shopping to do...
Defeated Legislators Explain Why The Voters Were Stupid
In a pair of stories, the small Greeneville Sun newspaper in Greeneville, Tenn., lets two defeated state legislators run on and on about how smart they were and how dumb the voters were and how lucky the state of Tennessee was to have them in the legislature. Somebody needs to tell the paper's reporter, Tom Yancey, that one-source stories in which the source is the subject of the profile are, well, extremely amateurish journalism.
State Rep. Zane Whitson blames his defeat on his vote for income tax.
Whitson said his “biggest disappointment” during 24 years in the legislature came last year when “we didn’t pass a flat (income) tax under which every person would pay less tax.” But wait. The flat tax plan would have increased overall revenue by about $850 million. So how would "every person" have paid "less tax"?
Whitson also waxes ineloquent about talk radio, Gov. Don Sundqust and the alleged (but unproven) impact of Internet retail on sales tax revenue.
Meanwhile, state Rep. Ronnie Davis doesn't blame his defeat directly on his support for the income tax. But, then, he's under a 12-count federal felony indictment for alleged extortion, influence peddling, bank fraud and money laundering.
Davis decries fellow Republicans who opposed the income tax: “The irony is, the public got mad because we (legislators) stayed down there too long and then passed an increase in the sales tax, but they didn’t get mad at the (legislators) that were willing to do nothing at all. They got mad at those of us who were willing to do something,” Davis said, to keep the state’s budget “from going down the drain.”
He also says TennCare isn't the cause of the state's budget problems.
And thus does another dull knife leave the drawer.
Gee. Ya Think?
Today's New York Times reports that Medicare will be cutting payments to doctors by 4.4 percent, and then notes that "federal officials predicted that doctors would, as a result, be less willing to accept new Medicare patients."
Thus is the NYT surprised by a basic principle of economics: less pay incentivizes less work. They must be surprised by it - they considered it "news" enough to make it part of the lead.
But one Dr. Mark H. Krotowski, a family doctor in Brooklyn, isn't surprised: "The new cuts will force more physicians to turn away Medicare patients. That's the reality. Doctors will not have any incentive to accept new Medicare patients. While Medicare reimbursements are going down, our expenses are rising 5 percent to 10 percent a year."
The NYT reports that the Department of Health and Human Services admits the payment cuts might "cause fewer physicians to accept new Medicare patients" and could prompt doctors to increase their charges to some of the 40 million Medicare beneficiaries." At least someone understands another basic principle of economics and, indeed, life: There is no free lunch.
A Sucker Bet
Rich Hailey explains why insurance is like a casino. It's a long post, but worth it as Hailey makes some excellent points.
In order for the system to work, those who claim in excess of what they pay in must be outnumbered by those who claim less than what they pay in, which means that for the majority of the people, they will pay in more than they get back. In Vegas, this is called a sucker bet, and the house loves gamblers who take it. Additionally, insurance companies set their premiums based on total claims over the past year, adjusting the rates to ensure a slight profit. In Vegas, it’s called the house’s edge, and it is what pays for all those multi million dollar casinos and resorts.
The worst part is that it is all unnecessary. If my employer paid me the $500 he pays for my insurance, I know I could invest it for a higher return than any private insurance company. I don’t have the overhead of adjustors, secretaries, boards of directors, advertising, and so on to cover. 100% that money could be dedicated towards creating a medical savings account, covering my health care far more effectively than an insurance company could. Of course, it would throw a lot of insurance company employees out of work, but we need to get rid of the parasites before they suck us dry.
Frist Attack Update
Today's New York Times recycles a ludicrous story about an allegedly racially insensitive remark made by Sen. Bill Frist when he was running for the Senate in 1994:
Also in that campaign, Representative Harold E. Ford Jr., Democrat from Memphis, demanded that Mr. Frist apologize to African-Americans for remarks that he and a supporter made. Mr. Frist, going to a largely black march against crime, had asked a worker to obtain imprinted pencils to distribute, requesting unsharpened pencils. "I don't want to get stuck," he told the aide.
Frist would be holding a handful of pencils to distribute and didn't want to prick himself on one of the sharp points - but his innocuous comment was seized on by the anti-Frist reporters for the Memphis Commercial-Appeal and the Nashville Tennessean as "evidence" that Frist had been racially insensitive.
It was absurd then - a lie propagated by two newspapers that had already endorsed Frist's opponent, the incumbent Sen. Jim Sasser - and most everyone in the newsroom at The Tennessean, where I worked at the time, knew it and was embarrassed by the story. It is even more absurd now for the NYT to recycle it in an attempt to undercut Frist as he ascends to the post of Senate Majority Leader.
[Editor's note: the Frist/pencils story from the 1994 campaign is not available online via the Tennessean's website. If you have a hard copy of it and can scan in an image of it, I'd be glad to post that image here. Email it to me at bhhobbs-at-comcast.net]
UPDATE: Reader H. Koenig writes to say: I had to reread that excerpt you posted at least three times before I figured out what it might be that was so offensive - it finally occurred to me that he was supposed to be implying they will be used as a weapon against him. The only racist here are the people who go out of their way to find offense in any innocuous comment. It's time to start telling people who react this way, "the comment is racist only to someone who is a racist, and wants everyone else to be one, too."
Amen to that.
UPDATE: Regular readers of kausfiles on Slate.com will see an item there today about Frist, the sharp pencils, and me. Mickey Kaus writes: "Hobbs' insider perspective carries some weight (although since his wife was apparently working on the Frist campaign he's not exactly unbiased, as he admits)." Kaus is referring to the post directly below this one. I should clarify something: My wife did work on the 1994 campaign - however I did not meet her until April 2000 and we were married in November 2001. At the time of the Sharp Pencils Attack, I had no connection to the Frist campaign. UPDATE OF THE UPDATE: Kausfiles has updated that post to reflect this. Thanks, Mickey.
ANOTHER UPDATE: OpinionJournal.com mentions the Sharp Pencils Incident and mentions my take on it in their "Best of the Web" roundup for Monday, Dec. 23. They call the NYT's reportage of it a "pointless complaint."
The Assault on Frist Begins
FratersLibertas finds bias in the Associated Press' description of Sen. Bill Frist.
Come on now AP, is it really newsworthy that a member of the Senate Republican leadership is a Bush ally? Or that a heart surgeon is wealthy? I don't want to tell you professional journalists your business, but no, it's not.
This journalist has to agree with the critic - the AP lead is factual, but in a selective and biased way. But then, I had a chance to talk with Sen. Frist a few years back while waiting for a table at Green Hills Grille, and found him quite likeable. And I enjoyed his first book. And my wife worked for his first Senate campaign. So I'm probably biased, too.
Trent Lott does what he should have done days ago - step down and let someone else be Senate Majority Leader. Good news: That person likely will be Sen. Bill Frist of Tennessee, which is great news for the nation as Frist is a man of exemplary character and skill.
I agree with Glenn Reynolds over at Instapundit.com that it's to the Republicans' credit that Lott is gone.
Unlike the Democrats with Clinton, the Republicans have purged themselves of someone who didn't belong in the office he held. The failure to do so cost the Democrats greatly. I think that the Republicans, meanwhile, will reap benefits from their action. says Reynolds.
Democrats, meanwhile, keep old racists like Sen. Robert Byrd, former KKK member, around.
Here's today's Tennessean story on the latest court order that threatens to swamp TennCare and cost taxpayers big bucks. The Memphis Commercial Appeal follows up its Thursday story on the same topic with two stories today, including a page one report on the details of the ruling and its possible impact, and this sidebar with the headline Clients who lost coverage happy to be spared from 'flawed process', replete with quotes from former TennCare members who are happy about the judge's order (which, essentially, says because some mistakes were made, every single person declared ineligible for TennCare must be put back on the rolls).
We're still scouring the paper's web site for a story headlined Taxpayers who stand to lose $300 million unhappy to not be spared by 'flawed court ruling'. We'll let you know if we find it. Don't hold your breath.
From today's New York Times story on Sen. Bill Frist challenging Trent Lott for the post of Senate Majority Leader:
Mr. Frist is also a relative newcomer, Republicans said, and his leadership skills are untested.
As leader of the Senate Republicans' campaing committee, Frist lead the party to a major win in the November elections, taking back control of the Senate when few analysts thought possible. I'd say he's been tested.
The Feel-Good Article of the Day
Tom Holsinger says the conquest of Iraq is already underway. And, he says, Saddam Hussein is like a frog in a slowly-heating kettle of water.
... on TennCare.
The order further calls for the reinstatement of every person disenrolled from TennCare, regardless of eligibility or possession of private health insurance, since July 1. TennCare is the state's managed-care health insurance program for people who are poor, disabled or uninsured.
“This decision ignores the clear mandate of the General Assembly and the waiver granted by the Bush administration,” Gov. Sundquist said. “If it remains in effect, it will cost the state at least $300 million this fiscal year, and TennCare as we know it may cease to exist, putting some 500,000 Tennesseans at risk of losing their health-care coverage.”
Yikes. They should just send the bill to Gordon Bonnyman at the Tennessee Justice Center.
Here's a little background on the case.
UPDATE: There's some good news on TennCare, too:
Officials of the Bush administration have indicated to Gov.-elect Phil Bredesen that they plan to allow governors as much flexibility as possible in managing programs such as TennCare and other health insurance plans. Bredesen spent yesterday in Washington with 15 other new governors in meetings with Cabinet secretaries and President Bush.
...on the economy. A yardstick of U.S. economic activity rose markedly in November in a sign that the nation's financial situation is beginning to improve, reports the AP.
Colorado Cap Helps State Spend More
Less-than-expected tax revenue has lead Colorado to spend less money. $700 million less. Colorado had planned to spend $13.8 billion this year, but has reduced spending to $13.1 billion. Tennessee, meanwhile, increased taxes by nearly $1 billion to deal with a similar shortfall. Why the difference in approach? Simple: Colorado has a constitutional provision called the Taxpayers Bill of Rights that prohibits tax increases without the consent of voters, while Tennessee does not. Thus, government in Colorado has learned how to economize and prioritize; while Tennessee's has not.
Check out the chart that goes with the Denver Post story. Since the 1993-94 fiscal year, Colorado has increased state spending by 72 percent, from $7.6 billion to $13.1 billion. (It would have been 81 percent if the legislature's $13.8 billion spending plan had been sustained by revenue.) During the same period of time, Tennessee increased spending by 56 percent.
But here’s the irony: Colorado cut taxes during that period of time. Tennessee raised taxes.
Colorado was able to increase government spending by a greater percentage than Tennessee because, unlike Tennessee, it has a mechanism that restrains the growth of spending. That's not an oxymoron. The reality is, Colorado's Taxpayers Bill of Rights - which limits revenue growth to the combined rate of inflation and population growth and returns excess revenue via tax cuts - helped Colorado's economy grow faster.
From 1993 through 2000, Colorado's gross state product – the measure of the state’s total economic output – rose 79.4 percent (from $93.6 billion to $167.9 billion), according to the U.S. Department of Commerce’s Bureau of Economic Analysis. Tennessee’s rose just 48.9%, (from $119.7 billion to $178.3 billion). While Tennessee's economy grew in those eight years, Colorado's grew much faster. Tennessee’s economy went from being 28 percent larger than Colorado’s to being just 6 percent larger.
From 1993 through 2001, Colorado's total personal income grew 84.3 percent, compared to 54.3 percent in Tennessee. Total personal income is an aggregate measure for the state and is one measure of the growth of the overall economy. Because some of that increase reflects growth in population, a better measure of real economic performance is per capita income - and there Tennessee also lags Colorado. In 1993, Coloradoans' per capita income was $22,196, or $2,655 higher than Tennessee's that same year. By 2001, per capita income in Colorado had risen 50.8 percent to $33,470, while in Tennessee it had risen just 38.1 percent to $26,988. Tennesseans' per capita income now lags that of Coloradoans by $6,482.
Another way to put it: Colorado's citizens have seen their incomes rise by an additional $3,827 per capita more than have the people of Tennessee since 1993 – the year Colorado enacted a policy of tax restraint and Tennessee did not.
Colorado's Taxpayers Bill of Rights, which took effect in 1993, created an environment of stable taxes and, indeed, tax cuts when revenue exceeds the generous TABOR limit. As a result, Colorado's economy boomed. That economic boom is reflected not only in its income statistics, but also in its population growth from 1993 through 2001 - 32.4 percent, compared to Tennessee's 15.9 percent.
All of that economic growth resulted in more money for the government to spending, even as Coloradoans' taxes were cut. Why? Because low taxes spur higher economic growth.
As I explained in this post, Colorado was able to increase per-capita state spending by 139 percent from 1990 to 2000, the third-largest increase among all 50 states, even though its TABOR amendment restrained the growth of revenues available for spending. But Tennessee, with no effective cap on revenues, taxes or spending, increased per-capita spending by 76 percent from 1990-2000.
Tennessee pursued a strategy of increasing taxes to fund more government spending in the 1990s, and routinely exceeded its weak constitutional spending cap. But because higher taxes reduce economic growth, the state actually brought in less revenue than it might have under a lower-tax/higher growth strategy. In 1990, Colorado's government spent $2,504 per capita and Tennessee spent $3,753 - 50 percent more than Colorado. By the end of the decade, Tennessee was spending $6,593 per capita, just 10 percent more than Colorado, which had increased spending to $5,992 per capita. Even though Tennessee raised taxes repeatedly during the 1990s in order to spend more, Colorado was able to raise spending faster by taxing less.
The lesson of Colorado is clear and undeniable: By restraining spending and taxes, with a Taxpayers Bill of Rights modeled after Colorado's, Tennessee could actually create a future in which taxes would be guaranteed to remain low yet state government would actually have more money to spend, all within a system that would put a premium on accountability and prioritization.
Gov.-elect Bredesen, are you listening?
In Oklahoma, A Democrat Calls for Spending Restraint
Oklahoma faces a budget gap. The governor-elect, a Democrat, says its a good reason to look for ways to spend less money.
Gov.-elect Brad Henry: As daunting as the latest budget numbers are, I sincerely believe that they present us not just with a challenge, but an opportunity as well. For better or worse, it will encourage state leaders to put the functions of government under a microscope and determine what works and what doesn’t, what should be a priority and what shouldn’t be. During these efforts, my administration will be focused on protecting public education, health care and other important programs. Everyone will have to tighten their belts, but hopefully, by thoroughly examining agency spending, we can minimize the disruption to vital state services. If department heads can’t justify each dollar that they spend, then maybe we can redirect that money to other priorities such as public school classrooms or health services for the elderly.
Henry's finance director-designate "believes strict across-the-board funding cuts are the most efficient approach to the state’s budget crunch," reports the Journal Record in Oklahoma City.
Deputy finance Director Alison Fraser tells the paper that revenue from the state's income tax is expected to be down 7.9 percent, with revenue from the sales tax down a smaller 6.2 percent.
Once again, another state faces a revenue shortfall because of its reliance on an income tax. The state of Oklahoma would have been well-served if it had followed Gov. Frank Keating's advice and phased out its income tax. And Tennessee is lucky it didn't create one. Had we done so, our budget crisis would have been made worse, not better.
UPDATE: What's to blame for various states' budget problems? It's not the mythical "structural" problem you often hear about, says Chris Edwards, director of fiscal policy at the Cato Institute.
If there is a structural problem in state tax systems, it is that individual income taxes raise too much money in boom years, thus causing states to overspend. State budget numbers can certainly be interpreted in different ways. Recent news stories have implied that state officials are innocent victims of sinister "budget gaps." However, I think a more accurate news report would read: "Huge budget forecasting errors cause massive overspending by the states."
That's certainly true in Tennessee.
Arkansas Legislators Balk at Raising Taxes
Unfortunately, it was a Republican governor who proposed raising taxes. Fortunately, Democrats in the Legislature are saying no, and pushing for budget cuts instead to eliminate the state's budget gap. This is likely to harm the GOP's chances of becoming the majority party in Arkansas.
Ex-journalist-turned peace activist Colman McCarthy "says kids need to study closely the history of the peace movement, starting with the lives and ideas of Mahatma Gandhi, Martin Luther King, Dorothy Day, the Berrigan brothers and other radicals. And he wants to teach kids that American violence goes hand-in-hand with widely accepted conventionalities such as economic competition, conspicuous consumption, tax cuts, U.S. foreign policy and gigantic Pentagon budgets."
Ugh. Mamas, don't let your babies grow up to be taught by this fool.
Incidentally, the story about this "former journalist" violates a basic rule of good journalism: no one-source stories. Especially not a fawning one-source profile where the profile subject is the source. (Yeah, I know - there is one quote in the story from one other person, but it's basically a quote that agrees with McCarthy, so that hardly counts). If the reporter made an effort to find one person to challenge McCarthy's anti-American views, the story doesn't indicate so.
from James Lileks.
Politics in the Information Age
Duane Freese examines the role of weblogs in the growing pressure on Senate Majority Leader Trent Lott, and what it says about information technology's impact politics in the future.
New information technology doesn't change politics per se. But it can have a leveling effect by creating a real forum for the views of more participants. When conducted through broadcast TV ads, telephone solicitations and direct mail campaigns, politics favor the kinds of organizations that only money can buy. And while ultimately that is the kind of organization any candidate needs, the Internet and new media allow motivated, like-minded, concerned people to coalesce and break through the normal filters of big money and big politics.
The technology appears to give no partisan advantage. Anti-globalists use cellphones and email to coordinate their anti-World Trade Organization protests, while libertarians used email to organize defeat of the intrusive "Know Your Customer" rules that the Federal Deposit Insurance Corporation had proposed for banks back in 1999. And now, a handful of conservative-leaning weblogs are leading the charge to unseat Lott.
Read Freese's story to have a fuller understanding of how the Internet and weblogs (of which this is one of thousands) can be used as tools of political communication and action.
It's stories like this that make TechCentralStation.com must reading.
The Apology Lott SHOULD Have Given
Below is the apology Trent Lott should have given, according to Quentin Langley, a reader of the daily News & Views email from Chuck Muth. (Go to ChuckMuth.com to subscribe to News & Views for yourself.)
Here's what Lott should have said:
I really don't know what I was thinking. As you know, I was brought up a racist, segregationist Democrat. I carried these views into early adulthood and worked for Democrats in Congress who were completely committed to the segregationist agenda. However, I saw the light, and left the party of Jim Crow for the party of Abe Lincoln.
When praising a man who was a big political wheel when I was just nine I suddenly found myself expressing a view far more suitable for Al Gore Senior or Senator Robert Byrd. Please be assured, just like Strom Thurmond, I have put the Democrat Party and its despicable policies behind me.
I don't know Quentin Langley, but he's right. And if Lott had given this apology, it would be the Democrats having to defend themselves today.
UPDATE: Ann Coulter is making a similar point today.
In 1948, Thurmond did not run as a "Dixiecan," he ran as a "Dixiecrat" – his party was an offshoot of the Democratic Party. And when he lost, he went right back to being a Democrat. This whole brouhaha is about a former Democrat praising another former Democrat for what was once a Democrat policy. Republicans made Southern Democrats drop the race nonsense when they entered the Republican Party. Democrats supported race discrimination, then for about three years they didn't, now they do again. They've just changed which race they think should be discriminated against. In the 1920s, the Democratic platforms didn't even call for anti-lynching legislation as the Republican platforms did.
Thurmond's Dixiecrat Party was not the only extremist spin-off from the Democratic Party in 1948. Henry Wallace, formerly FDR's vice president and agriculture secretary, left the Democratic Party that year to form the communist-dominated and Soviet-backed "Progressive Party." Much as Thurmond's Dixiecrat Party was expressly pro-segregation, Wallace's Progressive Party was expressly pro-Soviet.
Coulter notes that President Bill Clinton dedicated a room at the Agriculture Department to Wallace, a pro-communist Democrat. (Clinton, it should be noted, also has extensively praised former Sen. William Fulbright, a hardcore segregationist, in much the same way Lott praised Thurmond. But Democrats didn't try to rid their party of such racial insensitivity, while Republicans are desperately trying to rid their own party of that Lott.)
A Rare Species Found at UT-Knoxville
And The Tennessean gets an interview with that rarest of creatures, the UT football player who graduates. Actually, an inspiring piece. Let's hope someone reads it to all the other UT football players.
A Hate Crime at Ole Miss?
Vandals scrawled vile and racist graffiti on the walls of some dormitories at the University of Mississippi on Nov. 6. But was it a hate crime? No, says Michelle Malkin. It was "an apparent racial hoax committed by black students against black students, but blamed on whites - until the suspects were nabbed last week."
At the time the racist vandalism appeared, Ole Miss was commemorating the 40th anniversary of desegregation of its classrooms. Local and national observers immediately assumed the vandals were white. Why allow a double standard of justice to prevail? If the attackers had been white, they faced possible federal prison time. Because the suspects are black, the most serious consequence they face is expulsion. Welcome to equal treatment under the law, 2002-style.
Where is the uproar over the hoaxers' callous use of lynching imagery and flagrant exploitation of the N-word - at Ole Miss of all places? And where is the national press on this matter? Fake hate crimes are an abhorrently common phenomenon on modern college campuses, where race-consciousness reigns in such a poisonous way that it would make integrationists weep. "Students of color" are herded into separate dorms, separate departments, and separate graduation ceremonies.
Don't Blame the Sales Tax
Yet another state faces a shortfall - and it's the income tax that bears the blame. California's deficit has hit a whopping $34.8 billion - about $1,000 for every person in the state.
[Gov. Gray] Davis, a Democrat, said the deficit over the next 18 months is up from a previously estimated $21 billion mainly because of a nosedive in personal income tax revenues, which make up a healthy portion of revenues flowing into the state treasury.
Revenue from the sales tax is not to blame.
Some good news from the story: Voters may soon see a clear distinction between Republicans and Democrats on fiscal issues, as California's elected Republicans favor spending restraint while the Democrats favor propping up unaffordable big spending with higher taxes. Of course you knew that already. Reports Reuters: Republicans have called for reduced spending while Democrats urge tax hikes in order to preserve important state programs.
GOP Governors Hurt Party By Raising Taxes
Analysts say efforts by some Republican governors to raise taxes - including, notably, Gov. Don Sundquist's four-year failed effort to enact an unconstitutional state income tax, followed by his embrace of a billion-dollar sales tax increase that was the largest tax increase in the state's history - will hurt the GOP politically with voters.
Analysts warn that tax increases will hurt politically, especially for Republicans, as well as economically. "Republicans can talk all they want about it being a user fee or a temporary measure or a disagreeable, but necessary step," said Pete Sepp, National Tax Foundation spokesman. "That's not going to wash with voters who elect Republicans with the expectation that they will at least hold the line on taxes if not cut them."
It's an effort to "be popular with everyone" that won't succeed, said Sepp. "They want to be the education governor, or the transportation governor, or the compassionate governor" by pandering to special interests, he said. But such efforts will "[fail] to earn the respect of the interest groups pressing them to do it, because it's never enough."
But two GOP governors get points for cutting taxes rather than raising them. Colorado Gov. Bill Owens and Florida Gov. Jeb Bush. Owens and Bush - sure would make a nice ticket in 2008.
"A Screech-fest of Environmental Jibberish"
Brock Yates says our reliance on imports of oil from the Middle East isn't as big a national problem as our failure as a nation to successfully deal with traffic jams, and takes NYT columnist Thomas Friedman to task over his call for a "Manhattan Project" to free the U.S. from such dependence on foreign oil.
Mr. Friedman recently proposed a Manhattan Project to deal with our long-term energy needs. The centerpiece of the effort would be to relieve our dependence on foreign oil. Byproducts would be stabilizing our economy and perhaps settling our differences with the Arab world and the festering boil in Israel.
This is a grand idea, no doubt leading to hydrogen-based fuel cells powering our automobiles and our homes while 1000-foot super-tankers rust away before their scrappage on Indonesian beaches. Of course one wonders about the unintended consequences of, say, plunging the Middle East even deeper into poverty and despair once their oil revenues are cut off. But that is apparently of little concern to our great thinkers, who remain transfixed on the idea that all problems will be instantly solved as soon as the dreaded gas-guzzlers are excised from our highways.
It gets even better.
After Lott: Frist?
Tennessee Sen. Bill Frist is considered a likely pick to replace Sen. Trent Lott as Senate Majority Leader, if indeed Lott can be ousted from that job as payback for his racially insensitive pro-segregation remarks. He'd be a great pick.
Will Gore Be Back in '08?
James Pinkerton thinks so.
But can Gore succeed like Nixon did?
Gore's biggest problem is that other top Democrats seem to be making the same calculation - that it's best to sit out '04 and wait for '08. And one of them is named Hillary Rodham Clinton. Imagine Nixon having to run for the GOP nomination against a Senator who was also Mrs. Dwight Eisenhower in 1968. That would have been a challenge requiring all of Nixon's trickery to overcome. And Nixon had more tricks than Al Gore ever will.
A Call to Arms
If you care about freedom, America, and the Second Amendment, read this. Read every word of it.
To Phillipe and other genuinely interested and open-minded Europeans, let me simply refer you to that great unbiased, uncorruptible teacher: History. Ask yourselves why intellectual elites so love totalitarian states where people are unarmed sheep. Look at the examples of Hitler, Stalin, Pol Pot, Mao, and Saddam. If you hate America so much, then ask yourself why no one f--ks with Switzerland.
And when contemplating your ever-so-sophisticated foreign policy, ask yourselves what real options you are left with when facing a determined, heartless bastard like Hitler, Napoleon, Ghengis Khan or Attila.
Maybe the time for real evil like that has finally gone. I hope you are right, I really do. I don't want to go fight those bastards; I'd rather barbeque and watch the Gators. I'm sure the Jews in 1930 Germany thought such things could never happen again, not in a place as "civilized" as Germany. I'm sure every bound and beaten musician, surgeon, philosopher and painter being lined up at the side of a ditch thought exactly that.
Try and understand this about Americans like Rachel and me and most of the rest here: We are not going out like that. Get it? We'll put up with handgun murders if we have to, but we are not going down that road. As a general rule, we are quiet, peaceful, decent people with better things to do than referee endless bloodbaths abroad. But it is possible to get our attention. And believe me, you have it now, and I believe the time will come when you will regret calling us cowboys and Nazis and idiots, not when it comes time to fight us, because that day will not come, but rather when you once again need the help of people like Rachel and me and my late father, fighting forces you ignore not from superior sophistication but from sheer moral cowardice.
These trust the people freedoms are so deeply engrained in the fabric of America as to be genetic, I think. I used to worry that we'd bred that out of us, and then along comes Todd Beamer and company on United Flight 93, who, first among us that day, realized he was being marched to his death and decided to do something about it.
The framers, in their wisdom, put the 2nd Amendment there to give teeth to the revolutionary, unheard-of idea that the power rests with We The People. They did not depend on good will or promises. They made sure that when push came to shove we'd be the ones doing the pushing and shoving, not the folks in Washington. And by the way, gun rights supporters are frequently mocked when they say it deters foreign invasion - after all, come on, grow up, be realistic: Who's nuts enough to invade America? EXACTLY. It's unthinkable. GOOD. 2nd Amendment Mission 1 accomplished.
There's more. A lot more. Read every word of it. You won't regret the time you'll invest. And you'll owe Rachel Lucas a debt of gratitude for posting it.
Trent Lott Update
Radley Balko explains why Trent Lott can't be Senate Majority Leader. Don't worry, says U.S. News: he won't be.
Balko sez: There is, for example, a case to be made against affirmative action that's completely free of bigotry or animus toward African-Americans. But after the events of the last two weeks, Trent Lott can't make it. There is a case to be made for continuing the success of welfare reform that's completely free of the racially charged rhetoric, but after the events of the last two weeks, Trent Lott can't make it. There is a bigotry-free case to be made that government ought to get out of the business of race-based bean counting and monitoring the hiring practices of private firms, but after the events of the last two weeks, Trent Lott can't make it. There is a bigotry-free case to be made that federal statutes aimed at reducing hate crimes come dangerously close to thought-policing, that they're thinly veiled attempts to outlaw politically incorrect opinion. But after the events of the last two weeks, Trent Lott can't make it.
From U.S. News: Fellow Republican senators began adopting President Bush's position of nonsupport for Lott. That, say aides, is a clear signal that he has lost the confidence of his caucus. "All he has to do," says one, "is read the first sentence in the New York Times lead today to see it's over." That story begins: "Republicans with close ties to the Bush administration said today that Sen. Trent Lott had no chance of remaining majority leader and that the White House wanted him out."
Don't Bet On It
South Knox Bubba is offering up doubts about this AP story that says state legislators are looking at an estimated $880 million in new Lotto revenue. Ain't true, says SKB.
So, you might ask what's the big deal if lottery revenues are less than projected? Well, the State of Tennessee has a history of basing our spending budgets on wildly optimistic revenue projections. It sounds like this program will be no different. But, I could be wrong. We'll see.
Indeed we will. And I doubt we'll like what we see.
Democrats Ignore Realities of Social Security
Here's a good explanation of why Social Security must be privatized
Those who oppose private accounts ostensibly favor the current system. As illustrated earlier, there are only two ways to preserve the current system: higher taxes or lower benefits. To put it another way, adherents of the current system force us to choose between sticking it to senior citizens and sticking it to our children.
As baby boomers retire, Social Security benefits will soon exceed Social Security taxes. Regardless of how many IOU's there are in the trust fund, benefits can only be paid through some combination of increasing deficits, raising taxes, or cutting spending on programs, such as national defense and education.
The critics of Social Security privatization, most of whom are Democrats, can run on fear, or they can run on facts. But not both. They can't fool everybody for too much longer. Pretty soon, our children will grow up.
Your Tax Dollars at Work
Today's Washington Post reports that government-backed effort to provide a "personal notification service" to give commuters "personally tailored" traffic reports has folded for lack of three things: data, customers and profits.
A high-tech phone service launched six years ago to give Washington area motorists personally tailored traffic reports will fold today - before most people knew it existed. Local governments spent $8 million on SmarTraveler, calling it an essential public service in a region plagued by traffic jams. The money was supposed to cover start-up costs until the private operator could turn a profit. Five other areas also invested millions in SmarTraveler, but all have abandoned it as a profit-making venture.
Oops. Missouri Makes a Costly Mistake
Missouri may have to give back some $450 million in tuition illegally charged to students at the University of Missouri, reports today's New York Times:
University of Missouri alumni who went to court here claiming that state law entitled them to free tuition have won a ruling that could force the university to refund $450 million to some 200,000 students, past and present. University officials were stunned by the ruling, in a lawsuit they had regarded as frivolous. "If the court says we have to refund $450 million, it would be a severe problem," said David Russell, a university spokesman. "Our total budget is $1.87 billion, and $450 million is about the yearly operating budget" of the main campus, in Columbia.
Their suit, filed four years ago, was based on an 1889 law providing that "all youths, resident of the state of Missouri, over the age of 16 years," could attend the university without paying tuition. Missouri was one of more than a dozen agrarian states that adopted such laws in the late 1880's, a result of a pro-farm populist movement. Robert Herman, the lawyer who brought the case, says all those states except Missouri changed their laws by the 1930's. But in Missouri it was only last year, with the suit pending, that the law was changed to allow for tuition payments.
Manuel Pacheco, the university's president, testified at trial that it had never broken the law, because, he said, the charges that undergraduates paid for each credit hour were not tuition but instead "educational fees." In the ruling, however, Judge Kenneth M. Romines of St. Louis County Circuit Court called that distinction a "chimera," pointing out that even the university's own internal documents referred to the fees as tuition.
"Dr. Pacheco's testimony was nothing more than pure pretense, incredible and sadly not believable," Judge Romines wrote in the decision, issued on Dec. 6. "Resort to all editions of all dictionaries and honest scholarship demands the conclusion that `tuition' and 'educational fees' are synonymous."
The law is the law, even if it's a law from 1886. Missouri should have followed the laws, or changed it to allow charging tuition. It did neither. Then it compounded the problem by sending the university president into a court room to lie about it. The mistake's going to cost them $450 million.
Gore vs. Hillary
David Frum thinks Al Gore just didn't wanna get clobbered by Bush in '04, and is looking forward to possibly running for the Democratic presidential nomination in 2008.
Gore seems to have calculated that the risk of losing the nomination in ’04 was too great to bear – especially in an election year when the incumbent president was looking very strong. So he’s decided to do a Nixon – sit out the election after his defeat, let some other shmoe get whomped next time out, and start preparing now for ’08. Of course, there’s another strong national Democrat with an eager eye on ’08: Hillary Clinton. And quite a lot of the psycho-drama of the next six years in American politics will be watching these two strange beasts try to do each other in. And the most exciting part of the psycho-drama will be watching the most popular and prominent of all national Democrats, Bill Clinton, decide which of these people he dislikes more.
Gee. That IS a tough one.
Tax Cuts in American DNA
Bruce Bartlett examines America's love affair with tax cuts.
Conservatives believe that spending is the ultimate enemy, but it is fueled by higher taxes. They cite another "law" put forward by political scientist C. Northcote Parkinson. He argued that "expenditure rises to meet income." In other words, government will always spend every penny it has, and more if it can. Therefore, the only thing limiting the size of government is the ability to take money out of its citizens' pockets. In the 1970s, Nobel Prize winning economist James Buchanan formalized this relationship. He argued that the best way to limit the size of government was to limit its ability to tax. This is a view that was endorsed by the American people in what came to be called the "tax revolt," which began with Proposition 13 in California in 1978. Since then, voters have regularly supported the tax-cutting candidate against the tax-increasing candidate whenever they had a clear choice.
S.C. Budget Woes Blamed on Income Tax
South Carolina faces a budget gap and is having to enact an across-the-board 5 percent reduction in spending because of less-than-expected revenue from the state income tax, reports the Associated Press today.
Not the sales tax. The income tax.
An economist for the state told South Carolina lawmakers recently the state's $348 million budget shortfall can be traced in part to an apparent downturn in taxable bonuses paid to employees. "It's the loss of extra income that's killing us," Bill Gillespie, chief economist for the state Board of Economic Advisors, told lawmakers recently. "Our sales tax is doing OK," he said. "We need income tax."
Gillespie said the state has seen a $40 million drop in income tax collections, which can't be attributed only to stock market losses or rising unemployment, but also because as many as 100,000 workers in South Carolina didn't get the same bonuses last year that that got in 2000.
The evidence from South Carolina and other states clearly shows that if Tennessee had enacted an income tax in 1999, when Gov. Don Sundquist first proposed it, Tennessee's budget problems would be worse today, not better. As I've said here before, by defeating the income tax, we dodged a bullet.
A former Emory University historian who write a book full of lies designed to undermine the Second Amendment has had his prestigious prize for history writing revoked.
Columbia University said [Friday] that its trustees had voted to rescind the Bancroft Prize awarded last year to a book by an Emory University historian, citing accusations of scholarly misconduct. The prize had been awarded to Michael A. Bellesiles for "Arming America: The Origins of a National Gun Culture," published by Alfred A. Knopf in 2000. This is the first revocation of a Bancroft Prize since it was first awarded in 1948. The prize is awarded for works in American history "of enduring worth and impeccable scholarship that make a major contribution to our understanding of the American past." The trustees have also asked that the $4,000 prize money be returned, a university spokeswoman said.
The book, which argued that only a small percentage of people owned working firearms in colonial America, was hailed as a groundbreaking work after its publication. Advocates of gun rights criticized the book, seeing it as an effort to suggest that the Second Amendment right to bear arms did not apply to individuals. But other scholars who tried to replicate the research of Professor Bellesiles soon began to make accusations of errors and possible misconduct. Professor Bellesiles resigned from Emory in October after an independent panel of scholars strongly criticized his work. Their 40-page report accused him of "unprofessional and misleading work" and said that at times it "does move into the realm of falsification."
This piece by Northwestern University law professor James Lindgren rips the Bellesiles book and exposes its factual errors and the author's lies.
What made the book such a sensation was his description of guns in the seventeenth, eighteenth, and early nineteenth centuries. He claimed that guns were exceptional rather than common, in poor condition even in private hands, not stored in the home but rather in central armories, too expensive to be owned outright by most men, and restricted by law to the Protestant upper and middle classes. None of this is true.
Sports Break: Titans Update
Just how good is Tennessee Titans Quarterback Steve McNair? Very. McNair needs only 12 yards passing and 76 rushing to become the fifth quarterback in NFL history to throw for more than 18,000 yards and rush for more than 3,000 in a career. He would join Fran Tarkenton, John Elway, Randall Cunningham and Steve Young in that select group.
Yes, I made a change to the design of the site. Wider body text should mean less scrolling to read each article. I hope you like it. I'm currently trying to solve the archiving problem. If you wish to see the October 2002 or November 2002 archives, simply click the September 2002 archives link and then change the month in the URL. Or click here for October and here for November. I'm also working on adding an email newsletter subscription box.
The Empire Strikes Back
Voters in Washington state voted last month to limit auto-registration fees to a flat $30 per year. But the state is ignoring the new voter-passed law, which took effect Dec. 5. Now, the anti-tax group is having to sue the government to force the government to obey the law.
The state has continued to collect an annual car tax of 0.3 percent of the car's value, in King, Pierce and Snohomish counties, which provides about $50 million annually for Sound Transit, the agency that operates express bus service and a commuter line in the Seattle area, and is trying to build a light rail system.
Reports the Seattle Post-Intelligencer: While Initiative 776 repealed the tax when the measure became law Dec. 5, the state has continued to collect it, with Sound Transit officials saying they believe the initiative will be tossed out in court as unconstitutional. They also argue that the initiative may have passed statewide, but it failed in their three counties, and the voters in those counties had previously voted in favor of the tax to fund Sound Transit projects.
"Politicians and bureaucrats are making a mockery of justice by conspiring to ensure the voters don't get the policies they approved on Election Day," said Tim Eyman, leader of the Washington state tax revolt.
Washington's experience with the initiative-and-referendum process as a tool to reduce taxes shows the IR process to be spotty at best. Too often, politicians, bureaucrats, special interests and the courts collaborate to undermine any successful initiative by deeming it to be "unconstitutional" or suffer from some technical error that causes it to be unenforceable on the government. The lesson here: the best solution to reigning in runaway taxes and spending is a hard constitutional cap on both. Colorado's Taxpayers Bill of Rights (TABOR) is the model: It limits the growth of government spending to the combined rate of inflation and population growth, requires surplus revenue over that growth cap be returned to taxpayers, and requires voters approval of new taxes, tax increases, spending surplus revenue, or increasing government debt.
For more on how the Colorado plan is working, and efforts to create a TABOR in Tennessee, go here, and here, and here, and here, and here. And this link will take you to a post with links multiple TABOR resources.
If Only We Could Tax Bureaucratic Stupidity
A publication from the Tennessee Department of Revenue discussing the state's participation in a multi-state organization that aims to improve collection of "use" taxes makes a stupid assertion about the effect on the tax burden of better collection of such taxes.
Here's an excerpt. Pay close attention to the last two lines.
What is the use tax?
States that impose a sales tax on purchases also tax the use of property if it is brought into that state untaxed and is otherwise taxable. This tax is commonly referred to as a use tax. The use tax complements the sales tax by subjecting untaxed merchandise purchased from an out-of-state source to the tax.
While the seller is responsible for the collection and remittance of the sales tax, the consumer (or customer) is responsible for remittance of the use tax. Use tax applies to non-taxed purchases from sources such as mail order catalogs, television shopping networks, auctions, and toll free (1-800) telephone shopping services. Individuals that travel out of state and purchase untaxed merchandise that is shipped to their homes are also liable for the use tax in their resident state.
Why is another state's use tax important to me?
The use tax represents a large source of revenue for the states. If the tax goes uncollected, the lost revenue must be made up in other ways such as higher tax rates. If the use tax is collected, the overall tax burden is lightened.
If more tax is collected, the tax burden goes down? That's absurd. If the state does a better job of collecting the tax, the state has more money and the people have less. Perhaps they meant to say if the state collects use taxes, it could lower the sales tax rate. But even in that case, the tax burden is not lightened, it is merely shifted around.
In another publication, the state Department of Revenue says: If you make a purchase and Tennessee sales tax is added to the price, you do not owe any use tax. However, if you buy merchandise through the Internet, over the telephone, from mail order catalogs, etc., and sales tax is not added to the price, then you are responsible for paying the use tax directly to the Department of Revenue. Also, if you travel outside the state and purchase untaxed merchandise that is shipped to your Tennessee home, you are liable for the use tax.
But the state has no way to equitably enforce the tax. It can't assess it fairly on all taxpayers - because there is no way for the state to collect the tax from all or even most Tennessee residents who, theoretically, owe it. Such spotty enforcement of the tax would appear to violate a basic principle of constitutional governance, that all people are to be treated the same, a principle outlined in the first sentence of Article 11, Section 8 of the Tennessee constitution: The Legislature shall have no power to suspend any general law for the benefit of any particular individual, nor to pass any law for the benefit of individuals inconsistent with the general laws of the land; nor to pass any law granting to any individual or individuals, rights, privileges, immunitie, [immunities] or exemptions other than such as may be, by the same law extended to any member of
the community, who may be able to bring himself within the provisions of such law.
The lack of enforcement of the use tax is not a loophole, it is a feature. Any tax that does not include a collection mechanism isn't really a tax at all, but a request for donations.
You can voluntarily report your "use tax" liability to the state using this form. The state actually mails those forms to some taxpayers from time to time. Because filling out the form is voluntary, you can do what most taxpayers do: Toss the form in the trash.
A Very Cool Science Project
Sez here the Antarctica ice sheet seems to be getting larger. Right now, however, scientists don't know whether the globe's various ice packs are growing or shrinking. NASA's new Icesat satellite, scheduled for launch aboard a Delta II rocket Thursday from Vandenberg Air Force Base on the central California coast, is designed to find out.
"Very simply, we do not know," said Jay Zwally, the mission's project scientist at NASA's Goddard Space Flight Center in Greenbelt, MD. "Not only do we not know what is happening today, we don't know what is going to happen in the future."
However, the satellite can answer only one question in the debate over global warming. Even if it confirms that the world's ice is melting, some scientists dispute the widely held view that carbon dioxide is responsible for raising global temperatures. Even if global warming is taken as a given, there is vast disagreement on whether it is necessary to resist those changes, because some argue the earth can adapt to virtually any environmental change.
Wading Into a Political Minefield
Wow. The courage it takes for the Bush administration to even broach this topic is stunning. But the truth is, the Left has been hard at work shifting most of the tax burden to the wealthy while extending more and more benefits to the lower and lower-middle classes, in hopes of creating a permanent arrangement in which a majority of the people are dependent on government (read: Democrats) while the burden of paying for it pays on a small minority of people. Such would become permanent because those who pay for it all would be vastly outnumbered at the voting booths.
Answering critics who say the working poor do face high taxes because they pay high Social Security payroll taxes, outgoing White House economic adviser Lawrence B. Lindsey told the AEI tax forum that the 12.4 percent Social Security levy should not be considered when tax burdens are calculated. Lindsey said the Social Security tax is ultimately returned to the taxpayer as a benefit. Lindsey compared the Social Security tax to a deposit in a neighborhood bank's Christmas Club. In such clubs, periodic deposits are returned in a lump sum during the holiday season, and Lindsey said no one would consider such deposits a tax.
Early this month, J.T. Young, the deputy assistant treasury secretary for legislative affairs, lamented in a Washington Times opinion article: "[Higher] earners cannot produce the level of revenues needed to sustain the liberals' increasingly costly spending programs over the long-term. . . . If federal government spending is not controlled, then the tax burden will have to begin extending backward down the income ladder." (Editor's note: Click here to read Young's column.)
Rep. Jim DeMint (R-S.C.) has argued for two years that the nation is entering a dangerous period in which the burden of financing government is falling on too few people. In such an environment, the masses will always vote for politicians promising ever-more-generous social programs, knowing they will not have to pay for such programs, DeMint warned. "This issue is coming to a head," DeMint said earlier this month, just minutes after making his pitch to outgoing Treasury Secretary Paul H. O'Neill. "You can't maintain a democracy if the people who are voting don't care what their government costs."
The Left, on the other hand, doesn't want to maintain a democracy. The Left wants to gain and maintain their own power. Progressive taxation that shifts most of the cost to the wealthy while providing most of the benefits to the not-wealthy is one way to do it.
The way to solve the problem: Eliminate the federal income tax code wholesale and replace it with either A) a flat income tax that is constitutionally capped and prohibited from becoming a multi-rate tax, or, B) a national sales tax. I prefer the latter.
Andrew Sullivan recently begged for readers to pony up a few bucks to keep his blog going, and they did. I don't like to beg. And I'm not trying to turn this blog into my sole source of income - far from it. But the Amazon tip jar near the top right side corner of my blog is silent whenever I shake it to see if there's anything inside. Doing this for "free" still costs me time. So if you read this blog and enjoy it, please drop a few dollars into the tip jar. Thanks.
And please email everyone you know who might be interested in reading this blog and tell them about it.
That's it. Now back to business...
Strange But True: Guns Are Safer Than Doctors
We should ban doctors, not guns, says South Knox Bubba. Why?
Statistically, a doctor is approximately 9,000 times more dangerous than a gun owner.
Go to his site for the relevant data and calculations.
Economist Joseph Schumpeter called it creative destruction, and it is what powers capitalism. Without it, there would be no economic progress and growth. Now, it's roiling the telecommunications industry.
A November ruling by Panama's Supreme Court indicates how friction on the industry's margins is starting to sting the big companies at its center. In that decision, the court immediately suspended a government decree that had prohibited Panamanians from making Internet-based phone calls. International calls routed over the Internet and placed on either computers or regular telephones are often offered at steep discounts. The technology used to route Internet calls is a relatively inexpensive way to route calls around the world. Although its growth is still somewhat sluggish and in the early stages, Internet-based calling has expanded so much that it is understandable why monopolistic telephone companies, especially in the developing world, are feeling threatened.
Today's TechCentralStation.com also looks at Internet-based telephony, also called voice over Internet protocol or VoIP, and predicts it will drive rapid growth of Internet usage and broadband access.
Broadband connections are proliferating like kudzu. But it's voice, not data or video, that is becoming one of the biggest selling points. Callers are finding that by bypassing the phone monopolists' connection charges, they can cut their long distance phone bills by 20 to 30 percent.
TCS looks at how some African countries are turning to VoIP - voice over Internet protocol - to expand phone service more rapidly and cheaply. TCS also examines whether the telephone companies should be allowed to assess any additional access charges on VoIP calls and concludes they should not unless they "prove that it poses a real burden - not one of their imaginary ones - on their phone networks." Says TCS: "Per minute access charges would have thwarted the Internet data revolution, they can't be allowed to delay its growth as a medium that gives the people a real voice."
Another example of why I consider TechCentralStation.com "must reading" if you want to fully understand what's happening in the economy and technology today.
How Blogs Drove the Lott Story
What you are reading right now is a weblog or "blog." It is part of the "blogosphere," which one writer calls "the cyberworld of personal op-ed pages on the Internet." Blogs are a new form of journalism. And they are the reason the Trent Lott Affair became a national story even though Big Media mostly ignored it.
Here are two stories explaining how the blogs turned Lott's idiotic comments into a national story: The Internet's First Scalp - by New York Post columnist John Podhoretz. And A Hundred-Candle Story And How To Blow It - by Washington Post media critic Howard Kurtz
Whacking Jimmy Soprano
So far, Tennessee House Speaker Jimmy Naifeh has not paid a polical price for trying to ram an unconstitutional and unpopular income tax through the Legislature. Frank Cagle explains why, if Naifeh is re-elected Speaker, it will be Republican legislators who bear the blame.
There are enough House Democrats dissatisfied with Naifeh's heavy-handed rule and his pushing of a state income tax to elect someone else. But these Democrats are not suicidal. They will not vote for someone else unless they see that House Republicans will be united and will vote for an alternative candidate. If they see that House Republicans intend to vote for Naifeh then they will not go marching off the cliff.
A Republican vote for Naifeh this session is not a courtesy, not a formality, not a meaningless gesture. It is a real vote to retain him in power, because he will not stay there if Republicans do not support him.
Cagle's right. The Republicans seem too scared of the legislature's Jimmy Soprano to really explore whether they could put together a coalition to defeat him. But such a coalition is within their grasp. They could whack Naifeh. But my guess is they won't.
Government Healthcare, Sick Economy
Arnold Kling's latest column at TechCentralStation.com explains why Medicare is a threat to the economy - and what the Bush administration should do about it.
The most critical economic issue for the 21st century is socialized medicine. Largely because of Medicare, the default scenario for the United States in the middle of the century is that government spending on health care will be about 10 percent of GDP. It could be twice that under a "single-payer" system, as endorsed by former Vice President Al Gore. With Republicans in control of Congress and the Presidency, this may be the last chance to change course in this country. If we continue on the path of socialized medicine, there is every reason to fear that the United States will fall into the debilitating, low-growth, over-taxed trap that has Europe and Japan in its grip.
If the Bush Administration is looking for a bold economic agenda, then the best choice would be to take steps to return health care to the private sector. The most effective way to do this would be to raise the Medicare eligibility age for everyone under the age of 50.
I'm guess Kling wouldn't like TennCare very much at all.
In the 21st century, the size of government will be determined by the mix between public and private spending on health care, because that is where the money will be. Under current policy, those of us who favor a smaller government are on a losing course.
No, he wouldn't like it one bit.
What would you call someone who went out and uprooted smaller, weaker residents from their very comfortable home and forcibly relocated them in the name of "science" and "progress"? In America, we call them "environmentalists."
"We realized they didn't really have a source to come from, so we started relocating them," Fagg said.
What About That "Separation" Thingie?
A court orders a Memphis church to hold an election to choose whether or not to retain its embattled pastor.
During the election, the church gym rivaled any political polling site with its eight electronic voting machines, 10 sheriff's deputies and monitors from the Election Commission. Two Memphis police officers were called to direct traffic, and members of the media were stationed outside the building behind a chalk line. The election was the result of a lawsuit filed in October by 14 church members who questioned Thomas's fiscal management of the church, one of the city's largest black congregations.
It seems to me there are church-and-state issues raised by this story. But the Memphis Commercial-Appeal doesn't mention them at all.
Now That Al Gore is Gone...
Now that Al Gore has decided not to run for president in '04, the Democrats are thinking about offering up John Kerry as the sacrificial lamb. Mark Steyn makes that sound appealing ... if you're a Republican.
The reason Al Gore isn't in the White House today is because of the cultural disconnect between him and southern rural white males. Though officially running as a Tennessee farmer, he was perceived as an elite Massachusetts liberal. Replacing him with a real elite Massachusetts liberal seems unlikely to return Tennessee, Arkansas and West Virginia to the fold. As for the notion, promoted by many respected political analysts, that Mr. Kerry, being from Massachusetts, would have an edge in the New Hampshire primary, that betrays a somewhat hazy grasp of the relationship between the Granite State and its southern neighbor. In 2004, Granite State Democrats will be looking to recover from the hammering they got last month when a pro-tax gubernatorial candidate dragged the rest of the ticket down with him -- elevating a Massachusetts liberal who wants to raise taxes is not the best way to do that.
Now already I can hear Sen. Kerry frothing like a vat of Alberto Balsam on Don King's head: "I don't want to raise taxes. I just want to repeal the tax cuts you were expecting to get but haven't yet. It's not the same!" To which I say: Whatever, dude. But personally I'd save the hair-splitting for Cristophe's. By the time you've spent 20 minutes explaining why your tax hike isn't really a tax hike, the only two words anyone's going to remember are "tax" and "hike."
Of Football and Fair Taxes
In this story from today's Tennessean reporting on discussions involving the city of Mashville and the Tennessee Titans football franchise over the possibility of a "ticket tax" to help fund capital improvements of the city-owned/team-run Coliseum, there is this paragraph and its very curious final sentence:
Estimates indicate that a $1 tax on each ticket at The Coliseum could raise up to $1 million a year. That would include the team's 10 games annually, plus Fan Fair and other events. It is unclear whether Tennessee State University games could be exempted under the law.
The theory of a ticket tax is that the people who use the stadium are those who wear it out and contribute to the need for funds for upkeep and improvements - and also benefit from those improvements. The tax is not a tax at all, but a user fee. So why would or should tickets sold for TSU games held at the Coliseum being exempted from that user fee? Is there any logic to taxing fans who attend a game on a Sunday but not on a Saturday? No.
Even more curious: The Tennessean raises the issue in that one sentence, then never mentions it again,. and gives no hint as to who is pushing to exempt TSU games from the tax. But someone clearly is.
The Latest from the SKBubba Research Institute
South Knox Bubba thinks I'm psychic, and adds a comment or two about UT economist Bill Fox, asking, "Is is just me, or has anyone else noticed that Bill Fox's optimistic 'predictions' seem to have gotten the State into spending trouble?" (Note to SKB: I noticed. Scroll down to my post today titled "Question.")
In an unrelated posting brought to my attention by Instapundit, SKB reveals the results of his investigation into the Spaghetti Principle Effect.
A Symbolic Gesture
San Jose Mercury News coluimnist Peter Delevett has some good suggestions for California's legislators and Gov. Gray Davis when it comes to that state's multi-billion-budget gap.
The state's politicians ought to make a symbolic gesture to show they feel voters' pain. Davis already returns $10,000 of the $175,000 voters pay him each year; why not more? California legislators, meanwhile, earn $99,000, more than any other state lawmakers in the nation. The $12 million we spend on the governor and lawmakers is enough to spare many of the foster care and child welfare programs Davis wants to cut. Skipping a paycheck or two might prompt our fearless leaders to look harder for ways to save those key programs. Davis also might put his prodigious fundraising talent to work; after all, he raised more than $60 million for his re-election campaign.
Delevett doesn't discuss in his column the real cause of California's budget gap: wildly increased spending in the last few years.
Why is it when revenues don't match estimates, it is always portrayed as the fault of the revenue? Isn't it really the fault of those who made the estimate?
After all, tax revenue is the natural result of the natural economic activity of 5.6 million Tennesseans. The estimate is an artificial number created by the five-member State Funding Board - the governor, secretary of state, comptroller of the treasury, state treasurer, and commissioner of the Department of Finance and Administration - who are aided by testimony from three economists. In the past four years, the board - dominated by pro-income taxers - has selectively heard only from economists who are either openly in favor of or not publicly hostile to the income tax.
So why is the artificial "estimate" created by 8 people considered right and valid, while the natural economic activity of 5.6 million people is considered wrong and invalid?
Perhaps stories like this one and this one would be more accurate and fair if instead of blaming the budget gap on "sluggish revenues" and tax collections that "may fall short," they were to describe the budget gap this way in reporting on the monthly revenue data:
NASHVILLE - State officials today reported that, four months into the fiscal year, it is clear that the officials whose job it is to estimate how well the economy is doing and, therefore, how much revenue the state will collect, did a poor job in making their estimate for the current fiscal year. Because of the State Funding Board's over-optimism, the legislature has over-committed the state to the tune of at least $28 million this year. If the estimate continues to be wrong, the state could be over-committed by $60 to $90 million this year.
Some ascribe the mistaken estimate to ineptitude on the part of the Funding Board. Others say it is the Board's myopic refusal to hear from more than a small number of economists, one of whom (the University of Tennessee's Dr. Bill Fox) is an incessant cheerleader for higher taxes and more state spending. These critics note that there are several highly qualified economists in Tennessee that the Board ignores - and in each case those economists happen to be proponents of limited government and low taxes.
That story would more accurately reflect the truth about revenue estimates and the State Funding Board.
There is a solution: Base each annual budget on an estimate of zero percent revenue growth - in effect, the state would plan to spend next fiscal year exactly the amount of revenue it collected this fiscal year. Then, if revenue came in above that "estimate," - which, historically, it would do at least 95 percent of the time - the state would have a surplus.
For more on the State Funding Board, click here and here and here.
Why We're About To Go To War Against Iraq
This photo ran in The Tenenssean on Sept. 18. It was taken outside the downtown Nashville Convention Center while President Bush was delivering a speech inside. This young Iraqi girl was clutching her American flag ever so tightly, while the nearby anti-war protestors were not holding American flags at all.
P. Casey Daley/Tennessean staff
Hoping to see President Bush, Safaa Albadran, 4, stands outside the downtown convention center under a banner held by her father, Karim, left, proclaiming "Saddam: Out - Democracy In."
Trent Lott and the Double Standard
Yes, West Virginia Sen. Robert Byrd is a bigot, a racist, a former member of the Ku Klux Klan and all that. Yes, Jesse Jackson once called New York "Hymietown." Yes, former President Bill Clinton not long ago praised former Arkansas Sen. William Fulbright as a humanitarian, a great American, etc., etc., - and Fulbright was a segregationist. Yes, yes, yes, all of that is true. And yes, Democrats get a pass from the liberal media on their racist remarks while the media and the Democrats howl for the head of Trent Lott for his. Yes, there's a double standard. Yes, it is terribly unfair.
But Lott still has to go.
Why? Because he is not the right man to lead the Republican Party in the 21st Century. Because his indefensible words in praise of Strom Thurmond's pro-segregation presidential campaign of '48 can not be tolerated nor rewarded with the continuation of the power, prestige and pork of being Senate Majority Leader. And because if we conservatives are willing to force our closet racist from power, it makes the liberals look all the more crass and hypocritical and power-grasping for not sticking the political knife in the backs of theirs.
We win by convincing Trent to step down and hand the reigns of power over to someone else. Someone like Bill Frist, perhaps. Defending Lott with the argument that there's a double standard at work misses the point. But by abandoning Lott, the GOP can make the point crystal clear: double standard or no, the GOP will do the right thing, even though the Democrats won't. We'll see your double standard and chose the higher one. That's leadership. That's why Trent Lott must step aside.
Lott Gaffe Hurts Pickering?
New York Newsday has an interesting look at whether Trent Lott's racially insensitive remarks may cost Charles Pickering a seat on the federal appeals bench. Pickering is a well-qualified U.S. District Court judge in Mississippi whom President Bush had nominated to the Fifth Circuit Court of Appeals, but whose nomination the Democrats had refused to allow to come to a vote on the flimsy (indeed disproved) charges that Pickering was insensitive to minorities - knowing Pickering would have won confirmation if the full Senate had been allowed to vote.
Pickering was defeated on a 10-9 party-line vote by the Judiciary Committee in March after civil rights groups said Pickering supported segregation as a young man in Mississippi. Pickering's opponents also point to his conservative voting record as a Mississippi state lawmaker and decisions as a judge. Pickering's supporters, including some Mississippi Democrats and black leaders, say Pickering supported civil rights efforts as far back as the mid-1960s.
The Bush administration was considering renominating Pickering, now that the GOP controls the Senate. But Pickering and Lott are friends.
The Who-Will-Replace-Trent Lott-ery
Tomorrow's USA Today will carry a Walter Shapiro column that savages Trent Lott.
Here's an excerpt:
The odds on his survival plummeted Thursday when George W. Bush rebuked the man who stubbornly clings to the notion that he can serve as the appealing public face of Senate Republicans.
Such is the power of the bully pulpit. All it took was the president to declare, "Any suggestion that the segregated past was acceptable or positive is offensive and it is wrong. Recent comments by Senator Lott do not reflect the spirit of our country. He has apologized, and rightly so." Those three sentences launched the Lott lottery, the contest to pick the date the beleaguered senator will relinquish his leadership duties.
Senate Majority Leader Bill Frist has a nice ring to it, doncha think?
A Definite Downward Trent
Glenn Reynolds has links to more devastating stuff for Trent Lott, who ought to be reading the handwriting on the wall by now. Memo to Trent: Let someone else be Senate Majority Leader. Go to Instapundit and start here, then scroll down for more. Don't miss this one. Also, the new ToughTimes blog has a very damaging report on Lott. Turns out, Lott lead the charge to keep blacks out of his fraternity at the University of Mississippi.
Lott should go - for the good of the Republican Party. Tennessee Sen. Bill Frist would make a fine Senate Majority Leader.
Carter: World Better off if U.S. Poorer
That's the gist of the economic policy portion of former President Jimmy Carter in accepting the Nobel Peace Prize.
The Rocky Mountain News is having none of it:
...Consider the claim Carter made in his speech that the world's developed nations should "share with others an appreciable part of our excessive wealth." Excessive wealth? Without as much wealth as the developed world produces, the undeveloped world would be in that much more of a jam. Where would the Third World find the capital it so desperately needs to develop its resources? Where would it find the markets for its goods? Would the Third World be better off if the developed world were poorer? Was it better before the Industrial Revolution when being poor was the norm everywhere on the globe?
And in the developed world itself, does Carter suppose that increases in wealth contribute little or nothing to the solution of social problems, to better environmental stewardship, to better health - in short, don't increases in wealth ease the plight of those who are worst off in the richest nations, too?
Yes it does. But give the old man a break. Perhaps Carter was just reminiscing about how effectively he made the United States a whole lot poorer during his presidency.
Sundquist Legacy Update
Here's another story about the fine fiscal stewardship of Gov. Don Sundquist. According to the Memphis Commercial-Appeal, He's left behind a ticking fiscal time bomb called "state resort parks" that don't generate enough money to pay for themselves.
Attractive though they may be, these resorts could pose a huge financial burden for the oft-troubled state park system in the next several months. For the fiscal year that began July 1, the state owes a $5.1 million repayment on the bonds. With only $2.5 million available from motor-vehicle title fees to pay the bill, state officials are scrambling to make up a projected $2.6 million shortfall.
Seven of Tennessee's 53 state parks are considered resort facilities, and six of them received major improvements - such as new, renovated or expanded inns or conference centers - funded by the bonds. Besides Pickwick, where improvements totaled $16.9 million, the parks getting the facilities were Fall Creek Falls, Henry Horton, Montgomery Bell, Natchez Trace and Paris Landing. The General Assembly authorized up to $74.4 million in bonds for the projects, although the total issued between 1992 and 1996 was $56 million.
Mike Gaines, finance chief for TDEC, said the problem with the resort facilities is that they haven't produced the revenues that state officials expected. "The theory was that the revenues generated from the parks would increase sufficiently to cover the debt cost," Gaines said. "It hasn't happened." Revenues from the seven resort parks have increased, from $15 million in fiscal 1997-98 to $19.5 million for the fiscal year that ended June 30. But the increases haven't been enough to cover rising costs and the bond payments, Gaines said.
The "theory" that revenues would rise to cover the debt was in the minds of politicians - specifically, Sundquist - who wanted to use tax dollars to build monuments. Business professionals weren't consulted. We owe millions. Sundquist, who leaves office in a few weeks, doesn't have to pay the bill. You do.
Republicans Seek Increased Scrutiny of State Contracts
Conservative Republicans in the Tennessee state legislature are pushing for reforms in how the state grants no-bid contracts, reports today's Tennessean:
State administrators might be called on the carpet to explain to lawmakers why they are requesting approval of non-competitive service contracts as a result of new rules recommended yesterday by a panel of the legislature's watchdog Fiscal Review Committee. Rep. Bobby Wood, the committee vice chairman, said it is the committee's intent to reduce the number of such contracts, which a committee official said is in the thousands. Part of the plan requires legislative review of any non-competitive contract in excess of $100,000 before it is awarded.
Wood is one of the conservative anti-income tax Republcians who challenged pro-income tax Rep. Steve McDaniel for his position as leader of Senate Republicans. McDaniel was eventually ousted by another anti-income tax conservative, Rep. Tre Hargett.
Another proposed change would require the disclosure of the principal owners of any business that contracts with the state. That provision was suggested by Rep. Chris Newton, R-Cleveland, who said he wanted to make sure there was no favoritism or appearance of impropriety in the award of contracts covering everything from bulldozer service to health care. Jim Davenport, the committee's executive director, said the number of non-competitive contracts is in the thousands.
Newton is also an anti-income tax conservative.
Questions have been raised recently regarding some lucrative contracts that were given to friends of Gov. Don Sundquist without bidding.
According to the Tennessean, State Comptroller John Morgan told the committee he now has doubts about one of those contracts, a $1.9 million piece of business given to Workforce Strategists, a 6-day-old company, owned by a Sundquist friend, that provided garden-variety worker training and placement services but was billed as being the only company with the experience to manage the program.
The most interesting thing about the Tennessean's story is what the paper leaves out: No Democrats are quoted calling for increased scrutiny of state contracts. What are they trying to keep hidden?
TennCare's Latest Sickness
Supporters of TennCare often say that, if we didn't pay for TennCare, we'd be paying a lot more because all those uninsured sick people would be going to the emergency rooms, and ER care is more expensive to provide.
So this news - that TennCare patients are "flooding" Tennessee's emergency rooms - isn't good news. Not for TennCare, and not for taxpayers.
An increase in Tennessee emergency room visits over the past three years was more than double that in the nation because of a dramatic hike in traffic from TennCare patients, the Tennessee Hospital Association said today.
Emergency room use by TennCare patients rose more than three times that by other insured or non-insured patients, the THA statistics showed. They also showed that 30,000 of those visits were for ear infections, 29,000 for colds and 24,000 for headaches — all among the most common ailments for which treatment was sought.
Trent Lott Update
Glenn Reynolds thinks Trent Lott won't run for Majority Leader again, and predicts that announcement may come as early as today. I hope he's right - Lott has got to go, and not just because of his pro-racial segregation comments at Sen. Strom Thurmond's 100th birthday party. He's got to go because he's not the right leader for the GOP Senate majority. His stupid comment just provides the useful tool to replace him.
Reynolds has more on the Trent Lott Affair here at InstaPundit.
A Saddam-al Qaeda Connection?
Yes, most assuredly.
The strongest evidence comes from a surprising source - the files of those same intelligence agencies who have spent so long publicly playing this connection down.
The War on Terror and the coming war against Iraq are the same war.
Tennessee Enjoyed Solid Revenue Growth in November...
... but I guarantee you that's not how the major newspapers in Tennessee will play it. They will just repeat the official falling-sky spin. They'll quote from the Department of Finance and Administration news release, which stresses that "November revenues were $12 million less than the budgeted estimates," but they'll work hard to obscure the truth: even without the billion-dollar tax increase, revenue from the state sales tax is growing - and that growth is starting to show signs of increased vigor as the economy starts to heat up.
But here be the facts: Total revenue for the August-November period was up 12.32 percent over last year - with sales tax revenue up 16.6 percent. For the month of November, overall revenue is up 7.77 percent, with sales tax revenue up 18.56 percent. Sales tax revenue missed the budget estimate by a mere $1.6 million, a drop in the bucket given the state collected $477.7 million from the sales tax in November.
Factoring out the sales tax rate increase and the change in the single-article cap,, the sales tax is still producing revenue growth despite the still-sluggish economy. Sales tax revenue for the four-month period rose 1.85 percent, with growth of 2.56 percent in November compared to November 2001.
Total tax collections are coming in just slightly below the budgeted estimates. Through the first four months of revenue collections for the current fiscal year, the state has received $27.8 million less than its budget estimates and is based on. With the economy showing more and more signs of recovery, there is little chance Tennessee will face a large budget gap this year. More likely, revenue will fall short of the budgeted estimate by $50 to $80 million, a small amount compared to the state's $21 billion budget.
Upon taking office next month, new Gov. Phil Bredesen should immediately order all departments, agencies and programs to prepare a small-percentage across-the-board spending cut, in order to prevent the emergence of a fiscal problem if revenue growth doesn't improve. Actually, Gov. Sundquist should do it now - but he's too busy fighting with vegetarians and trying to rewrite his legacy.
The governor - old or new - should order such preparations just in case, but I doubt large budget cuts will be necessary. You read it here first - strong December holiday shopping, combined with the one-cent sales tax rate increase, will provide the state a huge revenue windfall that will erase most if not all of the revenue shortfall.
Yep. I was right. The major papers just swallowed the administration's sky-is-falling spin and regurgitated it without the addition of any critical thinking skills.
Knoxville News-Sentinel: Shortfall seen in state revenue collections
The November revenue report, which reflects tax collections for October, shows revenues for the month were $12 million less than estimated. Year-to-date collections were off nearly $28 million.
The paper fails to note that real revenue (with the tax increase factored out) is showing growth, and merely accepts without question the administration's projection of a $60 million to $90 million shortfall this year.
Oh well, at least the paper also reports on brighter revenue forecasts coming from three economists who testified before the State Funding Board yesterday.
The state Department of Revenue estimates total tax collections this year will be $8.54 billion - nearly 14 percent higher than last year. That's due largely to the recent tax increase and to the unusually weak economic performance the previous year.
The state has 14 percent more money than last year. Yet some politicians won't think even that is enough.
The Tennessean also buys the spin in a story titled "State tax collections may fall short." The paper also fails to note the irony of this paragraph in its story:
Bill Fox, economist from the University of Tennessee-Knoxville, estimated the state will be short about $63 million by fiscal year's end, meaning the tax increase yielded $870 million instead.
The only reason tax revenue from the tax increase is less than estimated is the economy is doing worse than anticipated. It is doing worse in part because of the tax increase. But supposedly brilliant economists who favor higher taxes - economists like Bill Fox - seem to always fail to note the connection between higher taxes and a slower economy.
Here a Cut, There a Cut...
Faced with revenue coming in lower than forecast, the state of South Carolina will implement an automatic across-the-board budget cut. South Carolina law requires a five percent across the board cut when state revenues fall five percent or more below projections, unless the General Assembly apportions the budget cuts differently.
According to the Wednesday edition of the Myrtle Beach Sun News, "legislators went home Tuesday, declining to change immediate across-the-board spending cuts imposed by the state Budget and Control Board." As a result, a state programs, departments and agencies will share equally in the sacrifice necessary to keep the state's budget balanced.
Democrat Gov. Jim Hodges, who lost his re-election bid to former Republican congressman Mark Sanford (who campaigned on a promise of phasing out the state's income tax), had called the legislators into special session and asked them to make cuts that spared K-12 education. But legislators balked, noting that K-12 education makes up 52 percent of the state's $5.4 billion budget, and they simply could not make enough cuts elsewhere to spare education. Besides, some noted, education has received priority funding in recent years, leaving some other agencies strapped.
The five-member Budget and Control Board ordered an immediate across-the-board spending cut of 4.5 percent and ordered 0.5 percent more held for possible cutting later if revenue does not improve. Hodges, a member of the board, was the sole vote against the plan.
The South Carolina approach - automatic across-the-board spending reductions if revenue comes in too much below estimates - offers much to be desired. Such an approach lessens the political pressure for tax increases during a sluggish economy. Indeed, tax increases are not on the table in South Carolina. I'd suggest one additional tweak: Automatic tax rate cuts if revenue comes in significantly above either the estimates or above the combined growth rate of inflation and population. Such a plan, especially if incorporated in the state constitution, would smooth state finances and prevent wild swings from surpluses and spending sprees to shortfalls and budget crises. It would also afford taxpayers a measure of economic protection they currently do not have.
The Thing They Haven't Tried
Bethany, a suburb of Oklahoma City, has a sales rate that is 62.5% higher than the neighboring suburb of Warr Acres. Bethany wonders why so many Bethany residents are shopping in Warr Acres that Warr Acres takes in $300 in sales tax revenue per capita while Bethany takes in just $185.
The bureaucratic answer: paint a blue line showing Bethanians where the border is, pass out blue decals to identify businesses within the city limits of Bethany, and beg people to keep shopping in Bethany. Of course, the blue line may backfire. After all, the line tells people where Bethany ends and lower taxes begin..
The Washington Times reports the blue line is "part of Bethany's plan to break down its anti-business image." How stupid is that? If you are seen as anti-business and want to change it, you don't need a PR campaign. You need to become less anti-business.
Perhaps if Bethany lowered its sales tax rate from 4 cents to 2.5 cents, to match Warr Acres, they'd keep more of Bethany's residents shopping at home. But cutting the tax rate would result in less revenue, right? No. Warr Acres brings in more revenue with a lower tax rate because it is more attactive to people, including the 21,000 residents of Bethany, to shop there. And if Bethany lowered its sales tax rate to below that of Warr Acres, some of those folks over in Warr Acres might just be tempted to come across that ridiculous blue line and spend a little money in Bethany. Warr Acres would have take down those signs it erected near the entrance to Bethany that say, "Warning: Higher Taxes Ahead." And over time, a low sales tax rate might just make Bethany the retail hotspot of greater Oklahoma City. Some mall developer might decide to put a big regional mall there. Then, tax revenue would soar.
It makes a lot more sense than painting the town's border blue.
If the Income Tax is Truly Dead...
... why are two of its biggest proponents stepping up to new levels of power in the state legislature?
Of the state sales tax increase that both [Rep. Tommy] Head and [Rep. Kim] McMillan opposed this year, they said there are already indications that it isn't going to be a long-term fix to the state's budget picture. Head said some state budget cuts may even have to be made in the next legislative session. "We are going to need at least 3 percent growth (in sales tax revenues) for it to last us any length of time," Head said. The quote comes from the Clarksville Leaf-Chronicle in Montgomery County, Tenn.
Head and McMillan are among the key supporters of House Speaker Jimmy Naifeh's income tax proposals. They are already laying the groundwork for claiming the sales tax increase, bringing in a billion extra dollars per year, is not enough.
Meanwhile, the Montgomery County Commission wants more money and is urging the legislature to pass a law letting counties collect a "realty transfer tax." In all of recorded history, no government has ever voluntarily said "we have enough money - you keep the rest." That's why the Tennessee constitution needs a Taxpayers Bill of Rights, to cap state and local taxes and spending and give the people a say in decisions of tax increases and spending of surplus revenue.
Who Are (Some of) These People?
Isn't it a bit of a stretch to call some of these anti-war Hollwood folks celebrities? You wouldn't recognize half of them if they walked past you on the street - even if the street was Rodeo Drive. A third of these people haven't had a hit since shortly after the end of the Pleistocene Era. Why are the views of any of them on Iraq more important than, say, yours? If you previously thought we should go to war against Iraq, will you change your mind because John Fugelsang is against it?
It Didn't Suck
The Rocky Mountain News marks the 10th anniversary of NAFTA, of the North American Free Trade Agreement between the U.S., Canada and Mexico.
The Toronto Globe & Mail reports that nearly half of Canadians think NAFTA was a net loser for Canada - but about the same number "favours even closer economic ties and trade with the United States and Mexico."
Meanwhile, former Canadian Prime Minister Brian Mulroney says NAFTA should be extended to include security cooperation, says the Toronto Star.
Our internal borders will only be smart if our external perimeter is secure," the former prime minister said during a conference to mark the 10th anniversary of the North American Free Trade Agreement. "We may well need new political institutions such as ministerial councils to heighten vigilance and direct concrete action which gives all of North America more certainty against the unprecedented threat of terrorism."
Mulroney's call puts him at odds with Prime Minister Jean Chrétien, whose government has balked at the notion of a security perimeter similar to the system used by the European Union. Under such a system, travellers arriving on that continent at any entry point would be screened once and then travel freely between member countries. The Bush administration has pushed Canada to adopt a common security perimeter by harmonizing its security and immigration laws with those in the United States.
Some of that harmonization has begun, but not to the satisfaction of the United States, which still regards Canada's more permissive immigration standards as a security threat.
Mulroney's right. Chrétien is wrong. And, quite possibly, a moron.
See also, this Globe & Mail editorial.
Good Decision in Knoxville
The Knoxville city council has rejected a proposed "Living Wage" for city workers. Good. Not because I don't want those workers to make more money. Because "Living Wage" rules are being pushed for city workers in an attempt by the national Living Wage movement to eventually create "Living Wage" laws that govern all businesses and employers. The first step is government workers. The next is expanding the law to require the city do business only with companies that pay a living wage. From there, it's only a short step to broad-based "living wage" laws.
Bob Becker of the Knoxville Living Wage Campaign said the organization's four-year quest would continue. He said the group also would work to raise wages at the University of Tennessee and in Knox County government, though he added organizers haven't determined their next move. The organization plans to be active in next year's city elections.
The saddest part of the story is the comment from the Rev. Chris Buice, a Knoxville Unitarian minister, who clearly believes the government is the only road out of poverty. "The best welfare reform is a good job at a living wage," said Buice, urging passage of the living wage for Knoxville city workers. His attitude, widely shared, is one reason the War on Poverty has not been won - too many on the Left think the government is the solution. First they pushed for government housing and government welfare checks. Now they push for government to "reform" that welfare program by paying a bit more. But no matter whether you live in the projects and cash welfare checks, or live in poverty and cash small government paychecks, you are still dependent on the government.
Let's be honest. The road to wealth doesn't run through dependency on government. It runs through the private sector. In government, salary scales are capped. In the private sector, the sky is the limit. Here's an idea for all those low-paid city workers: Work hard and show you're worth a lot more than you are being paid. Then ask for a raise. If they say no, take your skills into the private sector. Stop relying on the government to end your poverty. They've failed miserably at that for almost half a century now, and that's not likely to change.
A Living Wage that makes government dependency a bit more palatable for Knoxville city workers would, in the end, merely increase their dependency and guarantee they won't escape poverty.
The Empire Strikes Back
Voters in Washington State in recent years have used the referendum process to reduce their taxes, in an attempt to reign in the explosive and expensive growth of government. Now, reports the Seattle Times, a "study committee" is recommending the state adopt "tax reform" - which means, essentially, adding an income tax on top of the state's sales tax, because - boo hoo - the state doesn't have enough money.
The Tax Structure Study Committee last week said the state should reduce its dependence on the sales tax by adopting an income tax or a value-added tax on business. Failing that, the committee said Washington should extend the tax to consumer services. And it should work with other states to harmonize their various sales taxes, which in turn would make it easier to collect taxes on catalog and Internet sales.
The story lays out several possibilities, such as extending the sales tax to cover services, or replacing some taxes with a "value-added tax," and then looks at the income tax:
Finally, there's a state income tax, which the tax committee recommended as a way to reduce the sales tax. An income tax, either at a single flat rate or with graduated rates, also would make the system as a whole less regressive, backers like Higgins say. But courts have said Washington's constitution bars all but a 1 percent flat income tax. And aside from that, any such proposal would have to overcome popular and political hurdles — as well as the perception that sooner or later, the sales tax would start creeping back up.
Gary Strannigan, a former Republican state senator from Everett who sat on the tax-study committee, said many of his colleagues were skeptical when he briefed them on the various options. "The idea of adding an income tax to supplement the sales tax got a very cool reception," Strannigan said, even if the sales-tax rate were lowered as a result. "The feeling was that both of them would end up going higher."
The word "spending" appears three times in the Seattle Times' story. All three times it refers to consumer spending. The Tax Structure Study Committee, you'll note, was designed to look at only one half of the cause of government not having enough money - revenue. It ignores the main cause of government budget gaps, which is too much spending.
That's how Tennessee got into its fiscal mess - and how the Government Spenders finally created a crisis bad enough to engineer a billion-dollar tax increase. If the state of Washington has a disconnect between government's desired spending and the revenue coming in, the committee should have looked at both halves of the equation. They didn't. Government never thinks spending is the problem. My guess is, the people in Washington state are about to enter the same twilight zone of officialdom ram-rodding for higher taxes in the guise of "tax reform" that Tennesseans have endured for four long years.
An Academic Question
Why should the state of Tennessee have the authority to regulate whether a university in another state opens a satellite campus in Tennessee? More importantly, why would any higher education official want to block such a project? More schools offering more courses is good - it means more competition and, perhaps, lower tuition costs, making higher education more available and more affordable.
Sidney McPhee, president of Middle Tennessee State University, says he isn't against competition. But he is.
A Whole Lott of Trouble For Trent
Glenn Reynolds just keeps on serving up more and more great coverage of the Trent Lott Affair - namely, the senator's pro-racial segregation remarks at Strom Thurmond's 100th birthday celebration. The sooner Lott resigns his post as Senate Majority Leader, the better. The latest: a link to a report from Matt Drudge noting similar comments Lott made on the record in 1980 - which were reported at the time in the Jackson Clarion-Ledger. Go to InstaPundit to read it all - just start at the top and scroll down.
Maryland Dems Push Tax Hikes; New GOP Gov. Says No
Their preferred candidate, Kathleen Kennedy Townsend, lost in the governor's race to Republican Robert Ehrlich, but some Democrats in the Maryland state legislature are still pushing for tax increases to close the state's budget gap. (A budget gap, remember, is the merely difference between desired spending and expected future revenue. It is a projected shortfall that would exist if not dealt with via spending reductions, tax increases or a combination thereof.)
The Commission on Maryland's Fiscal Structure - created at the behest of Democrats and then-House Speaker Casper R. Taylor Jr., is "viewed by some Republicans as a device to give Democrat Kathleen Kennedy Townsend, then front-runner for governor, political cover to raise taxes," says the Baltimore Sun. But Townsend was defeated - as was Taylor - and Ehrlich promised during the campaign to hold the line on taxes.
Among the taxes the Democrats want to raise in Maryland: raising the income tax rate for top earners, raising the corporate income tax, increasing the sales tax and applying it to services while repealing various exemptions, raising the state property tax, raising cigarette and alcohol taxes, and raising the gasoline tax a dime to 33.5 cents a gallon. But Ehrlich is one governor intent on keeping his promise to not raise taxes (a concept admittedly foreign to Tennesseans since 1999).
Paul E. Schurick, Ehrlich's spokesman, said the governor-elect will be interested in reading the report but emphasized that some of its recommendations are off the table. "We have summarily rejected sales and income tax increases and are not interested in considering tax increases of any kind," Schurick said.
A Deficit Grows in Colorado
And so do the budget cuts as Colorado's governor and legislators do what Tennessee's said couldn't be done: lower spending to match revenue. Colorado now faces a budget gap roughly equivalent to that which bedeviled Tennessee's Sundquist administration last year, but there is no talk of raising taxes. Why? For one, Colorado Gov. Bill Owens is smart enough to know that raising taxes in an slow economy is stupid economics that merely prolongs the economic stagnation. And Colorado's constitution makes it difficult to raise taxes, forcing state government to look for ways to live within its means during tough times.
Colorado's main source of revenue is an income tax, yet revenue is declining - although you in Tennessee were told an income tax would prevent such problems! Colorado's November revenue collections were about $90 million less than forecast, reports the Denver Post. That brings the state's total predicted budget gap for the current fiscal year to $670 million. The legislature sent the governor a $13.8 billion spending plan in May, and it has been getting cut ever since. The budget now stands at $13.2 billion.
Getting Rid of HOV Lanes
Read this. And dream of the day we here in Nashville are able to get rid of our stupid HOV lanes too.
The Sports Page
I know where I'll be on Monday night: In front of my TV, watching the Titans. Unless you got tickets you wanna give me.
The Titans beat the Giants and Colts the past two weeks in large part because of quarterback Steve McNair, who completed 49-of-66 passes for 571 yards, four touchdowns and no interceptions. His completion percentage is 74.2% in those two games.
Our Crappy Local Economy
Here's more evidence of just how bad the Nashville-area economy is.
This is How It Ends?
Gov. Sundquist's second term approaches its end with the governor tussling with vegetarians over meat. First, the vegetarians tricked the governor into issuing a proclamation critical of livestock farming. Now they're upset he said nice things about steaks, lamb chops and pork barbecue. I'm no fan of the vegetarians - especially these radical vegetarians who would like to force their meat-free lifestyle on us all.
I like how then-Gov Lamar! Alexander dealt with these same anti-meat wackos 16 years ago. He "proclaimed a World Vegetarian Day in 1986 but retreated under pressure from cattlemen and others in the meat industry by signing proclamations for beef, pork and poultry and serving beef at a luncheon on Vegetarian Day."
Beef. It's what's for dinner.
Pork barbecue, on the other hand, is for lunch.
Memo to GOP: Support Naifeh at Own Peril
Frank Cagle explains why Republicans in the Tennessee House of Representatives should not vote for Democrat Rep. Jimmy Naifeh for Speaker of the House. They should either vote for someone else, or simply vote "present" rather than cast a vote for Naifeh, says Cagle, because a vote for Naifeh is "a vote to continue the regime that will continue to push for the income tax."
Says Cagle, "A vote for Naifeh is a vote for the opportunity to put the income tax back on the table."
The sad thing is, the GOP holds 45 seats in the 99-seat Legislature, and there is no doubt there are enough dissident Democrats who might form a coalition with them to oust Naifeh - except the Democrats believe the Republicans won't hold together, and that would leave the dissident Dems hung out to dry with Naifeh re-elected Speaker and gunning for them.
But, says Cagle, there may well be a political price to pay for Republicans who vote to return Naifeh to the Speaker's chair.
House Republicans may not have the votes to elect someone other than Naifeh as Speaker. But they need to be careful not to help. Else they may find a well-funded opponent in their next primary running ads asking why they voted for the income tax candidate for Speaker.
Heck, any anti-income tax Democrat who votes for Naifeh ought to face such questions in the next general election. That might even help the GOP gain the six seats it needs for a majority.
Wiring Classrooms Inexpensively
Mississippi will become the first state in the nation in which every public school classroom has at least one Internet-connected computer - and they found a way to do it inexpensively while also teaching students valuable real-world technology skills.
Students learn how to build computers from scratch, and to troubleshoot and refurbish donated machines. They also learn basic networking, which prepares them for A+ certification as an entry-level computer technician. The program is supported by a combination of state, public and private dollars. It's also helping Mississippi reach an important goal. By Dec. 31, every classroom in the state will have an Internet-accessible computer. It will be the first state to claim this distinction, according to Gov. Ronnie Musgrove.
Surveillance, Technology and the Future of Your Rights
Another brain-bending article from Arnold Kling. This is why I am an avid reader of TechCentralStation.com.
Over the long term, however, we need to confront the issues posed by trends in technology. The costs of surveillance are falling. The costs of data storage and analysis are falling. Meanwhile, our security risks are rising. We need to deal with the situation openly and directly. Our chances of preserving freedom are better if we use databases than if we rely on alternative measures. When databases are outlawed, only outlaws will have databases.
After O'Neill and Lindsey
What's next for the U.S. economy and the Bush Administration's economic policies, now that President Bush has fired Treasury Secretary Paul O'Neill and National Economic Council director Larry Lindsey? Good things, says economist Larry Kudlow.
So, who's the winner in all of this? Glenn Hubbard. It is expected that Hubbard, a key designer of the big-bang tax package, is likely to be put in charge of the National Economic Council as Larry Lindsey is vacating that position to move to the private sector. (Hubbard would retain his Council of Economic Advisors post, essentially merging the two staffs.) A former economics professor at Columbia University, Hubbard is articulate, has strong supply-side views, and has been a rising star in the Bush White House. Now all he needs is a congenial partner at the Treasury department. Another winner will be the American economy.
You wouldn't know it from listening to all the naysayers out there, but the U.S. economy has increased four consecutive quarters for an average growth rate of 3 percent with a 5 percent increase in productivity. Considering the terrorist bombings, the war, unprecedented corporate corruption, a plunging stock market, and new jitters over an anticipated invasion of Iraq, it's a miracle the economy has grown at all in the past year.
But the president now wants that 3 percent growth to turn into 5 percent. And that is why he's coming back with an aggressive new growth package and presumably some dynamic new officials to shepherd it through. Our MBA president knows all about the benefits of an expanding and profitable business. Now he's searching for some new executives to apply the same lessons to the economy.
The Trent Lott Debacle
Glenn Reynolds has been doing a fine job following the fallout over Trent Lott's over-the-top and racially insensitive praise for Sen. Strom Thurmond. Go to InstaPundit to read it all - just start at the top and scroll down. I agree, by the way, that Trent Lott ought to resign his position as majority leader.
Oops. Wrong Answer
The Tennessean almost nails it in this editorial concerning the power of the state's liquor lobby. But having identified the problem, they offer up only a weak solution.
Unfortunately, a few new faces on a regulatory board won't weaken the grasp of the liquor lobby on the state. But some meaningful laws on lobbyists and campaign disclosures would be a good place to start.
Perhaps, but to what end? The reality is, much of the state's current framework of anti-competitive protectionist legislation that serves to subsidize and help the liquor industry violates the Commerce Clause in the U.S. Constitution and the personal economic freedoms it is supposed to guarantee. You can read more about it here and here.
Changing the laws on lobbying and campaign finance disclosures might work. But overturning certain of the state's liquor and beer laws in court - such as the law that prevents out-of-state wineries from selling and shipping direct to Tennessee customers - definitely would.
What Causes Prosperity?
Here's a brain-bending article on the subject from Arnold Kling.
Even if prosperity can be achieved only if a country develops a work ethic, a public service ethic, and a learning ethic, that only begs the question: how are those ethics fostered? Standard economic prescriptions, such as letting the incentives of free markets operate, are only part of the answer. Free markets are particularly helpful in maintaining a work ethic. However, without a public service ethic, governments will undermine property rights rather than protect them. Without a learning ethic, agriculture, manufacturing, and services will stagnate rather than evolve.
Should we be surprised that the so-called "Washington Consensus" or "neoliberal" recommendations for deregulation, financial liberalization, and privatization have not brought rapid prosperity to countries that lack some of the necessary ethics? On the contrary, in retrospect we should be surprised that anyone had high expectations for success under such circumstances.
Enjoy the game embedded in the article.
Am I Protected By the First Amendment?
Yes. But the real question is, do state statutes that go beyond what the First Amendment requires extend their protections to speech published on the Internet - speech such as this weblog which, at times, is highly critical of elected officials and calls into question their competence and even their honesty.
Cyberspace speech is generally entitled to the same First Amendment protections as speech in newspapers or magazines. If the New York Times can say it, so can Slate, and so can your Fray postings, writes the brilliant UCLA law professor Eugene Volokh in this TechCentralStation.com essay. But statutory protections that go beyond what the First Amendment requires are a different matter, precisely because they are given only by the grace of the state legislature, with boundaries set forth by the legislature. The question is what the words of the statute call for - though a court may interpret the words in light of policy arguments about equal treatment and medium independence.
The answers to Volokh's questions may determine whether the Internet in the future remains an effective medium for challenging the powers and pronouncements of the established government and entrenched liberal media.
California Confronts Spending Crisis
California raked in the revenue during the late 1990s economic boom - and Gov. Gray Davis spent every dollar. But when the boom ended - as booms always do - the state suddenly faced a problem: It can't afford all that bigger government Davis bought. That's what happens when you spend as if the boom will last for ever.
The political combatants are entrenching along familiar ideological terrain. The powerful employee and teachers unions are vowing to resist the pay cuts and job losses that the governor's plan will require. Republicans have pledged to reject any new taxes, saying that the Democratic governor and Legislature spent their way into the current morass and must find program cuts to claw their way out. Democrats respond that the budget shortfall results chiefly from a severe drop in revenue from taxes on capital gains and stock options from the market run-up of the late 1990's and that those lost revenues must be replaced with new taxes.
In 2000, the state received $17 billion from taxes on capital gains and the cashing in of stock options, much of it from the technology industry. State officials estimate that the take from such taxes this year will be less than $5 billion. California prides itself on its progressive income tax, with people earning high incomes paying a huge share of state taxes. The top 10 percent of filers pay 75 percent of personal income taxes. But when their income drops, as it did when the technology boom went bust in early 2000, the state treasury crashes.
Democrats are crying for tax increases, but James L. Brulte, the Republican leader in the State Senate, says raising taxes would not only be insufficient to stanch the red ink but would also throttle growth when the economy is sputtering, reports the New York Times.
"You can raise the alcohol tax, the tobacco tax, the car tax, the income tax and sales tax and you still have a multibillion-dollar deficit," said Mr. Brulte. He said the only thing keeping the state afloat was consumer spending, which continues to grow, modestly. "Raising taxes on consumers clearly would be counterproductive. Raising taxes on business, when we actually need business to step up and start investing more so we can continue the expansion, would also be counterproductive. Anything that has the tendency to restrain either consumer spending or business investment will lead to an even larger deficit in California."
Just how tarnished is the Golden State under the leadership of Gray Davis?
Governor Davis took office at the beginning of 1999, with the high-tech industry roaring and unemployment at about 5 percent. He used the increased state revenues to invest heavily in schools and highways and to expand state-financed health services for children and the poor. The number of state employees grew from 282,000 at the beginning of his tenure to nearly 326,000 in 2001, according to the California Department of Finance. The biggest job growth came in two areas, prisons and state universities.
Republicans argue that this spending spree caused the current fiscal crisis. Davis administration officials say that half the spending was on projects that did not permanently add to the size of state government. Yet the nonpartisan Legislative Analyst's Office projects that revenues are so far short of spending that the state will run deficits of $12 billion to $15 billion for the next five years even if the economy recovers.
The Washington Times has a devastating critique of Davis' fiscal malpractice. Here' part of it:
Annual spending increases, which averaged a once-exorbitant 8 percent during the last four years of his Republican predecessor, exploded during his first two years. In 1999-2000, spending soared by more than 15 percent. During his second year, spending jumped by another 17 percent. Thus, during Mr. Davis's first two years, the general budget increased from $57.8 billion to $78 billion. The increases occurred during a period when inflation rose by less than 6 percent.
Is Earned Interest Private Property?
Here's a story about a very interesting legal case before the U.S. Supreme Court Monday involving a whether a government program violate private-property protections under the U.S. Constitution.
For nearly 20 years, bar association officials, state supreme-court judges, and state lawmakers have endorsed a program that uses lawyer trust-account and escrow monies to help finance legal services for the poor. The program, called Interest on Lawyers Trust Accounts (IOLTA), has grown to the point that last year it raised $162 million nationwide.
But the success of the program has prompted a thorny question: When interest is earned on money a client has deposited with a lawyer in an escrow account, does use of that interest to pay for a government program violate private-property protections under the US Constitution?
That is the central question confronting the justices of the US Supreme Court Monday, as they hear oral arguments in a case examining the constitutionality of the IOLTA program in Washington State.
In broad terms, if the court strikes down the IOLTA program it could make it easier to successfully challenge other government regulations and programs that intrude on private-property rights. On the other hand, if the court upholds the program it could open up the possibility of using a broad array of mechanisms tied to the pooling of client funds - at a time when many state budgets are dripping in red ink.
At issue specifically in the case is whether the IOLTA program is merely a clever regulatory innovation, or an unconstitutional "taking" of private property for public use. The Fifth Amendment requires that the government provide "just compensation" when it appropriates private property.
Lawyers with the Washington Legal Foundation, a conservative public-interest law firm in Washington, D.C., have challenged the constitutionality of IOLTA. "The program is government confiscation of private property for public use," says Richard Samp, the WLF's chief legal counsel.
Mr. Samp says he has nothing against the provision of legal services to the poor. The lawsuit, he says, is aimed at reinforcing the principle that the government must respect private-property rights.
Let's hope the justices see it Mr. Samp's way
For more on the case, go here and here.
Tennessee participates in the IOLTA program, under rules adopted August 27 of this year. See the sixth and seventh pages of this document for details.
Titans Update: McNair Gets Some Respect
Finally, somebody outside of Nashville is noticing what a great quarterback the Tennessee Titans' Steve McNair is. ESPN wonders why there were so few McNair jerseys in the stands Sunday, commenting: He doesn't get the hype, but Steve McNair may be the NFL's most dangerous quarterback in the air and on the ground - and at 29, he's still entering his prime. He was practically perfect in a 27-17 win over the Indianapolis Colts on Sunday.
McNair threw for a career-high 21 touchdowns a year ago, and has already equaled that amount this season. He's been an alternate for the Pro Bowl each of the last two years. And after completing over 60 percent of his passes for 2,988 yards so far this season, he should be a candidate to start the next one.
There's no tougher QB in the league, 'cept perhaps the Packers' Brett Favre, who has been doing it a bit longer.
And Now, For Something Completely Different
Nashville-area YMCA's won't give the discounted "family rate" to groups of individuals that are not, in fact, families, under the Y's definition of a "family," which is a married man and a woman. Gays are upset. But the Y isn't excluding gays from joining the Y. It merely says gay partners don't fit the Y's definition of "married" for the purposes of deciding where they fall on the membership fee chart. Gays are upset, as I said, but here's the bottom line: The YMCA is a private organization funded by private individuals who have the constitutional right to determine the parameters of their own membership. Further, it is a para-religious organization that enjoys First Amendment protection of its right to practice its religious principles. If you don't like it, start your own organization.
It's worth noting, by the way, that The Tennessean turns the griping of exactly one gay couple into a major story. There is as yet no big protest among Middle Tennessee's gay community of the Y's policy, though the paper is going to do what it can to gin one up. Upholding the right of conservative Christians to live by a particular set of rules is not high on the paper's list of priorities.
Incidentally, the story makes it obvious that the paper's editors know the YMCA is on solid legal ground. How? If the paper thought the gays have a legal issue, they would have made that a major focus of the story. But they didn't mention the First Amendment aspects of the story at all.
Gov. Don Sundquist says he had more fun during his first term. Tom Humphrey of the Knoxville News-Sentinel writes the obit on Sundquist's second and final term.
Back in 1994 Sundquist, at age 58, gave up the 7th Congressional District seat he had held for 12 years and launched a campaign for governor under the theme "in touch with Tennessee." He trounced David Copeland in the Republican primary, attacking the former state representative for having once advocated a state income tax, and went on to a comfortable victory over Bredesen in the general election despite being outspent by the Democrat, who was then mayor of Nashville.
Then came what he calls "a gigantic surprise." Outgoing Gov. Ned McWherter's administration informed him after the election that there was a $225 million hole in the state budget and he had to figure out how to cover it. Sundquist did so through a combination of cuts, hiring freezes, raids on obscure reserve funds and other patched-together means. It was a sobering learning process, he says, but the resulting $13.1 billion budget he devised was approved intact.
Further patching and raiding was required to balance the budget in 1997, but as Sundquist's first term came to an end he was regarded as so popular - polls showed him with an approval rating near 70 percent - that his reelection was assured in 1998. Perennial candidate John Jay Hooker wound up with the Democratic nomination and was attacked in a Sundquist radio ad for supposedly once supporting a state income tax - a charge Hooker denied. Sundquist won by a landslide - almost 70 percent of the vote.
Then, shortly after his re-election, came the unpleasant revelation - the state's revenue collections, especially from business taxes, were sagging to the point that a tax increase was needed. The man who had made a political career out of opposing taxes was suddenly transformed into an advocate of revenue enhancement. Though Sundquist's post-election revelation was greeted with considerable skepticism in some quarters, including the Legislature, he insists today he was surprised and wishes by the shortfall and now wishes he had made tax reform part his 1998 campaign. "My only major regret is not knowing there was going to be a tax collapse," he said of his eight years as governor.
At the outset of 1999, Sundquist continued to declare his opposition to a state income tax and instead advocated an overhaul of business taxes to raise new revenue. That flopped in the Legislature and he subsequently came around to openly and ardently pushing for tax reform, including implementation of an income tax with a rollback in other taxes.
(Sundquist's contention that he came to support an income tax only after his business tax reform plan died in the legislature is false. He admitted as much in an interview with WSMV-TV, Channel 4 in Nashville, in late July, as I recounted here. Although Sundquist declared his opposition to the income tax in his Feb. 8, 1999 State of the State speech, he told WSMV that he had decided to propose an income tax during the Christmas holidays of 1998, about two months before. As I wrote on July 26: History also now shows that, far from being dragged kicking and screaming to an income tax only after his business tax reform plan was rejected, Gov. Sundquist actually planned to go for an income tax from the get-go. He made the decision only a few weeks after being re-elected on an anti-income tax pledge. It's obvious now that the business tax reform plan was merely designed to provide him political cover so he could claim he only reluctantly supported the income tax because the legislature rejected his better plan.
And so Don Sundquist fades into retirement with his popularity among Tennesseans only slightly above that of Osama bin Laden. His legacy is one of a big-spending governor who grew the state's budget by a billion dollars a year, and wouldn't slow down even for a recession. His last budget includes the largest tax increase in state history, to fund the largest budget in state history, which breaks the state constitution's spending growth cap by the largest amount in state history. He will chiefly be remembered for breaking a solemn oath to oppose the income tax, yet his income tax was defeated. His successor campaigned against Sundquist's deplorable fiscal management, and against his income tax. And Sundquist's former seat in Congress is now held by one of the legislative leaders of the opposition to the income tax. No wonder he says his first term was more fun.
Memo to Don: Your second term was no picnic for we taxpayers, either.
If a Democrat Can Do It...
In Wisconsin, Democrat Jim Doyle unseated GOP Gov. Scott McCallum in a campaign that revolved around the budget issue. Like many states that overspent during the late 1990s boom and now is overcommitted fiscally, the state faces a gap between desired spending and expected revenue.
Doyle has also pledged not to raise taxes. He plans instead to concentrate on spending cuts as a way to bail the state out of its budget problems, reports the Milwaukee Journal-Sentinel.
Battling Higher Taxes in Minnesota
Incoming Minnesota Gov. Tim Pawlenty, a Republican, promises to balance the state's budget without a tax increase. A leading Minnesota Democrat thinks tax increases will be necessary:
"One of the politician's credos, I believe, should be to do no harm," [state Sen.-elect Rod] Skoe said, crediting the remark to the late U.S. Sen. Paul Wellstone, DFL-Minn. "When looking at this, I have to look at the harm we would be doing as a state if we do not do some revenue increases."
Get it? Not raising taxes = harming the state government. Republicans protecting taxpayers is a bad thing.
Sales Tax Increase in Indiana
Indiana's state sakes tax was increased one cent - to 6 cents - to raise $800 million to help balance the state's budget. They called it "tax reform." Interestingly, Indiana has a state income tax (3.4% of federal adjusted gross income). So I guess all those folks who said an income tax would protect Tennessee against budget shortfalls were, uh, wrong.
This is Interesting
Stateline.org, a news service covering state governments, says: Only 10 states report a stable budget outlook – Florida, Hawaii, New Mexico, North Dakota, Rhode Island, Tennessee, Utah, Washington, West Virginia, and Wyoming.
New York Budget: No Tax Hikes
The New York Times looks at the New York state budget and Gov. George Pataki's options for closing a budget gap. Tax increases are not mentioned. The paper does quote an analyst for Moody's Investors Service who correctly identifies the cause of New York's budget gap, and that of most states: too much spending during the late--1990s economic boom as if the boom would last forever.
"The boom created such a huge revenue surge that this feels very painful coming down, but the fact is we have reverted to a more normal growth pattern," said Robert A. Kurtter, an analyst for Moody's Investors Service.
Memphis Commercial-Appeal political columnist Susan Adler Thorp - who has already announced she's leaving that job to take a job as a spokesman for a liberal Democrat politician - calls conservatives who won't keep quiet and roll over for liberals "militants." Thorp writes in today's paper that Republicans shouldn't try to exert any real power in the state House of Representatives, even though they now hold 45 of the 99 seats and gained seats in the last election. She doesn't quite put it that way but that's what she means - and she drives the point home with the carefully selected quote that ends the column.
And the Point Is?
The Tennessean raises the issue of terrorism in the first line of this lame editorial about immigration, but doesn't mention it again - and thus fails to offer any constructive advice on how the United States should balance immigration with security against terrorism. Does The Tennessean think we should allow unfettered immigration? Does the paper's editorial board think we should increase or decrease efforts to stop illegal immigration? Does The Tennessean think we should do more - or less - to control our borders and keep out potential terrorists? You can't tell at all from this editorial.
... for the casket industry. Increasingly courts are striking down protectionist state laws and regulations as violations of the Commerce Clause and other rights - laws and regulations that are estimated to cost consumers more than $15 billion a year in higher taxes. I wrote about the larger issue here.
UPDATE: Here's the press release from the Institute for Justice, which brought the lawsuit that successfully challenged Tennessee's protectionist laws governing the sale of caskets.
The U.S. Court of Appeals for the 6th Circuit today issued a unanimous decision that the government cannot restrict individuals’ right to earn an honest living by imposing protectionist regulations. The decision upholds a lower court finding that Tennessee’s state-imposed casket monopoly unconstitutionally violates the right of independent casket retailers to earn an honest living free from excessive government regulation. This is the first federal appeals court victory for economic liberty since it was gutted by the New Deal. The decision further opens the way for entrepreneurs to sell caskets in Tennessee and elsewhere without first having to secure a state-issued funeral director’s license, which greatly limited competition and thereby drove up prices for consumers.
“This decision is another nail in the coffin of government-imposed monopolies,” said Chip Mellor, president and general counsel of the Institute, the lead attorney on this case. “The implications for this decision go far beyond casket retailing and call into question government’s common practice of protecting politically powerful businesses from competition. The Institute for Justice will now use this precedent as a launching pad for new legal challenges where the force of government is used for nothing more than naked economic protectionism.”
This case hasn't gotten the attention it deserves - the Sixth Circuit's decision is a big blow to protectionist anti-entrepreneur/anti-free-market laws and regulations on the books in Tennessee and most other states.
California Cuts Spending
California Gov. Gray Davis has finally faced up to the real cause of that state's mammoth budget "deficit": too much spending. He's proposed spending cuts totaling over $10 billion, with more on the way.
Says today's New York Times: During the boom years, when the state treasury was awash in tax revenues from newly rich high-technology millionaires, the state extended health care benefits to many low-income working families that otherwise would not have qualified. It also provided a dental care plan for Medicaid recipients. Mr. Davis said those benefits would now have to be rescinded. "Revenue is down significantly so I believe action should be taken immediately to reduce expenditures," he said. "We're not out of the woods by a long shot and may not be for several years."
Amazingly, the NYT admits the cause of California's budget crisis is not a drop-off in tax revenue, but a too-rapid expansion of government spending "during the boom years." As any sensible financial planner will tell you, spending during a boom as if the boom will go on forever is a recipe for disaster. Had California saved its boom-years windfall rather than spent, the state would not face a budget crisis today. Had it gone farther and used the windfall to cut taxes, California's economy would be in better shape today - and the state would be enjoying a surplus rather than a deficit.
TennCare's Latest Debacle
Is there anything TennCare does well? If TennCare was a business, the serial screw-ups running it would've been fired a long time ago. Unfortunately, the serial screw-ups in charge are government serial screw-ups, thus they get pay raises and more money to spend for orchestrating this travesty.
Bredesen's First Moves
Good news in this story from today's Tennessean concerning Bredesen's initial policy direction on the lottery, the state budget, etc...:
Gov.-elect Phil Bredesen said that he plans to advance a proposal for setting up a state lottery, preferring scholarships be given on some basis of need and merit, and that the program should not be structured so grants become an entitlement that someday puts the state in debt.
Here's how the Tom Humphrey at the Knoxville News-Sentinel covered it:
Bredesen said he also has financial concerns as he strives to "get my arms around the whole lottery issue" and plans a meeting soon with state Sen. Steve Cohen, D-Memphis, who led the pro-lottery crusade and is now sponsoring legislation to implement a lottery. "This is a fragile time, financially, for the state. Obviously, the last thing we need is a $200 million (in new state spending) entitlement program," Bredesen said.
Voters on Nov. 5 approved a constitutional amendment that authorizes the Legislature to create a state lottery, so long as proceeds go first toward paying college tuition for Tennessee high school graduates and, if money remains, for early childhood learning programs or infrastructure improvements in K-12 education.
A concern, Bredesen said, is that free tuition will bring an influx of students to state universities, where tuition covers only 40 percent of costs, requiring new expenditures of other state funds to cover the remaining 60 percent. "Pretty soon you can run out of money at the university," he said. Bredesen said he has a "modest preference" that the scholarships be awarded partly on the basis of financial need. The Georgia program, which served as a model for the Tennessee constitutional amendment, provides free tuition to any high school student with a B average with no regard for need.
That's good news - Bredesen is on the right track, though you can bet money some lottery supporters in the Legislature would prefer to just create a new entitlement without factoring in need or merit.
Why are officials with the lame-duck Sundquist administratrion offering millions of allegedly scarce tax dollars to a controversial industry just weeks before they leave office? Because they can.
Who Caused States' Budget Gaps?
The states are blaming Uncle Sam for their fiscal problems - hoping for a federal bailout. But the White House economic team correctly fingers the real problem: overspending by the states and a general failure of states to restrain spending during a sluggish economy.
"As to the question of whether federal taxpayers should be on the hook for states' budget problems, I'm skeptical," R. Glenn Hubbard, chairman of the president's Council of Economic Advisers, told the Financial Times this week.
White House budget office spokeswoman Amy Call said it was unfair for the governors to blame Washington for their troubles. The states are grappling with the same forces that have pushed the federal government into deficit: rising health care costs and a sluggish economy that has sharply eroded tax revenue.
One Republican congressional aide suggested the governors' clamor for federal aid is nothing new and entirely predictable.
A report last month by the Center on Budget and Policy Priorities blamed states' tax cuts during the 1990s for part of the current revenue shortfall many states are facing (But not Tennessee - which enacted large tax increases during the 1990s, yet still faces a budget gap because spending was irresponsibly raised even faster.)
The Center on Budget and Policy Priorities report says states also made the choice to expand social programs and the reach of Medicaid, the costs of which are now exploding. (That's precisely what happened in Tennessee with the creation of TennCare.)
The WaPo reports the Bush administration is "resisting the governors' entreaties for direct federal aid." That's good news for you. I explain why here and here.
Tax Cuts Drive Economy and Politics
Bruce Bartlett says Democrats "still don't get it" regarding tax cuts and why they showed so poorly in the November elections. He concludes that the GOP is still driving the economic policy debate with its focus - and credibility - on reducing taxes.
Republicans are still driving the economic agenda. Democrats are fighting on a field chosen by Republicans where the latter have an inherent advantage. Republicans have been cutting taxes for more than 20 years and have credibility with voters on the issue, whereas the last Democratic tax cut was enacted in 1964. Democrats have fought every tax cut since and imposed tax increases whenever they had the opportunity.
In truth, the fuel that runs the Democratic party is spending. The party exists mainly to take money out of some peoples' pockets and put it into others. There is no problem imaginable that Democrats cannot find a new government program to deal with. But all of this largess must, at some point, be paid for. That means high taxes and no tax cuts.
Good stuff - recommended reading. And for background, I suggest this essay from April 2001 which explains why the Bush tax cuts were not very big. (Note: the essay refers to the Bush tax cut of $1.6 trillion, which is the size of the tax cut as Bush proposed it. Democrats in the House and Senate whittled that down to about $1.3 trillion.)
Constitutional Rights for Everyone!
The Tennessean thinks that non-citizens who aren't in the United States and have never been in the United States - and who took part in making war against the United States - deserve constitutional rights.
Absurd. The notion that we should handle captured enemy soldiers through our justice system rather than treating them as enemy combatants is just nuts. The Taliban and al Qaeda fighters housed at Guantanamo are not petty criminals who need to be prosecuted and jailed. They are not people who violated federal or state law or city ordinance. They are part of an enemy that attacked our country. They are not domestic criminals, for whom the constitution provides a specific judicial process. They are enemy soldiers, for whom the constitution provides another process - one that involves a day of reckoning with the U.S. armed forces under the command of the President. The detainees at Guantanamo need to be detained until the war is over, or until the commander-in-chief deems them to be be no longer a threat to the national security of the United States if they are freed.
Did The Tennessean think captured Nazi soldiers should be brought to the U.S. and tried in the courts back in the 1940s? Probably not.
UPDATE: The notion that the detainees at Guantanamo deserve constitutional rights and entre into the United States' criminal judicial process is based on a faulty premise that the detainees are being held on suspicion of involvment in criminal violations of U.S. law. They are not. They are prisoners of war - and prisoners of war are not entitled to the contitutional protections of a government they made war against. They have already received their due: they were captured in battle and should be held as prisoners until the end of the war, or until the commander in chief determines releasing them does not put national security at risk.
A Fine Attempt
Now that voters have rejected a constitutional amendment that would've erased the limit on municipal fines without a jury trial, the Tennessee Municipal League says it will try again to convince voters to pass the same amendment in 2006.
Today's Tennessean reports: Under the proposed constitutional amendment, the legislature would set the maximum fine cities could charge. A $500 limit has been suggested.
That's the problem. A $500 limit has been "suggested."
The nice thing about the state constitution as currently written is, it sets the limit in stone. Yes, the limit ($50) is probably too low. But allowing the legislature to set the limit means allowing the legislature to raise the limit whenever they chose - which means about every other year when they need a little more money to spend. And what's to stop soome future legislature from setting the limit at, say $500,000, so that cities could avoid all sorts of jury trials and greatly reduce their costs of running their judicial systems?
A good amendment on this topic would set the limit in the constitution and tie it to some sort of inflation index. An amendment that subjects the limit to the whims of revenue-hungry politicians will always deserve to be defeated.
I'm Eating This Up
Tennessee's soon-to-be-retired Gov. Don Sundquist screws up. As usual.
Al Qaeda Active in the Netherlands
They apparently tried to strike at the very symbol of Dutch economic and cultural hegemony: IKEA.
Gore and Fox
Glenn Reynolds explains what Al Gore doesn't understand about news in the new era of cable television and the Internet.
Now viewers have a choice, and Fox's share is growing while its competitors' shares are shrinking. The same is true in other areas: talk radio, where liberal hosts have failed to get the kind of audiences enjoyed by conservative and libertarian hosts, and the Internet, where conservative/libertarian voices predominate to the great frustration of, well, guys like Al Gore. In fact, it seems that the greater the competition in a medium, the more that medium leans away from traditional establishment liberalism. In other words, instead of a Vast Right-Wing Conspiracy at work, we are seeing the market, now freed from anticompetitive constraints, serving a large group of customers who were dissatisfied with earlier offerings and who now have some options. Not surprisingly, those who benefited from the old system aren't happy with the results.
James Pinkerton's take on Gore's claims vis a vis Fox News and the "Vast Right Wing Conspiracy" is good too.
To be sure, something has gotten under Gore's solar panel. And so while the former senator from Northwest Washington—oops, Tennessee—may still favor earth tones for clothing, his vocal tone is 100% Alpha male—or at least Alpha-male wannabe. It's one thing to say that Fox, The Times, and Rush are too conservative, too brash, too whatever. But it's quite another to say, as Gore said to The New York Observer, that these media outlets represent a "fifth column" in the Fourth Estate.
Finally, Some Fiscal Sanity
The Bush administration is right to cancel this Clinton-era travesty of fiscal insanity. A few years ago I wrote columns condeming the Clinton administration's plan - which was to allow states to use money in their unemployment compensation trust funds to pay for paid leave for parents of newborns. The plan, something never intended by Congress when it created the unemployment trust fund, also put at risk the fiscal health of the state's unemployment trust funds. But to Clinton-Gore, those trust funds were just a large money pot they were hoping to tap to buy votes. The thing is, those trust funds are not federal dollars. Each state collects taxes from business to fund unemployment compensation checks - Uncle Sam just holds the money. (Which is insane, given that Congress long ago spend the Social Security trust fund and tossed some IOUs in instead, but that's a whole 'nother issue.) The Clinton-Gore rule authorized states to expand "unemployment compensation" to people who were not unemployed but merely on leave - thus making tax increases on business more likely during a recession because of the counter-cyclical design of the way unemployment compensation taxes are collected. (For a good explanation of that, click here.
Thankfully, no state had yet passed legislation to adopt the change, but special-interest groups in many states were working on it.
From today's New York Times:
The Labor Department said the repeal was necessary because the economic slowdown since the Sept. 11 attacks had depleted state unemployment trust funds, leaving 28 states with less than 12 months of benefits in reserve. Officials said, moreover, that the Clinton rule, which has not been put into effect by any state, would allow for claims that Congress never intended to finance. "Our first priority is to help laid-off workers and their families, and this new measure strengthens their safety net," said Emily Stover DeRocco, the assistant secretary of labor for employment and training.
Ms. DeRocco said states had demonstrated their concern about dwindling reserves by refusing to activate the rule, which she called an experiment. Only the Massachusetts Legislature approved the use of unemployment money for family leave purposes, but the measure was vetoed by Gov. Paul Cellucci.
The Sundquist Legacy
Here's a column I wrote last summer. You want to know what Gov. Sundquist's fiscal management legacy is? This is it:
A year ago, the Legislature grappled with how to balance the budget and found the state had enough state, federal and other money to spend $18.4 billion this fiscal year. A year later, we find our state spending an extra $500 million to $600 million. More than a year ago, Neel's predecessor was truthful enough to admit the extra millions the state found were "unbudgeted dollars." The state constitution prohibits the state from spending a dollar without the Legislature passing a law that specifically appropriates it, but the administration spends surplus funds anyway.
Given a chance to explain, Neel declined to answer. Yet he - and the governor he works for - want you to trust them with an income tax. Trust, however, grows best in the soil of credibility, and the soil in the executive branch is thin indeed.
Nashville Not On Sprawl List
Nashville didn't make the "sprawl index" from the organization Smart Growth America, but only because it wasn't one of the 83 urban areas the organization stuidied. But Nashville likely would've been one of the cities found to be among the most sprawling, the organization says here.
In comparing 83 metro areas across the country, the study found that southern metros accounted for four of the five most sprawl-intensive places, and six of the top 10. (Number one was Riverside-San Bernardino, CA) The six most sprawling southern metro areas are:
Greensboro-Winston Salem-Highpoint, NC
West Plam Beach-Boca Raton, FL
In truth, these cities likely would have more Southern company had the study included Nashville, TN and Charlotte, NC, according to the study's lead researcher, Reid Ewing of Rutgers. Although some pieces of the array of data used to evaluate the other regions was missing for those two metro areas, enough was available to confirm their likely presence in the sprawl pantheon, Ewing said. For the full report, as well as metro area fact sheets and more information, see www.smartgrowthamerica.org.
Next up: the organization and other Smart Growth proponents will propose all sorts of legislation, regulation and taxation to curb "urban sprawl."
A Line Crossed
A respected news service calls Osama bin Laden a "dissident." Thus, Reuters - which also calls Islamikaze terrorists "freedom fighters" - no longer deserves your unquestioning respect.
Calling bin Laden a "dissident" is a profoundly crude attempt at reputational whitewashing. After all, the world knows this man. He has made a point of introducing himself. He is an Islamic warrior. He is a mass murderer. He's not denying any of that. It's his soulcraft. He stays up late at night trying to figure out how to slaughter more people in his crusade to bring down the Great Satan. ... Yet in Reuters's deeply considered view, this mass-murderer is merely a dissident. - Dave Shiflett, National Review.
Sundquist Defends His $orry Legacy
Almost-former Gov. Don Sundquist says he ran the state well. Gov.-elect Phil Bredesen respectfully disagrees. One canard the Sundquistians toss around is that he reduced the rate of growth of state spending. Fact is, Gov. Spendquist piled one huge spending increase on top of another, increasing spending faster than the rate of inflation, faster than population growth, faster than the growth of the state's economy, and faster than revenue growth. Just because a larger budget makes each year's billion-dollar spending increase a smaller percentage increase doesn't make it fiscally responsible.
The fact is, at the beginning of this year Gov. Sundquist proposed a budget for fiscal 2002-03 that would've exceeded the state constitution's cap on the growth of spending by a whopping $1.27 billion dollars. The legislature cut his budget request by some $500 million, yet Sundquist's legacy remains that he signed into law a budget that includes the largest spending in excess of the constitutional cap in the history of Tennessee - a whopping $771 million, or some 9.27 percent more spending than the constitutional cap allows. He also signed into law the largest budget in state history and the largest tax increase in state history, neither of which were anywhere near as large as Sundquist had sought. That's the legacy of the soon-to-be-ex governor who, strangely, still considers himself a fiscal conservative.
You can read more about that here.
As required by the constitution, the legislature passed a one-page law setting forth the amount by which the cap would be exceeded. That law, passed July 4, says: "The index of appropriations from state tax revenues for the 2002-2003 fiscal year may exceed the index of estimated growth in the state's economy by seven hundred seventy-one million dollars ($771,000,000) or nine and twenty-seven hundredths percent (9.27%).
That's $771 million in just the first year. Because each year's budget increase is built on top of the previous year's budget, exceeding the cap by $771 million this year means next year's budget will also be $771 million higher than it would have been if the constitutional spending cap had been respected. And the next year's budget. And the one after that, etc... Over the next 10 years, this year's busted spending cap will cost Tennessee taxpayers an astonishing $7.71 BILLION dollars in additional taxes, unless something is done.
Bredesen is right. The state was terribly mismanaged for the past eight years.
Need I remind you of how the Sundquist administration perpetuated a multi-year, multi-million-dollar scam on the federal government and leaves Tennessee owing Uncle Sam's Medicare program at least $100 million and possibly as much as half a billion dollars?
''I feel there shouldn't be any surprises and certainly no gotchas,'' Sundquist said yesterday.
Surprises and gotchas, Don? You mean, like, promising to oppose an income tax and then doing everything in your power to create one?
I feel like barfing.
A Crime In Maine
Democrats in the Maine state Senate are working overtime to steal an election - and the majority in the state Senate - from the Republicans. Where is the outrage? Right here, but that's not enough.
More Income Tax Fallout
Republicans in the state House have replaced a crew of moderates - including their pro-income tax/cozy with-the-Democratic-speaker leader - with conservatives.
State Rep. Tre Hargett of Bartlett defeated Rep. Steve McDaniel as Republican Leader of the Tennessee House Monday in a GOP Caucus election that swept moderates from leadership positions. Hargett, 33, promised a more aggressive approach for the GOP in the House, where the Republican minority has been marginalized by the Democratic majority for decades. "This is about how we become a more proactive and relevant caucus," Hargett said, adding that he would like to reinstate policy work groups to develop policy ideas and legislation. - reports the Memphis Commercial -Appeal liberal columnist/reporter Paula Wade, who no doubt hated writing every word of it.
Dumping McDaniel in favor of Hargett is more fallout from the income tax debate, which has produced a more conservative and more anti-income tax state House and state Senate.
Here is the Tennessean story on it.
Bias Watch: A Lie in the Times
Paul Krugman, a lefty columnist in the New York Times, says the Wall Street Journal is advocating tax increases for the poor with this editorial. But it's a lie, a deliberate mischaracterization of what the WSJ said.
Here's more on the WSJ column and the latest Krugman lie.
I Just Can't Get All Worked Up About ...
... felons' being upset about a new State of Tennessee website that provides the public with access to information about convicted felons.
Users input a name and the Felony Offender Information Lookup database matches it with Tennessee Department of Corrections Department records and show whether the felon remains incarcerated, when he or she is up for parole and when the sentence ends. Users can also access it with a Social Security number or the felon's TDOC ID number. It currently does not give information about the felon's crimes, although TDOC plans to add that.
Advocates for felons say the online database is a bad, bad thing. Some say "the ease of finding information will guarantee that ex-offenders are forever shunned and will only discourage inmates from reintegrating into the community," reports today's Tennessean newspaper.
Here's a little hyperbole from that story:
"We might as well brand an 'F' on someone's forehead," said federal Public Defender Henry Martin, who predicts a chilling effect on former offenders' ability to find jobs. If the economy is sluggish and jobs are scarce, then an easy search means many employers probably won't hire a former offender, he said.
Boo hoo. You mean committing a felony makes life tough? Who knew?
Officials with TDOC note that the information was already available at the local courthouse - all they've done is make it easier for the public to get public information. So critics, really, just want to make it hard for the law-abiding public to get information they are legally entitled to and which, in fact, was created with their tax dollars. So that public defender, Henry Martin, really just wants employers to hire felons even if they would prefer not to .
Good thing people like Henry Martin and the other critics of the Felony Offender Information Lookup aren't in charge.
Why It's A No Good, Very Bad Idea
Below, I argue against a notion, pushed by New York Times columnist Bob Herbert, that the federal government should bail out cities and states facing budget gaps, arguing that "Such a move, of course, would prevent state and city governments from learning important lessons about fiscal conservatism."
Robert Locke, an associate editor of www.frontpagemag.com, makes the same point in a detailed way in this forceful essay. Locke explains the five main problems with such bailouts:
1. They enable spendthrift policies to continue.
2. They enable the politicians who created the mess to stay in office and never face the electoral wrath that would come if voters saw their incompetence made manifest by bankruptcy.
3. They conceal from the public that a mess was ever created, preventing the voters from learning a needed lesson that would discourage them from electing spendthrift politicians in future.
4. They encourage future spendthrift policies by creating the expectation that the Federal Government will always be there to deliver a bailout if anything goes wrong.
5. They violate the principle of political accountability: that those localities that make dumb decisions, pay the price for them.
The fourth point is largely a matter of tax-exempt bond finance. State and municipal spending depends upon the willingness of the bond market to continue to buy the bonds issued by these governments at a reasonable interest rate. If the government concerned is perceived as a payback risk, their bonds will not sell, choking off their ability to keep spending. More importantly, a turn towards big spending will result in a higher interest rate even before the point of absolute insolvency is reached. The presumption that a bailout will be available undoes this crucial discipline.
These governments’ problems are entirely their own fault and bailing them out will just enable them to avoid addressing their fundamental problems. The powers that be will heave a huge sigh of relief that as they rediscover the eternal political truth that business-as-usual always goes on. If, of course, we let it.
What would a state or municipal bankruptcy look like? Municipalities file bankruptcy under Chapter 9. For a start, this enables them to abrogate their expensive union contracts. For a second, it enables them to restructure, i.e. not pay back on time, their debt. Frankly, this country needs a real government bankruptcy, in which bondholders feel real pain, to instill the discipline of fear that will turn them back into the constituency they used to be for small, responsible government.
Locke also explains how the New York City budget crisis was created chiefly by over-spending (as, indeed, most government budget crises are created).
It's good reading.
A No Good, Very Bad Idea
Mired in budget problems caused chiefly by their own profligate spending in the past, many states and some cities now face a choice between raising taxes, which angers the public, or reducing spending, which is the fiscally responsible choice that, unfortunately for the governing class, angers special interests that have become used to feeding at the public trough.
So along comes New York Times columnist Bob Herbert, a fan of ever-larger and more-costly government, with a very bad idea.
He writes: Last week I interviewed Felix Rohatyn, the financier who helped guide New York City through the nightmarish fiscal crisis of the mid-1970's. Local governments, said Mr. Rohatyn, do not have the resources to overcome the extraordinary fiscal pressures they are currently facing. He said, "I've thought for a long time that since what's happening is happening all over the country, and a lot of it is recession-driven and stock market-driven (the loss of capital gains taxes), that there ought to be a national program to deal with it, essentially a revenue-sharing program."
While it might seem unlikely that the Bush administration would be interested in a large-scale program of assistance, Mr. Rohatyn believes that a concerted bipartisan effort by states and municipalities to spotlight the severity of the problems and the need for broader-based solutions might be persuasive. He said: "There ought to be some kind of coalition of mayors and governors to petition the Congress as well as the administration for, say, a three-year program of special assistance to state and local governments financed by federal borrowing, since the federal government can do things we can't, namely run a deficit. "And if there were ever a time to run a deficit, it would be to deal with this particular issue, because if the states are left to their own devices to close their gaps by cuts and by taxes, it's going to be very deflationary and recessionary."
In other words, Rohatyn - and his NYT champion Herbert - want the federal government to take more of your tax dollars to bail out states and cities that mismanaged the way they handled your tax dollars in the past. Such a move, of course, would prevent state and city governments from learning important lessons about fiscal conservatism.
Herbert is no fan of fiscal conservatism or tax cuts.
In this November 21 column, Herbert condemned taxpayers as "extreme" and "mindless" if they oppose higher taxes.
The states are in a fix and no one at the moment sees a way out. Big-time tax increases and painful service cuts are inevitable in some places. In others, the resistance to tax increases is so extreme it is difficult to imagine how a reasonable budget solution can be crafted. In California, for example, the brutal fiscal situation has not weakened the opposition of Republican legislative leaders to tax increases. Just a few days ago The Los Angeles Times quoted the Senate Republican leader, Jim Brulte, as saying, "I don't see any Republican votes" for higher taxes.
On Election Day in Massachusetts, which will face an estimated $2 billion deficit next year, voters moved perilously close to a tax revolt that was breathtaking in its mindlessness. Nearly half the voters - 45 percent - supported a ballot proposal to eliminate the state income tax, a move that would have plunged the state into a fiscal emergency.
If you are opposed to government taking an ever-larger share of your income, Bob Herbert think you are "extreme" and "mindless."
Herbert's columns ignore the success of Colorado in crafting balanced budgets via spending restraint and tax cuts that fueled one of the strongest state economies in the nation. He also ignores the recent report from the America Legislative Exchange Council detailing the failure of tax-and-spend economics. I comment on that report here, noting that in it, "two highly-accomplished economists explain why higher taxes ultimately harm a state's economic growth, and why reducing taxes (and reducing state spending) leads to higher economic growth."
You might want to email Bob Herbert and tell him what a bad idea he's pushing. Also, refer him to my website, which is loaded with information about the damaging effects of tax increases and the positive effects on states that restrain the growth of spending.
Campaign Finance Loopholes
The Denver Post says there are loopholes to be found in new federal and Colorado campaign finance reform laws, and lawyers for both major political parties are already looking for them. The confluence of new federal and state laws in Colorado make that state "the testing ground for new fundraising loopholes," the paper says.
"We're ground zero for creative financing for elections," said Sean Tonner, who spearheaded Gov. Bill Owens' overwhelming campaign victory last month. "With federal and state campaign finance reforms, Colorado will be the most restrictive or have the most changes in taking money."
Meanwhile, the Rocky Mountain News weighs in on campaign finance reform and that old constitutional bugaboo, "free speech," and concludes that the portion of the law that prohibits an organization from mentioning a candidate's name in advertising before an election deserves to be overturned.
A federal judge has said a group of citizens in Hawaii can actually get away with mentioning a candidate's name in pre-election advertising, and, well, you have to wonder whether the decision is not carrying free speech much too far. He is really going to let these people voice their thoughts on issues and maybe try to influence an election? The next thing you know, Americans will think they have rights or something.
Let's hope they do. It's an unmitigated farce, the McCain-Feingold campaign finance act that would have stopped Hawaii Right to Life from running political ads on TV and radio if the judge had not intervened. The law, which curbs public debate on politics in the name of campaign-finance reform, is clearly unconstitutional and runs against the spirit of liberty and democracy in a manner that is blatantly obvious, direct and fundamental.
Boneheaded Headline of The Day
David Climer's Sunday column, It might pain McNair to sit, but it might be best for Titans, suggested Titans QB Steve McNair not play in Sunday's game against the NY Giants because he might hold the team back.
McNair played: Listed as questionable with rib, shin and toe injuries, McNair passed for 334 yards and three touchdowns, including a nine-yard scoring pass to tight end Frank Wycheck with nine seconds left in the fourth quarter, and Joe Nedney kicked a 38-yard field goal in overtime to lift the Tennessee Titans to a 32-29 victory over the New York Giants, reports CNNSi.com.
UPDATE: Climer's Monday column praises McNair's game performance, but doesn't mention Climer's contention the day before that McNair shouldn't play because he'd hurt the team's chances of winning. I guess being a daily newspaper sports columnist means never subjecting your past columns to instant replay.
UPDATE: It's Tuesday and still no "oops, I blew it" from Climer. Though sportswriter Jim Wyatt has a nice piece on McNair.
Another Democrat Sees The Light
Here's another Democrat who thinks cutting spending is the right way his state should deal with a growing budget gap.
(Remember: A budget gap is the difference between projected future revenue and desired future spending.)
West Virginia House Speaker Bob Kiss "sees West Virginia's fiscal crunch as less severe than the 1989 crisis and is confident the Legislature can ride it out next year without sweeping tax hikes," reports the Register-Herald.
"This is one of the greater fiscal challenges since I've been here in 1988, but there have been worse. And when the dust settles next year, because we're making cuts, we'll finish the year with a very small surplus again."
West Virginia's governor imposed a 3.4 percent spending rollback last week, following a 10 percent cut in April. The state faces a $30 million hole in the budget this year. A drop in expected revenue from the state's personal income tax is one primary cause. The projected gap in next year's budget without spending cuts or higher taxes is $250 million.
Kiss scolded Democrats and Republicans alike for pointing fingers at each other. "What bothers me is this blame game," the Beckley tax lawyer said. "Republicans say it's because of 20 years of mismanagement by Democrats. If you listen to some Democrats, it's George Bush's fault. Which is bunk. This happens in cycles."
"I will be shocked to see any additional revenues next year besides tobacco," the speaker said. "The only way to deal with it (crunch) is on the expenditure side."
Kiss also noted that Tennessee, by using its tobacco settlement funds to prop up spending, merely made its budget gap worse.
Tennessee, for example, drained both its tobacco money and rainy day account, and today is strapped with a $1 billion deficit, he said.
Are you paying attention, Gov.-elect Bredesen?
An Influential Economist
Hope you had a good Thanksgiving holiday. Our family did. Today's New York Times has a long profile of Harvard economist Marty Feldstein, whose views on economics have had a strong and positive influence on the Bush administration's economic policies.
Almost two decades after the soft-spoken but hard-driving Mr. Feldstein ended a fractious stint in the Reagan administration, he has built an empire of influence that is probably unmatched in his field. Aside from his administration ties, he holds sway over many fellow economists as president of the nation's premier economic research organization, and thousands of Harvard students who have taken his, and only his, economics class during their Harvard years have gone on to become policy makers and corporate executives.
Mr. Feldstein's stature and his vigorous defense of Mr. Bush's economic policies have won him frequent mention as a possible candidate to succeed Alan Greenspan eventually as chairman of the Federal Reserve.
Known for his wide-ranging research on taxes and government spending that examines the ways public policy affects people's behavior, Mr. Feldstein has helped shift the economic consensus to the right over the last three decades. As an adviser to Mr. Bush's 2000 campaign and a frequent contributor to op-ed pages, Mr. Feldstein provided much of the intellectual rationale for the tax cut last year. He continues to push for changes in the Social Security system that would include private investment accounts.
"I think that is quite a remarkable number," he said during a lecture one recent Monday, using a laser pointer to direct attention to "43.65 percent" displayed on an enormous screen inside the steeply tiered Sanders Theater, just off Harvard Yard. The percentage signified the portion of every additional dollar earned by somebody making $35,000 a year that goes to paying taxes.
"I find it quite strange that somebody at this relatively low income is paying about half of his income in taxes," he said in his clear, dry speaking style. "What high marginal tax rates do is distort behavior."
He has also said that unemployment benefits keep joblessness higher than it otherwise would be and that taxes often cause people and companies to act in inefficient ways.