Friday, April 30, 2010

TBTF Hits the Euro Zone - Acropolis Now

I am close to canceling my subscription to The Economist. Today's leader (not yet online) calls for swift and decisive action to bail out the Greeks despite their obstinate refusal to do anything about the root cause of their massive (115% of GDP) debt. I am typing the money quote (can't link it yet):
What then is to be done? The mounting crisis - and the fact that Greece will almost certainly not pay everybody back on time - will renew some calls to abandon it. That would spell chaos for Greece, European banks and other European countries: the effect would indeed be Lehman-like. hence the necessity, even at this stage, of a show of financial force, linked to the construction of a stronger firewall between Greece and Europe's other shaky countries. The priority for European policy-makers is to do the same as governments eventually did with the banks: to get ahead of the crisis and to convince investors that they will spend whatever is necessary.
In other words, invoke To Big Too Fail, again. The leader goes on to argue that for the Germans, this is not an act of charity, but of self interest. I say hogwash, because the crisis is that of moral hazard. Unless some nation or some large bank is allowed to fail and suffer the consequences, we are doomed to permanent bailouts. The Greeks to date have refused to take any significant action that would prevent a recurrence of their current predicament. KT is again spot on with today's analysis:

Greece has borrowed money until they can't service their debts. Also, they aren't competitive in the world market - their wages are too high relative to what they have to sell. You can tell this because they have huge trade imbalances. Greece is insolvent - that is, it's not that they need a loan to carry them through bad times, it's that they don't make enough money to make their loan payments. Bailing them out now will just sign you up for another bailout later.
Here in America we see this thinking in the supposed financial reform introduced by that paragon of fiscal rectitude, Chris Dodd. Dean points out the institutionalization of TBTF in the U.S bill in his excellent recap of the Heritage Foundation analysis. A snippet:
Creates a protected class of “too big to fail” firms. Section 113 of the bill establishes a “Financial Stability Oversight Council,” charged with identifying firms that would “pose a threat to the financial security of the United States if they encounter “material financial distress.” These firms would be subject to enhanced regulation. However, such a designation would also signal to the marketplace that these firms are too important to be allowed to fail and, perversely, allow them to take on undue risk.
When are we going to get it. The bailouts just keep coming because .... we just keep doing bailouts. STOP!

Weekend Music Chill

Because I'm in a certain mood:

Thursday, April 29, 2010

About That Tax Promise

Hows' that working out for you America?

1. Senate Dems plan to raise taxes on seniors depending on dividend checks for their income. (Actually on everyone, but I can outdo lefty dufus' with heart-wrenching headlines.) With the expiration of the Bush tax cuts in 2011, the tax rate on dividends for middle class Americans in the 28% marginal bracket is set to increase from 15% to 28% and all the way to 39.6% for those in the highest bracket. Not only is this a broken promise, what a way to encourage investment in the economy.

2. Dems now calling federal ObamaCare mandate a “tax”. Admittedly, this is so that the Obamacare mandate can pass constitutional muster in the Supreme Court, but hey, if they're going to call it a tax....

3. Dems to Allow Millions of Middle Class to Drift into Alternative Minimum Tax bracket, as previously reported in these pages. By not indexing the Alternative Minimum Tax for inflation millions of middle income Americans will be subject to the AMT. This happens when you have many otherwise legitimate deductions, such as charitable giving, that reduce your tax bill, but Uncle Sam wants his cut anyway. In years past, Congress has shielded middle class from these effects by raising the income level at which the tax kicks in. Their failure to do so now is surely a tax increase, because ordinary folks like myself will be paying more in taxes.

4. Obama Signs Federal Cigarette Tax Hike. Who do you think is paying this tax?

And what's on the horizon? The number of hints from the administration that they will propose a Value Added Tax are overwhelming. And will it come with the elimination of the income tax? (Don't forget to take my poll at right.) And what is cap and trade but a new tax on every American.

I'll close with this video about all the new taxes on Obamacare impact not just small businesses (most of whose proprietors make much less than $250,000) but how we are all hit with higher taxes.

So that's my answer to the left, when they ask how my taxes have increased under Obama as they sling epithets my way. That civil enough for you coffee partyers?

Wednesday, April 28, 2010

Greek Update and a California Question

And no, I don't mean a frat party at UCSD. KT has been keeping up with the Greek debt situation and alerted us to the fact that the interest on Greek two year debt has shot up to 26%, "...26% is what you would pay on your credit cards if you missed a payment." My question is to what extent is California going to go the way of Greece? California can't print its own money, just as Greece can't print euros. California apparently lacks the political will to tackle its structural deficit, a la Greece. California will inevitably ask the feds for a bailout, much as the Greeks have done with the EU. And the promise of a bailout may come too little, too late to help. Bottom line, I wouldn't be holding California debt if I could help it, and that includes waiting on an income tax refund check, like I'm doing right now. There's a name for chumps like me that paid too much in taxes to the state and are now waiting for that check, Unsecured Creditors. Last in line for you, pal.

Some Practical Financial Reform

Temple of Mut has an excellent piece on the "financial reform" proposed by Democrats and some practical proposals to actually implement some reform that is minimally intrusive. She also points to the best headline I have seen on the subject (from BizzyBlog):

‘Financial Reform’ Is a Massive Power Grab

Her practical reforms include limiting the oversight of financial derivatives to credit default swaps (not to instruments that have served markets well, such as cocoa futures) and limiting the amount of borrowing against the appraised value of a home, to limit the financial exposure. The money quote:

It matters much less to me who is responsible for the problems, because there is plenty of blame to go around. It matters to me that the problem be fixed on a permanent basis as best we can, in order to eliminate risk going forward for everyone involved. I think one thing we have learned from the financial crisis is that what happens on Wall Street impacts the average American much more than previously imagined. Financial liquidity freezes mean loans are not made and businesses fail. A credit crisis is not a good thing. Having unsold homes is not a good thing. Losing your job is not a good thing. Losing confidence that you are being told the total situation about a financial product is not a good thing. And especially ballooning our federal deficit to bail out selected companies at the expense of hard-working American taxpayers is not a good thing.

Immigration Conundrum

The immigration law in Arizona is a conundrum for me. We shouldn't fool ourselves into believing this doesn't energize the left and hurt our chances to remove deficit busting Obamacare loving Democrats in the fall. As I said yesterday, the law itself is fairly mild; but the political repercussions are large. This is particularly true because I strongly believe that Latino voters could easily be split away from the Democrats, not least because Democrat policies are resulting in their children getting pathetic education.

Since the federal government won't enforce the law and the steady trek of illegals through the backyards of Arizona residences seems likely to continue unabated; I am sympathetic to a law that merely reiterates the federal law. But at the same time, Republicans have refused to put forth an agenda to tackle this issue. Once again, we can blame Bush, who had an opportunity but failed. However, we need some kind of solution to dispel the notion that mere border enforcement is an adequate cure.

At the same time we need to push back on the notion that this law is somehow an example of racism run amok. It is not. It is very important that the state of Arizona make clear the manner in which they intend to enforce the law.

But I think that the energy this brings, especially the energizing of identity politics, hurts the GOP in the long run. I think the only silver lining is the foolish overreaction on the left; like boycotting Arizona Tea (bottled in New York), San Francisco banning city workers from traveling to AZ (who cares) and an Arizona congressman who calls for a boycott of his own state (only some serious gerrymandering can keep him in office.)

Tuesday, April 27, 2010

Systemic Thinking About Illegal Immigration

The Arizona law that seeks to enforce established U.S. law on immigration through the agency of the state law enforcement has put the spotlight on illegal immigration again. Solving this problem is in the best interests of Republicans, because it will continue to be used by the Democrats in their attempts to make the party look racist, which it is not.

The issue requires a realistic view of the incentives driving the current problem. For the businesses that employ the illegals, such as restaurants, poultry and meat packing, landscapers, and janitorial firms, the illegal immigrants are a source of cheaper labor. To say that native Americans are not willing to do these jobs is not technically correct; they are unwilling to do these jobs at the wages on offer from these businesses. Often, these businesses are able to employ the illegal immigrant at below the prevailing minimum wage, either directly or through not paying social security and withholding taxes for the worker. So there is a large incentive on the part of businesses to provide a magnet for people to cross the border illegally or overstay a visa, the other main source of illegal immigration.

For the workers, even the reduced wages on offer are a significant improvement over the wages available in Mexico or other third world nations. Their desperation for income drives them to the very dangerous undertaking of crossing into the United States. Because they are outside of the law, they also become prey for the unscrupulous. For the "coyotes" that guide them across the border and often abuse the illegals, they provide a steady income.

The border between the U.S. and Mexico is the primary entry point for this illegal immigration. The length of the border makes it very expensive to adequately patrol and prevent the immigration. Further, while one might infer that a person in the country illegally, i.e. without authorization, has committed the crime of "improper entry by an alien," that is not necessarily self evident. As a result, the actual violation is "illegal presence" and is not technically a crime. The civil sanction is deportation, not any criminal prosecution. This puts the Arizona law into a different light. Essentially, the police are being asked to perform a check for a civil violation while they going about enforcing Arizona's criminal code. One might view that as fairly benign or as overreach. For example, would we like the police to check the status of child support payments of everyone they arrest? One might argue this either way. Conversely, it puts the outcry against the law in a different context. What rights are being violated? However, as a libertarian, suspicious of state power, I have to ask what constitutes suspicion that an individual is an illegal alien and therefor subject to having to produce papers. Let's say I was jaywalking after going swimming at a community pool and have no identification on me and am detained. How do the police determine reasonable suspicion of my alien status? I think this is a tough one. I would have much preferred if the law had been limited to persons taken into custody, because then there is really no additional penalty for an immigration status check, they are already detained.

We find a situation with huge economic incentives driving behavior. Conservatives and libertarians often point out the folly of Obamacare and other government efforts by a similar analysis showing how stupid legislation drives behavior. The current example being the lack of enforceable penalties means that healthy people won't buy health insurance until they are sick, driving up insurance rates. With regards to illegal immigration, the only solution is to remove the economic incentives to cross the border illegally in search of work. This leaves these options:

1. A massive crackdown on employers who employ illegals to dry up the demand. This would involve massive increase in the policing and enforcement of existing law. We are already perhaps seeing a test run of this option in the San Diego prosecution of the French Gourmet restaurant. The federal DA is seeking forfeiture of the property of the restaurant as a means of leverage to settle the case. I personally have eaten there and had them provide food for catered events, so I am distressed. We see the heavy hand of the state and it makes me nervous.

2. A much more massive guest worker program that we currently have. If every worker who wanted to search for work in this country were allowed to enter the country after being fingerprinted, having a records check and being issued a green card; there would be no need for the trek across the Arizona desert. Further, such a program would probably require a sub-minimum wage to remove all the incentives to work illegally. Further, such a program would have to require workers to return to their country of origin when no longer working and prevent them from becoming citizens to be palatable. Such a program would be good for the economy, but would probably rouse organized labor to vehemently oppose it.

3. Vastly increase the budget to enforce the border with Mexico. I don't think this will solve the problem by itself, the economic incentives are too powerful. I know this is what most of my readers would like, but frankly, we should be realistic about how effective this will be. The East Germans couldn't stop the steady leakage of people out of that country even with a massive police apparatus and much less economic incentive. What are we going to do?

Ultimately some compromise among these three options will have to be made. As you may have guessed, I favor mostly option 2, because I believe that we are economically better off the more work that is performed in our own country. But we need to offer some solutions. Total intransigence just looks like nativism.

Monday, April 26, 2010

More Picking Winners and Losers

If there was any doubt as to why corporations and unions contribute large sums to political campaigns, today's news should dispel any doubt.

1. Ben Nelson (D-NEfarious) quietly introduced a change to the current financial reform legislation that would hugely benefit Berkshsire Hathaway, Warren Buffet's conglomerate investment vehicle, headquartered in Omaha. Berkshire Hathaway has large exposure to derivative contracts that the bill, as previously written, would have required reserves against potential losses against to be set aside. Now the bill will only apply to new derivatives. This probably makes sense, but why does it take lobbying by a firm led by one of the nation's wealthiest to make a change. Because it's about who wins and loses. No amount of campaign finance reform could stop Buffet from influencing this legislation. All he would have to do was to drop a few lines in his newsletter about what an idiot Ben Nelson was, and Nelson's opponent would be showered with cash. Unless were going to totally end free speech in America,.... (never mind, I don't want to give the left any ideas.)

2. Meanwhile the WSJ editorial pages discuss UPS latest attempt to compete with FedEx, by saddling FedEx with the same Teamster problems that plague UPS. What does Congress have to do with this? The rules for organizing unions at airlines and railroads are different for trucking companies. Under the Railway Labor Act, unions must organize nationally, which has been an impediment to unionization of FedEx. Meanwhile the teamsters strikes have often caused havoc at UPS including the infamous 1997 strike. The Chair of the House Transportation Committee, James Oberstar (D-mORalizing) has tried to change these rules to favor the Teamsters and UPS. So why wouldn't FedEx, UPS and the Teamsters all be pouring cash into key elections? For FedEx, their very survival as a company might be threatened.

3. As previously discussed on these pages, the current financial reform bill makes permanent the idea that the federal government will become the permanent Bailout King. Obama says otherwise, but why would his bill include a $50 billion dollar "resolution" fund, if it wasn't intended to be used to bail out companies that are in trouble. Obama says this won't cost tax payers a dime, because it will be paid for by taxes on financial firms. But how are those firms and their shareholders not taxpayers? And how is it that those expenses won't be passed along to consumers, since they will be a cost of doing business for every financial firm?
Obama wants to make this guy look small time.

4. Closer to my home of San Diego, a $228 million dollar redevelopment project downtown has been stalled, again, by the Coastal Commission. If you were a developer, spending money putting plans together, and having bid a project, wouldn't you be tempted to spend a little coin to influence the membership of the commission? I would think so.

None of this is to say that regulation is always bad, or government has no role. But we can see that the side effects of regulation and picking winners is to cause financial capital to be converted into political capital in our economy. That should cause us to regulate cautiously and minimally. It should mean that we try to limit the size and scope of government. It means, we should adopt the Tea Party agenda.

Sunday, April 25, 2010

My Enemies List - Public Employees Unions

The blogosphere and the conservative and libertarian press have come alive lately reporting and documentation of how the public employees unions are buying off state governments and creating an unsustainable welfare state. The size of state government budgets accrues not only to the amount of "services" delivered by the state, but the cost per employee of delivering same. Included are burgeoning retirement costs, and generous health care benefits. To provide my readers with a little background on this subject and to remind us of why the Tea Party is so desperately needed by the people of this state and the country as a whole, I have a little round up.

Back in January, Reason magazine got me tuned in to the magnitude of the problem with their cover article, Class War, How Public Servants Became our Masters. From things as small as running red lights with impunity, to rigged retirement rules that lets public employees live of taxes for half their adult lives after they quit work, it dives into the whole entitlement mindset and the unions who enable it. They followed with this quick hitter, also posted on YouTube (also read the article):

The most blood boiling article was this one from Steve Malanga, The Beholden State, in City Journal. He focuses on the unions' highly successful in the California to increase their own pay, and specifically points to the methods behind their success. As previously noted, this got my blood boiling so bad, I needed a med check, and had to read it in small doses.

Meanwhile, union marches continue unabated to squeeze more tax dollars out of you. TempleOfMut linked me to this article where union marchers demanded $40 billion in tax hikes in California, that's right, in the middle of 12% unemployment in the state. Dean has some great video from Illinois, where the lefty political unions are demanding more tax hikes. Taken together, we see a movement that can only be compared to the communist party of the old Soviet Union, where membership confers privilege and wealth not available to the average member of society. I do not make such comparisons lightly.

Given this extraordinary level of self serving by these unions, and the fact that their heavy influence over politicians comes from campaign cash and get out the vote efforts, I think that the Tea Party members must never vote for candidates with public union endorsements; including police and firefighters, maybe especially. I know that police union endorsements used to mean a candidate was tough on crime, but it is safer to say that is no longer true. From Malanga:

Even cops who run for office have felt the wrath of public-safety unions. Allan Mansoor served 16 years as a deputy sheriff in Orange County but angered police unions by publicly backing an initiative that would have required them to gain their members’ permission to spend dues on political activities. When the conservative Mansoor ran successfully for city council several years back in Costa Mesa, local cops and firefighters poured resources into helping his more liberal opponents. “I didn’t like seeing my dues go to candidates like Davis, so I supported efforts to curb that,” Mansoor says. “Union leaders didn’t like it, so they endorsed my opponents by claiming they were tougher on crime than I was.”
This is why I can't bring myself to endorse Howard Wayne in San Diego Council District 6, even though he was the most knowledgeable at the debate I covered.

So as the unofficial chief ideologue, I am asking the Tea Party movement to not vote for those candidates endorsed by the public employees unions. Along those lines, I would ask that Democrat readers of this blog give serious consideration to supporting Mickey Kaus for U.S. Senate against Barbara Boxer. Nice article on Kaus at Politico.

Disclaimer: I am an employee of the Federal Government, though not represented by a union. The opinions I express in this blog are my own and not that of any agency of the federal government.

Saturday, April 24, 2010

New Poll - VAT

I have put a poll about the Value Added Tax, since this will be on Obama's agenda in the future. B-Daddy's very short take on the idea of a new tax. Hell No. Now what if we threw in the same bill, the total elimination of the income tax? Now you're talking. Unfortunately, that is unlikely to happen, but I want to hear from the readers anyway. The other drawback of the VAT is that it is even less visible than the income tax and payroll tax, at least I can look at my pay stub and see what those are costing me. The VAT is so well hidden it really allows government to grow, but only when the private sector grows. Since it is simple, it will distort the economy far less than the income tax. Regardless, please take our poll. I'd like to hear from the Coffee Party on this issue, especially in the comment.

Now Dems Invoke PayGo - To Raise Middle Class Taxes

The President has been bragging that he has cut taxes for the middle class and that the Tea Party should thank him. Simultaneously, much of the vitriol directed at the Tea Party has taken the form of accusing us of being ignorant, liars or both over the issue of tax increases. To recap, if you are new to this space, our position is that the the massive deficits, Obamacare and stimulus will eventually result in middle class tax hikes, because there is nowhere else to get the money.
Right on cue, we get this headline from the AP (H/T HotAir) discussing how 30 million taxpayers will face tax increases (sounds like a middle class tax hike to me):

Millions face tax increases under Dems budget plan

The alternative is tax increases elsewhere in the revenue code averaging up to $100 billion a year after 2011 to continue alternative minimum tax relief and also curb taxes on people inheriting large estates.

The Democratic plan released Wednesday by Senate Budget Committee Chairman Kent Conrad of North Dakota relies on such boosts in revenues to carve the deficit from $1.4 trillion last year down to $545 billion by 2015.

From the HotAir article:
Democrats want to spend even more money, and do it on the backs of middle-class taxpayers. They waive Pay-Go for spending and invoke it for taxes. That’s exactly the kind of hypocrisy that has fueled Tea Party determination to kick Democrats out of power in the midterms.
Let's face facts lefties, stop the lies about the Tea Party. You know taxes are going to increase for the middle class, if not income taxes then through a Value Added Tax (VAT). (I could support a VAT, IF all income taxes were eliminated, but that isn't going to happen, maybe I should start a poll.) If you haven't been paying attention, the administration has been sending out signals that the outcome of a the deficit commission will be a new national tax like the Euro's VAT. The commissions actual name is the Commission on Fiscal Responsibility and Reform, but they should call it the Sneaky Commission Raising Excises Without Everyone Discerning it if they want truth in advertising.

Friday, April 23, 2010

Weekend Music Chill

I flew into Louis Armstrong New Orleans International airport Monday for some work on a "cloud computing" conference, don't ask. Schedule and work prevented me from seeing much of the city, but the conditions didn't look too bad where I went. The roads were atrocious; but can I say better of San Diego?
I did manage to get a fried catfish Po' Boy at the Sugar Shack in the French Quarter for dinner, my one bit of local flavor. It was excellent. I also overheard some conversation at the hotel that led me to believe that the city is still riding high over the Saints Super Bowl victory. So to honor the city and the Saints here is Louis Armstrong with an all time favorite.

Thursday, April 22, 2010

Harry Reid Wants to Seize a Bank Near You

Supposedly, Harry Reid is close to invoking a cloture vote on a financial regulation bill. This is an opportune time for the Republicans to truly grasp this issue and say no to more Democrat inspired crony capitalism. The GOP appears fearful that they will be tarred with a pro-Wall Street taint if they oppose the supposed increased regulation of the financial sector. As my readers are aware, I am no fan of the cozy relationships that allow the banks and other financial firms to get away with gambling with taxpayer backed dollars and then receiving bailouts when things head south. But the "Restoring American Financial Stability Act of 2010" does not such thing. Instead it grants the administration, of either party in power, the authority to take over any darn business it feels like. From the WSJ,
The federal government would get the power to seize teetering financial giants and dismantle them, just as the Federal Deposit Insurance Corporation now seizes failing banks.
The Republicans need to unite, now, against that one aspect of the bill. Think about the horrible power we are investing in the federal government. First, let's say your a big bank executive and you criticize the administration; whose to say if you aren't "teetering;" perhaps an emergency audit might show you are, so watch what you're saying. Second, and more worrisome, is that whole "dismantle" option. Whose to say how much dismantling is really dismantling. What if you are Bank of America and you just bought Merrill Lynch. Let's say that it turns out that was a dud buy. Let's say you make some big campaign donations. Let's say you get "dismantled" by the government buying Merrill Lynch and taking it off your hands.

I really don't care that much about the rest of the bill; it's probably crap too, but on the same order of crappiness that we are currently living with, so who cares. I just want the stinking bailouts to end. Is that too much to ask? Call your congresscritter and let them know that we just want the bailouts to stop. We want all power to bail out financial firms stripped from this legislation.

P.S. What is wrong with Republicans? The no bailouts argument is compelling and easy to understand. They could be kicking butt by making it. Instead they are cowering in abject fear that a vote on this stupidity will make them look bad. Well of course it will; if they continue to act stupid.

Wednesday, April 21, 2010

B-Daddy Profiles a Passenger

I had a tiny bit of drama on my flight home tonight. It's not very political, so I posted at my other blog.

Good, Bad, Ugly?

No pictures today, doing some airport blogging.


New Jersey voters are listening to Governor Chris Christie's efforts to beat back teacher union thuggery and demand for ever higher salaries in these tough economic times appears to be paying off. To see why California is a basket case, and why the New Jersey revolt is the roadmap for what we must do read "The Beholden State" by Steve Malanga at City Journal. WARNING: Take your meds before reading, the horrific abuses visited on our fair state by the unions and the polticians they have purchased will make your blood boil.


Frequently in software, we use the phrase, it's not a bug, it's a feature to describe some annoying product detail that will guarantee the software coders job security for their lifetimes, as they continue to fix bad code. Dean has been detialing many of the features of Obamacare already. I tripped over this one today, which was wholly predictable. From the New York Times (H/T)

Fearing that health insurance premiums may shoot up in the next few years, Senate Democrats laid a foundation on Tuesday for federal regulation of rates, four weeks after President Obama signed a law intended to rein in soaring health costs.
After a hearing on the issue, the chairman of the Senate health committee, Tom Harkin, Democrat of Iowa, said he intended to move this year on legislation that would “provide an important check on unjustified premiums.”

Well, if you were looking for a path to single payer, this is it, regulate the health insurance industry out of existence, but hey you can keep your existing coverage, you just can't keep your existing insurance provider. How Orwellian.


The Tea Party endorsed the Democrat, Minnick, in the Idaho Congressional race. At first, I was appalled, but read hotair's take, excerpted here:

They have also made the point Russo notes here, that both parties need to have fiscal discipline in order for the US to end the spending spree that is sending us careening towards bankruptcy. In that sense, Minnick might be the one Democrat to support. While his party pushed a Porkulus bill that cost $830 billion and didn’t stimulate anything, Minnick proposed a $170 billion version that eliminated all of the pork and had self-termination clauses that returned unspent money after recovery began. He voted against Porkulus, cap-and-trade, and ObamaCare.

Monday, April 19, 2010

Programming Note

Out of town for a few days, so blogging will be light. We have two big issues in the Congress right now, Cap and Trade and Financial Reform. My sense is that Cap and Trade won't pass unless significant sweeteners for coal state Democrats are thrown in the mix, in which case, it won't actually do much to reduce Carbon Dioxide emissions. We should oppose this bill for those reasons and because it will be one more way for the Congress to rewards special interests and continue to rake in campaign cash from same. I intend to eventually post about how the simplicity and fairness of the tax system contribute to economic growth; it is not sufficient to merely go for reductions in taxation and spending, although they are important as well. Cap and trade, like the health care Obamanation is another step in the wrong direction.

On financial reform, I blogged on Sunday on this issue. We should remain vehemently opposed to the Dodd's bill because it keeps Too Big To Fail alive and well, permanently entrenching crony capitalism in our system.

Sunday, April 18, 2010

My Anti-Corporate Agenda

Coffee Party member OBRag called me out in the comments of my last post on that subject, asking where I got my anti-left wing sensibilities from (he said we were all in it together as paycheck slaves) and was seeking cooperation on an anti-corporate agenda. I have edited my response from the comments:

Thanks for commenting. You pose an interesting philosophical question as to where I get my anti-left wing sensibilities from, I may try a blog on that some day. With respect to corporations, they are neither inherently good nor evil, but opportunistic. The free market is the most effective disciplining force that keeps their behavior under control, even turning corporate behavior to a net positive. I think that many corporations today have become incredible forces for good in the world. American corporations help feed the world, and American corporations brought the PC and the internet to the world for two examples.

The most egregious corporate abuses occur when they team up with big government, see Kelo vs New London and its aftermath. In general, if someone is a wage slave, then they need to get new skills and find new work that will make them happy or go into business for themselves. We are not at the mercy of corporations in our employment any more than we are as consumers. With respect to the banks, they are subsidized under too big to fail, when many should have just gone bankrupt. There is deposit insurance to protect the little guy. It is the government intervention that encourages the risk taking that led to the financial collapse. The answer is to punish the stockholders with bankruptcy and the corporate executives with loss of their jobs.
As I have said before, if we want an anti-corporate agenda, then let's end the subsidies, bail outs and tax breaks that go to corporations. But that would mean vast simplification of the tax code not seen since Reagan and Rostenkowski worked out a deal. In general, it means we have to renounce government interference in the economy to achieve a true anti-corporate agenda. But politicians of both parties can't resist the temptation. This is where the Tea party comes in, we educate the public on the negative impact and demand a smaller more accountable government. I'm not talking laissez-faire but just minimally intrusive policies.

For example, on health care, wouldn't it have been good enough to just subsidize the lower income brackets to purchase health care and guarantee portability so that pre-existing conditions can be covered? No the left wanted vastly more government intervention than that; now we have goodies provided for all sorts of industry groups with a huge new bureaucracy to decide winners and losers in the industry, that will only cause more corporate cash to flow into elections. In my view, the left wing agenda just fed the very beast it purports to be trying to slay. Peter Senge talks about this in a different way in The Fifth Discipline, we create the very reality that causes the problem we are trying to deal with, because we fail to apply systems thinking to the problem. Big government turns out to be the cause of big business abuse not the cure.

The only sensible response is to have policies that encourage, not limit, competition, to temper corporate ills. It turns out that increased government spending and regulation both have the effect of shielding corporations from competition by erecting barriers to entry. Once again a minimalist approach to regulation, and a dedication to smaller government are necessary to achieve the outcomes the left says they desire. The alternative is full state ownership of the means of production, aka communism. I guess that also answers why I have anti-left sensibilities, it's about the freedom.

Saturday, April 17, 2010

Financial Reform?

Financial reform appears to be next on the Obama agenda. This is going to be present a tough political issue for a movement dedicated to smaller government that remains within its constitutional bounds. The bank bailouts, followed by reports of fat bonuses for top banking executives makes them a ripe target for retributive justice through by means of increased regulation. However, the nature of the reform matter deeply. First, we have to ask ourselves if the current regulatory regime is actually inadequate. Initially, it appears obvious that the current system failed. But while that is true, it doesn't mean that the current laws failed in their entirety. The Senate banking committee has conducted a yearlong investigation into the failure of Washington Mutual. I don't always believe everything I read from the Senate, this has some interesting facts:

A year-long Senate probe presented at a hearing Friday concluded that the OTS had identified a pattern of errors, poor risk management and even fraud at Washington Mutual. Yet it took no action to stop the bank from dumping toxic mortgages into the financial system because the bank was a huge moneymaker that paid fees amounting to 15 percent of the agency's budget, the panel said.
Yet OTS examiners refused to lower Washington Mutual's asset quality ratings even though its practices were unsatisfactory because "WAMU was making money and loans were performing," Thorson said. This assessment runs counter to OTS guidelines, which state that demonstrating profitability is not sufficient if an institution has a high exposure to risk, Thorson said.

In this case, there was an office with a specific responsibility to regulate the quality of the banks' loans, but failed. But why do we need such oversight? Because WaMu could package the loans and sell them as securities, while continuing to rake in fees on servicing the loans. Fannie and Freddie played a big role here in enabling this behavior by securitizing mortgages. They did not see their role as anything other than increasing the number of mortgages. Look what happens when that goal was challenged:

Enter bailout nation, in which the government has apparently pledge unlimited funds to bailout not just the dud loans of the nation's banks but apparently the banks themselves as well as their parent corporations.

So what is happening with the legislation? The biggest issue is that "too big to fail" is alive and well, as one might expect in legislation built under Chris "Countrywide" Dodd's tutelage. From the Wall Street Journal:

The Dodd bill, instead, still gives regulators the authority to rescue essentially the entire financial industry. While much debate has centered around the FDIC's new "resolution" authority for failing firms, there's been almost no discussion around a separate FDIC program under which the agency can guarantee corporate debts. To Mr. Dodd's credit, this provision has improved slightly. In an earlier draft, the Fed and the new systemic risk council could have applied FDIC debt guarantees even if the FDIC itself opposed such bailouts.

Now the FDIC has to be on board, but the core problem remains—an even more explicit taxpayer backstop than anything Fannie Mae and Freddie Mac enjoyed during the housing bubble, and one that's available to a virtually unlimited number of firms. Federal regulators can create a "widely available program" to guarantee the debts of not just banks, but their parent companies as well, and all of their affiliates.

Fannie and Freddie were rolling the dice with an implied backstop, but this legislation would allow regulators, without a vote of Congress, to explicitly put the full faith and credit of the U.S. government behind Goldman Sachs, JP Morgan and Morgan Stanley, among others. This list could have more than 8,000 names on it, because any bank or company that owns a bank, or is a affiliated with a company that owns a bank, is eligible.

Sorry this post got so long, but I wanted to air out a big part of the problem. Big Government's regulation and unaccountable bailout are at the root of the financial crisis. I remind the constitutional professor that occupies the oval office of Article 1, Section 9 of the United States Constitution:

No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law; and a regular Statement and Account of the Receipts and Expenditures of all public Money shall be published from time to time.
Time to oppose this legislation with some simple arguments:



Friday, April 16, 2010

About That 47%

Does it matter to our cause that 47% of Americans apparently pay no federal income taxes? Ramesh Ponnuru over at the Corner on NRO thinks not, and I had already been drifting in that direction. The number is a little misleading, because it implies that there are folks who are free riders on the system, getting benefits without paying their fair share. However, I notice that many of the folks at the Tea Party rallies might be in that group, but they are out there protesting government largess just the same. This is because the tax and spend structure of the government impacts them just the same. Further, people making under $50,000 are still paying a lot in taxes.
This average household would have paid 0.8 percent of its income in corporate taxes (through the stocks it owned), 0.9 percent in gas and other federal excise taxes, and 9.5 percent in payroll taxes. Add these up, and the family’s total federal tax rate was 14.2 percent.
Further, these families are very hard hit in California by a sales tax of 8.75%, much of which goes to pay for federally mandated spending, set to increase under Obamacare.

The fact these households are still paying taxes, presents an opportunity and a challenge. The only way one can enact a tax cut for the lower middle class, would be to reduce the payroll tax, which would threaten social security. Obama has famously pledged he would not raise taxes on ... who can remember but it was a lie anyway. As the looming deficits hit, he will be forced to either cut spending, fat chance, or raise taxes on folks he promised he wouldn't. Meanwhile, those folks know this is coming, so they show up at the Tea Party rallies. The real issue isn't so much who is taxed, but the fact that government has grown overwhelmingly big, and no one can pay for it, no matter who we tax.

More from Ramesh Ponnuru:

The argument — which has been steadily picking up adherents on the Right for ten years — is that people who pay no income taxes are likely to perceive big government as a free good and therefore become more supportive of it than they would be if they paid income taxes. A secondary argument is that it is important, as a matter of both morals and civics, for everyone to pay taxes.

These claims, I think, overstate the importance of the distinction between income taxes and payroll taxes. I've never seen evidence that people who pay payroll taxes but have no income-tax liability regard themselves as not paying taxes or favor big government.

Weekend Music Chill

Feeling very upbeat after yesterday's protests and the great turn out, so this weekend's music is as upbeat as any that I really like. Also, I love the 80s, Ronald Reagan really did make it morning in America again. The seven fat years turned this country around.

Katrina And The Waves (Walking On Sunshine) - MyVideo

Also like this version:

Thursday, April 15, 2010

Well Done - Midway Drive Tea Party Protest

A quick note from today's Tea Party at the San Diego Main Post Office on Midway. First, we got some MSM love from the local fish wrap. I know that we can't count on them, but our persistence and the focus of our message is paying off, we are being taken seriously. I came a little late, W.C. had said he would cover the earlier part of the festivities and he was good to his word. Dean, Leslie, Sarah and Dawn were all there as well as the proprietor of Doo Doo Economics, who runs a great place to get your Tea Party protest gear.

I was concerned about the impostors, and apparently W.C. found one, and he was identified and called out; I personally missed him. Overall the signs were great, focusing on taxes, spending, and the constitution. Turnout looked to be a couple hundred to my untrained eye. The police stayed in the background. There was no birtherism, trutherism or racism to be found. WELL DONE!

Finally, the enthusiasm of people dropping off their taxes was overwhelming. People were honking and waving and giving us a thumbs up.

Unfortunately there was this grim reminder that we've got a lot of work to do.

Mighty waynok will have some video as school work permits.

Wednesday, April 14, 2010

Tea Partying - California Style

Potentially light blogging tonight, as the B-Daddy household struggles to meet the tax deadline. Don't want to wait until tomorrow, because I might miss out on some of this:

California Tax Day Tea Party from Lipstick Underground on Vimeo.

From the website:

This video represents a short history of how we got to this place, how much we've accomplished, and how we have nothing but momentum at our backs heading into the 2010 election.

Thanks, Sarah, for the work on this.

Tuesday, April 13, 2010

Defining the Pale

There is a phrase, "beyond the pale" that means those things that are considered totally unacceptable. Interestingly enough, it derives its meaning from something beyond the bounds of law. As the Tea Party movement, is largely unorganized in terms of "official" organization and membership, how do we police behavior that is "beyond the pale" and indeed, what is behavior that is beyond the pale. This is potentially a real issue for us, as some lefty wingnuts think they can infiltrate to make us look bad.

So first, we should ask what is out of bounds for us. I think that all the craziness has to be a start, first and foremost, racism. I'm not talking about the faux racism of saying Obama has a good basketball shot either. You know it when you see it, but in general it is the use of demeaning stereotypes. Right up there with racism, are the truthers and birthers. Both of these types of conspiracy idiot savants have put 2 and 2 together and gotten 22. If you listen too long, it sounds plausible, but it just ain't so. Finally, I would also say that anti-gay sentiment has no place here. I admit to voting for Proposition 8, but if you are against and are also against big government spending you are welcome here. That is just not our issue.

Now the tougher question of what to do? I propose a two prong approach. First, just like the Apache example in the Starfish and the Spider, we should shun those beyond the pale. We should ask them to leave, repeatedly, and we should make it clear that they are not welcome. Unfortunately, for the hard core lunatics this may not work. The other thing to protect our image would be to interrupt any effort by news media to take their picture, video them or interview them. We need to make it clear that they do not share our core beliefs and this is about the size of government, the intrusion of government and the preservation of the republic, nothing else.

Time to get ready, Thursday is going to be a busy day.

It's the Spending, Stupid!

Imagine my shock when Bill O'Reilly echoed a main theme of TLT on today's Talking Points Memo, laying into the unsustainable levels of spending at the federal, state and local levels. I normally find O'Reilly entertaining but not usually an inspiration for my blog, but he was spot on today. (Sorry for no link, Bill holds back his material from the web for a day, for business reasons, I suppose.) But this is the exact message of the Tea Party from day one, when we started by protesting the porkulus, the stimulus, and the bailouts. It's never been about race, it's the spending stupid. Why the left can't get this? Because it doesn't fit their narrative and it distracts people from the simple fact that excess spending is causing growing debts and deficits.

But, I think the word is getting out. More and more people identify with the Tea Party movement; the left's attempt at demonization has backfired. Every day we see more articles on the out of control spending, as O'Reilly called it. This is why we will be out in force on April 15. Now the liberals will say to the average tax payer, how has Obama increased your taxes? Answer: even if you don't see it on your tax bill Thursday we all know it's coming. Rich Lowry takes aim:

This is why the country has a roiling tax revolt prior to the imposition of any significant tax increases. The tea-party movement is an act of pre-emption, based on the simple calculation that higher spending eventually means higher taxes. For all the tsk-tsking about its supposed irresponsibility, the movement is attuned to the future in a way that the president -- who hopes to evade or hide the consequences of his budgetary choices for as long as possible -- is not.
Not only will be paying future taxes, we are already paying the price through increased inflation, higher interest, higher state taxes over mandated medicare spending, higher health insurance premiums and fewer jobs due to increased taxes on the rich and capital gains besides the tax increases for the grandkids. Just no increase in your personal income taxes... today. There, don't you feel better. What crap; the President thinks he can increase spending, while holding down middle class taxes and no one will notice? Memo for Team Barry, our level of economic ignorance does not match yours.

Time to get ready for Tea Party protests on Tax Day. The media is going to ask this very question of one of us at the protest, or some variation "Have your personal taxes gone up and if they haven't, why are you protesting?" Let's all be ready with our answer.

I couldn't resist one more paragraph of Rich Lowry's article to round this out:

"I like to pay taxes," Oliver Wendell Holmes famously said. "With them I buy civilization." With ours, we will buy a misbegotten stimulus program, bailouts, runaway entitlements, a costly new health-care program and a federal government where incontinence is a perpetual pre-existing condition. No matter what your tax bill this year, don't worry -- it'll go higher.

Monday, April 12, 2010

Common Cause With the Coffee Party?

On Sunday I published another piece about the Coffee Party and their progressive roots and national organization. This prompted a comment from Mike James who met me at the first San Diego Coffee Party. I liberated part of his quote:

I don't want this to be "Us against them." Of course the media would love that.

The consensus at most of our meetings is to address the issue of Campaign Finance Reform . I believe that will be the first priority of the Coffee Party.

This issue should be non-partisan. Both Democratic and Republicans politicians are influenced by money from corporations, PAC's and Unions.

We all want to be heard, we want our politicians to be accountable.

Gerrymandering is another area to explore. The lines have drawn in California to where incumbents need not listen to all sides of an argument.

Think of the results, if citizens from differing sides of the political spectrum can come together on this issue.

O.K. maybe I'm a disillusional, but a guy can dream can't he,

I appreciate Mike James' comments and meeting him as well. I will admit that I saw no nastiness at the Coffee Party meeting I attended. I also think us vs. them does no one any good, but seems an inevitable media angle, given the name they have chosen for themselves. However, if the Coffee Party and Tea Party want to make common cause, then we must select causes we have in common. With respect to campaign finance reform, I submit that we won't agree. Yes, there is money in politics that distorts the process, but 40+ years of effort haven't removed the money. It is important to understand why this will never happen as long as the First Amendment is the law of the land. The federal government has become like Mom and Dad, with citizens and corporations as the kids. It is able to reward some groups and punish others. Currying favor becomes necessary to both thriving and mere survival. It is now a routine practice among many big corporations to seek help from the Justice Department in their competitive battles, for example. The tax code has grown to hundreds of thousands of pages, sprinkled with goodies for every interest group around. It is the very complexity of regulation and taxation that draws special interest money into politics, like flies to sugar.

Steve Forbes put it best in the mid-1990s. If you have a vermin problem in the kitchen, you can set traps, put out poison and board up the house all you want, but sooner or later, your going to have to stop leaving the cake under the kitchen sink. Unless we reduce the size and role of the government at all levels, and only vote for politicians who work to do so, the role of corporate money will only increase.

So here is my counter-proposal to the Coffee Party. If you want an anti-corporate agenda that the Tea Party can get behind, then let's end all corporate welfare, starting with ethanol subsidies, paying farmers to not farm, quotas on sugar imports, and most importantly, all the bailouts of big corporations and the "too big to fail" theory. Let some of these corporate fat cats go out of business when their excessive risk taking gets them into trouble, and don't spend my tax dollars on bailing them out. Now there's an anti-corporate agenda I can get behind.

Now I have to admit, I do like the gerrymandering issue, because right now, there are VERY safe Republican and Democrat seats. This has the effect of hardening positions and allowing the majority party to be led by the most extreme element within it. If Coffee partiers want to make this their cause, I would personally support it; I think most other Tea partiers would as well. I don't know that it would rise to the top of our list, but it still might be a worthy cause. The cynic in me says that this is not really going to be a Coffee Party top priority, because the current system gives "progressives" an outsize voice to their actual numbers, but, to coin a phrase, a guy can dream can't he?

I went over and looked at the San Diego News Network article suggested by Mutnodjmet. Overall the Coffee Party almost strains at sounding very reasonable. But reasonable or not, sometimes there is something called the hedgehog principle that applies. I first read of this in Jim Collins compelling management primer, Good to Great. Here is a quick explanation:

The Hedgehog concept compares two animals; a fox, which is very clever and knows many creative ways to get a meal, and the hedgehog, a somewhat dull animal that knows one, and only one, thing. To roll into a spiked ball for protection.

In this animal scenario the hedgehog always wins, because despite the fox's many clever tricks and high intelligence, there's no getting around a spiky ball.

I liken the Tea Party movement to the hedgehog. The coffee party may have deep discussions and understand the complexities of this or that government policy. They may see corporate practices they don't like. They will probably come up with a complex agenda to address all this, bringing the best progressive brain power the nation has to offer. They "will offer solutions on solving problems within the federal government, particularly when it comes to finances." And they will still fail, because they don't get the ONE BIG THING. The Tea Party knows one thing that has complex causes and effects, but it is still one thing:

Government has grown too big and become a threat to our liberty and well being.

That's it, that's all we really need to know. We can debate a thousand questions about flat tax or gerrymandering, and I will certainly join in; just don't forget the one thing, because now it's time to take action to make government smaller and more accountable. (As an aside, Ronald Reagan knew one thing, "Communism could and should be defeated." He too was derided as a simpleton.)

Sunday, April 11, 2010

Dealing With the Opposition - A Christian Perspective

Brad Dacus of the Pacific Justice Institute delivered the sermon today at Clairemont Christian Fellowship this morning. I apologize for not making the Q&A session he held before service, 9:00 a.m. just wasn't working for me this morning.

He took inspiration from Paul's story in various portions of Acts, but he started with a little of his personal story. He had been working for the Rutherford Institute, heading up their west coast operations out of Sacramento when they let him know that they needed to scale back, but he could go back east to a DC job they had available. He said he couldn't sleep because even though he loved the idea of stability and the steady pay check, he didn't think this was God's calling for his life. Brad felt God asking him "What is the desire of your heart?" And it was the desire of his heart to represent those on the west coast that were faced with discrimination and violations of their rights because of their faith. He said that the Lord provided for this ministry through donated air time on KWVE for the program "The Legal Edge," and he received donated office space as well. This led him to realize that even though he had his own ideas about his ministry, it would so well to remember that it is God's ministry.

Another point he made from Acts was the manner in which the Lord uses the apostle Paul. When Paul was Saul, he tells the story of how he delivered the brethren (that is early Christians) to prison and death, even traveling to Damascus to round up Christians for transport to Jerusalem. If we didn't know the story already, we might be hoping that the next line goes something like "And God, being angered at this unbeliever's wickedness, smote him where he stood." Which is how we would want to deal with him. But God doesn't always give us what we deserve, he has other plans for our lives. I try to remember this, maybe failing, when I write this blog. I am hoping to persuade always, to not think of the other side as the enemy, but just people who haven't seen the light yet. As a Christian, Brad reminds me that the world is really divided into two groups, those are lost and those who used to be lost. I don't want to give up on reaching out.

Without rerunning the whole sermon, here are the main points:
  1. Everyone has a story to share.
  2. As a Christian you will face persecution.
  3. Never, never, ever give up.
Brad had some real world examples of the persecution that can be faced in today's climate of anti-Christian bias:

  • A woman at a law firm in San Francisco, who was a Christian was badgered into revealing her vote on Proposition 8. When she finally admitted she would be voting for it, she was fired for contributing to a hostile work environment.
  • A teacher in the Los Angeles school district was abused for not wearing a red shirt for a day of silence protest in support of the pro-gay agenda.
  • In Alameda school district, parents were not allowed to opt out of "anti-bullying" training that aimed to teach kindergartners about transsexuals, even though there had not been one incident of bullying on those grounds and real bullying over race, ethnicity and religion have been reported in the district.
  • Brad also discussed the Guatay church case that Dean has blogged about. Local PJI affiliate, Peter Lepiscopo is representing the church.
Back to how we treat the opposition, Brad reminded us of the transsexuals and kindergartners case and quoted Jesus when he said in Matthew 18:6 "But if anyone causes one of these little ones who believe in me to sin, it would be better for him to have a large millstone hung around his neck and to be drowned in the depths of the sea." He's not throwing anyone into the sea, he's just filing suit.

I urge you to check out the Pacific Justice Institute and support their good work.

Saturday, April 10, 2010

Dropping the Mask - Coffee Party Update

My reporting from the first San Diego Coffee Party meeting generated my most comments ever for a post. It also caused me a bit of anxiety, because I was criticized by some of the people I had met for treating them unfairly. I have always cared deeply about the tone of this blog. Their actions since have only eased my conscience. Today, I received a follow up email from the national leadership about what the Coffee Party had decided were the most important issues facing the country. Anything about looming and ever growing debt and deficits at all level of government? No way, down with corporations is our motto. From the email:
Hello B,

We have some exciting announcements to make.

Take the Coffee Party Priorities Poll in the next 48 hours.

Based on reports from Coffee Party USA meetings and online discussions, Money in Politics and Wall Street Reform have emerged as top legislative priorities for our community. Before we consider various solutions to these issues as a community, we ask for your direct input. There will be other issues and priorities as we go forward. This poll is to select our first actions to impact legislation at the national level. So please take the poll before NOON ET on Monday April 12th.

After you take the poll, go to and join a local Coffee Strategy Session on Money in Politics and/or Wall Street Reform in your community.

In the coming weeks, we plan to vote online about whether or not we support specific legislation on Money in Politics and/or Wall Street Reform (depending on results of the Priorities poll. So please take time to engage in informed deliberation -- in coffee shop meetings and our newly organized online forums.

As a community, let's show Washington how we create positive solutions together.

For Local groups: You can also choose your own issues to work on as well. We encourage you to go through a democratic process and take the time to make an informed decision.

-Annabel, and your Coffee Party Team
Can't you just smell the fertilizer of the grassroots activism?

I removed some of their HTML coding in the above quotes so that you wouldn't click the link and get a cookie intended for me. Also, Anabel's return email address is at And to think I was excoriated for suggesting that this might be a top down political organization directed from a national level.

Most importantly, the web site is actually hosted by the owners of domain. Here is what a Google search turned up when I type in
A non-profit organization, DIA offers a web-based tool that progressive organizations to send emails to Congress [sic].
And nothing says non-partisan, coming together as a community like "progressive;" DIA standing for democracy in action in the above quote. So there you have it, my hard evidence that the coffee party is just a masquerade for typical lefty astroturfing. They have no doubt, sucked in a number of innocent victims. I figured out that little nugget about the web hosting because I turned off "display html" in my email, which I suggest to everyone for the safety of their online experience.

I can't resist one more quote from the coffee party; after reviewing all these facts what do you think about their "about us" page:

We are 100% grassroots. No lobbyists here. No pundits. And no hyper-partisan strategists calling the shots in this movement. We are a spontaneous and collective expression of our desire to forge a culture of civic engagement that is solution-oriented, not blame-oriented.

We demand a government that responds to the needs of the majority of its citizens as expressed by our votes and by our voices; NOT corporate interests as expressed by misleading advertisements and campaign contributions.

And where is the lame stream media, who called the Tea Party astroturfers? I don't normally complain, because at some point an issue like the lefty bias in the news media ceases to be a problem and becomes just a fact; but sometimes the hypocrisy is a bit overwhelming.

Friday, April 9, 2010

Weekend Music Chill

At the end of the movie, Sherlock Holmes, which we all enjoyed immensely, the credits song was Rocky Road to Dublin, apropos to nothing we could think of, but immensely enjoyable nonetheless. Here are the High Kings performing this traditional Irish melody.

And in case you prefer the version from the movie:

Clairemont Debate - Part 2: The Good News is the Bad News

In my previous post, I set up the start of the District 6 San Diego City Council debate held at Clairmont High. I wanted to summarize the remainder of the debate without a verbatim transcript. The whole event was filmed, if it gets posted I will provide you a link. Incredibly, no media attended, so that makes me the de facto reporter.

The Pre-staged Questions

I don't know if the candidates had access to these questions ahead of time; but based on their answers, they all must have reasonably anticipated them.

1. Do you support water reclamation?

Everyone favored this project, except Howard Wayne added that he wanted to see cost effectiveness. Wayne said that this was twice as expensive a way to produce water in the last study he saw. Lori Zapf talked about getting gray water in purple pipes to projects that are ready in Mission Valley. Ryan Huckabone was also in favor of cisterns to capture storm water run off.

2. Do you support the Strong Mayor system and Proposition D?

Steve Hadley was the only one not in favor, because he said it made city managers unaccountable to the council members. Zapf wanted cost containment on cost of 9th district. Wayne said that city manager form of government is for small cities and added that he would add a companion measure to ensure city council subpoena power over city managers.

3. What is your top priority?

Here is where the good news = the bad news. All the candidates acknowledged the woeful state of the city's finances. Apparently, it is so bad that no candidate felt they could ignore them and every candidate ruled out tax increases, knowing that "dog wouldn't hunt" in this economy. When Democrats with city union endorsements are ruling out tax increases, you know the Tea Party and the outrage that fuels its success are having an impact. Huckabone and Zapf favored aggressive implementation of the managed competition proposition that was passed in 2008 but never implemented. Later in the debate, Hadley detailed his opposition to the measure (this was the deal killer for me with Hadley, he seems so eager not to offend the unions, regardless of other pronouncements, that he is disqualified.) Wayne talked about bringing in jobs but offered no specifics. Hadley also talked about waste and inefficiency, but this guy has been at city hall for 10 years. Zapf discussed meaningful pension reform and kept hammering managed competition, as did Huckabone. Huckabone emphasized getting new employees on 401k style pension plans.

4. What are your specific ideas to deal with the pensions issue?

This was largely a continuation of the prior question. Zapf had some very specific ideas after pointing out that the 401k idea doesn't do much in the short term. She also proposed reverting to high 3 instead of high 1 and raising the retirement age to 60 from 51 or 55 depending on the job. Huckabone kept emphasizing the need to keep our promises to current employees, which I found troubling since some of those promises were made contrary to law. Wayne later pointed out that employees are required by law to contribute to the pension system in approximately the same amount as the city, and this is not happening. Wayne pointed out that the courts have struck down some attempted changes. He called out higher retirement age and more employee contributions. Throughout the debate Wayne seemed to have the firmest grasp on the pension issues and was the only candidate to specifically address that bankruptcy is not viable and would not discharge pension obligations. Hadley made a statement that only 58% of retiree benefits are vested, but never explained the specifics of why that gives the city leeway on the pension problem.

Candidate to Candidate

This got a little interesting, it was more interesting to see what the candidates asked their opponent than the actual reply. They drew names from a hat to set this up.

Hadley asked Huckabone, "You make mention in your web site that a new stadium is a goal, how do you propose paying for that?" Huckabone talked about the Chargers being an asset to the community and the national air time from Aztec and Charger games helping tourism. He proposed a mix of negotiation with the county and redeveloping the Qualcomm property as well as getting the Chargers to kick in. I really didn't like his answer, and felt Hadley tagged him.

Huckabone to Wayne, "Your thoughts on declaring bankruptcy?" For the life of me I can't understand why Huckabone asked this question. Wayne totally schooled him on the question and demonstrated a deep command of this issue. (Pops once asked me about this issue and after some research, I came to the same conclusions as Howard Wayne.)

Wayne asked Zapf, "What local problem have you solved?"
This put her off balance for a moment, she talked first about her work as a business owner then here charity work with underprivileged and USO. Wayne's years of public (government) service were meant to be highlighted by this question.

Zapf asked Hadley, "How do you square your opposition to managed competition with the fact that the voters approved the measure?" Hadley responded with a very cheap shot at Zapf, which I won't repeat. He received the only boos of the entire evening. He recounted some anecdotal horror story from an outsourcing in Phoenix. At this exact point in the debate, I knew for sure that I could eliminate one candidate.

Then there were questions from the audience that were randomly drawn out of a hat. My question about what will you do to save the taxpayer dollars that will be opposed by the public employee unions didn't cover much new ground. Although I thought Hadley side stepped the issue by talking about not opposing Wal Mart and big box stores, which a. had nothing to do with my question and b. was delivered in a deliberately obfuscating manner. There were some questions about the homeless, thank God no one proposed some big program that would "solve the problem" most acknowledged that it wasn't solvable. There was a question about the landfill, but who cares really?

The summations at the end did not add much to the debate either:

Hadley: Continue Donna Frye's push for open government.

Huckabone: Some rambling story about horse racing and some praise for Donna Frye.

Wayne: Pretty canned speech about the greatness of our neighborhoods and his years of experience.

Zapf: Potholes representing unfulfilled promises of the past. She will do the heavy lifting and we need new people with fresh ideas.

At the end, I noted that Howard Wayne was first out of his seat to shake everyone's hand.

B-Daddy's Assessment:

Only Steve Hadley fully disqualified himself. Howard Wayne had a deep command of the issues, but has those stinking union endorsements. Ryan Huckabone is a very likable guy, but got schooled on the stadium and bankruptcy. If you read all my commentary, you might be asking, then why aren't you endorsing Lori Zapf? It's hard for me to put my finger on it, but she was just a little touchy and angry at times, and it makes you wonder. As a small business owner, which I greatly admire, and probably could not do myself, she is used to a certain style of interaction with employees and vendors. For better or worse, that style doesn't always work in the political arena and she seemed clearly unused to being challenged. As a result, I am not taking a position just yet. For what its worth, Kim Tran should have shown up. The playing field was level, it didn't matter if you were Republican, Democrat or Independent, there was reasonable debate about tough problems facing the city.

The only down side? Sitting in high school cafeteria chairs for two hours left my back in bad shape. But hey, democracy is hard.

Steve Hadley

Ryan Huckabone

Howard Wayne

Lori Zapf