Don't Wait for a 'Smoking Gun'
James Robbins explains why the Democrats are hanging themselves out to dry - and potentially putting American lives at risk - by demanding absolute proof of Iraq's guilt before we go to war.
The threat is more nuanced than it used to be. For example, how do you show a convincing photograph of anthrax spores, especially taken from a satellite? Suppose the Iraqis have outfitted mobile chem-bio laboratories that they keep on the move and away from inspectors. One would guess the labs look a lot like trucks. Suppose chemical-weapons components are being offloaded into a warehouse - OK, there's a building, here men move boxes.
Even a nuclear weapon would not necessarily look like a World War II-era bomb with great big fins and radiation symbols painted on the side. It might look like a shipping container, which when you think about it is even more alarming.
Steaming hot commentary on journalism, Tennessee, politics, economics, the war and more...
- Name:Bill Hobbs
- Location:Nashville, Tennessee, United States
Don't Wait for a 'Smoking Gun'
A Refreshing New Attitude
New Gov. Phil Bredesen has set a new fiscal tone in Tennessee when it comes to government spending. He's proposing actual cuts in state government's budget and payroll, and major institutions that in the past lobbied for higher taxes are now agreeing that there is waste to be cut.
Bredesen, who says he plans to reduce the state payroll by 2,900 employees (returning it to the number of state employees on the payroll in 2000), now is asking the state's higher education system to do its part.
Amazingly, higher ed is lining up to comply. I say "amazingly" because, for the last four years, the University of Tennessee system has sent busloads of students to the state capital at taxpayer expense in order to lobby the legislature to pass an income tax.
But now that the governor who championed the income tax is gone, and the new governor is committed to balancing the state budget without raising taxes, UT officials are saying they can, indeed, find ways to cut.
Reports the Tennessean newspaper in Nashville: UT President John W. Shumaker and other officials said they would find ways to work through hard times. ''We exist for our students,'' Shumaker said. He said UT's new executive vice president, Steve Leonard, would lead an effort to find ways to save money. Shumaker mentioned what he called a small but telling example of how money might be saved. After seeing an invoice for items the university had purchased recently for $290, he sent a staff member out in Knoxville to buy the same materials. They cost $54.
Shumaker says UT will continue to raise private funds, and plans a major capital campaign next year. He declared the university a ''no-whine zone,” the paper reports.
Incidentally, Bredesen’s plan to reduce the state payroll by 2,900 employees has people wondering why the previous administration added 2,900 people to the payroll in the midst of what it said was a budget crisis.
2,900 employees is not small change. At an average of just $30,000 per year in salary and benefits, those employees would cost the state $87 million per year. Yet the Sundquist administration hired them in the middle of a “budget crisis.” More evidence the budget crisis of the past four years was at the very least a political exxageration.
(This item is also up at PolState.com today.)
What Are You Doing Here?
Looking for stuff about the war with Iraq? Hmm... There's some down below. But before you go read it, I urge you to zip on over to Donald Sensing's blog and read this, in which exposes how a fellow United Methodist pastor, Nashville UM Bishop Melvin Talbert, allowed himself to be Saddam's dupe in the anti-war movement. It's important - because Talbert is currently all over the news for his starring role in anti-war television commercial.
Not convinced you need to go to Sensing's blog pronto? Okay, here's an excerpt...
The bishop recently went to Iraq (December, as I recall), where he let Saddam spin him like a top. He saw only what Saddam wanted him to see, he spoke only to the people Saddam wanted, he heard only what Saddam intended. There is no account of Talbert's visit, including his own, that he attempted to give a witness to the Iraqi people or the regime's figures of the Gospel of Jesus Christ; there is no evidence or report that he challenged Saddam's regime on its tyranny and murder; there is no evidence or report that he had any real agenda other than a barely-concealed willingness to be used a dupe by the co-winner of the Gold Medal for bloodthirstiest tyrant alive today (Kim Jong Il being the other).
Now... get going!
UPDATE 2/16: I received an email from reader Tom Lee, who informed me the dictator-coddling United Methodist bishop's first name was Melvin, not John. My mistake, indeed it is Melvin. It will be corrected in the originial item Lee also said Talbert was from San Francisco, not Nashville. True, but in this case we're both right. According to this story. Talbert teaches at Vanderbilt Divinity School right here in Music City. Bishop Talbert retired from his San Francisco post Sept. 1, 2000. Lee pointed me to this very interesting press release from the United Methodist News Service regarding the circumstances surrounding Talbert's resignation.
Welcome, Tennessean Readers
HobbsOnline is getting a fair amount of new visitors today who read my op-ed piece in today's Tennessean on the paper's website and clicked the hyperlink at the bottom of it. I imagine some who read it on the dead-tree version are also visiting this site. If you are looking for information about the Taxpayers Bill of Rights, scroll down and look for the blue rectangle with the outline of the state of Tennessee on it, and click that.
You should also click here and also here. The latter has links to a lot of TABOR-related posts on this site. Also, if you think TABOR is a good idea, visit TnTABOR.org. And finally, if you like this site and want to help keep it going, you can support it with a donation via Amazon tip jar.
We're Almost Ready...
A lot of websites have been pixelated with comment on Bush's statement in the State of the Union telling the people of Iraq that their enemy was not surrounding their country, but ruling it.
Bush said: Tonight I have a message for the brave and oppressed people of Iraq: Your enemy is not surrounding your country, your enemy is ruling your country. And the day he and his regime are removed from power will be the day of your liberation. It was a strong statement, designed to provide comfort to the Iraqi people who await liberation, commentators said.
But there's a second message in that statement, aimed at the Iraqi military, and not meant to comfort them at all.
Ready for War
Here's a report from the front lines in Kurdish northern Iraq, where the biggest fear is that America won't attack.
During their 12 years of freedom, the Kurdish, Turkmen and Assyrian inhabitants of this land have rebuilt most of the 4,000 villages Saddam Hussein's troops bombed and bulldozed into oblivion. They have also created at least the semblance of democracy, complete with elections and a representative parliament.They have laced the country with highways and transformed Sulaymaniyah, Irbil and Dohuk into modern cities with multiple newspapers, traffic jams and omnipresent Internet cafes. The people are warm and well fed, thanks to the Iraqi-U.N. oil-for-food program. But with Turkish tanks hovering above Dohuk, an Islamic militant group shelling Halabja and Saddam Hussein's troops patrolling their southern border, Kurdistan residents realize all too well how fragile their beautiful new world is. That's why they hope that the "top secret" American airstrip near Sulaymaniyah will be put to use soon.
In fact, the invasion is already underway.
"He needed killin'"
Jonah Goldberg is one of my favorite writers. His latest is all about Bush and Iraq.
After he's gone, when the Iraqi prisons and archives of terror are opened and the Iraqi people are free, Bush can simply say of Saddam, in cowboy parlance, "He needed killin'"; and everyone will understand.
Donald Sensing explains the difference between Islam and Western ideals.
I haven't read or heard any commentary about the most penetrating quote in the president's SOTU speech Tuesday night. It's this one, that came in the penultimate paragraph: "The liberty we prize is not America's gift to the world; it is God's gift to humanity."
That sentence defines the chasm between the West generally, including America specifically, and Islam generally, including Arabic Islam specifically. Islam teaches that Allah's control over events of the world and human life is total and complete. There is no human free will, there is only rebellion against Allah or submission to Allah. Yet even rebellion is, somehow, under the controlling purview of Allah. Everything that happens, without exception, is the preordained will of Allah. Bin Laden's sort of self-justifying extremism is not the mainstream of Islam, but neither is it as far removed as we might imagine. Fatalism is a characteristic of Islam. There is no human freedom. Human liberty, especially as Americans think of it, is literally a foreign concept to Islam, expecially Arab Islam.
We say that the defining idea of American liberty is "self evident:" Human beings "are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness." This claim has no natural fit with Islam. The idea that humans, created by the power of Allah, could inherently possess unalienable rights of their own, which no authority may remove, would require Islam to surrender the idea that Allah enjoys meticulous control over all affairs of nature and humankind. But this notion is lethally dangerous to the defining idea of Islam itself: that Allah has all the power.
Liberty as we conceive it is at the heart of the conflict. For Muslims, the most desirable state of human sociegty is not one that is free, in the Western sense, but one that is submissive to Allah, according to the dictates of Quran. This state of society is dar al Islam, the world of peace. Anything else is the "world of war." Hence, Islam does not use terms such as free or unfree to refer to nations, but at war with Allah or at peace (through submission) to Allah. And because of the deterministic model of Allah, any form of political repression conducted under Islam's banner is seen as Allah's will. Think Saudi Arabia, Iran and the Taliban.
Go read the whole thing. Sensing's blog is always first-rate.
Arnold Kling's latest brilliant essay explains how "Economic idiotarians are people who implicitly reject market logic and instead see economic arrangements as an either-or choice between idealistic sharing and evil exploitation."
I believe that the Internet is going to create new Market Pricing institutions and intermediaries in the realms of journalism, music, and other cultural work. Moreover, my guess is that these institutions will not resemble today's publishers, and their revenue models may be nothing that today's industry incumbents would recognize. I believe in the digital revolution, but I distance myself from those who see this revolution as a conflict between Authoritarian Ranking and Communal Sharing.
Sometimes, advocates for Open Source Software speak as if Microsoft inflicts its products on the public using Authoritarian Ranking, when instead software should be available for Communal Sharing. I believe that it is more accurate to view both proprietary and Open Source Software through a Market Pricing framework. This leads one to predict that Open Source developers will lack incentive to make their work accessible and usable for a non-technical audience, which seems to be an issue.
The phrase "tax cuts for the rich" is designed to trigger an idiotarian response. You are supposed to see a conflict between the Communal Sharing of the tax revenue that naturally belongs to all of us and the Authoritarian Ranking of powerful rich people stealing from this communal resource.
A successful idiotarian campaign was the assault on "Big Tobacco." The lawsuits against the tobacco companies were reported as a victory for Communal Sharing and a defeat for Authoritarian Ranking. However, from a Market Pricing perspective, this is not so clear. It may be more accurate to say that smokers are people who made choices rather than victims of tobacco companies; and the winners of the lawsuits were the individual attorneys who collected huge fees, not the community as a whole.
I didn't know The Tennessean was going to publish this today. I don't know they were going to run it, period. But I'm glad they did. What is it? Go see for yourself.
Support the Tennessee Taxpayers Bill of Rights!
Coffee mugs, shirts and baseball caps, artfully emblazoned with Tennessee Deserves a Real Taxpayers Bill of Rights!, are available here. Meager profits will support the ongoing operation of this site.
Big Bang Theory
Austin Bay over at StrategyPage.com explains why toppling Saddam Hussein will be a death blow to al Qaeda - and how al Qaeda is responding to the threat.
The massive American build-up around Iraq serves as a baited trap that Al Qaeda cannot ignore. Failure to react to the pending American attack would demonstrate Al Qaeda's impotence. For the sake of their own reputation (as well as any notion of divine sanction), Al Qaeda's cadres must show CNN and Al Jazeera they are still capable of dramatic endeavor.
This ain't theory. Al Qaeda's leaders and fighters know it, and the rats are coming out of their alleys. In Afghanistan, several hundred Al Qaeda fighters in the Pakistani border region have gone on the offensive. They specifically link their attacks to America's pending assault on Baghdad. Al Qaeda terror teams are reportedly moving into Western Europe.
The big loss will be access to Saddam's WMD. A WMD spectacular is the kind of operation that can reverse Al Qaeda's international propaganda decline. That ain't theory, either. Al Qaeda's leaders know it, which is why they seek nukes and nerve gas. It's why American strategists who know Al Qaeda know the axis of evil must be utterly broken.
Read the whole thing. And check out StrategyPage.com from time to time. It's on my permanent links list.
Reason magazine explores the unreasonableness in the way municipal governments are increasingly abusing eminent domain to benefit private businesses.
Eminent domain has a long history, and it isn’t likely to go away. After all, it’s enshrined in the U.S. Constitution, not to mention the constitutions of all 50 states. What distinguishes the current era is the degree to which local governments are willing to use this power to achieve all manner of public policy goals. Sometimes they succeed, and sometimes they’re driven back by public protest or the courts. But they’re unquestionably pushing the boundaries.
In the current climate, many of the traditional constraints on public takings of private property seem to have disappeared. Most redevelopment laws, including Arizona’s, explicitly acknowledge that land can be taken even if the beneficiaries will be other private parties. This principle is even articulated in federal law, through the 1954 Supreme Court decision Berman v. Parker, which allowed local governments to condemn land for urban renewal and then transfer title to private parties. Even then, local governments didn’t have carte blanche; they had to justify the taking as a way to mitigate "urban blight." But over the years that term has become little more than a name for property a government wants to take. Today redevelopment agencies enjoy more discretion than ever, and eminent domain is becoming their tool of choice.
The American Revolution is Not Over
The coming war for Iraq's liberation is the next logical step in the American Revolution, says Alex Napp:
And so the job falls to us and our core allies. Nobody wants war, but when the alternative is leaving millions of innocent people at the mercy of brutal thugs who look for more ways to acquire weapons and expand their power, well, I'll take war. Granted, there are stages that can be gone through. I'm all for deep cover operations and all that other cool spy stuff. War doesn't have to be tanks and rockets. But it's time to fulfill the promise of the Enlightenment. It's time to live up to our ideals of freedom. For most of human history, thugs and barbarians ruled humanity. 227 year ago, the tide turned, and pockets of humanity started ruling themselves, learning to stand tall and spit in the eye of anyone who tried to make them kneel. And it's high time we made sure that nobody kneels again. That nobody has to wake up at 3am hearing that fateful knock on the door. That nobody has to worry that noting the resemblence of their elected officials to lower primates will result in their head on a silver platter. In other words, it's high time to liberate the world. It's a dirty, messy job that will take decades. But it has to be done.
"Tonight I have a message for the brave and oppressed people of Iraq: Your enemy is not surrounding your country, your enemy is ruling your country. And the day he and his regime are removed from power will be the day of your liberation." - President George W. Bush, Jan. 28, 2003.
Pataki Comes Through
Faced with a revenue shortfall, New York Gov. George Pataki does the only sensible thing. He proposes a smaller budget, and rejects calls that he increase the state's income tax or major corporate taxes, calling them "job-killing." New York, says Pataki, will live within its means.
The State of Your Wallet
The president spoke about the economy and taxes last night, too, and it was all good. Three things stand out.
First, his call to accelerate and make permanent the tax cuts Congress has already passed: "You, the Congress, have already passed all these reductions, and promised them for future years. If this tax relief is good for Americans three or five or seven years from now, it is even better for Americans today."
Hard to argue with that. If the medicine is good medicine - and it is - better to take it now than later.
Second, Bush confronted the specious class-warfare arguments the Democrats will try to make: "This tax relief is for everyone who pays income taxes, and it will help our economy immediately. Ninety-two million Americans will keep this year an average of almost $1,100 more of their own money. A family of four with an income of $40,000 would see their federal income taxes fall from $1,178 to $45 per year."
Sounds very good to me.
Third: the president suggested goverment spending not grow faster than per capita income. "I will send you a budget that increases discretionary spending by 4 percent next year, about as much as the average family's income is expected to grow. And that is a good benchmark for us: Federal spending should not rise any faster than the paychecks of American families."
He's right. That's the philosophy behind the Taxpayers Bill of Rights concept: government spending shouldn't grow faster than the economy, whether you measure it by per capita income, or population plus inflation growth, or some other sensible measure.
Glad to hear the president believes that.
Club for Growth leader Stephen Moore says Bush is Ronald Reagan's third term. I'm hoping for a fourth.
Soon It Will Be Over, Over There
Lileks is brilliant today. Well, every day. But today is special. It's the day after the State of the Union.
He’s tired. This is taking a lot out of him. Think back to the post 9/11 climate, and remember the feeling you’d get in your stomach when you read a story headlined “Does Al Qaeda have a nuke?” or “Smallpox fears rise” - it seemed as if the one thick thread that held your world together was about to get a good hard yank. Some forget how every day brought the same routine - news report, a hot squirt of fear in your stomach, a quick imposition of denial, then . . . well, you had to make dinner, or pick the kids up, or take the dog to the vet. We lived in these twin worlds of the Now and the Horribly Possible. The latter, thank God, hasn’t happened yet.
Imagine, however, that your Now is also your Horribly Possible, and you live there 24-7. And imagine that every day you read intelligence reports that suggest the Possible is quite Likely. It would take its toll on a fellow.
So what do I take away from the speech? Nothing I didn’t know before. I always thought Iraq was next. Defeating Iraq isn’t the camel’s nose in the tent - it’s the camel’s head in the bed of every other Arab leader.
Let's say I'm a 44-year old Iraqi man with a two-year old girl and a wife who worked in the Ministry of Justice and came home every day weeping because someone else had been taken away, I would hear this speech and be filled with piercing fear and incandescent hope and the two emotions would wrestle every day until it was over. When you think about it, a postwar Iraq might actually be safer from WMD than New York City. It’ll be over for them. We’ve no idea when it’ll be over for us.
Also brilliant, as usual: Victor Davis Hanson, who calls the speech "an elemental talk about life and death, good and evil," and dimisses the Democrats' response as being the response of a party that is "on the wrong side of history in opposing the removal of a deadly fascist, in a post-9/11 world where there is no margin of error."
Read 'em both.
KnoxNews columnist George Korda has a good analysis of the early days of the Bredesen administration.
If government is reduced, he gains the critical high ground in the perception battle. Early perceptions are like wet concrete. As they harden, they hold fast. The concrete Bredesen is pouring is based on his campaign promise to bring better management to Tennessee’s government. Voters are seeing these factors as the new governor sets up spending reductionst: Bredesen said he would manage, and he’s managing. Bredesen said there would be tough choices, and he’s making them. Had Don Sundquist attacked the problem similarly – and let people see it - he might not have passed his income tax, but he’d be seen in a different light today. Whatever short-term problems these actions may cause Bredesen with different constituencies, in the long run it will pay political dividends with Mr. and Mrs. Average Voter.
I think that's about right.
The Headline is a Lie
The New York Times today headlines its story on the Bush speech by saying the "President seeks cuts in taxes and spending." The Bush budget proposal will increases federal government spending by 4 percent.
Let's go to the text:
We must work together to fund only our most important priorities. I will send you a budget that increases discretionary spending by 4 percent next year, about as much as the average family's income is expected to grow. And that is a good benchmark for us: Federal spending should not rise any faster than the paychecks of American families.
The NYT story starts this way:
President Bush vowed tonight that he would not burden future generations with the nation's pressing domestic problems: growing budget deficits, a lagging economy and a crisis in health care. He offered few new specifics on how he would solve those problems, and Democrats asserted that some of his proposals could actually worsen them. But Mr. Bush, addressing one of the core critiques of his administration, argued that he "will not pass along our problems to other Congresses, other presidents and other generations."
I heard the speech. The president's promise to "not pass along our problems to other Congresses, other presidents and other generations" was NOT a reference merely to deficits, the economy and "a crisis in health care," as the NYT spins it. The vow covered everything in the speech, from Medicare reform to dealing with terrorism and Iraq. And Bush offered specifics on each item. You can verify that by reading it yourself.
More lies: NYT columnist Maureen Dowd says Bush "tried to sell skittish Americans on a war with Iraq by alluding to the possibility of a link between Saddam and Al Qaeda."
Bush didn't allude to a possible link. He said we had evidence of a link. When in doubt, go to the text:
Evidence from intelligence sources, secret communications and statements by people now in custody reveal that Saddam Hussein aids and protects terrorists, including members of Al Qaida.
The war with Iraq started in 1990, says Austin Bay.
After Desert Storm, the war inside Iraq continued, as Saddam's troops savaged rebelling Shia Arab villages in southern Iraq. Washington hoped for Saddam's fall, but with Khomeini's militant Iran next door, no one in the Middle East wanted Iraq to fragment. So U.S. forces didn't move, and continued to respect the spirit and letter of UN resolutions that did not permit Saddam's removal as long as he gave up his weapons of mass destruction (WMD) and posed no offensive threat to neighboring nations.
Thanks for the reminder.
Bay's StrategyPage.com is must-reading for understanding what's really going in over there is a syndicated columnist with Creators Syndicate and the author of four non-fiction books and two novels. His commentaries have appeared on National Public Radio's Morning Edition. Bay has worked as a special consultant in the Office of the Secretary of Defense and is a colonel in the US Army Reserve. A graduate of the Army War College, he hold a PhD from Columbia University. Check out this great piece on the Iraq-al Qaeda link and the possibility of Iraq launching terror attacks inside the United States.
More on the State of the Union
Regarding the Democrats' rebuttal: "It all boiled down to, "What Bush said, only less. Unless you want more. Really, we're flexible." - Steven Green, a/k/a the VodkaPundit.
Meanwhile, Andrew Sullivan loved Bush's speech:
In many ways, this was a Kennedy-like speech, a speech a Democratic president could have made, if the Democratic Party hadn't fallen into such moral and strategic confusion. Self-confident, convinced, as he should be, of the benign nature of America's role in the world, ambitious, and warm, it was a tour de force of big government conservatism, mixed with Cold War liberalism.
Quote of the Year
Yeah, it's only January. But I doubt any political line this year will top this one from Bush's speech:
"Tonight I have a message for the brave and oppressed people of Iraq: Your enemy is not surrounding your country, your enemy is ruling your country."
Yeah. But not for long.
At some point today this site welcomed its 50,000 visitor. Thanks, whoever you were. Hope you got your money's worth. I just wish all 50,000 of you had dropped a dollar in the tip jar. ;-) But don't worry, I'm not gonna pull an Andrew Sullivan on you.
More Proof of the U.N.'s Near-Total Uselessness
Iraq and Iran will co-chair the next meeting of the United Nations' Conference on Disarmament, in Geneva, Switzerland, in May, because the co-chairs rotate among countries on an alphabetical basis and it is Iraq's turn.
According to CNN, the Conference on Disarmament and its predecessors have negotiated such major multilateral arms limitation and disarmament agreements as the Treaty on the Non-Proliferation of Nuclear Weapons, the Convention on the Prohibition of Military or Any Other Hostile Use of Environmental Modification Techniques, the Convention on the Prohibition of the Development, Production and Stockpiling of Bacteriological (Biological) and Toxin Weapons and on their Destruction, the Convention on the Prohibition of the Development, Production, Stockpiling and Use of Chemical Weapons and on Their Destruction, and the Comprehensive Nuclear-Test-Ban Treaty.
"The irony is overwhelming," a U.S. diplomat said.
But, then, the U.S. is planning its own little "disarmament conference" in Baghdad in February or March, it appears, with our delegates arriving by land and air. So if the current government of Iraq isn't in power in May and a U.S.-led coalition government is running Iraq, can we recall the Iraqi ambassador and send our own to chair the meeting?
State of the Union Speech:
A grand slam home run. Rich Hailey had an on target preview of the speech, noting that "The Democratic response will be muddy, emotional, filled with worn out rhetoric. It will attack President Bush's plan, but offer no alternative. If the Dems had a viable alternative, then one of the Presidential hopefuls would be giving the response." Good point.
Here's the transcript of Bush's speech. And here are some of my favorite sections:
I am proposing that all the income tax reductions set for 2004 and 2006 be made permanent and effective this year. And under my plan, as soon as I've signed the bill, this extra money will start showing up in workers' paychecks. Instead of gradually reducing the marriage penalty, we should do it now. Instead of slowly raising the child credit to $1,000, we should send the checks to American families now. This tax relief is for everyone who pays income taxes, and it will help our economy immediately. Ninety-two million Americans will keep this year an average of almost $1,100 more of their own money. A family of four with an income of $40,000 would see their federal income taxes fall from $1,178 to $45 per year. And our plan will improve the bottom line for more than 23 million small businesses. You, the Congress, have already passed all these reductions, and promised them for future years. If this tax relief is good for Americans three or five or seven years from now, it is even better for Americans today.
How will the Democrats explain saying no to that?
To improve our health care system, we must address one of the prime causes of higher cost: the constant threat that physicians and hospitals will be unfairly sued. Because of excessive litigation, everybody pays more for health care, and many parts of America are losing fine doctors. No one has ever been healed by a frivolous lawsuit; I urge the Congress to pass medical liability reform.
That's when Sen. John Edwards, millionaire trial lawyer and presidential wannabe, fumed sullenly. Priceless!
In this century, the greatest environmental progress will come about not through endless lawsuits or command-and-control regulations, but through technology and innovation. Tonight I'm proposing $1.2 billion in research funding so that America can lead the world in developing clean, hydrogen-powered automobiles. A simple chemical reaction between hydrogen and oxygen generates energy, which can be used to power a car, producing only water, not exhaust fumes. With a new national commitment, our scientists and engineers will overcome obstacles to taking these cars from laboratory to showroom, so that the first car driven by a child born today could be powered by hydrogen, and pollution-free. Join me in this important innovation to make our air significantly cleaner, and our country much less dependent on foreign sources of energy.
The politics of that is simply amazing. Bush is supposed to be the captive of "Big Oil," yet he is proposing a rather large program to develop a commercially-viable replacement for oil as an automobile fuel. And the crash program to develop hyrdogen power cars will be a boon to the technology sector, helping the economy. And Democrats will have to vote for it.
Today, on the continent of Africa, nearly 30 million people have the AIDS virus, including 3 million children under the age of 15. There are whole countries in Africa where more than one-third of the adult population carries the infection. More than 4 million require immediate drug treatment. Yet across that continent, only 50,000 AIDS victims -- only 50,000 -- are receiving the medicine they need. Because the AIDS diagnosis is considered a death sentence, many do not seek treatment. Almost all who do are turned away. A doctor in rural South Africa describes his frustration. He says, "We have no medicines, many hospitals tell people, 'You've got AIDS. We can't help you. Go home and die'." In an age of miraculous medicines, no person should have to hear those words.
AIDS can be prevented. Anti-retroviral drugs can extend life for many years. And the cost of those drugs has dropped from $12,000 a year to under $300 a year, which places a tremendous possibility within our grasp. Ladies and gentlemen, seldom has history offered a greater opportunity to do so much for so many. We have confronted, and will continue to confront, HIV/AIDS in our own country. And to meet a severe and urgent crisis abroad, tonight I propose the Emergency Plan for AIDS Relief, a work of mercy beyond all current international efforts to help the people of Africa. This comprehensive plan will prevent 7 million new AIDS infections, treat at least 2 million people with life-extending drugs and provide humane care for millions of people suffering from AIDS and for children orphaned by AIDS. I ask the Congress to commit $15 billion over the next five years, including nearly $10 billion in new money, to turn the tide against AIDS in the most afflicted nations of Africa and the Caribbean. This nation can lead the world in sparing innocent people from a plague of nature.
Simply masterful. This is the kind of foreign aid that makes sense - reducing the spread of AIDS globally is in the interest of American national security. There's no down side to it politically, either, and Democrats have to vote for it.
Our war against terror is a contest of will in which perseverance is power. In the ruins of two towers, at the western wall of the Pentagon, on a field in Pennsylvania, this nation made a pledge, and we renew that pledge tonight: Whatever the duration of this struggle and whatever the difficulties, we will not permit the triumph of violence in the affairs of men; free people will set the course of history. Today, the gravest danger in the war on terror, the gravest danger facing America and the world, is outlaw regimes that seek and possess nuclear, chemical and biological weapons. These regimes could use such weapons for blackmail, terror and mass murder. They could also give or sell those weapons to terrorist allies, who would use them without the least hesitation. This threat is new; America's duty is familiar. Throughout the 20th century, small groups of men seized control of great nations, built armies and arsenals, and set out to dominate the weak and intimidate the world. In each case, their ambitions of cruelty and murder had no limit. In each case, the ambitions of Hitlerism, militarism and communism were defeated by the will of free peoples, by the strength of great alliances and by the might of the United States of America.
Darn near lyrical. And from there, Bush laid out a very clear, tough, and convincing case for military intervention in Iraq. The announcement that Colin Powell will present evidence to the United Nations on Feb. 5 tells you when the war will begin: soon after, regardless of what the UN does.
Some have said we must not act until the threat is imminent. Since when have terrorists and tyrants announced their intentions, politely putting us on notice before they strike? If this threat is permitted to fully and suddenly emerge, all actions, all words and all recriminations would come too late. Trusting in the sanity and restraint of Saddam Hussein is not a strategy, and it is not an option. The dictator who is assembling the world's most dangerous weapons has already used them on whole villages, leaving thousands of his own citizens dead, blind or disfigured. Iraqi refugees tell us how forced confessions are obtained: by torturing children while their parents are made to watch. International human rights groups have catalogued other methods used in the torture chambers of Iraq: electric shock, burning with hot irons, dripping acid on the skin, mutilation with electric drills, cutting out tongues, and rape. If this is not evil, then evil has no meaning.
And tonight I have a message for the brave and oppressed people of Iraq: Your enemy is not surrounding your country, your enemy is ruling your country. And the day he and his regime are removed from power will be the day of your liberation.
It will also be one of the greatest days in American history.
Telling the Truth
This is two weeks old, but I just found it, thanks to a link on Virginia Postrel's blog. It seems that USA Today decided to tell the real truth about all those state budget shortfalls you hear about from coast to coast.
State governments are struggling to pay for expensive programs that were approved or expanded during the economic surge of the late 1990s. Although the economy began to cool in 2000, state and local spending has continued to grow, increasing by an annual rate of 4.2% in the first nine months of 2002. Governors and legislatures meeting this month in 42 states must decide whether to raise taxes or retreat from spending promises made before the recession set in. But most of the budget cuts under consideration are reductions in planned spending increases, not actual declines in spending from last year.
Tax collections by the states fell 5.7% nationwide in the 12 months that ended June 30, the Census Bureau reports. That decline was offset somewhat by increases in federal aid and other revenue. Many states met their higher spending obligations by tapping reserve funds and using accounting gimmicks. Tax collections are rising again: up 1.4% nationwide in the quarter that ended Sept. 30. But that's not enough to match spending increases that legislatures have approved.
The paper actually published two stories. Here's a link to the other one, which says:
State and local governments are spending more money and hiring more people than last year, even as governors and mayors warn of draconian cuts in public services because of the economic slump. The National Governors Association says states face the ''most dire fiscal situation since World War II.'' But a USA TODAY analysis shows that most of the budget cuts being studied are not declines in spending from last year. Instead, they are reductions in spending increases that were approved when the U.S. economy was booming.
UCLA management professor Daniel J.B. Mitchell told USA Today the words "'shortfall'' and ''budget gap'' are political terms, not accounting terms, and "the public mistakenly thinks this means you have to cut spending or raise taxes by this amount to balance the budget.''
Consider California. The terms "shortfall" and "budget gap" are merely an estimate of the difference between what the Legislature approved spending and what it has money to pay for. Says USA Today:
California's budget ''shortfall'' is largely caused by the Legislature's plan to increase general fund spending from $78 billion this year to $85 billion next year and $91 billion in 2005. Those proposed increases are likely to be cut. It's like an employee who expects a 5% raise, gets only 3% and complains about a 2% pay cut. Mitchell says questionable accounting makes it hard for the public and legislators to understand the state's true financial condition. California reported a $3 billion surplus in the budget year that ended June 30, 2001, just as the high-tech bubble was bursting. But the state actually spent $5 billion more than it took in - a deficit. ''California is in trouble now because it ran huge deficits even at the peak of the revenue cycle,'' Mitchell says. ''If you run deficits in good times, you're bound to have a fiscal crisis in hard times.''
Postrel's Jan. 15 blog item notes that a sidebar chart in the printed version of the paper, but not available online, revealed more data on how states have spent themselves into their current crises.
The printed sidebar includes a great chart, unavailable online, that shows the average annual change in each state's budget from 1997 to 2002 and the projected change for 2003. Examples: California's state budget grew 9.4% a year from 1997 to 2002 and is projected to shrink by 0.2% this year; Colorado's grew 8.1% a year and is shrinking 2.7% this year; Virginia's grew 8.0% a year and is projected to grow 1.6% this year. Major outliers: Florida, which grew 4.4% a year from 1997 to 2002 and is supposed to grow 8.0% this year, North Dakota (3.5% vs. 15%), and West Virginia (2.8% vs. 10.8%).
Tennessee's budget also grew exponentially during that same five-year period, from less than $15 billion in fiscal year 1997 to more than $20 billion in the current fiscal year.
Woman of Mass Deception
A Tennessee state legislator from Memphis is claiming the coming war with Iraq will cost Tennessee's budget an estimated $1.3 billion in federal funding for roads, schools and other domestic needs.
State Rep. Kathryn Bowers, D-Memphis, said yesterday in an open letter to the governor, other legislators and the public, that she wants Tennessee citizens to know that the state's serious budget shortfalls will be compounded by a reduction in federal funds which she believes will be redirected to war spending, according to this story in today’s Tennessean newspaper.
Bowers wrote: ''We are very concerned about the cuts in the federal budget to provide money for a war in Iraq and the wrong message that is being sent to our children.”
The message Bowers is sending to children is that it is okay to lie in order to further your anti-war goals. Bowers’ claim is at best a half-truth, at worse a deliberate lie.
Bowers wrote the letter as part of her work as president of a national organization called Women's Action for New Directions, based in Arlington, Mass.
The organization’s web site says “WAND's mission is to empower women to act politically to reduce violence and militarism, and redirect excessive military resources toward unmet human and environmental needs.”
Bowers cited federal budget figures and projections from two reports of the National Priorities Project, described in the paper as “a nonpartisan, nonprofit Massachusetts-based group used as a resource for citizens and community groups to help them shape federal budgets and priorities,” for her wild claim that Uncle Sam will cut federal funding to Tennessee by $1.3 billion in order to help finance the war.
However, as The Tennessean helpfully notes, “The NPP reports … did not link the federal funding loss and cost of war as Bowers did, said Anita Dancs, the NPP's director of research. Dancs said in one report that the NPP calculated the amount taxpayers in every state would pay to fund a war based on the assumption war would cost $100 billion.
The Tennessean’s description of NPP is a joke, by the way. The "about us" section of the organization’s own website says this about itself: “For a number of years, NPP has focused on the trade-offs between military spending and tax breaks with social spending. This has enabled us to build bridges between the peace community and the many groups fighting for social and economic justice, expanding the number of groups who will work on both community needs and peace.”
In other words, NPP is allied with the anti-war Left.
But back to Bowers.
In a separate report, unrelated to the war, the NPP claims President Bush has proposed cuts federal funding to certain programs that will result in Tennessee losing $2.4 billion. Those cuts included $178 million in highway planning and construction, $22.1 million in the clean water revolving fund; $6.4 million in the Workforce Investment Act; $4.6 million in the low-income energy assistance program; $760,600 in airport improvements; $678,180 in the drinking water revolving fund; and $19,689 in schools.
But none of those cuts is related to the war and not going to war will not mean Tennessee gets that extra money.
Bowers ignores that inconvenient fact. And having set up the straw man, she goes in for the kill:
“My concern is that because of our state budget crunch, we will not be able to make up those dollars and we'll have to cut services even more — and people think we're cutting state dollars, but it's federal dollars being cut,” she told the newspaper.
After all, she said, Tennesseans pay $219 million in taxes for the federal government's nuclear weapons program, and that’s enough to buy Head Start for 32,047 Tennessee children; affordable housing units for 3,123 Tennessee families; and salaries for 5,101 elementary schoolteachers.
In other words, Ms. Bowers implies, if you favor a strong defense and/or the war with Iraq, you are against Head Start, decent housing and paying Johnny's school teacher well. That's absurd. You can be for all of them. Or none of them. You can even be in favor of kicking Saddam's butt so Johnny's affordable house and his school teacher's place of work won't be hit by one of Saddam's WMDs in the hands of terrorists down the road a few years .. or a few months ... from now.
But that’s not the kicker.
This is. One of WAND’s five stated policy goals is
Eliminate the testing, production, sale and use of weapons of mass destruction
Isn’t that what we’re trying to do in Iraq?
You can ask Rep. Bowers yourself, by emailing her at firstname.lastname@example.org.
And They Said It Couldn't Be Done
Gov. Phil Bredesen is going to do what the previous administration said could not be done (and, indeed, never seriously tried to do): he's going to cut the budget. And revelations of massive budgeting errors by the previous administration are helping Bredesen lay the grounwork for the state's first real budget trimming in almost a decade.
The Tennessean reports:
Gov. Phil Bredesen is asking most state departments to look for 7.5% across-the-board spending cuts in the short term and said in the long term he hopes to find ways to eliminate 2,900 state jobs he said were added since 2000. In his second week as Tennessee governor, Bredesen continued to work through ways to deal with expected budget shortfalls with his new Cabinet in meetings that he has opened to reporters. He is putting a "full-court press" on getting a handle on TennCare cost overruns, which, he said, will cause most of the projected shortfalls this year and next.
Bredesen told his Cabinet yesterday that TennCare pharmacy costs are out of control and "it doesn't make sense'' that some TennCare enrollees would receive more than 65 prescriptions a month."
It hasn't made sense to TennCare critics for the past four years, either, but the previous administration and Gov. Don Sundquist were hell-bent on enacting a state income tax and refused to address TennCare's giant financial black hole because it made the budget crisis worse - and pushed more legislators to the brink of voting 'Yes' on the administration's various proposals for an unconstitutional state income tax.
Indeed, for the past 4 years, Sundquist officials stamped their feet and repeatedly claimed the $5 billion TennCare program wasn't the cause of the state's chronic budget problems, but Bredesen is telling the truth: "TennCare is so big that when it sneezes everyone else catches pneumonia."
Bredesen revealed that the Sundquist administration made "two flat-out errors" in TennCare budgeting, failing to budget $36 million in payments to hospitals and creating $45 million in administrative costs by overprojecting how much the federal government would contribute.
Over-projecting was a chronic budgeting problem with the Sundquist administration, which often over-estimated revenues, appropriated the money, and then blamed the tax code - rather than their politicized estimates - for the shortfall.
The story also includes some snarky, defensive comments from the former Sundquist administration's top budget official about those two huge TennCare budget errors that ocurred (or were perpetrated) on his watch.
Things are getting fun in Tennessee. And remember, TennCare is just the first budgetary problem Gov. Bredesen is dealing with. I suspect Tennesseans will be learning a lot more details about various "budgeting errors" and other masterpieces of fiscal malpractice of the Sundquist administration in the weeks and months ahead, which will provide Bredesen enormous political capital to cut Tennessee's bloated budget down to a more management and sustainable size.
(This post is also at PolState.com.)
It’s a non-issue in Tennessee, but that hasn’t stopped the state’s capital-city newspaper from raising it anyway. The Tennessean reports that proposals to release some prison inmates early in order to save money and help balance the state budget are getting a “cool response” from state lawmakers.
Who is making the proposal?
The Tennessean, and nobody else, apparently, in a prime example of a newspaper manufacturing news on a slow news day.
Despite Tennessee's budget woes, most of which stem from an additional $258 million required for TennCare, state lawmakers interviewed by The Tennessean were largely opposed to making early release of inmates a budget tool. ''I'm willing to listen to their argument, but I'm not persuaded at this point that is what we need to do,'' said Sen. Joe Haynes, D-Goodlettsville.
Whose argument? The paper mentions no Tennessee lawmaker or state official who has proposed early release. It merely cites a New York Times report from last month that some states were “laying off prison guards, closing prisons or giving prisoners emergency early releases to reduce budget deficits,” including Iowa; Ohio, Illinois, Montana, Arkansas, Texas and Kentucky. But not Tennessee.
To understand why the non-story became front-page news in The Tennesssean, you have to understand the paper’s political agenda. The paper favors an income tax, and favors virtually unlimited government spending on healthcare. Because it is now clear that TennCare – not the state’s tax structure – is the prime cause of the state’s budgetary problems in recent years, the paper is seeking to refashion the budget story to be a story about something other than the giant financial sucking sound called TennCare. The scary specter of early release of violent felons – which no one except the Tennessean itself has raised – makes a convenient diversion.
But just remember - it isn't a real issue in Tennessee.
Andrew Sullivan well-states the case for war with Iraq, and the case for not going to war. Here's a long excerpt, but you need to just go ahead and read the whole thing.
Neither option is without risks. The calm today is deceptive. The risk tomorrow is greater than most of us can imagine. If we do nothing - or worse, we do nothing that looks like something, i.e. fruitless U.N. inspections ad infinitum - then the worst could happen. If we do something, the worst could also happen - the use of such weapons in Iraq, a growing conflict in the Middle East. But by going in, we also stand a chance of seizing our own destiny and changing the equation in the Middle East toward values we actually believe in: the rule of law, the absence of wanton cruelty, the dignity of women, the right to self-determination for Arabs and Jews. We also have a chance to end an evil in its own right: the barbarous regime in Baghdad. We choose Iraq not just because it is uniquely dangerous but because the world has already decided that its weapons must be destroyed. We go in to defend ourselves and our freedoms but also the integrity of the countless U.N. resolutions that mandate Saddam's disarmament. Our unilateralism, if that is what is eventually needed, will therefore not be a result of our impetuous flouting of global norms. It will be because only the U.S. and the U.K. and a few others are prepared to risk lives and limb to enforce global norms. Far greater damage will be done to the United Nations if we do nothing than if we do what we have an absolute responsibility to do.
Anyone offers you a meal of this, accept immediately. Buffalo meat loaf and buffalo burgers taste very good - and compared to beef it has less of the things that are bad for you and more of the things that are good for you.
Donald Sensing offers his nomination for Super Bowl MVP - and a succinct analysis of the game. I am in total - and happy - agreement with him. I have two favorite teams - the Philadelphia Eagles (team of my birthplace) and the Tennessee Titans. I wanted to see them meet in the annual Roman Numeral Bowl, but alas the Bucs finally found a way to win at the Vet, and the Titans lost to the Raiders. So I was a bit conflicted. Until I recalled that the Raiders are the team the Eagles lost to in the Super Bowl a couple decades ago, the last time the "Iggles," as Philadelphians call them, were in the Big Game. YAY BUCS!
Legacy of Failure
Don Sundquist was governor for eight years. He left behind a legacy of failure - and documented it! When you say your prayers tonight, thank the Good Lord Sundquist has left the building.
This story reflects very well on Nashville and the patriotism of her people.
Northern California ranked second to Nashville in the Marine Corps' national recruiting last year, according to Maj. Mark Johnson, commanding officer of Marine Recruiting Station San Francisco, which covers the area from Monterey to Eureka and as far east as Solano County. He said some of the hardest work for the military was in San Francisco high schools, which have a policy that bans on-campus recruitment by military services.
Nonetheless, said Capt. Tuan Pham, a Marine recruiting officer, the service has had good results in San Francisco, San Jose, Oakland, Santa Rosa, Alameda and Contra Costa County. Overall, he said, the Marines signed up 1,122 young men and women last year in the San Francisco district. Army Lt. Col. Paul Woods, who runs the Northern California recruiting headquarters in Sacramento, said the region has "a positive environment" for recruiting. "We are doing well overall since Sept. 11," he said. Woods said that unlike the Marine Corps, the Army does not rank its recruiting districts' numbers. He said he has signed up about 300 new recruits a month for the active Army and the reserves.
The results were a bit of a surprise to some military officers, who share the national perception that Northern California in general and the Bay Area in particular have strong anti-military prejudices. Woods said he had been told that Northern California did not look favorably on the military when he was transferred to the area after five years in Europe. Recruiters have more success in rural areas and smaller cities than they do in large cities, Woods said. This is true over the rest of the country, and Northern California is no exception.
The story notes that the San Francisco school districts' ban on military recruiters violates federal law, but the school districts don't appear in a hurry to comply. What do you expect from San Francisco? The region's built-in anti-American bias screams from the headline of the story, in which the San Francisco Chronicle calls people who join the miltary "suckers." Feel free to flame the writer.
On to Baghdad
Bill Keller's piece in the New York Times explains why the Iraq war will be underway in February or March - and why it should.
The detour through the United Nations looks more than ever like a dead end. Saddam's shuck and jive shows he will never come clean. The antiwar tantrums of France and Germany just encourage his intransigence.
Perhaps if we give Mr. Blix a few more months to chase wild geese around Iraq, the U.N. will reward us by endorsing war, but we can already count on a substantial coalition: The gulf Arabs are on board (if they are sure we will see it through to the end), probably Turkey (which wants leverage over the future of its neighbor), the Brits, the Aussies, Italians, Spanish and all those dependable ex-Communists. The Russians and French might even jump on the train once it's moving, to protect their investments. Where's the unilateral in that?
David Warren's piece in the Ottawa Citizen is good, too.
Pataki Makes the Right Call
New York Gov. George Pataki has endorsed the president's plan to end the tax on stock dividends. As you might expect, the typical chorus of liberals is lined up to complain that the federal plan might cost New York some tax revenue too. Pataki appears to understand better than they do that cutting taxes will boost the economy - and boost revenue.
Specifically, the governor singled out for praise a proposal to eliminate taxes on corporate dividends paid to taxpayers, the centerpiece of the plan President Bush announced on Jan. 7 for kick-starting the stalled economy. "The president's new economic stimulus plan will help New Yorkers, specifically his proposal to eliminate the double taxation of dividends," Mr. Pataki said in his first public statements since the Bush announcement. "This element of his stimulus package will help a financial industry in New York that is hurting."
But, the Times reprots, Gov. Pataki "was noticeably silent on the question of whether New York, whose income tax laws are tied to the federal laws, would enact changes to keep it from automatically following the federal government's lead."
Some state officials, mostly Democrats, have said that the Bush proposal will hurt New York at a time when it faces a cumulative deficit of $12 billion and needs every source of revenue it possesses. Alan G. Hevesi, the state comptroller, said that if the state piggybacks on the federal plan and decides it will also stop collecting a dividend tax, it could lose $551 million in revenues in the fiscal year that begins April 1, and $2.5 billion over four years.
The notion that Bush's plan to end the federal dividend tax will harm state revenues is a canard being tossed about by liberals who oppose tax cuts in general. But here's the truth for New York and any other state with a tax on dividends: staes can de-couple their tax codes from the federal system, create a new state dividend tax form and continue collecting the tax, simply, and easily. Tennessee already does it. Or states can continue to tie their dividend tax to the federal system, cut taxes along with the feds, and accelerate the economic growth in their state.
TABOR: Safeguarding Democracy?
I though Aristotle said it, but then I Googled it and found the famed quote was actually written by Sir Alexander Tytler, a Scottish jurist and historian who lived from 1742-1813. What did he say?
“A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largess of the public treasury. From that time on the majority always votes for the candidates promising the most benefits from the public treasury, with the results that a democracy always collapses over loose fiscal policy, always followed by a dictatorship…” Tytler's words come from his book, The Decline and Fall of the Athenian Republic, published in 1776.
I’ve long thought about Tytler's warning – that democracy is undermined by itself once voters see the political process as a way to feed at the public trough – as I’ve watched the American Left try to create a tax-and-spend system in which a minority, defined as “the rich,” pays the taxes and a majority reaps the benefits in the form of various government welfare and spending programs. Tytler, I thought, just might be right.
But now I'm not so sure. I think democracy is evolving a way around the problem Tytler identified. It's called the Taxpayers Bill of Rights and because of it I believe Tytler is dead wrong. Democracy’s demise is NOT inevitable. Constitutional provisions like Colorado’s Taxpayers Bill of Rights turn Tytler’s premise upside down.
Colorado’s Taxpayers Bill of Rights has five provisions. It limits the legislature to revenue growth based on a formula approximating economic growth. It requires surplus revenue be returned to taxpayers. It requires the legislature get approval from voters if it wants to spend surplus revenue, raise taxes or increase government debt. It applies to county and local governments. And local and county governments can hold referendums to ask voters permission to temporarily or permanently exempt the jurisdiction from the amendment.
Tytler envisioned a world where special interest groups would pressure lawmakers to craft legislation that would dole out money to them. Voters would “always vote for the candidates promising the most benefits from the public treasury,” he said. But under the TABOR concept, there is no public treasury, at least as Tytler views it. For what Tytler called the “public treasury” was really the “government treasury,” as he viewed it. But that’s a false premise. There is no such thing as government money, and the Taxpayers Bill of Rights is built on that fact.
Under the TABOR concept, the government doesn’t have money; it merely is allowed to take a restricted portion of the people’s money, with the people having the final say over changing that limit.
The impact of this is that legislators must prioritize and economize, and they must engage the electorate in debates over taxes and spending. In Colorado, the legislature can not spend surplus dollars without approval by voters in a statewide referendum. This has had the effect of reducing the influence of special interests. Proposals to spend surpluses must be crafted to gain the approval of a majority of voters statewide, rather than cater to narrow interests.
When voters say “No” to proposals to spend surplus dollars – as they have done five out of six TABOR referenda since 1993 - are they acting as Tytler envisioned? No. Just the opposite. They are not voting for “largesse from the public treasury” and they are not voting for candidates who promise more “benefits” from the public treasury – they are voting for less money being in the government’s hands in the first place. They are voting to reduce the power of the “public treasury” by leaving the money in the hands of the general public.
Voters may well vote their own selfish interest when faced with a ballot question involving what to do with surplus revenue under Colorado’s Taxpayers Bill of Rights. But because of the way that amendment is structured, the decision must be the majority opinion of the whole state. A vote to benefit one’s own wallet is a vote to benefit every other Coloradoan’s wallet too. Likewise, a vote to approve the spending of surplus revenue will only happen if legislators propose a program or project that benefits the vast majority of Coloradoans, not just a special-interest few.
And because the people are more engaged in the fiscal discussion, democracy is strengthened rather than weakened.
For more on the Taxpayers Bill of Rights concept and how it has strengthened democracy and had a positive impact on the economy and state budget of Colorado, download my 17-page white paper, available online here in a PDF file thanks to South Knox Bubba. The paper also examines flaws in the Colorado Taxpayers Bill of Rights that open the door to the kind of special-interest mischief Tytler was warning about, and suggests ways to fix those flaws in a Tennessee Taxpayers Bill of Rights.
Cutting Texas Down To Size
Texas has a budget shortfall. A big one. It is, after all, Texas, and things are BIG in Texas. The governor's response: "CUT!" And the bureaucracy is doing it, reports the Houston Chronicle.
Gov. Rick Perry and Republican legislative leaders officially began the process of slashing the state budget Thursday, sending state agencies a letter urging immediate 7 percent spending cuts to save $700 million this year. "We must instill fiscal discipline across state government," Perry said. "We must not shy from this challenge. This is the time for bold leadership, innovative solutions and fiscal restraint."
They suggested cuts in government administrative costs, elimination of foreign and most out-of-state travel, a decrease in capital purchases, a hiring freeze and - if need be – layoffs, the Chronicle said, but acute Medicaid services, the Children's Health Insurance Program and the Foundation School Fund, which acts as the main bank account for public schools, will be exempted from cuts.
"Savings achieved now will be key to resolving the state's budget issues for the remainder of this year and for the next biennium," the letter told agencies, directing them to submit savings plans to the leadership by Feb. 6.
Texas Comptroller Carole Keeton Strayhorn released a lowered revenue outlook last week that that nearly doubled the state's estimated budget shortfall to almost $10 billion over the rest of this fiscal year and next fiscal year. Texas must cut $1.8 billion in spending by the end of August to balance its current budget.
No sooner than the fax machine could spit out the high-level directive, budget slashing had already begun. Perry himself pledged to cut the governor's staff by 14 percent, although he did not provide details of how he'd do that. Comptroller Strayhorn's office preempted all others with an announcement early Thursday that she is cutting her budget by 6 percent, or $5 million.
That’s leadership by example.
UPDATE: Here's more on the cuts from the AP.
MORE UPDATE: Speaking of Texas... amen to this.
I've updated this post, reflecting an ongoing debate between myself and CalPundit over the merits of using inflation+population growth as the measure by which goernment tax revenue should be limited under a Taxpayers Bill of Rights.
Speaking of the Taxpayers Bill of Rights, Colorado has a good one, which is why their legislators are cutting spending rather than talking about a big tax increase in order to balance that state's budget.
Just Some of the Facts
This Tennessean editorial notes some good news about the state's budget process, but alas the editorial is marred by the paper's continuing inability to really tell the whole truth regarding the state budget. The paper says that Bredesen "is considering opening budget meetings, where department heads map out their respective budget proposals," and rightly remakrs that "openness in the process would go a long way toward rebuilding trust."
Just remember: The Tennessean never found the previous governor's budget process to be untrustworthy - in fact, they swallowed the process and the lies hook, line and sinker for four years.
The editorial writers still can't tell the whole truth about the state budget. They write: "According to the governor, the state is looking at a $322 million shortfall, despite the record $933 million tax increase enacted last year. On top of that, the state shortfall for the next fiscal year could hit $500 million." Notice the subtle linkage between the shortfall and tax revenue. But the governor they praise for being trustworthy and competent recently said the cause of the shortfall this year is largely TennCare cost overruns, not a failure of the tax code to produce sufficient revenue. And, through December, the state is actually running a small surplus of revenue compared to the approved budgeted estimate.
The Tennessean, its longing for a state income tax unquenched and undimmed, wants readers to keep thinking the tax structure is to blame.
But this Memphis Commercial-Appeal editorial today is much more egregious. It just flat-out lies and blames the shortfall on the "failing tax structure."
Bredesen, has yet to find a magic wand he can wave over the budget problems created or exacerbated by the state's failing tax structure. ... The biggest tax increase in Tennessee history - a $933 million hike last year, primarily in the state sales tax - will not live up to expectations."
Lies piled on lies. The tax hike will bring in more than $1 billion in the next fiscal year, and even more as the economy inevitably improves. Combine that with Bredesen's willingness to make actual spending cuts now, and by the middle of his first term, Gov. Bredesen and the state of Tennessee will be enjoying a revenue surplus.
This Was Not Unexpected
And it's a classy move by Tennessee's new governor. Not only does Gov. Phil Bredesen forego his annual salary, he finds a way to economize in the governor's office, the Tennessean reports: Bredesen "said he was able to increase salaries for staffers in the governor's office and stay within budget by having fewer people work for him." Imagine that. Here's hoping the rest of state government takes its cue from Gov. Bredesen's actions.
UPDATE: the Memphis Flyer likes Bredesen's initial moves.
Frist - and Tennessee - Explained
This piece on Bill Frist and Tennessee's politics in the Weekly Standard is just plain excellent.
If you went into a lab and tried to create a state that would be perfectly suited for producing successful national politicians, you would create Tennessee. It is southern, which is important because the South is both the largest and the fastest growing region of the country. But it is not too southern. It is rich, and has that huge fundraising base, but it is not culturally elitist, like New York and California. Most important, it is heterodox. If you are going to live in Tennessee and thrive there, you cannot live in an insular cultural enclave, the way Trent Lott can in Mississippi, or the way Nancy Pelosi can in the Bay Area. In Tennessee you have to travel to the eastern part of the state, where they supported the Union, you have to travel to the western part, where they supported the Confederacy, and you have to travel to West Nashville, where they support Cadillac dealerships. If you travel and campaign throughout Tennessee, you are apt to acquire an instinctive feel for how different types of people think and react.
Start with Nashville. The city is hard to figure out because, though it isn't very big, it exists on many different planes. Beyond the Belle Meade elite, there are the music people, who live in the exurbs or in rural mansions. When Bill Frist was growing up, he would not necessarily have had any contact with the country music community, who would have been regarded as rednecks. Even today, when the music industry is just another successful business sector, the visitor is surprised to find that country music has a relatively low profile in Nashville. Country music doesn't dominate the radio dial. It doesn't color local conversation the way the movies color chatter in Los Angeles. As Lamar Alexander, a successful governor and newly elected senator, notes, "Country music still sits uncomfortably in Nashville, like McDonald's in Japan."
Then, outside of Nashville, there are collar counties, such as Williamson County, with McMansions, mega-churches, G. Gordon Liddy fans, and new money. These fast-growing places are extremely Republican, anti-tax and anti-government, and are looked upon with bewilderment and suspicion by many people in Bill Frist's neighborhood. There are also the religious elites. Nashville is home to several denominations, including the conservative Church of Christ. The city hosts the largest publisher of Bibles in the world.
It's long, well-written, mostly accurate and highly deserving of your time.
Praise from the Left Coast
Kevin Drum, a/k/a/ "CalPundit," likes the Taxpayers Bill of Rights concept, but the California blogger offers a twist:
The basic idea of TABOR is flawed because it essentially means that state employee salaries are frozen forever in real terms. If we had adopted this kind of rule in 1970, teachers would still be getting paid about $15,000 a year today. A better idea, I think, is to limit state spending to a percentage of gross state product (GSP, the state equivalent of national GDP), with perhaps a small amount of wiggle room allowed by a super-majority vote. This allows everyone to benefit from economic growth, while still keeping a clear cap on spending.
I'm not so sure I agree with his contention that TABOR freezes teachers' salaries - or spending on any other government program - forever in real terms, as CalPundit says. I think policy choices have as much or more impact on teacher pay as TABOR does. But that's almost beside the point. I welcome debate over the proper measure to tie revenue growth to - the real issue ultimately remains putting some sort of restraint on the growth of taxation and government spending via the state constitution, and giving the taxpaying public more control.
My research shows that, since the adoption of the TABOR amendment in Colorado in 1993, Colorado's per-capita spending by government has accelerated rapidly. Much more rapidly than Tennessee's. The reason is that TABOR creates a stable tax environment and, in boom years, leads to tax cuts - and a stable tax environment and periodic lowering of taxes helps the state's economy grow faster and the state's people grow wealthier. I document that in fine detail in my TABOR white paper, available online in a PDF file thanks to South Knox Bubba.
An excerpt of my research: From 1990 through 2000, Colorado increased per-capita state spending by 139 percent, the third-largest increase among all 50 states, while Tennessee increased per-capita spending by 76 percent. In 1990, Colorado's government spent $2,504 per person. Tennessee spent about 50 percent more than that - $3,753 per capita. By the end of the decade, Tennessee spending per capita had risen to $6,593, and Colorado’s had increased to $5,992. Tennessee state government now spends just 10 percent more per capita than does the government of Colorado.
One other point: TABOR provides a remedy for the effect CalPundit cites, and Coloradoans used it to address the very issue of public education funding. In November 2000, Colorado voters approved a ballot question asking for roughly one fourth of TABOR surplus revenue over the next ten years to be set aside for increasing spending on public K-12 education. Essentially, the amendment, effective 2001, altered the TABOR formula and allows for extra revenue growth earmarked for education, and increases per pupil spending by at least inflation plus one percent for the next ten years and by at least the rate of inflation thereafter. The money was dedicated to several uses, including class size reduction, technology upgrades, and performance incentives for teachers.
Again, it is policy choices that drive teacher pay. TABOR doesn't lock teacher pay or government spending at a lower level. It merely forces legislators to prioritize.
UPDATE: Keven, a/k/a/ CalPundit, writes, "My basic problem with population growth + inflation is that as population grows, the number of teachers will grow at the same rate (assuming class size stays the same). Thus you have no choice except to keep their salaries constant (in real dollars) unless you cut other stuff."
I'm not so sure that's true. First, it assumes the growth in population will mirror the pre-growth demographics of the state, with the same percentage of families with school-aged children, the same wealth distribution, etc. But that's not a given. In Colorado, per-capita disposable income has soared since TABOR was enacted. I have not data, but you'd have to assume that as the population becomes wealthier a higher percentage of people will be able to afford private schools for their children. But demographic questions aside, CalPundit hasn't addressed one basic fact of Colorado since TABOR: state government spending has not just grown, it has grown per capita.
Once again: From 1990 through 2000, Colorado increased per-capita state spending by 139 percent, the third-largest increase among all 50 states. According to this inflation calculator, which is based on federal Consumer Price Index data, inflation from 1990 through 2000 totaled 34 percent. Factor that in and Colorado still increased per-capita spending by government by roughly 100 percent. The state spent $2,504 per capita in 1990, but in inflation-adjusted 2000 dollars that would've been about $3353. But Colorado actually spent $5,992 per capita in 2000 - an inflation-adjusted real increase of 78 percent.
That's $2,639 more per capita, after factoring inflation. Surely there was money in there for teacher pay increases. - and remember, that's a per capita increase so it already takes into account population growth. If those teacher pay increases did not beat inflation, that is because lawmakers made other choices, not because the TABOR formula didn't make the money available.
MORE STUFF: CalPundit’s basic complaint with the TABOR formula (inflation + population growth) is that it prevents the government from benefiting from economic growth and using the extra revenue to fund increases in teacher pay (or, presumably, increase spending on other perceived needs.)
Economist Dr. Barry Poulson, a professor of economics at the University of Colorado in Boulder, said the following in one study of TABOR’s impact:
“That the TABOR Amendment has slowed the growth of state spending is now well documented. But TABOR has also had the effect of stabilizing state spending over the business cycle. The result is what economists refer to as consumption smoothing in state finance. Consumption smoothing is important because it permits the government to maintain stability in the provision of government services without discontinuous changes due to cyclical changes in state revenue.
“It is often argued that the TABOR Amendment requires a decrease in state government relative to the private economy. This argument is a major source of misunderstanding, because it ignores the consumption smoothing impact of the TABOR Amendment over the business cycle. To the extent that TABOR is a binding constraint, as it has been over the past five years of rapid economic growth, state government will grow less rapidly than the private sector. But during periods of recession and slower economic growth … TABOR is a less binding, and possibly a nonbinding, constraint. In recessions state government is likely to grow more rapidly than the private sector.”
They Protest Too Much
SayUncle has something to say about the anti-war protestors:
Hey folks, life gets more complicated when you put down the weed, wear a suit instead of a tie-dye shirt, stop living in a fantasyland where we can trust evil dictators, make more than $18K per year, and realize that someone has got to actually solve problems. No amount of pot smoking, free love, and dressing like the Statue of Liberty will solve the problems of the world.
Read the whole thing.
I have added two new features to this weblog in the past few days. First, you can subscribe to receive an email update once per day alerting you to new items posted at HobbsOnline. If I post nothing, no email is sent. You'll find the subscription box over there on the right. Also, I've added a search box that allows you to search this website for past articles. It's quicker than scrolling through the archives. Just enter your search terms in the search box. Enter the last name of our new governor, Bredesen, and you'll find numerous articles. Unfortunately, the PicoSearch tool only finds returns the main page from the archives - you'll still have to scroll, but at least you'll have the date something was posted and can use your browser's "find" tool to locate the word on that page.
Arghh. Tennessee now has an anti-income tax governor who pledges to propose a budget that doesn't spend more than the state's revenues - even if it means cutting. And he's a Democrat. Down in Georgia, theyir new governor is proposing a big tax increase and more government spending. And he claims to be a fiscally conservative Republican. Stephen Moore examines the crazy tax increase proposal from Georgia Gov. Sonny Perdue, who is that state's first GOP governor in a century - and as of now very likely to be a one-termer.
What is astonishing is that Perdue turned to giant tax hikes even before even pretending to make an effort to cut the badly bloated budget in Atlanta. Perdue doesn’t seem to understand that Georgia, as with most every state this year, has a chronic overspending problem — not a revenue-shortfall problem. Perdue adopts the standard left-wing education rhetoric of “meeting the needs of families and children.” Thus his budget throws money at dubious government programs: more dollars for pre-kindergarten programs, more money for foster care, more money for higher education, and more money for school construction. But if there is any money for the reform that really matters in improving academic achievement — expanding parental choice in education — I couldn’t find it in the budget, and the governor never mentioned it in his budget speech.
Tax revenue growth has exploded in Georgia over the past decade. The budget is more than twice as large as it was in 1990 — and so are total revenues. After adjusting for inflation, tax revenues have climbed from $7.1 billion to $14.4 billion. How could any rational person look at this steep revenue growth and conclude that new taxes are needed to balance the budget?
A Cato Institute study shows that if the Georgia budget had simply grown at the rate of inflation and population growth over the past decade, the state would have a $1.9 billion surplus today, not a deficit. Cato’s analysis shows that if spending had been restrained over the past decade — as many states out west require — the average Georgia household would be getting a $635 tax cut this year.
There is nothing in Perdue’s budget about tax-and-expenditure limitation measures to make sure that spending sprees don’t happen again. There is no call for an audit of state agencies to ferret out waste and inefficiency and duplication of services, things that are endemic in state budgets. There is no call for a super-majority vote-increase requirement to raise taxes. There is nothing in his budget that would require a vote of the people before taxes are raised. My suspicion is that if the Perdue tax hike were put to a vote of the people it would be soundly defeated.
Georgia Democrats are lining up to oppose Perdue's tax hike.
Taxpayers Bill of Rights Update
Regular readers know that I have developed a white paper, heavily footnoted and documented, outlining the history of tax-and-expenditure limitations, the history of the Colorado Taxpayers Bill of Rights, and the positive impact it has had on that state's politics, finances and economy.
If you would like a copy of that white paper by email, contact me at bhhobbs-at-comcast.net and tell me if you want it as a Microsoft Word file with active hyperlinks, or as a PDF file, and I'll send it along. Actually, if you want it as a PDF file, you can go to South Knox Bubba's blog and download it. A very hearty thanks to SKB for making a PDF file out of it and posting it online. Bubba's got some comments on TABOR here.
And here's the link to the TABOR PDF file.
For more information on efforts to enact a Tennesssee Taxpayers Bill of Rights, check out TnTABOR.org.
UPDATE: Justin Bollinger of Elephant Rants comments on SKB's site: "That sounds like taxation WITH representation doesn't it? What a great idea...of course I am not getting my hopes up."
Bredesen Agrees with Beavers and Blackburn?
One's a moderate Democrat, the other two are conservative Republicans, but they seem to agree on the proper approach to the chronically-in-crisis Tennessee budget.
From the Jan. 22, 2003, Memphis Commercial Appeal: "Phil Bredesen...told Cabinet members to work on plans to shave up to 5 percent from department budgets."
From the March 24,2002, Knoxville News-Sentinel: "Some conservative legislators - notably including Sen. Marsha Blackburn, R-Brentwood, and Rep. Mae Beavers, R-Mount Juliet - have long argued for across-the-board cuts of 5 percent or whatever figure is necessary to balance the budget. But Finance Commissioner Warren Neel and many legislative leaders dismiss the idea as impractical at best or impossible at worst."
Thanks to Ben Cunningham of Tennessee Tax Revolt for sending those. Hmm. Guess Neel was wrong.
For more on Bredesen whipping out the "Big Hatchet," check out South Knox Bubba's blog, which also links to Memphis Mike Hollihan's Half-Bakered blog for even more good commentary.
Surprise, surprise. The cops lied about it. The Tennessean had an audio expert analyze the sound on the video, and determined that Cookeville Officer Eric "I'm terrified by tail-waggin' mutts" Hall shot the dog simultaneous with yelling "Get back!" Two officers claimed Hall yelled "get back!' before firing. But he didn't. Officers also claim the dog barked, but the audio indicates the dog did not bark.
The Cookeville police officer who shot to death a family's dog Jan. 1 during a traffic stop did not yell ''get back!'' before firing, as he and another officer wrote in police reports, an audio expert said. Computer enhancement of the audio portion of the videotape does not match with some accounts given by police officers of what happened.
Sadly, the trigger-happy Hall still has his job. And his gun. Don't you feel safe when you're passing through Cookeville?
Have you heard of or seen those silly commercials that accuse SUV drivers of funding terrorism because they use gasoline from the Middle East? Of course, the commercials are devoid of real logic. If SUVs support terrorism because they use gasoline from the Middle East, drivers of small cars also support terror when they pump gas.
But there's something even worse than buying petro products from oil-rich countries run by terror-supporting Islamofacist regimes like the House of Saud. This slide show explains it in devastating fashion.
This is Good News
Hilary is resigning. No not that one. This one. But like that one, she won't be missed by a large segment of the affected population group.
A Month Late and a Few Million Dollars Short
News travels slowly to Kingsport, Tennessee, apparently. The Tuesday edition of the Kingsport Times-News carried this story with the following headline: November sales tax revenue largely flat across state .
But the Sundquist administration released the November revenue data in mid-December. It was in all the papers on December 12th, including this story in The Tennessean. I had it here on December 11th. (Yes, I beat the dailies by a day.)
And the December data was released on January 10 by the Sundquist administration. I reported it here less than an hour after the data was released. The daily paper in Nashville reported it the next day and the Knoxville and Memphis dailies worked the data into stories over the weekend. So I beat them to the punch by a day or more.
We all beat the Times-News by more than a month on reporting the December tax revenue data, and there's no telling when they'll get around to reporting the January numbers. That's a shame, because until they do, their readers in Kingsport are living under the false notion that sluggish tax revenues are creating a deficit in Nashville. But the truth is the December revenue totals were higher than expected and erased the emerging shortfall. Today, new Gov. Phil Bredesen says the state does indeed face a shortfall this year, but it is caused by TennCare cost overruns, not by sluggish revenues.
You learned this just today from The Tennessean and from me. I'm guessing the fine people of Kingsport will find out in mid-February.
If You Think Taxes Are Too High...
You are in the solid majority, according to a FOX News/Opinion Dynamics Poll that isn't getting much press. Survey says: 78 percent believe total taxes - state, local and federal - should amount to no more than 30 percent of one's income. According to the nonpartisan Tax Foundation, the average American pays 39 percent of their income in taxes to all levels of government. Now you know why tax-cutters win elections - and why a Colorado-style Taxpayers Bill of Rights is not only good policy, it's good politics.
Thanks to Edward Boyd's Zonitics blog and Instapundit for bringing the Fox poll to wider attention.
Kiss Your Online Privacy Goodbye
This sucks. The music industry - when it's not too busy filling the local record stores with $17.99 platters of crap - now has the legal authority (until this ridiculous court ruling is overturned) to make your Internet service provider cough up your identity if you download a song file without paying for it. And they don't even have to prove you actually infringed a copyright.
San Jose Mercury News columnist Dan Gillmor says it best: The mere allegation of copyright infringement is now good enough to wreck all privacy protections. It's enough to override common sense.
Frank Cagle Names Names
Frank Cagle suggets checking the footwear on these legislators: reps. Michael Harrison of Treadway; Russell Johnson of Loudon; Joe Kent of Memphis, Steve McDaniel of Parkers Crossroad, Bob McKee of Athens; Chris Newton of Cleveland; Doug Overby of Maryville; Bob Patton of Johnson City; Bubba Pleasant of Arlington; Dennis Roach of Rutledge and Raymond Walker of Crossville. Find out why here.
Get Email Updates!
You can now receive an email update from HobbsOnline each day, summarizing the day's newest items. Just enter your email address in the subscription box over there on the right. Your email address will be kept private and used only to send you the email update each day the site is updated.
Bias Watch: AP Stumps for Income Tax
Half-Bakered, better known as Michael Roy Holihan, finds pro-income tax bias in this AP story about the start of new Gov. Phil Bredesen's administration. The reporter "talks to six people, a thoroughly non-representative sample. Worsening the bias is the fact that four of the six depend on State money for their livelihood! The fifth is a former newspaper reporter, a group known for its income tax sympathies. The sixth is the mayor of Knoxville, which also depends heavily on State spending. Naturally, they're all looking for 'tax reform,' soon." Good stuff. Welcome back to the fray, Michael.
Marching the World Into Hell
...The American Left now marches with Stalinists says Michael Kelly. A blistering critique of the recent anti-war marches around the country sponsored by "International ANSWER," a front group for the communist party and apologist for murderous tyrant dictators around the world.
The left has hardened itself around the core value of a furious, permanent, reactionary opposition to the devil-state America, which stands as the paramount evil of the world and the paramount threat to the world, and whose aims must be thwarted even at the cost of supporting fascists and tyrants.
International ANSWER today unquestioningly supports any despotic regime that lays any claim to socialism, or simply to anti-Americanism. It supported the butchers of Beijing after the slaughter of Tiananmen Square. It supports Saddam Hussein and his Baathist torture-state. It supports the last official Stalinist state, North Korea, in the mass starvation of its citizens. It supported Slobodan Milosevic after the massacre at Srebrenica. It supports the mullahs of Iran, and the narco-gangsters of Colombia and the bus-bombers of Hamas.
This is whom the left now marches with. The left marches with the Stalinists.
And many Democrats march with the Left.
The Daily Roundup
The Tennessee Budget Wars
...New governor = new cause for budget deficit. Check it out in today's Tennessean: Gov. Phil Bredesen laid out a bleak budget picture to his Cabinet yesterday, telling members in their first meeting since taking office Saturday that revenue will fall $322 million short of what is needed to fund the budget that ends June 30. He also said estimated revenue will be $500 million less than needed to fund a similar budget next year — with both shortfalls largely blamed on TennCare overruns. The previous governor always blamed budget shortfalls on the tax structure providing too little revenue - and always claimed TennCare was reasonably well-run and saving the state oodles of money. Over the next few months, I predict, that will be proven to be not the case.
...Even The Tennessean is slamming Tennessee House Speaker Jimmy Naifeh for being a partisan boor. Well, they said partisan, I said boor. They also said Republican voters deserve better treatment by Naifeh - who last year championed the income tax the paper wanted. when House members re-elected him as speaker, he received the votes of 11 Republicans as well as all the Democrats. By slighting Republican office-holders, Naifeh slights the voters who elected them. And House committees could use the ideas and energy from GOP leaders. It appears the Tennessean has seen the parade - a new anti-income tax governor, a more strongly anti-income tax legislature and Naifeh's dwindling popularity - and decided to try to get in front and lead it.
...When your local hospital goes bankrupt, blame TennCare: Hospital representatives were alarmed last week when TennCare Director Manny Martins told lawmakers the program might halt supplemental payments totaling about $75 million to 91 hospitals that treat most TennCare patients. The remark came as Martins warned officials TennCare was running $258 million over budget.
...This is refreshing: a governor who not only knows the real meaning of "budget cut," but has the courage to actually cut the budget rather than whine about tax structures and demand a tax increase."What we're talking about today is not extraordinary - most states are dealing with these same issues," Bredesen said. Finance Commissioner Dave Goetz said the state will likely use most of its budget reserves and savings from vacant state positions to balance the current-year deficit.
The World Around You
...Here's more proof that Memphis suffers a chronic inferiority complex.
...This bit of demographic news will impact America in ways too numerous to discuss.
Your Legal Rights
...Here's a comical look at how the Supreme Court is keeping Mickey Mouse locked up.
Get Email Updates!
You can now receive an email update from HobbsOnline each day, summarizing the day's newest items. Just enter your email address in the subscription box over there on the right. Your email address will be kept private and used only to send you the email update each day the site is updated.
Here's a story designed to scare people into thinking President Bush's proposed elimination of taxes on stock dividends will make state budget deficits worse. Don't believe it.
President Bush's proposal to exclude dividends from individual taxable income would reduce state revenues by a total of $4 billion a year at a time when states face a $50 billion budget shortfall, according to the National Governors Association, reports the Washington bureau of the American City Business Journals chain of weekly business newspapers.
It's a lie. Most economists agree eliminating the double taxation of dividends will be good for the economy and lead to long-term higher economic growth, most economists agree. That will benefit state treasuries, not hurt them. Especially states that rely on sales taxes - like Tennessee - because not taxing dividends means holders of dividend stocks will have more money in their pockets to spend. The story reports that some people, including the Bush administration, the head of the U.S. Chamber of Commerce, and the governor of Colorado, understand this:
Vice President Dick Cheney says the president's economic package will stimulate enough growth to boost state revenues by $6 billion a year. "These greater revenues will more than offset the revenue states lose from the dividend exclusion," Cheney said during a Jan. 10 speech at the U.S. Chamber of Commerce. Tom Donohue, the chamber's president and CEO agrees. The "real solution" for the states' budget crises is "to jack up the economy," he says. Many Republican governors share this view, and like the president's tax-cutting plan. "A dollar spent in the private sector does much more to spark economic growth than a dollar spent by the government," says Colorado Gov. Bill Owens, chairman of the Republican Governors Association.
But even if it doesn't spark the economy, the end of the federal tax on dividends won't really cut states' revenue from their own dividend taxes. That's because states are free to continue taxing stock dividends even if Uncle Sam doesn't. The story notes that "Most states with an income tax tie it to the federal income tax because that is easier for taxpayers and state tax collectors." But the reality is that states increasingly are "decoupling" their income taxes from the federal income tax, so that tax cuts at the federal level don't impact state revenue collections. All it would take for any state to continue taxing stock dividends is to create a form like this one and they can keep right on collecting their tax on dividends.
A second point of story is that eliminating the dividend tax will make stocks more competitive with municipal bonds, and cause states and municipalities to possibly have to offer higher interest rates on bonds to attract investors. That would drive up state and city debt costs. Tennessee is not greatly at risk. Tennessee issues very little bond debt, primarily because our mammoth road program is operate on a pay-cash-as-we-go basis. States that do issue lots of bonds may indeed see their interest costs rise a bit - but according to the Federal Reserve Board, new borrowing by state and local governments totaled $103 billion in 2001. If interest rates had been 1 percent higher than they were, that would have raised borrowing costs by $1 billion, total, for all 50 states and countless municipalities. That's a large number - but pales in comparison to the increased revenue from stronger long-term economic growth that will come from ending the federal tax on stock dividends.
And states that don't want to pay that higher interest costs have another option: Pay cash.
Two new features on the website today. First - you can now get a daily update via email. Just add your email address to the subscription box over there on the right. Also, I've added a new feature: A daily roundup of news I find interesting. I call it "The Daily Roundup." Catchy, huh? Enjoy!
The Daily Roundup
The Tennessee Budget Wars
...Check out the second photo with this story from Nashville City Paper about new Gov. Phil Bredesen's first real day at the office. Gov. Phil is using a Microsoft Excel spreadsheet to work on the state budget. This is a comforting photo for a couple of reasons. First, Bredesen knows numbers. Second - it means we won't hear any of the lame explanations that his predecessor gave us about how he learned of the budget crisis from his staffers. With just six months remaining in office, governor Don Sundquist says his biggest disappointment was having to ask for an income tax. ... He said he reached the hard decision after his staff came to him Christmas of 1998 and told him the state's tax structure was collapsing. Can you imagine Gov. Sundquist using a Microsoft Excel spreadsheet? For that matter, can you imagine Gov. Sundquist using a PC to do anything other than play Solitaire or cybergolf? Me neither.
...An economic analysis of tax increases predicts tens of thousands of lost jobs in Wisconsin if the state raises the income tax or the sales tax. I wonder how many jobs are being lost in Tennessee right now because of last year's $933 million sales tax increase. "This study clearly demonstrates that when you raise taxes, you kill jobs," said James Pugh, spokesman for Wisconsin Manufacturers & Commerce in Madison, the state's largest business trade group. "Higher taxes put private sector employees on the unemployment line while they put government employees on the gravy train."
...In California, it appears the Empire is striking back at the tax Rebels by deleting their emails. But that may violate state law, not to mention the First Amendment, reports CNS News. A conservative California group that wanted to provide citizens with an outlet to send e-mails to their legislators is now suing the state for its role in blocking thousands of the messages. The Campaign for California Families filed the suit Friday in Sacramento after it claims the state's Legislative Data Center blocked and destroyed more than 22,000 "No New Taxes" e-mail messages last week. "To have the state destroy public records is illegal," said Randy Thomasson, the group's executive director. "And for the state to violate the free-speech rights of citizens to petition the government for a redress of grievances is unconstitutional." The anti-tax initiative was launched last Monday, but by Thursday e-mails started bouncing back and the group's website, SaveCalifornia.com, was pulled down by its Internet hosting company. It's back up now.
...A study just released by the National Taxpayers Union Foundation concludes that higher taxes are the wrong solution for states to balance their books. Read more about it here. The study said states that enacted tax hikes in the early 1990s experienced slower income, less employment and less population growth during the ensuing decade. "The message of history is clear," [NTUF President John] Berthoud observed. "Ratcheting up taxes is a devastating poison pill for state economies." ...
...Shocking: The NYT admits high taxes discourage work. Corporate dividends, however, are not the only kind of income that is taxed twice. Other taxes create a double, triple or even quintuple burden. And unlike the double taxation of dividends, which mainly affects the wealthy,[Ed.note: All taxes affect mainly the wealthy.] the burden of other forms of multiple taxation - sales taxes, import taxes, payroll taxes, among others - often falls most heavily on poorer Americans. These taxes may not be associated with inefficiencies in the capital markets, but can still take a hefty bite out of paychecks and reduce the incentive to work.
...Iran Update: An Islamofascist Theocracy Totters! Faster please, indeed.
...Our allies, the French. Next time the Germans take France we should let them keep it.
...Jimmy Carter wants to solve the Venezuelan political crisis. After all, he cut a deal to solve the North Korean crisis back in 1994. Yeah, that's working out real well. Clinton signed the 1994 accord after an earlier nuclear crisis and a year of tough negotiations brokered by former President Jimmy Carter. The United States, Japan and South Korea promised to give North Korea $4 billion in aid, including food, oil and two light-water nuclear reactors that could not be used to make nuclear weapons. In exchange, North Korea pledged to shut down and eventually dismantle a plant that had begun reprocessing weapons-grade plutonium. As required under the accord, North Korea froze the plutonium facility in Yongbyon, 60 miles north of the capital of Pyongyang. But unknown to the United States, it began a separate program at another site to produce highly enriched uranium for nuclear bombs. Go Jimmy go! (And please don't come back.)
...Have you taken this test?
...Hackers will find a way around this in, oh, about 2 weeks, I predict.
A Non-Taxing Story...
...and a memo to Gov. Phil Bredesen
The most interesting thing about this story from today’s Rocky Mountain News is what it doesn’t say. Colorado is facing a revenue shortfall – like most states – because of the sluggish economy. Yet there is no mention of tax increases. None.
Tennesseans accustomed to a governor and legislature that looked to tax increases as a first resort when faced with a hole in the budget may be asking why Colorado is different. The answer is the Colorado Taxpayers Bill of Rights, an amendment to the state constitution adoped in 1992. As this story in today's Denver Post shows, the result is the Colorado legislature must economize and prioritize and make decisions over amounts as small as a few million dollars.
I have developed a white paper, heavily footnoted and documented, outlining the history of tax-and-expenditure limitations, the history of the Colorado Taxpayers Bill of Rights, and the positive impact it has had on the state's politics, finances and economy. If you would like a copy of that white paper, email me at bhhobbs-at-comcast.net and request it and I'll send it along. For more information on efforts to enact a Tennesssee Taxpayers Bill of Rights, check out TnTABOR.org.
UPDATE: Colorado Gov. Bill Owens issued a strong defense of the TABOR amendment in his State of the State speech last week, as reported in the Rocky Mountain News.
Here's an excerpt of his speech:
"As we work together, we must avoid the too-easy answer of asking more from Colorado taxpayers. Some have said we should change Colorado's system of tax limitation. Some say now is the time to roll back the fundamental protections that the Taxpayer Bill of Rights gives Colorado taxpayers. The goal? Taking more money from the paychecks of Colorado families to spend more on government. I believe that far from being a straightjacket for Colorado, TABOR is an economic bulletproof vest. While other states spent their way through the 1990s, and are now raising taxes to pay for their spending, Colorado was better prepared for the revenue downturn that we face. Here in Colorado, we will not weaken our taxpayer protections. We will live within our means. We must not raise taxes. And so long as I am Governor, we will not raise taxes."
Here's a link to the rest of Owens' State of the State speech.
Meanwhile, this report from the Jan. 6 Rocky Mountain News explains the real primary cause of Colorado's budgetary problems this fiscal year:
The state got itself into additional trouble by spending some TABOR surplus for construction needs, then refunding it the following year. It's tough to find the repayment money when revenues plunge. Adding to the problem has been voter approval in 2000 of a couple of ballot measures - Amendment 23 that guarantees Colorado's public schools additional funds for the next 10 years and Referendum A which will grant senior citizens tens of millions of dollars in property tax relief.
UPDATE: I just ran across a story in the September 27, 2002, issue of Business First, the weekly business journal in Columbus, Ohio, which presents more convincing evidence of the positive impact of TABOR.
As the decade of the 1990s began, Coloradoans had per-capita disposable income of $17,251, which was 100.6 percent of the U.S. average. At the end of the decade, Coloradoans' per-capita disposable income had grown to $27,573, which was 109.9 percent of the U.S. average.
This astonishing 9 percentage point jump was unmatched by any other state. By comparison, Ohioans began the decade with an average of $16,442 in disposable income and ended it with $24,023. Ohioans now have 95.7 percent as much spendable income as the average American.
The complexity of state economies make it unlikely that one single factor is the source. Colorado's new jobs were created by millions of decisions, large and small, made by millions of consumers and business owners. Colorado's favorable weather conditions, recreational opportunities and scenery clearly played roles. But according to Barry Poulson, professor of economics at the University of Colorado, state government tax and regulatory policies are the key.
"Colorado has achieved unprecedented growth over the past decade due to a favorable business climate," he said. A key feature of Colorado's business climate is the TABOR constitutional amendment, approved by voters in 1992 by a 53 percent margin. Tabor is short for Taxpayer Bill of Rights and it strictly limits the taxing and spending power of Colorado politicians."
I did some more research based on the Columbus Business First story. Statistics from the U.S. Department of Commerce's Bureau of Economic Analysis indicate Ohio's per capita disposable income jumper from $16,439 in 1990 to $24,112 in 2000, which is 95.6 percent of the national average of $25,214. By comparison, according to the BEA, Colorado's jumped from $17,232 in 1990 to $27,690 in 2000, which is 109.8 percent of the national average. But Tennessee's rose from $15,181 in 1990 to $23,525 in 2000, which is just 93.3 percent of the national average.
Ohio's per capital disposable income was 95.9 percent of the national average of $17,135 in 1990, while Colorado's was 100.6 percent of the national average and Tennessee's was 88.6 percent. So, Ohio lost 0.3 percentage points, while Tennessee gained 4.7 percentage points. But Colorado gained 9.3 percentage points.
Advantage, Colorado - where the people are better off financially in part because of the Taxpayers Bill of Rights.
The good news is, new Tennessee Gov. Phil Bredesen is apparently intent on keeping his promise to balance the state budget without resorting to a tax increase. The bad news is, Tennessee's constitution lacks a Taxpayers Bill of Rights to protect us against unrestrained growth of taxes - and Gov. Bredesen has previously said he opposes such a common-sense protection. For the sake of improving the fiscal health of the people of Tennessee and their government, and for his own political future, Bredesen ought to change his mind and embrace the Taxpayers Bill of Rights concept.
Gov. Bredesen, are you listening?
There is No Free Lunch
And this Arnold Kling essay on the economics of the international oil business explains that concept quite well.
Real Taxpayer Rights
I have developed a white paper, heavily footnoted and documented, outlining the history of tax-and-expenditure limitations, the history of the Colorado Taxpayers Bill of Rights, and the positive impact it has had on the state's politics, finances and economy. If you would like a copy of that white paper, email me at bhhobbs-at-comcast.net and request it and I'll send it along. For more information on efforts to enact a Tennesssee Taxpayers Bill of Rights, check out TnTABOR.org.
Nowhere to Cut?
Here's a fine piece of commentary on the inability of Nevada Gov. Kenny Guinn to find anything to cut. Sadly, Guinn is a Republican who, like a certain recently retired former Tennessee governor, thinks the answer to a budget crisis is to propose more spending and higher taxes.
If the high school diploma you earned 20 years ago is still "good" and didn't have to be replaced when you moved to Nevada, why isn't the first driver's license you were ever issued still "good"? Does your latest one prove you can drive any better than that first one? This is all about state revenue and making sure the police can track us. Isn't there a "right to travel" - not convertible into a privilege, mind you - guaranteed by the Ninth Amendment? Did George Washington have to hang a numbered plate over his horse's rump to travel from state to state? Did Americans die for freedom so we could all be numbered?
After eight years of fiscal madness accompanied by deceptive spin and a governor who woke up every morning trying to break a solemn promise, our new governor's comments on the budget, taxes and his intention to keep his campaing promise are quite refreshing. Here are some quotes from Gov. Phil Bredesen, as reported in a Q&A with The Tennessean:
I think we got ourselves in a difficult position by spending too much money over the last two or three years so that we're going to have to end up with some of the cutbacks and stuff that other states started doing a couple of years ago.
We just had the largest tax increase in our history. We know the revenue estimates are overly optimistic, and we're falling short. So it's hard to escape the conclusion that you have to pare our state government in some way and, when you talk about paring state government, it's hard to talk about that without at least saying that the issue of layoffs or cutbacks or furloughs or something like that would have to be on the table in some fashion.
I'm going to have to make the best estimate that I can of what those obligations are and do it on the pessimistic side. If that requires reducing budgets in other places to make it happen, that's what I'm going to have to do. I'm not going to bankrupt the state. I'm not going to lie to people about what the situation is. I'm not going to push the problem off into next year by grabbing some sort of fund balance somewhere. TennCare is something that ought to be competing with other needs for money in the state — whether you put your extra dollars in TennCare, in K-12 education, in higher education, in incentives for companies.
TennCare has gotten to be the dragon that eats everything. One of the things we're trying to accomplish was giving the state a little more in the way of some levers that they can use to decide how much money they were going to spend on TennCare. The dragon has got to be put in its cage and kept there with the other animals of the zoo.
(The Tennessean then asked about the "Independent" Tax Study Commission and what Bredesen will do with its recommendations. But Bredesen apparently isn't fooled by the paper's calling the commission "Independent" when it clearly is nothing of the sort.)
It was created by the legislature, but I will certainly read it carefully. I was asked by some people who were thinking about serving on it what my attitude was, and did I think they were wasting their time. I said if they're taking an objective look at the tax structure and how to correct taxes and not thinking how could we quickly raise another billion dollars of revenue, then it could be useful.
If what this thing is, just to bring the income tax again two years down the line, I just feel I ran for this office on a promise not to implement an income tax in my first term, so don't look at it as something which is going to box me into a corner. I will certainly listen to what they say with respect, and I think it will be a useful contribution for discussions.
The paper then asked how Bredesen would react of the commission recommends a revenue-neutral income tax.
I genuinely feel that I ran for this office and was elected on the premise that I was not going to propose an income tax during my term as governor and I have no intention of doing it. I guess if I were convinced that was far and away the best way to do something, I would want to give people a referendum chance and by making it clear that I intended to explore that alternative in a second term in governor and making it clear during the campaign.
The Tennessean also interviews David Goetz, Bredesen's new Finance & Administration commissioner. Notice how the questions are biased in favor of higher taxes generally, and the income tax.
Goetz, who as a lobbyist for business argued against higher business taxes, is asked if in his new job he is now on the "other side of the fence." And when Goetz talks about economic development and the goal of increasing Tennesseans' personal income, the paper immediately asks "If you get the personal income to rise again, how do you take advantage of that increase without a personal income tax?"
Goetz should've slapped the reporter for asking such a stupid question. If people earn more they spend more, and sales tax revenue rises. Duh.
Last week, I had the pleasure of speaking to the organization meeting of the Tennessee Taxpayers Bill of Rights project (www.tntabor.org), and I spoke on the history of tax-and-expenditure limitation laws at the state level, and in particular the Colorado Taxpayers Bill of Rights. I have developed a white paper based on that speech, heavily footnoted and documented, outlining the history of tax-and-expenditure limitations, the history of the Colorado TABOR, and the positive impact the Colorado TABOR has had on the state's politics, finances and economy. In the audience were a number of political activists from around the state as well as several members of the Tennessee legislature, including a state Senator who plans to sponsor TABOR legislation this year.
If you would like a copy of that white paper, email me at bhhobbs-at-comcast.net and request it and I'll send it along.
Dog Shooting Update
Tennessee Highway Patrol dispatchers are given a written reprimand and orded to take a crisis management class, for their role in the murder of a tourist family's dog. Meanwhile, state Sen. John Ford - who has had his own problems with guns and police - seeks a racial angle. But hey, at least THP is admitting it goofed up. The only problem is, the THP officers, and Cookeville Officer Eric "I'm afraid of tail-wagging mutt" Hall still have their jobs. And Hall, with three dog kills on his record, still has his gun.
Energy Independence Update
The Bush administration is proposing a good strategy for making America less dependent on the oil that's underneath the Islamofacist regimes of the Middle East: Produce more domestically. Strangely, some on the Left oppose this common sense notion.
Memphians aren't wild about the geographical makeup of new Gov. Phil Bredesen's Cabinet: It's mostly Nashvillians.
House Speaker Jimmy Naifeh is purging the House leadership of representatives who defied him on the income tax. To absolutely nobody's surprise.
Naifeh replaced House Judiciary Comittee chairman Frank Buck, who opposed Naifeh's income tax, with Rep. Joe Fowlkes, who voted for it.
House Minority Leader Tre Hargett, R-Bartlett, said Democrats, who have a 54-45 majority, were again exercising their version of the Golden Rule - ''He who has the gold rules.''
''During the 2002 legislative elections, Tennesseans cast 749,618 votes for Republican House candidates while they cast only 643,779 votes for Democratic House candidates,'' Hargett said. ''Those 749-plus thousand citizens have been shut out of committee chairmanships once again. I am confident a new day is coming.''
The powerful Commerce, Finance, Ways and Means, Government Operations, Judiciary, and Calendar and Rules committees are all now headed by committed income tax supporters. Naifeh also appoiinted three Republicans who voted for the income tax to the Finance Committee, which deals with all legislation involving taxes or state spending. They are Reps. Steve McDaniel, Bob Patton and Raymond Walker.
NewsChannel5's Phil Williams appears to have uncovered damning evidence of corruption at the highest levels of the Sundquist administration. Once again, state money is steered toward a company with ties to a friend of Don's - and in apparent violation of state law.
Thank God the Sundquist administration ends at high noon today. There's a new sheriff in town. Memo to Gov. Phil Bredesen: The more you expose Sundquist administration corruption, the better you'll look by comparison.
The Tennessean continues to tell half-truths about the teacher-pay equalization issue - although it is making the lie easier to spot:
Estimates of the cost of equalizing teacher pay, as the court requires, range from a low of $20 million to a high of $540 million if salaries are brought up to the Southeastern average, according to groups that are drawing up proposals for the legislature.
Equating the $540 million with the court order, as The Tennessean does, is very deceptive. Most of that $540 million estimated cost has nothing to do with meeting the court's order to equalize teacher pay. Most of that $540 million would be for raising all teachers' pay to the Southeastern average. The court did not order that.
But the Tennessean favors higher teacher pay (while consistently opposing meaningful education reforms), and so it continues to try to blur the facts and make it sound as if it could take $540 million to satisfy the court. It won't take anywhere near that.
Here's a fascinating essay on how the U.S. will wage "post-industrial" war against Iraq. It's from Michael Barone.
Industrial America fought its wars with industrial forces: huge aries and navies – 15 million men in World War II – made up mostly of low-skill conscripts and equipped with relatively unsophisticated mass-production machines. The war was won with kids from Brooklyn and rural Texas and machines mass-produced in Detroit and Los Angeles. Today, postindustrial America is planning to fight its latest war with highly skilled professional soldiers and sophisticated high-tech machines. We need fewer people–and can expect far fewer casualties–to win quicker victories. Critics who look back at World War II with nostalgia and argue for shared sacrifice and a drafted military miss the point. We are no longer the kind of country that fights most effectively that way.
Bubonic Plague Update
The missing-bubonic-plague story is getting stranger. And there's a Nashville connection.
Dr. Thomas C. Butler, the researcher in charge of the potentially dangerous biological agent that was reported missing Tuesday, was arrested Wednesday night, accused of making a false statement to a federal agent. Butler told the FBI the 30 vials under his control were missing as of Saturday, but "he knew they were destroyed prior to that date," said Dick Baker of the U.S. Attorney's Office.
Butler was the only person who legally had access to the bacteria, classified as a select agent that has to be registered with the International Biohazards Committee, an internal committee at Tech, as well as with the federal government.
The Lubbock Avalanche-Journal makes no attempt to explain why Butler might have wanted to mislead investigators about the missing vials. However, this story from the A-J says the events of yesterday had an "eerily familiar" feel, as the city practiced a bioterrorism response drill in September 2001.
In September 2001, city officials held a bio-terrorism exercise at the Lubbock Memorial Civic Center that involved the intentional release of the same bacteria reported missing at Texas Tech Health Science Center. In the training exercise, the bacteria caused an outbreak in Lubbock of pneumonic plague, creating a national emergency and causing the death of 613 residents. Lubbock Public Information Officer Sandy Glass said Wednesday that she recalled the training. "No one mentioned it, but personally, I thought of it, and it helped me know what to think about and what could have gone wrong," Glass said. "That's one thing about those exercises, you can never train too much."
Google shows more than 400 stories on the missing-plague story; most are version of this AP story.
Actually, Not the First
Nashville's daily newspaper, The Tennessean, has a story on the completion of the "first Gateway arch." Actually, the first Gateway arch was completed on Oct. 28, 1965 - and for less than $15 million. Nashville's Gateway arch will cost $28.9 million - and be much less impressive. Name change, folks, name change.
A Very Bad Idea
NYT columnist Bob Herbert continues to push for a very bad idea: Uncle Sam, he says, should spend tens of billions of dollars to bail out states that are facing revenue shortfalls. But that just means bailing state governments out of a self-created problem of out-of-control spending. The truth is the states facing large budget shortfalls this year are the same states that spent like drunken sailors during the late 1990s economic boom, acting as if they believed there would never be a shortfall. Tennessee is a prime example.
During the past 8 years, Gov. Sundquist led the state to spend every penny in revenue, and even dipped into the state's various reserve funds, in order to propel billion-dollar annual spending increases. His reckless spending even exceeded the state's constitution cap on spending growth - which is designed to ensure budget sustainability by limiting growth to the rate of growth of the economy - by a cumulative $1.1 billion. Those budgets are why Tennessee needed a $933 million tax increase. Eliminate that over-cap spending and Tennessee today would be enjoying a large revenue surplus.
Herbert's idea of having Uncle Sam bail out profligate spending states will prevent those states from learning vital fiscal discipline - and set the state for a worse crisis the next time the economy softens. For more, go here, and read the post below it too.
Owens in 2008
Colorado Gov. Bill Owens was sworn in for a second term Tuesday. He was reelected in a landslide after a first term in which the governor cut taxes by $1 billion.
The Denver Post says Owens' inaugural address "made it clear that he has no regrets for the $1 billion in tax cuts that he signed into law his first two years in office." (In contrast to the liberal Post, of course, which started regretting those tax cuts before they happened.)
Owens said: "To keep our families strong, we must always understand that the families of Colorado fund our government. This golden dome rising behind us should always remind us that the gold in Colorado's treasury belongs to the people whom we proudly serve. Our commitment to this inflexible principle protects us when cold economic winds buffet our state. This principle, the belief that there is no such thing as government money - only people's money - will help bring our economy back."
Owens faces a revenue shortfall of $850 million this year. But without the state constitution's Taxpayers Bill of Rights, which limits the growth of spending, the state government would have spent $1 billion more in the past four years, increasing the state's budget and setting the state up for a much-larger shortfall this year. TABOR further protects the people of Colorado by making it difficult for legislators to raise taxes - an otherwise tempting option to patch a revenue shortfall. Instead, because of TABOR, legislators are motivated to fund ways to economize and prioritize and live within existing revenues.
Incidentally, Gov. Owens will be unemployed in four years, which is about when the 2008 presidential campaign gets underway.
Wharton Weighs In
Economists at the highly respected Wharton School of Business at the University of Pennsylvania say the economy looks "promising" here at the start of 2003.
Last year marked the first time in decades that the U.S. stock market had logged three losing years in a row. Will 2003 be better? So far, the signs are encouraging. The Standard & Poor’s 500 rose nearly 6% in the first nine trading days. Historically, the start of January has been a good indicator of full-year performance, though there have been plenty of exceptions.
“The economy looks like it’s going to move along,” says Wharton finance professor Marshall Blume, echoing a widely held view that recovery is taking hold. “Stock prices will move along, too. We’ll probably have some inflationary pressure, but not much.”
A survey of 54 economists by the newsletter Blue Chip Economic Indicators found most expect corporate profits to rise 8% during the year. That would be the biggest increase in five years. The economists said economic activity will pick up as the year progresses, due to stimulation from government military spending and a decrease in the “risk aversion” that has held back spending by businesses. The economy should expand at a 2.7% annual rate in the first quarter, compared to a 2.4% rate in 2002, with the rate rising to 3.8% in the fourth quarter, those surveyed said.
Stronger economic growth will push interest rates up, and the economists predicted the Fed Funds rate will rise from today’s 1.25% to 2.13% by the end of the year. They project unemployment to fall from the current 6% level to about 5.7% in the fourth quarter.
During the last four recessions, the S&P 500 hit bottom several months before the recession ended, then followed with big gains. After bottoming out in the 1990-91 recession, for instance, the index gained 27.8% in the following six months and 29.1% in the 12 months after the low point. This doesn’t necessarily suggest the market is headed for stupendous gains in 2003, however. The S&P 500 has already gained about 20% since hitting a five-year low Oct. 9.
Many forecasters say the possibility of war with Iraq is holding the market back despite the improving economic outlook. Consumers, credited with keeping the economy together by continuing to spend during the past few years, are still doing so, and military spending by the government will help.
If there is not an oil crisis, the economy could enter “a traditional, full-fledged recovery” in the third quarter, says Richard Marston, professor of finance and economics at Wharton. He recalls that the S&P 500 fell about 15% in the two months after the Iraqi invasion of Kuwait in August 1990, but that it had regained all those losses, and continued higher, before President Bush declared a cease fire at the end of February 1991. “I see the [stock] market turning around sometime this year. I think it’s going to be the result of some indication that the economy is turning around,” Marston says. But “interest rates are going to rise. We know that.” And rising rates are likely to hammer bond prices.
President Bush has added a new element to the mix with his $674 billion tax-cut proposal, centering on elimination of the income tax investors pay on dividends. Such a move would make dividend-paying stocks more profitable for investors, and the proposal has already helped boost stock prices, says Andrew Metrick, finance professor at Wharton. If Congress adopts the measure, stocks will further benefit; if it is defeated or scaled back to only a partial tax exemption, stocks may suffer, he suggests.
Most experts agree that the president’s proposal is not so much a short-term stimulus as a long-term reform that could benefit the economy and financial markets in years to come.
I'm not sure if I've mentioned this online magazine before, but you should check out Capitalism Magazine.
An Affirmative Action
The Bush administration is preparing to do the right thing in a legal case before the Supreme Court involve race-based university admissions policies. Martin Luther King, who had a dream that one day people would be judged by the content of their character rather than the color of their skin, would be pleased.
Another Reason to Oppose Online Sales Taxes
A brilliant lawyer wrote this two years ago. I just found it today. It has aged well.
The harder issue - so far forgotten in this debate - is privacy. In real space, stores collect sales tax without necessarily collecting personal information. That's because there's "cash" in real space, and cash is a privacy-enhancing technology. However, in cyberspace there's no good equivalent yet to cash - early experiments with cybercash have run dry, and the infrastructure for privacy-enhancing trust is not yet well-developed.
If Congress enables states to push online retailers to collect taxes now, then Congress is permitting states to push online retailers to gather identities, too - for without identities, as things are now, you can't tell who owes what state what. Identification technologies are relatively few and, in important respects, crude. So far the technologies are essentially all or nothing - if I must certify that I am from California, I must also certify my name and address and yada yada yada.
A tax-enabled cyberspace just now would be the death knell for privacy for a long time to come.
Go For It
Andrew Sullivan explains why George W. Bush keeps on confounding just about everyone from the Europeans to the Democrats to the Beltway pundits.
It's hard to recall now but Bush was barely elected two years ago; and, given the dubious nature of his mandate, he was expected to do the smart thing and start very modestly. But Bush - again far from being outer-directed - simply pushed what he believed in anyway. He went for a massive tax cut, and he got almost all he asked for. I'm not privy to the inner workings of his judgment, but my guess is that he reckoned he was president anyway and he might as well do what he believed was right. It says something about the nature of most politicians, but that's highly unusual these days. Or take the November elections. Since it's a historical given that a president loses ground in his first mid-terms, the savvy judgment was that Bush should duck the campaign, play it safe and meet the Democrats half-way on war and peace. But Bush went out and campaigned boldly - and the big gamble paid off.
Mac Davis Was Right
Here is only the latest reason I'm so glad I don't live in Lubbock anymore. 35 vials of the Plague are missing from the Texas Tech University Health Sciences Center. Here's CNN's story on it. The AP reports the samples of bubonic plague can be "converted to weapons grade." And here's a biting story that explains the obscure pop culture reference of my headline - and why Lubbock, a city I once lived in, is a city I love to loathe. Bubonic plague? Just another run-of-the-mill disaster for the little city on the West Texas plains.
UPDATE: Authorities now say they've found the missing Plague.
SKB has a pithy comment about the election - again - of Jimmy Naifeh as Speaker of the Tennessee House and Sen. John Wilder as Lt. Governor.
Half a Loaf
Frank Cagle explains why state Rep. Diane Black's failed quest to unseat House Speaker Jimmy Naifeh is better than the alternative.
The Next Osama
For a few months a year or so ago, I published a parody blog called "Osama's bin Bloggin'," pretending to write as if I was Osama bin Laden doing a weblog. It was a minor Internet hit, drawing attention from the likes of Washington Post media critic Howard Kurtz, The Wall Street Journal's online "Best of the Web" feature at OpinionJournal.com, and Instapundit.com. But I stopped doing it in mid-2001. Now, apparently, someone else has taken up the slack:
We went to the Mall of Pakistan today and bought a new satellite TV system at Circuit City. Also a nice five disc DVD player. And since travelling through mountain passes by mule while periodically enduring bombing raids can be hard on home electronic equipment, we of course got the extended service plans. Afterwards we blew up the store.
Funny stuff. And I'm flattered he even copied the look-and-feel of my Osama blog.
Best of luck, "binny."
Bill Gets A Job
I'll be posting less here in the coming days and weeks and months. I started a full-time job at Belmont University on Monday, where I'll be developing a fairly complex and involved online publication that will incorporate weblogs and other forms of online journalism. And apparently I have already impressed my bosses greatly, because they're giving me Monday off. Oh. Wait. What's that, you say? Everyone gets Monday off at Belmont 'cuz its Martin Luther King Day? Oh. nevermind.
Opportunity in New Income Tax Strategy
Methinks I have detected a new strategy by those who favor creation of a state income tax: Push for taking it to a vote of the people. (Imagine that!)
Last week, the pro-income tax Knoxville News Sentinel columnist Tom Humphrey said there needs to be a statewide referendum on changing the state tax structure. In today's Tennessean, the pro-income tax state Attorney General says pretty much the same thing, although it's not clear if he wants the people to vote on an actual tax reform proposal or on whether to call a constutional convention on tax reform:
Although Naifeh and other legislative leaders have said repeatedly that any proposal for a state income tax is dead, state Attorney General Paul Summers told reporters last week that there should be a statewide referendum on whether to consider changing provisions of the Tennessee Constitution dealing with taxation. He predicted that the tax issue will be debated in the new session. ''Unless you have a constitutional convention or a constitutional referendum that allows or does not allow an income tax, we are still going to be debating it, and we will never resolve it,'' he said. ''It would take pressure off the legislature. It would give people the opportunity to speak and, I hope, put the issue to rest for a long time.''
That he's called for a public referendum at all is evidence of a realization among those who favor the income tax that their four-year approach - creating a series of fiscal crises by chronic overspending and then blaming the tax code and demanding the legislature pass a statutory income tax - isn't going to work. By admitting that and agreeing to seek tax reform constitutionally, they may have opened up room for negotiation with income tax opponents. Last Saturday, a large group of political activists, ordinary citizens and even some members of the state House and state Senate met in Crossville to map out strategy for amending a real Taxpayers Bill of Rights into the state Constitution, one that limits revenue growth and spending, returns surplus revenue to taxpayers and prevents tax increases without voter approval. Such provisions have worked well in other states.
Such ideas deserve consideration in a constitutional convention on tax reform, or inclusion in any proposed tax reform package put before voters. And these comments by Humphrey and Summers indicate a tacit realization by the pro-IT crowd that they're going to have to compromise in order to get even a small bit of what they seek.
(Editor's note: be on the lookout for more pro-income tax officials and commentators voicing support for the constitutional convention or constitutional amendment via referendum route. It's my hunch you're likely to see a lot of that in the weeks and months to come. If you do, please bring them to my attention.)
This Is Not True
At least I don't think this is true. But it easily could be.
In one of its first acts, the 108th Congress has created a new board to oversee the newly-created Public Company Accounting Oversight Board (PCAOB). The Oversight Board of the Public Company Accounting Oversight Board (OBOTPCAOB) will keep an eye on the activities of the PCAOB to bolster public confidence in its work. In overnight trading, stock prices surged on the news.
A Fine Idea
Tennessean sports writer Joe Biddle has a great idea for Tennessee Titans owner Bud Adams - a way to motivate the team to win the Super Bowl. The reward?
Take the team to the Pro Bowl. They could strut around wearing their Super Bowl Champions T-shirts and baseball hats as they spend the week winding down. Let the Pro Bowl players go through the daily grind of practices and try to summon the energy and desire to play a meaningless game on the Sunday after Super Bowl XXXVII. The Titans could spend their time at the beach, on the golf courses, sightseeing or just kicking back at the hotel pool and basking in the glory that being a Super Bowl champion brings.
A winning idea.
He's Done It Before
South Knox Bubba reports that Cookeville cop/shooter of friendly tail-waggin' dog Eric Hall is a multiple dog killer.
Glenn Reynolds is pointing to this today from Orson Scott Card regarding why we won't invade North Korea - and why the President's critics are wrong about North Korea, Iraq and the administration's policies toward both. Read it and you'll know why.
Biased Memphis Commercial-Appeal legislative 'reporter' Paula Wade's latest column ends with a little postcript about the income tax:
As a postscript, it appears that everyone except the most stubborn reformist dreamers and the most paranoid anti-taxers acknowledge that a state income tax is a dead issue in Tennessee. Take it from someone who witnessed its tortured life and agonizing death - it's gone. Or don't take my word for it - do the math. Tax reform had 45 votes in the 99-member House last year. Fifteen of those supporters are gone now, by either voluntary or forced retirement. Thirty votes in the House, none in the governor's office, and about six in the Senate won't get you a cup of coffee in the legislative cafeteria..
And then there's this snide snippet at the end:
Tennessee is the third most regressive state in the country, meaning we tax our poor a lot more heavily than the rich, and that's not likely to change. I guess we just like it that way.
Somebody please tell Paula Wade that the study purporting to show Tennessee had the third-most regressive tax structure in the nation was produced by a left-leaning "think tank" with a very liberal agenda on taxes. The Institute for Taxation and Economic Policy is backed by some of the most liberal foundations in America and does not favor the fairest form of income taxation, the flat tax. And ITEP's rankings are based on subjective estimates and assumptions based on the organization's political leanings. ITEP is NOT an "independent, nonpartisan" think tank, as some media have described it. The organization's bias is very well documented.
Economists Blamed for California Deficit
Economists' overly optimistic revenue projections are one reason the state of California faces a mammoth revenue shortfall. We've had the same problem in Tennessee - overly optimistic revenue projections that lead the government to appropriate and spend more than we can afford. (When, of course, they weren't issuing overly pessimistic estimates of revenue in order to make the deficit appear worse and increase chances for passage of an income tax.)
Who Didn't See This Coming?
It looks like the Tennessee Highway Patrol's screw-ups lead to the incident in which a trigger-happy Cookeville cop shot a tourist family's friendly tail-waggin' mutt.
Tennessee Highway Patrol dispatchers appear to have exaggerated details of a cell-phone caller's report and, in doing so, played a key role in the Jan. 1 traffic stop during which a Cookeville police officer shot an innocent family's pet dog. Discrepancies between what the caller said to a THP dispatcher in Nashville and what other THP dispatchers in Cookeville were later told have come to light in a Tennessean analysis of internal documents, an audiotape and a videotape released last week by the highway patrol and Cookeville Police Department.
At the end of this, they're going to find that the THP had no probable cause to order a felony stop, and that the THP's gross negligence lead to the false arrest and rough treatment of the Smoak family - and the murder of their dog.
Six figures, approaching seven.
Good Day for Taxpayers
A judge has ruled that TennCare doesn't have to provide coverage to 150,000 people ruled ineligible. This is good news for taxpayers.
Court Gets This One Right
This case has never really been about the TSSAA's no-recruiting rule. It has been about jealousy and an an effort to punish a successful private school football program by less-successful public school football programs. The judge has made the right call.
Why Americans Favor "Tax Cuts for the Rich"
Because they want to be rich some day. Because they 'vote their aspirations," says writer David Brooks in this excellent piece in the New York Times.
Many Americans admire the rich. They don't see society as a conflict zone between the rich and poor. It's taboo to say in a democratic culture, but do you think a nation that watches Katie Couric in the morning, Tom Hanks in the evening and Michael Jordan on weekends harbors deep animosity toward the affluent?
On the contrary. I'm writing this from Nashville, where one of the richest families, the Frists, is hugely admired for its entrepreneurial skill and community service. People don't want to tax the Frists - they want to elect them to the Senate. And they did. Nor are Americans suffering from false consciousness. You go to a town where the factories have closed and people who once earned $14 an hour now work for $8 an hour. They've taken their hits. But odds are you will find their faith in hard work and self-reliance undiminished, and their suspicion of Washington unchanged. Americans resent social inequality more than income inequality.
Most Americans do not have Marxian categories in their heads. This is the most important reason Americans resist wealth redistribution, the reason that subsumes all others. Americans do not see society as a layer cake, with the rich on top, the middle class beneath them and the working class and underclass at the bottom. They see society as a high school cafeteria, with their community at one table and other communities at other tables. They are pretty sure that their community is the nicest, and filled with the best people, and they have a vague pity for all those poor souls who live in New York City or California and have a lot of money but no true neighbors and no free time. All of this adds up to a terrain incredibly inhospitable to class-based politics. Every few years a group of millionaire Democratic presidential aspirants pretends to be the people's warriors against the overclass. They look inauthentic, combative rather than unifying. Worst of all, their basic message is not optimistic.
I found this story via Donald Sensing, who also has some good comments.
Support for Ending Dividend Tax
Here's some good information for you if you want to win an argument that President Bush's plan to end the taxation of stock dividents is a good idea. In it, Jeremy Siegel, author of the best-selling book “Stocks for the Long Run,” and Andrew Metrick – both finance professors at the prestigious Wharton School of Business at the University of Pennsylvania, along with Harvard finance professor Paul Gompers, argue that a simple solution would be to eliminate one of the most detrimental taxes in the U.S. economy, the corporate dividend tax.
Few recognize how pernicious the double taxation of dividends is. Since interest costs, but not dividend payments, are deductible, management is inclined to raise an excessive level of debt and to retain earnings, since paying dividends currently confers no tax benefit. These retained earnings are hopefully transformed into capital gains for both shareholders and option holders, particularly for top-level, option-laden management.
Over the past decade, the proliferation of option-based compensation schemes and an increasingly tax-sensitive shareholder base caused capital gains and not dividends to become the preferred source of shareholder return. When the earnings are of unquestionably high quality and are being invested profitably, the shift to tax-favored capital gains rewards stockholders. But the revelations at Enron, WorldCom and other firms have shown that creative legal accounting and often outright fraud has impaired our ability to use the earnings reported by management as yardsticks for judging value.
How would the deductibility of dividends “fix” these problems? If dividends were a deductible expense, firms would be strongly motivated to pay out all their profits as dividends, since retained earnings would be subject to the corporate tax. Firms that did not pay dividends would be viewed unfavorably by investors who feared that the earnings are inflated and that the cash does not exist. The payment of cash dividends would therefore add significant credibility to management’s earnings reports.
You Do The Political Math
Judging from their websites, neither the Tennessean nor the Knoxville News-Sentinel nor the Memphis Commercial-Appeal reported on the good news that state revenues grew faster than expected in December, wiping away the state's revenue shortfall for the current fiscal year. The state Department of Finance & Administration released the data yesterday at 11 a.m., well before any of the paper's news deadlines. All three papers jump on the story and trumpet it loudly when the monthly revenue report is bad, or can easily be spun that way. All three papers endorsed the income tax and continue to claim the state faces a fiscal crisis. You do the math.
UPDATE: A reader found coverage of the story on the Tennessean's web site. It's got a heavy dose of spin.
News from Dead-Dogpatch USA
Tennessee Gov. Don Sundquist, who loves dogs so much he once appropriated one belong to a youngster, only to give it back after the youngster came forward and asked for his dog back, has apologized for the killing of a tourist family's harmless tail-waggin' mutt by a scaredy-cat Cookeville cop. The Tennessean rushes an update of this dog news onto its web site at 4:28 p.m. Clearly, on a day when a surge in state revenues wiped out the state's growing budget shortfall, this is the most important news of the day. Because The Tennessean sure didn't rush that silly revenue story onto the web.
Good News on State Tax Revenue
This just came in from the Tennessee Department of Finance and Administration: five months into the fiscal year, and Tennessee does not have a revenue shortfall. And I PREDICTED IT A MONTH AGO!
Here is the text of the administration's revenue press release:
On an accrual basis December is the fifth month in the 2002-2003 fiscal year. Department of Revenue tax collections were $682.2 million. The collections include new revenue collected under the Tax Reform Act of 2002. December revenues were $33.8 million more than the budgeted estimates, Finance and Administration Commissioner C. Warren Neel announced today. The general fund had a $26.9 million overcollection and the four other funds overcollected by $6.9 million.
Sales tax collections were $7.8 million more than the estimate. Adjusted for the rate change and the single article cap, the growth in sales tax collections was 0.35% for the month. For August through December, the adjusted growth is 1.55%. Franchise and excise taxes combined were $98.4 million for the month. Collections were $23.6 million more than the budgeted estimate and included nearly $10.5 million from a settlement. Some firms may have made their January quarterly payment early. The December collections must be combined with January revenue to assess these taxes. For five months revenues are $2.8 million overcollected.
Gasoline taxes and motor vehicle registrations in December were $7 million more than the budgeted estimate of $76.4 million.
Year-to-date collections for five months are $6 million more than the budgeted estimate. The general fund has an undercollection of $15.2 million and the four other funds are overcollected by $21.2 million.
The budgeted revenue estimates are based upon the State Funding Board’s consensus recommendation adopted by the second session of the 102nd General Assembly in June of this year.
In other words, Tennesse has a surplus. The minor shortfall in revenue compared to the estimate for the general fund is easily handled with the state's "rainy day" reserve fund, which was established for exactly that reason.
I predicted as much a month ago in this post, in which I said the following:
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.
Indeed it did.
Editor's note: the above was posted at 11:14 a.m., a mere 14 minutes after the press released reach my email in-box, beating the state's major newspapers - who, no doubt, are trying to figure out how to spin the above good news in the worst possible light. Perhaps they'll focus on the sales tax and complain that it isn't growing as fast as the administration had hoped. And maybe they'll whine about how the $963 million tax increase is going to bring in a little less than that. Ignore them. The state is not facing a significant budget shortfall. It merely faces a runaway TennCare program and a court order to equalize teacher pay.)
What Ails California Is...
The economic policies of Gov. Gray Davis, says Bill Whalen.
The more Davis talked economics, the more one got the sense that this what America would have been subjected to do were it Al Gore, not George W. Bush, had delivered this week's big speech in Chicago.
In case you haven't been paying close attention, California is running a $34.8 billion budget deficit. That's according to the state's department of finance, which isn't showing anyone how it does its math (California's legislative analyst office places the deficit much lower, around $21.1 billion). It's a morbidly obese figure for the Golden State, as California's shortfall amounts for about half of the entire debt accumulated by all 50 states. And it sets the stage for an ugly debate between the governor and the state legislature over what services to cut and taxes to raise in order to balance the budget, as is constitutionally required.
That debate begins in earnest today, when Davis announces the details of his proposed budget fix. In the meantime, there's another debate awaiting California, and it's a mirror reflection of the coming fight between the White House and Congress over what policies best harvest and sustain economic growth. Fortunately, for Americans, their president gets it. Unfortunately, for Californians, their governor doesn't.
This Is Cool
Oak Ridge National Laboratory researchers have installed about 20 sensor packages in Washington, D.C., as one of the first tests of the SensorNet system to combat terrorism. The chemical and radiological sensors are being tested in conjunction with meteorological equipment installed earlier by the National Oceanic and Atmospheric Administration. Biological detectors are not part of the Washington test but will be included in future operations.
Hey. This is the kind of news that might help overcome the current national image of Tennessee as a Dead-Dog Patch USA.
The Immigration and Naturalization Service has started tracking foreign students to make sure they comply with their visas. Foreign students are upset about this.
The new Internet-based tracking system is called the Student and Exchange Visa Information Service and was up and running as of Jan. 1. The INS already requires information from foreign students and their schools, but SEVIS will replace the cumbersome paper-based system the INS has used for years. In the past, schools kept the information in files, which the INS had the right to see on request. "Students just need to stay in compliance with their immigration status, make sure that they're taking the courses they're supposed to and stay out of trouble," said INS spokesman Christopher Bentley. The INS has had a mandate to create a computerized system since 1996. But the long-delayed overhaul took on new urgency after the Sept. 11 attacks. Some of the hijackers had entered the United States on student visas. "Will SEVIS be able to stop the next 9-11? No. But it's part of a clear approach to helping national security in the United States," Bentley said.
Unfortunately, the INS has a lousy track record at actually deporting foreigners who have overstayed their visas or violated the conditions and permissions that govern them being allowed in the U.S.
Roots of a Dog-Shooting
The Tennessean correctly places the blame for a tourist family's dog being shot by a Cookeville cop on the side of I-40. While Cookeville's Barney Fife cops try to blame the dog - after all he was wagging his tale and barking! - the truth is that the Smoak family should not have been pulled over at all. There had been no crime, no robbery. There had not been a crime or robbery reported. No armed robberies involving robbers and a getaway car resembling the Smoaks and their green station wagon had been reported to authorities anywhere in Tennessee.
The Tennessean comments: "A passing motorist reported money flying from a car that passed her at a high rate of speed and reported it to a Nashville dispatcher. But the motorist's suspicion that the people in the vehicle were ''up to something'' blossomed into a full-blown robbery by the time it was relayed to authorities. The incident illustrates the woeful inadequacy of communication between departments and dispatchers. It's one thing for a witness to engage in hyperbole, but her message should have been relayed with professional detachment and acted upon in the same manner once it was received by law enforcement."
Instead, the Tennessee Highway Patrol and the Cookeville cops descended on the Smoaks as if they'd just knocked over a bank or a convenience store. Having done so, they then refused repeated requests from the Smoaks to close the door so the friendly little dog couldn't get out of the car. The dog, naturally, jumped out of the car and - tail wagging, barked happily and ran around. Unfortunately, he ran in front of Cookeville's answer to the Keystone Kops - Officer Eric Hall - who feared the little mutt's wagging tail so much that he shot the dog in the head.
Then he wrote an incident report in which he said the dog - which Cookeville Police incorrectly claimed was a pit bull - "'singled me out from the other officers and charged toward me growling in an aggressive manner." The video released yesterday belies Hall's claim. And any journalist who has ever spent much time covering the police beat - as I have done in Lubbock, Texas., and Clarksville, Tennessee - knows that officers often become, shall we say, hyperbolic, in their incident reports. A tail-wagging mutt becomes an aggressive, growling pit bull. After all, the dog is dead, and the officer knows the other officers won't challenge his story.
But the video does. The Smoaks deserve a generous settlement for their treatment and for the death of their dog. Six figures approaching seven. More importantly, the incident absolutely must result in reforms so that the Tennessee Highway Patrol can no longer initiate a traffic stop on the uncorroborated word of a single hysterical person who thinks she saw something suspicious. Otherwise, the next time you accidentally leave a can of Sprite on the top of your car as you drive away from the Kwik-e-Mart, the Cookeville cops may pull you over on suspicion you robbed the bottling plant. And, God forbid, if you don't have a dog, they might shoot you.
Remember, in the Smoaks' case, there had been no robbery reported, and no witness had seen any crime occur. No one had been robbed by three people in a green station wagon. One hysterical woman thought she saw some dollar bills fly out of a car window as it passed her on I-40. That's why the Smoaks were stopped. That's why a happy, tail-wagging dog was killed.
UPDATE: The cops' story keeps changing. Now, according to CNN, they are claiming they believed the Smoaks had been involved in a "carjacking," not a robbery. The CNN story has a good description of the video, including the Smoaks' repeated appeals to the officers to close the car doors so the dogs wouldn't jump out.
After the Tax Cut
James Glassman has some suggestions for two things the Bush administration should do to boost the economy alongside pasing the president's tax cut plan.
A study by the president's Council of Economic Advisers, published last April, attempted to put a dollar value on the devastation. The researchers found that the U.S. tort system ''is the most expensive in the world'' and ''represents a large drain on the productive resources of the United States.'' Torts cost about 2% of the gross domestic product, or triple the level in Britain, according to the study. Some of these expenses are justified; the threat of lawsuits gives businesses an additional incentive to make safe products. But the council noted that tort costs that can be identified as ''excessive'' constitute a tax that ''is ultimately borne by the individuals through higher prices, reduced wages or decreased investment returns.'' Using conservative data from academic researchers, the study's authors estimated that these extra expenses were the equivalent of a 2% tax on consumption, a 3% tax on wages or a 5% tax on income from investments.
That's the first. The second has to do with the war on terror.
Better Than the Democrats' Plan
Larry Lindsey has a good piece in today's New York Times defending President Bush's tax cut plan.
The final criticism of the president's plan is that it disproportionately favors the wealthiest Americans. Wrong. The tax cut is almost exactly proportional to taxes paid. Under current law, families making more than $200,000, who pay 45 percent of the income tax under current law, will get 40 percent of the tax cut. Families making less than $100,000 will pay 28 percent of the income tax this year and will get 34 percent of the tax cut. Not only that, Mr. Bush's plan would provide bigger tax cuts for middle-income families than the Democrats' alternative would.
Bias Watch: Source Not ID'd as Liberal
It would have helped readers if the Nashville City Paper reporter Joe White had bothered to mention that the Institute on Taxation and Economic Policy is a liberal think tank in this swallow-and-spew-the-spin story on the "fairness" of Tennessee's tax structure. The ITEP believes no tax system is fair unless it taxes dollars earned by certain groups of people at higher rates than dollars earned by other groups of people. However, an alternate view of fairness is that every dollar should be taxed at the same rate.
By failing to mention the ITEP's liberal viewpoint, White presents the study as a credible and unbiased or neutral report rather than what it really is - propaganda in favor of a graduated income tax. He compound the error by using as his only local source of comment the equally biased "Tennesseans for Fair Taxation," and describing the group - which favors a liberal economic agenda - as merely "advocates for the poor."
Well, I'm an advocate for the poor. I advocate NOT imposing a graduated income tax on them (or anyone else) because such a tax punishes those who work hard to earn more by taking an increasing percentage of the their money, and punishes the poor especially hard as cost-of-living wages shove them into higher tax brackets even though their purchasing power remains stagnant, resulting in them paying higher tax bills and having less money to put food on the table. It also harms the economy, which hurts all people including the poor.
ITEP, incidentally, is funded by some of the most liberal foundations and organizations in America, including the Ben and Jerry Foundation, the National Education Association, the Open Society Institute, the Schumann Foundation (an anti-capitalist organization led by PBS commentator Bill Moyers), the Streisand Foundation, and Working Assets Funding Services.
Reporter White could have found all of that within 10 minutes using Google. I did. Because I want readers to know the whole truth.
Today's Funny Page
Today's humor section comes courtesy of a critic of the Cookeville Dog-Shootin' Police Department, the almost world-famous Putnam Pit, an online newspaper dedicated to using the facts to make Cookeville look stupid. Which pretty much the city has accomplished on its own repeatedly, the latest by a cop shotgunning some tourists' friendly little dog, a bulldog-boxer mix. Today's Tennessean has a pretty good story on the shooting of the dog, which occurred during an altogether stupid traffic stop. Plus video, which appears to show the officer who shot the dog is lying when he says the dog came toward him "growling, in an aggressive manner." The dog's tail is wagging.
Glenn Reynolds is right. That whole incident is "too pathetic for words." Oops. Guess now I gotta drive real slooooooow next time I drive through Cookeville. Which will be this Saturday. I'm sure it's a nice place. I take back all that stuff I just said. In fact, I've got some good ideas for new tourism slogans for Cookeville. Ummm... "Cookeville is for Cat Lovers." Or... "Cookeville...Bring Your Dog and Have a Blast!"
(Extra irony: the police claim the dog was a Pit Bull, though the truth is it was a bulldog-boxer mix. A mutt. Matt Welch once called the Putnam Pit "one of the only journalistic pit bulls on the Internet.")
Newsflash: Democrats Like Bush's Plan
Just not the current-day Democrats. Bruce Bartlett explains: "President Bush's proposal to reduce taxes on corporate dividends is being attacked by Democrats as another give-away to the rich. But not too many years ago it was Democrats who were in favor of this policy and Republicans who were against it.
Bartlett on Blogs
Blogs are here to stay, says National Review's Bruce Bartlett:
One of the things I like most about blogs is that they provide links to articles, information, and commentary that would not otherwise come to my attention. All one has to do is click and you are instantly taken to the original source. I have found many valuable websites and documents this way that I use in my own writing.
One of the criticisms of blogs is that they tend to shoot from the hip — posting information that is sometimes unreliable. But that is true of any medium that deals in time-sensitive information, including newspapers and broadcast-news programs. However, where blogs excel is in almost instantaneously correcting themselves. By contrast, papers like the New York Times often take weeks to publish corrections of factual errors, and television news programs almost never admit error — ever. Blogs have become a kind of early warning system for me, alerting me about things like Trent Lott's political problems days before it appeared in the conventional press. Blogs are here to stay and their power will only grow. I think they are going to revolutionize politics and news gathering permanently.
You wondering what the heck is a blog? You're reading one.
Five Stories You Should Read
The Coming Police State: This is not supposed to happen in America.
This is Getting Scary: Too bad we can't just appease them with a $4 billion reactor, some food and some fuel oil. Already been tried by some fools named Clinton and Carter.
If We're Not Wanted... Then Let's Leave: Hey. If they want to be subservient to a madman, why shouldn't we let them?
This is Getting Scary 2: "Iraq is also known to have included ricin in its biological weapons programme." Yeah. Where is that stuff? Missing? Oh. Casus belli.
Hey, That Guy Was Pretty Smart: The good thing about gravity is it works even if you don't know how.
Bubba Likes Taxpayers Rights
South Knox Bubba says he didn't favor a state income tax, and has lots of nice things to say about my recent Memphis Commercial-Appeal column advocating a Taxpayers Bill of Rights be part of any Tennessee tax reform plan.
In the article, [Hobbs] also suggests that instituting a 4% flat income tax, eliminating the Hall Tax on "unearned income" (which actually taxes earned income in some cases, like mine), lowering franchise and excise tax, eliminating inheritance taxes, and lowering the sales tax would generate more state revenues and make Tennessee a business Mecca. Now, the idea of an income tax in any form is about the last thing I would expect from Bill Hobbs, nor would I have expected to find myself agreeing with such an idea. But this is a simple, straightforward proposal that would work, and the only fair way to impose an income tax. The only problem with this idea is that the extreme left liberals will want a graduated tax so the wealthy pay more and they pay less. Hey, any good tax plan has to have a little wealth redistribution, right?
And there would have to be a constitutional amendment to allow it. Bill's idea of attaching a Taxpayers Bill of Rights to any such income tax amendment would be an outstanding way to protect taxpayers of Tennessee from money drunk politicians. A Taxpayer Bill of Rights also addresses one of the problems at the core of the budget debates in Tennessee - mistrust of our elected officials due to their history of wasteful spending and misrepresentations about the budget. Getting back to Dave Goetz, it is interesting that this is one of the main points in his Tennessee Prosperity Project agenda on taxes. In fact, their agenda on taxes very closely resembles Bill's Taxpayer Bill of Rights.
So maybe it's time to push for what seems like a pretty good idea. We have a new Commissioner of Finance and Administration who seems to agree with the principles of a Taxpayers Bill of Rights, and a Governor who ran on exactly these types of promises to get himself elected.
Sadly, Gov.-elect Phil Bredesen is opposed to the Taxpayers Bill of Rights. But maybe his opposition can be changed to support. After all, it's a a pretty good way to get re-elected.
UPDATE: Bubba says the Tennessee Prosperity Project's agenda on taxation including items similar to the Taxpayers Bill of Rights I've been pushing. So I checked the TPP's "Road Map to Prosperity," basically a political wish list, and sure enough, it has some provisions that are similar in basic concept to the Taxpayers Bill of Rights.
The TPP would like to see tax reform that would "cap spending growth in state funds at the growth in the state’s economy and not allow simple legislative override, but instead require either reserving or rebating funds above that rate, and also "require stability and consistency in tax policy, prohibiting retroactive taxation," and "measure the proportion of total citizens’ income that the state may collect, with a suggested maximum of 6 percent."
TABOR, as I've outlined it, would limit the state to annual revenue growth equal to inflation plus population growth, and mandate surplus revenue be rebated to taxpayers. Colorado allows for that rebate via rate cuts or direct payments. I would prefer an automatic across-the-board rate cut. Colorado's TABOR also controls the growth of spending by requiring the legislature to go to the people and ask permission in a referendum in order to spend surplus funds on a specific list of projects and programs, rather than rebate the surplus. And the legislature must get permission from voters in order to raise taxes. Colorado's TABOR does allow for a sensible state reserve fund.
What's worth noting here is that there is room for common ground on tax reform. I'm a Republican, Bubba's a Democrat, but we both agree that a TABOR-ized tax system would be better than the runaway tax-and-spend system we have now, in which there are no effective controls on the growth of either taxes or spending. And we will soon have a governor committed to better fiscal management, and an F&A commissioner who supports an agenda similar to TABOR.
Tennessean Slams Tax Study Commission
The Tennessean says the new Tax Study Commission is off to a poor start. But not because it comes pre-loaded with income tax proponents like former state Sen. Bob Rochelle, former state education commissioner Nelson Andrews, Eastman Chemical Co. executive Gary Poe and others. No, the Tennessean believes promises of open-mindedness are "heartfelt." The paper just doesn't like it that the 14 of the 15 members on the panel are white men.
Praising members who "have expressed a willingness to look at all options, with no preconceived notions," the paper says the panel's lack of diversity "will lead to questions of whether it is able to think of new options for the state, or whether it will simply trot down a well-worn path." And, says The Tennessean: The result is a committee that has the appearance of old-time, back-room politics.
Yes, it does. And that same old-time, back-room politics leads down one very well-worn path: to a recommendation of the creation of a state income tax. The Tennessean, which favors such a tax, knows this. And knows that the panel's lack of diversity undercuts its pre-scripted result.
Some states are whining about the Bush tax cut plan, saying its centerpiece - wiping out the federal tax on corporate dividends - will hurt states that also tax dividends.
The New York Times says states with income taxes face this obstacle. Tennessee taxes dividend income.
Says the Times:
The worry of states and cities, analysts said, is that the 41 states that have personal income taxes will automatically lose state revenues as a result of the federal decision to stop taxing corporate dividends — unless they enact their own changes in tax law to keep them from automatically following the federal government's lead.
That is because state income tax laws generally parallel the federal system. Recently, the economic slowdown has prompted many states to break from custom by passing tax laws that preserve their own revenue streams. For example, after Congress in 2001 approved a 10-year plan to phase out the federal estate tax, 16 states decided to continue collecting such taxes.
Iris Lav, a policy analyst with the Center on Budget and Policy Priorities, estimated that the elimination of dividend taxes would cost states a combined $4.5 billion. Even if states wanted to continuing collecting the tax, she said, they might find it almost impossible to do it because after eliminating dividend taxes, the Internal Revenue Service would no longer require taxpayers to fill out forms listing their dividends. Since states use the same forms to calculate dividend income, "there's a high likelihood they won't be able to because there would be no paper trail," she said.
Hmmm. I guess it would be too difficult for those states to create a similar form, now, wouldn't it Iris?
The notion that Tennessee will find it difficult to tax something if Uncle Sam stops taxing it is silly. Tennessee taxes all sorts of things independent of the federal government. Taxing dividing income with the Hall Income Tax will be no different.
UPDATE: Tennessee already has such a form. It's called Schedule A of Form INC-250. Phew. I thought the Tennessee income tax proponents might have another false crisis to use in their unceasing propaganda war on your wallet.
A second point of the Times' story is that eliminating the dividend tax will make stocks more competitive with municipal bonds, and cause states and municipalities to possibly have to offer higher interest rates on bonds to attract investors. That would drive up state and city debt costs. Again, Tennessee is not greatly at risk. Tennessee issues very little bond debt, primarily because our mammoth road program is operate on a pay-cash-as-we-go basis.
Let's Hope He Goetz It
South Knox Bubba emailed to show off his recent post regarding David Goetz, Tennessee Gov.-elect Phil Bredesen's pick to head that political hot potato the Department of Finance & Administration, which sits at the epicenter of all battles over the state budget and taxes and 'tax reform' (the latter generally referring, of course, to the income tax). SKB - a Democrat and perhaps even an income tax supporter - nonetheless finds an interesting connection that may well tick off those Tennesseans who oppose the income tax (which is to say most of them). Goetz is connected to something called the "Tennessee Prosperity Project," which is a business group focused on education reform and reform of the tax and regulatory structure to improve the business climate, which is all well and good. SKB’s post links to a Tennessee Prosperity Project website that includes a Power Point presentation that stumps for "aggressive tax reform," though not specifically an income tax. But ain’t nobody proposed any serious "tax reform" plan that didn't include an income tax. Not even me
Bubba writes, "Thought you'd be interested in this (even though you're probably way ahead of the curve as usual)."
Thanks for the compliment, Bubba, but you're out in front on this one. Good work. Nay, excellent work: the more we know about Bredesen's cabinet picks, the better, no matter which side of the issues we're on.
As for Goetz, I don't know whether or not he supports the income tax. I hope he doesn't. But it is far more important that he change the culture of deception that infused the Department of Finance and Administration's executive suites in the last four years. Under his two immediate predecessors at F&A, the department routinely issued intentionally misleading press releases regarding state tax revenues - deceptions designed to enhance the 'fiscal crisis" atmosphere and improve the chances of passing an income tax. As I've extensively and meticulously documented here on this site, the department would spin its revenue press releases to focus selectively on data that supported their case, while ignoring or downplaying data that didn't.
If Goetz reforms F&A so that its revenue reports are complete, accurate and free of political spin, he'll be good for the department, good for Gov. Bredesen and good for the people of Tennessee - regardless of his personal views on the income tax.
UPDATE: Bubba says he doesn't support the income tax.
An Economic Boost
The fine folks over at High Frequency Economics expect President Bush's economic package to pass "largely intact," and add 3/4 of a point to GDP.
Some excerpts from their daily email newsletter:
The package is worth about $670B over 10 years, with nearly half of the total earmarked to finance the elimination of the tax on dividends. The elimination of the dividend tax will immediately raise the net present value of the cashflow investors receive from dividend-paying stocks. It should therefore induce a significant, onetime rise in the prices of such stocks relative to those which pay low or no dividends. One consequence of this might eventually be that tech sector companies, many of which have eschewed dividends, will be forced into paying them in order to maintain the attractiveness of their stocks.
The president is clearly willing to buy the necessary support for his proposals from a few Senate Democrats by offering new benefits for people who have exhausted their entitlement to unemployment insurance, and by raising the child tax credit. Accordingly, while there will be a noisy debate in Congress, we expect the president's proposals to pass largely intact, probably by Easter. In order to ensure that consumers' spending power is boosted by the tax measures as soon as possible, media reports indicate that the administration intends ensure that income tax withholdings are reduced immediately after the package becomes law. The unemployment assistance is to be backdated to December 28, the date on which the previous federal assistance program expired.
Sounds good to me.
InstaProfile in the Trib
The Chicago Tribune explains the amazing success of Instapundit.com, perhaps the web's most successful and important weblog.
For his part, Reynolds explains his success this way: "People are hard-wired to gossip and what's going on the world, and I think blogs are a reflection of that. They're most like 18th Century coffee houses where people got together to talk about the latest news."
Read the whole thing and you'll understand this new form of journalism called "blogs."
Bush Economic Plan a "Big Bang"
I like the new economic plan from President Bush. I'll defer to economist Larry Kudlow to explain why the Bush plan is so good.
Eliminating the double taxation of corporate dividends will raise stock market values, increase investor returns, and improve both corporate governance and corporate finance practices, in effect becoming the most significant pro-growth tax reform since President Ronald Reagan slashed personal income-tax rates twenty years ago.
Kudlow says the plan is not only good economics, it's good politics. I concur. More than half of all Americans are now invested in the stock market, and the Bush plan will appeal to all of them.
The alternative, says Kudlow:
Democrats, of course, are dusting off their class warfare arguments, criticizing the Bush plan as another tax cut for the rich. But this is a content-less position that has failed miserably in recent elections.
A Curious Appointment
Of all of the appointments to Tennessee's new "Independent" Tax Study Commission, perhaps none is more curious than House Speaker Jimmy Naifeh's selection of Hal Roe. Naifeh is a partisan Democrat. Roe is a Republican who ran for the state Senate last year. Why would Naifeh appoint a Republican to the commission? Perhaps the answer lies with Mr. Roe, who unsuccessfully challenged sitting state Sen. Jeff Miller in the 2002 Republican primary in satate Senate District 9.
Miller was an outspoken opponent of the income tax - and signed the anti-tax pledge. As best as I can tell, Roe did not sign the pledge. If that is incorrect, I will correct the record here.
I've done some research seeking whether Mr. Roe supported the income tax. So far, I've come up with nothing to indicate if he did, or did not. In interviews with Cleveland Daily Banner and the Chattanooga Times-Free Press, Roe indicated he supported a constitutional convention on taxes, but did not say what he hoped that convention would produce. An income tax? A ban on income taxes? A hard cap on taxes and spending? What?
The Chattanooga paper reports reported on July 29, 2002: Republican candidate Hal Roe, president of Bradley Equipment Rentals, said he also supports a constitutional convention on taxes to "let the people decide." He said he also wants to address problems with TennCare.
Meanwhile, the Cleveland Daily Banner reported this week that Roe wants the commisison to "determine who the tax burden is really on":
Roe said the legislature itself has done tax studies, but this independent committee will be able to evaluate the soundness and fairness of the current tax structure more completely. "We will take a look at the tax structure as an independent group, instead of as a legislative group," he said.
"Little has changed in the state tax structure since the 1940's," said Roe. "We will need to determine who the tax burden is really on." Roe added Tennessee's tax structure should be reviewed every few years, instead of just when there is a shortfall. He said the committee represents a cross section of people across the state. "I feel we can come up with several things to recommend to the legislature," Roe said.
Again, not enough to indicate Roe's position on the income tax. But the fact that Naifeh appointed Roe, who challenged one of the legislature's strongest anti-tax senators, speaks volumes. I can't imagin Naifeh would have appointed Roe to the commission if Roe wasn't at least open to an income tax.
If you have any specific information regarding Mr. Hal Roe vis a vis his position on the income tax, his primary election challenge to anti-tax state Sen. Jeff Miller, or his connection to income tax architect House Speaker Jimmy Naifeh, who please contact me at bhhobbs -at- comcast.net.
That's what the people who did this are.
The FBI considers the Earth Liberation Front one of the nation's most prolific domestic terrorist organizations. It is thought to be responsible for the 1998 torching of a ski resort in Vail, Colo., considered the most destructive act of eco-terrorism in U.S. history
The Bush doctrine - anyone who harbors a terrorist or helps them is also guilty of terrorism - should be applied, swiftly, to these wackos before they kill someone.
But instead, the ivory towers of academia are aiding and abetting these criminals - and getting away with it.
The list of participants for a California State University event on the environment reads like an international Who's Who of eco-terrorists. One man is wanted by authorities in two countries. Billed as "Revolutionary Environmentalism: A Dialogue Between Activists and Academics," the Feb. 12-14 conference is an attempt by the Fresno-based university to create a "statement of principles that represents the radical environmental community." Sponsored by the school's Department of Political Science and Public Administration, the conference on the "practical, political, and spiritual aspects of revolutionary environmentalism" is designed to aid understanding of the growing movement of sabotage. Confirmed participants include Paul Watson, a captain with the Sea Shepherd Conservation Society who left Greenpeace because his method of ramming whaling ships differed from the group's policy of nonviolence. Mr. Watson, whose ship bears a skull-and-crossbones flag, is wanted in Costa Rica for ramming a ship and in Iceland for sinking whaling ships. Gary Yourofsky, a representative from People for the Ethical Treatment of Animals who has been arrested more than a dozen times for liberating minks, will also attend. Ric Scarce, a Michigan State University sociology professor, is expected to attend. Mr. Scarce was jailed for refusing to cooperate with a grand jury on the activities of the Earth Liberation Front (ELF), a group that takes credit for numerous acts of arson. Participants also include Craig Rosebraugh, former ELF spokesman who refused to answer questions during a congressional hearing on his organization's criminal activities, and Leslie Pickering, Mr. Rosebraugh's successor at the ELF. ELF's sister group, the Animal Liberation Front, will be represented by convicted arsonist Rodney Coronado. He spent four years in prison for torching a Michigan State University lab.
"I think it's remarkable that a university with public money is going to be validating and legitimizing this sort of violence at a time when America is so concerned about terrorism," said David Martosko, director of research for the Center for Consumer Freedom. "Here is a rouge's gallery of domestic terrorists and people who move in domestic terrorist circles putting it out there like it's a conference of literary scholars with no balance at all presented from an opposing viewpoint."
Overall discussions at the conference will focus on "the history, philosophy, economics, politics and current strategy of revolutionary environmental activism." There will be a roundtable panel to discuss "the ethics of sabotage" and "Is environmentalism a spirituality?"
Bias on the Tax Study Commission
A reader wrote to say that Gary Poe, the Eastman Chemical exec just appointed to Tennessee's new "Tax Study Commission," may be bringing a pro-income tax bias to that supposedly "independent" commission that is supposed to take a clean-sheet look at Tennessee's tax structure. The reader, whose name I'm not revealing because his email address indicates he works for Poe, says Poe "wrote an op-ed in the Kingsport Times-News about one year ago advocating an income tax."
I searched the Kingsport Times-News website for that op-ed, but couldn't find it. However, it isn't clear if the paper posts all of its guest commentaries online. The paper does not post all of its content in general on the site. I emailed Times-News reporter Hank Hayes, asking if he recalled such an op-ed. Here is Hayes' emailed response:
I just did an archive search of our web site and couldn't find anything. If you know of an exact date, I'll try again. Or you can try your own archive search of our web site. It wouldn't surprise me if Eastman, Mr. Poe's employer, was pro-income tax. The Kingsport chamber endorsed the income tax last year.
Incidentally, Hayes' story about Poe's appointment quotes Poe as critical of inaction in the past on implementing the recommendations of prior tax study commissions. Those commissions all recommended an income tax.
I think you can mark Poe down as a biased pro-income tax member of the commission but it would help to find a copy of that op-ed. If you live near Kingsport and can find a copy of it in a library, please contact me. I'd like to get a copy and scan it in and post it on the web so that Tennesseans know Poe's bias and can evaluate his work and the work of the commission accordingly. My email address is listed in the "about this site" section on the right-side column.
Other income tax supporters on the commission include former state education commissioner Nelson Andrews, who will chair the commission; former state Sen. Robert Rochelle, who sponsored an income tax bill in the last General Assembly; James Neeley, chairman of the state AFL-CIO, which supports the income tax; and Julius Johnson, president of the Tennessee Farm Bureau, another organization that endorsed the income tax.
As for Andrews, this story notes he was a supporter of Gov. Ned McWherter's push for an income tax. It also notes that Gov. Sundquist's spokeswoman says the governor picked commission members based on their agreement with his general political philosophy on tax reform. That is to say, they support an income tax. Thus the deck is stacked.
There is at least one glimmer of hope: Joe Huddleston, a former commissioner of the Tennessee Department of Revenue, has testified in the past that Tennessee's current tax structure is not the state's primary problem when it comes to revenues. According to this 1999 report from the now-defunct Tennessee Institute for Public Policy:
Joe Huddleston, former Commissioner of the Tennessee Department of Revenue, stated in testimony before the legislature earlier this year that the primary tax problem in Tennessee is not its tax structure, but the myriad of sales tax exemptions granted to politically powerful companies and industries. There are currently over 200 state sales tax exemptions that resulted in $3.345 billion in reduced state and local tax revenue ($2.575 billion/state; $770 million/local) during FY 1998, according to the Department of Finance and Administration.
It's not clear whether Huddleston also supports an income tax, but at least it appears he doesn't think passing one is the first priority.
Political State Report is a new cooperative political blog involving writers from around the country - and from all over the political spectrum - covering politics in their own states. The blog, located at PolState.com is fast becoming a must-read on the Internet if you're a political junkie. I'm one of two Tennessee writers involved with the site. Meanwhile, blogger Patrick Ruffini is suggesting bloggers be included among the 15,000 or so media covering the 2004 GOP convention in NYC. He makes a good case.
Regurgitating the Spin
The Kingsport Times-News repeats the long-ago discredited notion that TennCare has "saved" the state money in this editorial today:
While the cost of TennCare is a constant source of irritation to many lawmakers, the fact is, state figures show the program has saved the federal government $740 million over the life of the program and saved Tennessee $1 billion versus the traditional fee-for-service Medicaid program operated by other states. Still, many lawmakers continue to say the state simply cannot afford TennCare, no matter what its advantages.
Here are the facts the Kingsport paper either ignores or never learned because they were too busy swallowing the Sundquist administration's duplicitous spin:
The "state figures" the paper cites are created by the state to justify TennCare. They are biased. The state calculates its savings based on 1994 projections of the future growth of the cost of Medicaid and compares TennCare's cost to those projected growth figures, resulting in its "savings." But the truth is, from 1994 through 2001, Medicaid costs did not rise nearly as fast as those projections indicated. In fact, costs rose about the same as did TennCare. The state is clinging to its "projected" savings and declaring them to be real, but compared to the actual growth in the cost of Medicaid, TennCare did not "save" any real money.
In fact, the Urban Institute, a left-leaning think tank in D.C., did an exhaustive study and found no net savings to the state from TennCare versus the old Medicaid system.
One Good Idea
Knoxville News-Sentinel political reporter Tom Humphrey has a good idea. And it sounds a lot like my good idea. What does this mean? It means the notion has gone mainstream that the only way Tennessee will have an income tax is if it is approved by the people as a constitutional amendment, and is capped. Humphrey is right when he says "income tax advocates have failed so miserably in their efforts to enact reform by legislation that a statutory income tax is already dead - if not forever, at least for the foreseeable future. Thus, an astute income tax advocate should recognize that putting the issue to a vote is the only real choice nowadays." But I think he's wrong on one count. I believe people would approve approve an income tax under certain conditions. But if the cap on that tax is the one Humprey describes - a weak cap breakable by a two-thirds vote of the legislature - it won't pass. But if it is capped with a Taxpayers Bill of Rights, similar to Colorado's, which gives the people the final say over tax increases, I believe such an income tax reform plan could pass in 2006. Without a strong TABOR, it would be defeated.
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 here. And this link will take you to a post with links to multiple other TABOR resources.
Bredesen: Budget Cuts Coming
Tennessee Gov.-elect Phil Bredesen says across-the-board budget cuts are "on the table" as a solution to Tennessee's budget shortfall.
Unlike many states, Tennessee's budget gap this year is not primarily revenue-related. After a $900 million tax increase last year, revenue is coming in only slightly below estimates - with this year's shortfall expected to be only about $100 million, in a state with a $20 billion budget. However, the state faces a possible $300 million hit for its bloated TennCare program if a federal judge's order restoring 200,000 ineligible people to the rolls of the healthcare program is not overturned. And another judge has ordered the state to equalize teacher pay across the state, but left it up to the legislature to determine how to do that. Estimates range from $50 million to $450 million for that - although the larger estimate also includes raising teacher pay to the average among southeastern states, not just equalizing teacher pay across Tennessee.
Bredesen, who takes office Jan. 18, promises a "no-tax-increase budget" and tells The Tennessean says his "obligation is to submit a budget that is balanced with the resources available." Bredesen says that will likely mean "some serious belt-tightening" and "the issue of furloughs and layoffs is on the table. The idea of across-the-board budget cuts for each department, as many other states have done in this environment, is on the table."
That will mark a distinct change from the previous administration of Republican Gov. Don Sundquist, who pushed annual billion-dollar spending increases despite not having the revenue to pay for them - and then demanded the legislature pass an income tax or some sort of tax increase to pay for it.
Such an approach was not unexpected from Bredesen - a Democrat who won by winning over Republican voters in East Tennessee and in the Nashville suburbs in Middle Tennessee in part by pledging a level of fiscal conservatism and management not provided in the prior eight years by Sundquist, who, ironically, styled himself a "fiscal conservative."
Meanwhile, another report says legislators are eyeing the sacred road fund and funds the state shares with local governments. Bredesen says he doesn't want to dip into those. This also marks a big change from the Sundquist years, in which the governor repeatedly spent one-time reserve funds and monies to pay for recurring expenses in order to present "balanced" budgets that merely set up the state for worse deficits the following year.
Good News/Bad News
The New York Times says the Bush administration's next economic package will include not only about $600 billion in tax cuts - good! - but also help for fiscally ailing states in the form of "billions of dollars for state governments wrestling with huge budget shortfalls." That's bad news. I understand the politics of it - Bush can't hope to win some states in 2004 if his opponent can run ads telling the voters of that state that Bush left them to suffer as their legislature either "slashed programs for the poor and the children" or "raised taxes on the working people." But by bailing out the states, the administration merely delays the day when state governments will learn their lessons and be more fiscally responsible during boom years, so as not to set themselves up for massive deficits in the inevitable lean years. I've discussed that before here and here.
At least, if the NYT is right, some of that help for states will go toward state Medicaid programs and "homeland security" programs, rather than just issuing checks to paper over the states' deficits. That could be good news for Tennessee, which is suffering greatly under an out-of-control Medicaid-replacement called TennCare. But long-term it will prevent Tennessee's legislators and bureaucrats from learning much-needed lessons about fiscal conservatism.
Religion of Peace® Update
Glenn Reynolds has an update on the latest in France courtesy of Islam-The Religion of Peace®.
Meanwhile, the New York Times reports that non-alcoholic beer is a big hit in the Islamic world.
"Al Ahram has beautiful malt drinks, and we believe these have a solid future in Saudi Arabia," said a Heineken spokesman, Albert Holtzappel. "The nonalcoholic drinks are very fine, and very attractive for export. We are going to help Al Ahram to improve and expand further with our brewery technology, financial and technical support." Ahmed Zayat, executive chairman of Ahram, said his company's products would benefit greatly from Heineken's distribution muscle. Heineken owns 110 breweries in countries around the world, including some with Muslim majorities including Indonesia, Nigeria and Arab countries like Morocco and Lebanon. "There are 1.3 billion Muslims in the world, and many of them want to drink beer but do not because they are religiously observant or for social reasons," Mr. Zayat said. "They want something fizzy, malt-based, flavored and socially acceptable."
My guess is, many of them want to drink beer but do not because they don't want to be rounded up and beaten by the religious police under the direction of the Islamofacist governments they live under. But it's just a guess.
Personally, I think "pineapple-flavored Fayrouz" sounds disgusting. Ditto the mango-flavored version.
Philly Mayor "Regrets" First Amendment
This is a rather shocking statement from Philadelphia Mayor John Street, regarding an entry in the annual Philadelphia "Mummers Parade" that offended the local Catholic Church hierarchy:
"I am personally offended by this and regret that under the Constitution I am limited by what I am able to do about it," Street said in a statement. "I encourage the brigade to rethink the theme for its performance and not focus on an episode that is so painful for many Americans."
The Mayor asked his legal department to look into whether the entry could be excluded from parade, apparently after receiving complaints from Cardinal Anthony J. Bevilacqua of the Philadelphia archdiocese. The comic troupe's planned parade entry included a pope, a couple of cardinals, a couple of nuns in a go-go cage, a couple of altar boys, and some cops chasing the priests. It's meant as satire, and the leader of the comic troupe is a Catholic. Sure, it's in bad taste. But, then, so is the whole Mummers Parade. (And I say that as a native Philadelphian.)
So, the mayor of the nation's fifth-largest city "regrets" the First Amendment. Amazing. And a terrible shame - because the real target of his regret should be that the Catholic Church - or any powerful institution - would so rapidly turn to ask the government to muzzle its critics.
UPDATE 1/4/03: They decided not to do it. The Slick Duck Comic Brigade scrapped its parody of the Catholic priest sex-abuse scandal during Saturday's 102nd Mummers Parade in Philadelphia. The head of the group declared his members were all "good Catholic boys." Apparently, the group has informed local Philly media it was all a joke and they never really intended to present the mean spoof of the Catholic church sex scandal. The joke's on Mayor Street and Cardinal Bevilacqua, who came out of the incident looking heavy-handed and thin-skinned respectively.
New Income Tax Task Force Starts Badly
The new "Independent Tax Structure Study Commission" that is ostensibly supposed to be neutral as it "studies" Tennessee's tax xstructure and makes recommendations for "reform" is anything but neutral. It's very mission - tax reform - and the fact that 10 of its 15 members are appointed by outspoken supporters of the income tax indicate the results of its work are predetermined.
So it is good news that the committee is starting off under a cloud, under fire for failing to adequately represent women and minorities. In fact, of the first 14 appointees named, all 14 are white men. Gov. Don Sundquist appointed five white men, including Nelson Andrews, an income tax supporter, as chairman of the committee, and former state Sen. Robert Rochelle, the Senate's leading proponent of the state income. Rochelle resigned his 2002 senate campaign after polls showed him losing badly to an anti-income tax legislator, Mae Beavers, who eventually won the seat. Lt. Gov. John Wilder appointed five white men At least one of them, Tennessee AFL-CIO head Jim Neeley, is an income tax supporter.
If you have documented proof of the pro- or anti-income tax leanings of the remaining members of the tax panel appointed by Sunquist, Wilder or Naifeh, please send that information here. My email address is listed in the right-hand column. The more members "outed" as pro-income tax, the less credible the commission's final report will be to the general public.
I've posted more commentary on the tax study commission at PolState.com, including why I think the July 1, 2004, deadline for the commission to issue its report is good timing for opponents of the income tax.
The RIAA Can't Explain This
Many music industry representatives believe unauthorized downloading of music off the Internet is contributing to the decline in sales. If they are right, then the Recording Industry Association of America needs to explain this:
Country music bucked the trend of declining album sales last year, posting a 12.3% gain, while sales in all music categories went down 8.7%.
Tell us, RIAA: Did "unauthorized" online file-sharing magically boost sales of one genre while reducing sales of all other genres? If so, how? Where's the logic in that? If not, then what caused the different sales trends? Quality?
UPDATE: Is this a country song, or what?
Trouble in Paradise
This isn't supposed to be. I mean, we here in Tennessee were told that it was the sales tax that was too volatile and that an income tax was the cure, the way to stabilize revenues and the state budget. Based on what we were told here in Tennessee, Oregon should be doing just fine. They have no sales tax, just an income tax. So I was surprised to read this in the Seattle Times:
Hooked on a volatile state income tax, Oregon has suffered a $1.9 billion shortfall in revenues once expected to fuel a two-year budget of more than $11 billion. Legislators are asking voters in a few weeks to approve a temporary boost in the income tax. But Measure 28, which would only bring in an additional $313 million, is not expected to pass...
North Korea Can't Win
Donald Sensing explains why North Korea can wreak devastation on South Korea but would ultimately lose a second Korean War. It has something to do with the Battle of Omdurman in Sudan, 1898.
The North can invade the South, but it cannot win. The ensuing war would be disastrous for the South in terms of human loss, also for the North unless the war ended with the South's suzerainty over the North. But even so, the North Korean people would suffer very greatly until then. The problem, though, is not that the North could win such a war. It is that its isolated, self-justifying oligarchy might think it can win. And with its impending development of atomic weapons, it may think that all the more.
Liberals Looking for a "Limbaugh Loophole"
I was mulling over this New York Times story about the Democrats looking to groom a liberal Rush Limbaugh and start a liberal news network and it ocurred to me that there's more to the story than just liberal envy of the success of Limbaugh, the Fox News Network, and such. I think it has to do with the fallout from campaign finance reform. Democrats may be worried that campaign finance reform will partly muzzle them. Consider this: campaign finance reform bans special-interest groups from running issues ads in the last few weeks of a campaign. The provision is being challenged on constitutional grounds (it appears to violate the First Amendment) but Democrats believe the provision should stand. If it does, the liberals know Rush will continue to reach 20 million listeners a week with a conservative message, and others like Sean Hannity are also providing conservative commentary to a large national audience. But the liberals have no such built-in "loophole" of a successful talk radio host to help them get around the impact of campaign finance reform.
New Political Blog
There's a new political blog, the Political State Report at PolState.com, and it's worth you checking regularly. I'm one of the Tennessee correspondents for the all-volunteer site, which aims to cover politics at the state level. My latest posting at PolState.com is here.
Some Get It
Arizona's new governor says she won't seek a tax increase to balance the state budget; she'll rely on spending cuts instead. Arizona blogger David Dodenhoff says Napolitano - a Democrat - is just bending to political reality in conservative Arizona.
As a practical matter, Governor-elect Napolitano probably has no choice other than to make up the shortfall with spending cuts; a conservative legislature would be very reluctant to raise taxes, particularly in a sputtering economy. Under the circumstances, any major spending initiatives are clearly out of the question. Thus, in the near term at least, Napolitano will have to stake her reputation on effectively managing the state's budget crisis rather than funding new programs and policies.
Ultimately, the politics of the budget deficit should work to Napolitano's advantage. Eventually, the economy will turn around and begin throwing off revenues as it did through most of the 1990s. Going into the 2006 election, therefore, Napolitano may very well be sitting on budget surpluses and opportunities to fund new programs, which she can claim as the result of her budget stewardship.
The interesting thing about this is, some Democrats seem to understand that cutting spending is the real answer to a budget gap, while some Republicans don't.
This Will Help the Economy
The "luxury tax" of 10 percent of the cost of a luxury car above $30,000 has quietly ended, reports the Washington Post.
The tax, enacted in 1990 as part of a package of taxes on "envy items," including boats, furs, jewelry and airplanes, has long been a thorn in the side of high-end car dealers. The levy originally amounted to 10 percent of the amount by which a car's price exceeded $30,000. Congress backtracked in 1993 and repealed the tax on the other luxury items after being blamed for the collapse of the pleasure-boat industry. But cars continued to be taxed.
Retail Sales Update
You've probably heard or read a few news stories describing the holiday shopping season rather hyperbolically as the worst since the 1970s. If you've read my blog much, you've seen me suggest those reports are, uh, wrong.
Well, I'm not the only one. The economists at High Frequency Economics, in Valhalla, N.Y., say it has been a pretty good year for retail - and slam news coverage of the topic - in their daily emailed newsletter.
With the peak holiday and post-holiday frenzy in the malls now over, there are already plenty of anecdotes and surveys available to "help" you assess the strength of spending. We remain of the view, however, that you should treat all surveys, media reports and individual stores' trading results with great skepticism. Remember that the point of reading all these reports—we presume—is to try to pin down the official December sales figures, which will be released on January 14.
The key numbers in the retail sales report are the month-to-month, seasonally adjusted, changes in total and non-auto sales. But almost all the survey and anecdotal data reported by the media are expressed in year-over-year terms. Compared to previous years, the year-over-year increase in holiday sales this year is bound to be low, because the trend rate of growth of sales has been slowing for three years. A low year-over-year number, however, will not necessarily result in a small or negative month-to-month change.
And then there's the subjective question of what constitutes a good month-to-month number: We were amused by a Reuters report in Tuesday's New York Times, which said that the "Redbook report showed a meager 0.7 percent gain for the month [December] as a whole compared with November." Given that 0.7 annualizes to 8.7, and that non-auto sales rose by just 5.0 in the year to November, we would be very happy indeed to see that number printed in the official report.
Bear in mind, too, that media reports tend to concentrate on large store chains, whose performance does not necessarily reflect the overall picture in any given month. Wal-Mart is the world's biggest retailer, but not everyone shops there. There may well be big regional differences in retailers' performance, too, so we tend not to take any notice of numbers purporting to show mall traffic in particular locations was up or down or unchanged compared to last year. We're not talking about Andorra here; the U.S. is too big a place to draw national conclusions from limited regional data.
For now, our view remains that it is reasonable to expect a modest gain in core December retail sales compared to November. Together with the stronger than expected 0.5 increase in real consumers' spending in November, reported over the holiday, this suggests that consumption did manage to rise—just—in the fourth quarter. We had been expecting spending to be unchanged. Accordingly, we have moved up our working assumption—it is too soon to call it a forecast—for fourth quarter GDP growth to about 1 from zero.
The report was written by Ian Shepherdson, Chief U.S. economist for HFE.
Those Evil Corporations
All last year you heard about big evil corporations. Bad dog! Bad dog! Well, now it's a new year and there's a new tune: Big Business is likely to pull the economy out of its slump. Good doggie!
After two years of cost-cutting, economists expect companies to start using rising profits to rebuild inventories and make capital improvements in 2003, helping to fuel an economic recovery, a survey published Thursday said. The Wall Street Journal's 2003 economic-forecast survey of 55 economists indicates that economists generally believe increased corporate spending will contribute to steady economic growth throughout the year. "Businesses are making higher profits and generating more cash and they have to do something with it," Ian Shepherdson, chief U.S. economist at High Frequency Economics in Valhalla, N.Y., told the Journal.
This Story Is More Important than You Might Think
A tiny nation you never heard of (unless you read this last October) has lost its one-boat navy. Nigeria appears to have swiped it.
Why is that important? Because the tiny two-island nation of Sao Tome and Principe, off the coast of Nigeria, sits atop massive oil reserves. And is pro-American. And Nigeria - increasingly falling under the sway of Islamofacists - covets that oil and increasingly seeks to intimidate Sao Tome.
Says today's WSJ: Everything that happens in the former Portuguese colony has taken on a new weight since the world discovered that below Sao Tome's waters lie an estimated four billion barrels of crude oil. That's one reason the Bush administration suddenly views Sao Tome as a new strategic ally far from the turbulent Middle East. Sao Tome fears that by holding hostage its Coast Guard, Nigeria is trying to intimidate it to gain leverage over the potential wealth lying beneath their shared frontier in the Gulf of Guinea. At the moment, the two countries are supposed to jointly develop the oil in those waters, subject to a 2001 treaty.
For more on Sao Tome and why the Bush administration was reported to be considering helping the little nation out by establishing a friendly U.S. military presence there, click here.
Also, this BBC article from October reports that there are no U.S. plans for a full-scale military base on the tiny island, but that "the US was looking at providing Sao Tome with patrol boats to improve its maritime and customs controls, and would be expanding co-operation in other areas. Even if a military base is now discounted, there is no doubt that the US is increasingly interested in the 60 billion barrels of proven oil reserves in the Gulf of Guinea."
To put that in perspective, Saudi Arabia has about 250 billion barrels of proven oil reserves.
Given the role of Islam-The Religion of Peace® in both terrorism and many of the largest oil-producing nations, you may be wondering about the religious make-up of Sao Tome. Me too. So I looked it up. Turns out the little nation of 140,000 people is largely Roman Catholic. And Sao Tome's constitution provides for freedom of religion. Here's a link to some more information about that.
Oh, and Sao Tome is a democracy, and a stable one at that.
Here’s a quote from the Oct. 7, 2002, New Yorker magazine cover story ( a must-read, not available online), quoting an unnamed State Department official about Sao Tome’s oil:
"We import fifty per cent of our oil. Supplier number one is Canada, two is Saudi Arabia, three is Venezuela, four is Mexico, and five is Nigeria. Folks have finally figured out that we don't need to rely on the Middle East for oil. African oil is less sticky than the stuff you get in the Middle East, and much of it is in deep water far offshore, so the natives don't notice it being taken, whereas in the Middle East it's pumped out of the ground under the noses of Wahhabi fundamentalists. Then you have Sao Tome, which is basically the only stable democracy in West Africa. It's perfect."
UPDATE (1/4/03): Here's more info on that tiny African island nation of Sao Tome and the possibility that the U.S. might establish a military presence in the pro-American, oil-rich country. It's from early December but, hey, I've been busy.
Sao Tome and Principe's President Fradique de Menezes, is quoted in a recent article in The East African, published in Kenya as saying his country has reached agreement with the US for the construction of a naval base that will be able to accommodate aircraft carriers. Washington has denied that it wants to build a Sao Tome base, though it is hinting at "coastal patrol issues". Signs are that in the short term the US administration may want to play down the role of west Africa as a source of oil that would replace Mideast producers.
Up in Smoke
The Rocky Mountain News mocks New York City for thinking that it could raise the city tax on cigarettes from 8 cents a pack to $1.50 without it altering people's cigarette-buying habits.
The tax was the product of the usual mix of motives: pecuniary because it would bring in lots of money and patronizing: "Let's get people to quit this filthy habit by making it prohibitively expensive." The result of the tax hike, according to the Wall Street Journal, is that legitimate sales have fallen steeply, the number of tax stamps sold by the city is off 50 percent and the city has a thriving black market in contraband cigarettes, easily obtainable down Interstate 95 in the low-tobacco-tax states of Virginia and North Carolina. The politicians have thus unerringly honed in on that economic benchmark where it pays people to cheat.
The paper also notes that cigarette taxes are "brutally regressive, penalizing lower income smokers much more harshly than the well-to-do."
Here's a link to the WSJ story, which reports:
Smokers are in rebellion. Legitimate retail sales of cigarettes are down steeply. The number of cigarette-tax stamps sold by the city from August through November was down 50% from the same period a year ago. (Tax revenue, however, is still up sharply.)
Your Tax Dollars at Work
PBS is recruiting for Islam, says James Pinkerton.
To be sure, PBS puts on many shows about religion, especially around this time of the year. But there's a huge difference in their tone, depending, seemingly, on the faith. And the bottom line is that while Islam is held as beyond criticism, Christianity, by contrast, is held to close scrutiny. For example, immediately after the airing of "Muhammad" in Washington last week, Channel 22 re-ran "The Face: Jesus in Art," an intellectually and visually sumptuous chronicle of the changing depictions of Jesus over the centuries. "The Face" was not at all irreverent, but still, it kept its distance from Christian faith; assertions and declarations were always modified with phrases such as "Christians believe..." or "It is thought..." And there's nothing wrong with that. But there shouldn't be a double standard, in which Islam is treated as revealed truth while Christianity is treated as a good topic for an art-history lesson.
Read the whole thing. And be righteously angry that the Bush administration isn't trying to de-fund the Corporation for Public Broadcasting.
A Cry For Help
The Tennessean has some suggestions for Uncle Sam to help deficit-riddled states pay their bills. Some of their solutions and comments are quite surprising. The paper admits that "soaring healthcare costs" are to blame, although for three years the paper has steadfastly repeated the propaganda that TennCare was "saving" the state of Tennessee money. (It wasn't.) The paper also calls for "tax cuts aimed at lower- and middle-income taxpayers."
On the other hand, The Tennessean does repeat the spin that states are facing the "largest collective gap in state budgets in half a century," without mentioning that the largest single cause of that "collective gap" is California's mammoth deficit - a deficit caused by wild overspending during the first four years of Gov. Gray Davis' administration. As Orlando Sentinel columnist Peter A. Brown noted recently, "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." (There's more on Brown's column here.
The good news about the Tennessean editorial is it didn't go where the headline suggested it might: Calling on Congress to write checks to bail out the states, a very bad idea being pushed by some commentators on the big-government Left. Such "help" would be a bad idea, of course, forestall the day when state legislatures finally address the root cause of their budget crises: overspending.
The Instapundit has some good comments on this New York Times story reporting the not-so-surprising news that some college students with Internet-connected laptop PCs aren't paying attention in class.
The Times: The screens provide a silent commentary on the teacher's attention-grabbing skills. The moment he loses the thread, or fumbles with his own laptop to use its calculator, screens flip from classroom business to leisure. Students dash off e-mail notes and send instant messages. A young man who is chewing gum shows an amusing e-mail message to the woman next to him, and then switches over to read the online edition of The Wall Street Journal.
The Professor: I also tend to wander around the room a lot (I'm one of those don't-stay-behind-the-lectern professors), which may discourage some of that behavior. And I tend to call on the students who don't seem engaged. But I don't make any particular effort to ensure that students aren't surfing or IM-ing or whatever. They're grownups. If they're willing to risk their grades, and to look dumb when they're called on, well, I'm willing for them to do that too.
New Year, New Blog
Donald Sensing has moved his "One Hand Clapping" blog to a new home on the web, DonaldSensing.com. I'm a big fan of Sensing's blog. By the way, he's a United Methodist pastor in suburban Nashville who writes, often and intelligently, about military matters. And he wanted a new gun for Christmas. A Beretta AL 391 Target SL 12-gauge, automatic shotgun.
Axis of Evil Update
The Rocky Mountain News explains why we need to confront Iraq now, before they develop nukes. The two-word short version of the answer: North Korea.
Rather than being an example of why the United States should be ignoring Iraq, North Korea is an example of why the United States should be pre-emptively engaged with Iraq. Iraq has been violating U.N. resolutions for years, while North Korea's belligerence has recently escalated. Diplomacy long ago failed with Iraq; it is precisely what must be tried now with North Korea.
I've listened to this guy make speeches and answer media questions on TV and he's not impressive. So I'm glad he's going to run for president. It should help bring his Senate career to a quick end and give the GOP a chance to pick up a seat in North Carolina. Why do Democrats activists like this guy? He looks good. Yeah, but John Edwards still stands for the same old Democrat agenda that failed to attract voters in the 2002 elections.
"Conservative Media Bias" Claim Debunked
Reason's weblog reveals there's no there there in a story in the American Prospect,a liberal rag, that purported to "prove" the mainstream media has a conservative bias. Reason used Nexis to debunk the magazine's claim.
Stubborn Old Ideas
Tim Mahar of Manchester sends the following deconstruction of The Tennessean's lead editorial on this the first day of 2003.
A new year, a new governor, legislature
Tennessee greets the new year with a new governor preparing to take office and stubborn old issues refusing to budge.
Stubborn old issues can’t budge with stubborn old ideas budgeting more spending than revenues.
Gov.-elect Phil Bredesen and most of the legislature - old members and new - won office last year promising that tax reform was off the table. Tennesseans should welcome the chance to bury the rancor and discord over the past three sessions.
A stab at honesty: "tax reform" = "income tax" in Tennessee media and government language. California's total 2002 revenues from taxes and licenses were $12.9 billion lower than their revenues for 2001. Personal income tax collections were $11.5 billion lower and corporate income tax collections were $1.4 billion lower, accounting for every bit of the total revenue reduction. Sales tax and other collections were up slightly, offset by those that were down. But the income tax is California’s primary revenue source, accounting for 67% in 2001 and 61% in 2002. Tennessee can equal California’s “performance” with the healthy dose of stupidity required to implement "tax reform."
Events, however, are swiftly catching up with election year promises. Tennessee's new year bears more than a passing resemblance to the old one. The new governor identified some of the pressing issues himself. He wants to restore those who've been knocked off TennCare's rolls. That's not the only thing on TennCare's weighted agenda: Doctors continue to flee the system.
Again using California as an example: Medi-Cal, their version of HillaryCare Lite, costs $25 billion per year. Recently revealed fraud resulted in estimates of at least 10% fraud in the system. That $25 billion is five times TennCare’s cost in a state with a population seven times that of Tennessee. Medi-Cal serves 5 million people, about 14% of their population, while TennCare serves 1.4 million, about 25% of Tennessee’s population. Why Tennessee should have nearly double the percentage of its people on HillaryCare Lite is the question here. The number has to be cut to about 0.8 million to compare favorably with California. And California supposedly has a much higher number of illegal immigrants living off government largesse.
Tennessee's Supreme Court has dictated still another place on Tennessee's agenda: ordering Tennessee to equalize pay between rural and urban teachers. Bredesen, the former mayor of Nashville, has said he doesn't want to punish urban school districts to solve the problem.
The Supreme Court did not dictate how to equalize the pay. Among other ways, Tennessee can allot a fixed amount per teacher, and if the lowest current number is used, that will lower the total cost. Another way is to eliminate state funding of teacher salaries. Why should the state collect tax monies to subtract all its administrative costs before returning it to the school districts as payments? Eliminate all that mess, cut the state sales tax in half. The counties and local governments are already raising taxes unmercifully, taking their lessons in arrogance from the state government and its band of miscreant economists with their unconstitutionally optimistic “revenue estimates”.
Some lawmakers have seen savings and perhaps money to be had from the Department of Transportation, the only budget in government not struggling to make ends meet. Bredesen's appointment of Gerald Nicely certainly guarantees more efficiency but changing the culture of TDOT won't be easy.
Why target TDOT only? Several other areas of state government sit on funds that became assets at fiscal year ends. There may be as much as $4.7 billion in excess government wealth – TDOT represents about $0.3 billion of that.
The legislature has begun looking at how to establish a lottery and how to spend the winnings from expected proceeds. The new governor has weighed in on ideas of his own for distributing some of funds. Since the proceeds can go to scholarships, early childhood education and K-12 capital improvements, Tennessee's only new revenue source for the year won't be much help as the new administration assumes its duties.
Now the state will start spending the winnings, too? This is becoming another avenue for “tax reform”, since the idioconomists will optimistically inflate expected proceeds beyond reality while the hoodwinked legislature will spend based on those foulcasts. “Tax reform” will be needed to make up for the “deficits” in the foulcast “crisis”.
Apparently, the additional one-cent sales tax increase from last year's attempt to avoid tax reform won't be as much help on the budget as anticipated either. The continuing flight of sales to the Internet and a flat economy have kept gains from the sales tax at a minimum.
The tax increase hasn’t helped? That’s total malarkey! Tax collections for the period July through November 2002 amount to $3.2 billion, compared with $2.9 billion in 2001, an increase of 10.67%. Sales and use taxes went from $1.9 billion to $2.2 billion, an increase of 13.6%. The 1% increase indicates a 16.7% increase if the tax base were equal, so obviously the tax base was reduced, to the tune of $240 million ($31.7 billion down to $31.4 billion). Gross receipts taxes were down 8.57%. Many items subject to sales and use taxes are selling at lower prices this year – it’s all something to do with supply and demand, basic economic principles. Governments don’t concern themselves with that too much, since their basic revenue-raising job is also known as confiscation. A Taxpayer Bill of Rights a la Colorado is the taxpayers’ only hope to control government revenue (supply), as their runaway giveaway programs (expenditures or demand) must increase because there is no control.
Amen. Thanks, Tim.
An Oxymoronic Luddite
She's a modern-day Luddite, which is an oxymoron if you really think about it. Make it, she's a present-day Luddite.
Then along came electric dishwashers. The dishwasher, she says, is "a perfect example of the wrong kind of technology. It leaves you with the non-creative work, the drudgery, which is scraping the plates and loading and unloading them. And it robs you of the only interesting aspect of dishwashing, which is how to get off that piece of cheese that's stuck to the plate. And it removes the opportunity for the kind of shared family task and conversation that dishwashing used to be.
Yeah. Or you can do what I do: Toss the dishes in the dishwasher, and go play with your kids.