Weekend Music Chill - Labor Day Edition

Happy Labor Day! Here is a reminder that the labor movement once represented people who worked very hard, but who also suffered real oppression, because the businesses for whom they worked used government police forces to enforce oppressive conditions. Here is Tennessee Ernie Ford with the classic "Sixteen Tons."

Best Explanation for The Ongoing Recession

. . . Comes from Victor Davis Hanson, of course. Please indulge an extended quote, because it crystallizes what we have been saying about the poisonous growth of the federal government.

In the last 30 months, the Obama administration has created a psychological landscape that finally just seemed, whether fairly or not, too hostile to most employers to risk new hiring and buying. Each act, in and of itself, was irrelevant. Together they are proving catastrophic and doing the near impossible of turning a brief recovery into another recession.

Here is the lament I heard: the near $5 trillion in borrowing in just three years, the radical growth in the size of the federal government and its regulatory zeal, ObamaCare, the Boeing plant closure threat, the green jobs sweet-heart deals and Van Jones-like “Millions of Green Jobs” nonsense, the vast expansion in food stamps and unemployment pay-outs, the reversal of the Chrysler creditors, politically driven interference in the car industry, the failed efforts to get card check and cap and trade, the moratoria on new drilling in the Gulf, the general antipathy to new fossil fuel exploitation coupled with new finds of vast new reserves, the new financial regulations, an aggressive EPA oblivious to the effects of its advocacy on jobs, the threatened close-down of energy plants, the support for idling thousands of acres of irrigated farmland due to environmental regulations, the constant talk of higher taxes, the needlessly provocative rhetoric of “fat cat”, “millionaires and billionaires,” “corporate jet owners,” etc. juxtaposed, in hypocritical fashion, to Martha’s Vineyard, Costa del Sol, and Vail First Family getaways — all of these isolated strains finally are becoming a harrowing opera to business people.

While big businesses are as capable as leftists of using government to their own personal advantage, the flood of regulation and the promise of more to come is crushing entrepreneurial spirit. No wonder businesses are sitting on piles of cash and not investing and hiring. Of course, this very sensible policy is coming under attack by the left. Here is Lorena Gonzales, secretary-treasurer of the San Diego and Imperial Counties Labor Council, in today's U-T, complaining that businesses won't hire because the policies she supported have been enacted into law; another "blame the victim" moment from the left.

The irony, of course, is that these corporations need consumers to spend our money. And, to do that, we need these corporations to spend their money hiring people. If they won’t spend on us, we can’t spend on them. It’s the classic chicken and egg. And right now, they are chickening out on the economy.

Irony? You criticize people and threaten them long enough, and they start to believe you. Then you complain that they are paranoid? It's not paranoia when they really are out to get you.

I think KT would call this a John Galt moment. Hard not to agree.

Meanwhile, the President's chances for re-election continue to fall, dropping below 50% for the first time this August, and sitting at 48.9% as of this writing. My only concern is that the odds of defeating the President will peak too soon.

Weekend Music Chill

Happy Labor Day weekend, marking the traditional end of summer and back to school. Mrs. Daddy and I are not particularly fond of the season, as we prefer colder climes, but San Diego is where the job, family and friends are. Here is a song by a favorite band named after our favorite month.



And because we're liking bands from Georgia today, here is REM with Radio Free Europe.

A Real Jobs Program

With Obama set to address the nation Thursday, we can hopefully have the excuse of the NFL season opener to avoid his joint address to Congress. He'll probably schedule around it, but maybe I won't watch. We know what he'll say already, more temporary tax cuts and bridges. Maybe some more high speed choo-choos and some training programs thrown in. Then he'll demand that we the people force Congress to "do its job" and pass this legislation. Which is really rich, considering that there is no actual legislation and that Obama never does his job of leading. Here is part of an email the President sent me:

Friend --
Today I asked for a joint session of Congress where I will lay out a clear plan to get Americans back to work. Next week, I will deliver the details of the plan and call on lawmakers to pass it.
Whether they will do the job they were elected to do is ultimately up to them.
But both you and I can pressure them to do the right thing. We can send the message that the American people are playing by the rules and meeting their responsibilities -- and it's time for our leaders in Congress to meet theirs.
And we must hold them accountable if they don't.

Of course the right thing is always to pass something, anything so that Obama can claim victory.

We already know that temporary changes to the tax code aren't very productive. People and businesses want to plan for the long term. The reduction in social security taxes has been a disaster, as no one is hiring more people, because they know their long term costs will go up when the tax reprieve is lifted. It has increased the deficit at the same time.

Here's what a real jobs program looks like, and I caveat that any tax code changes have to be permanent. Most of this proposal comes from Jon Huntsman, of all people. Mr. Huntsman is unlikely to ever be a Tea Party favorite, but this is why having a lot of candidates in the race is good for the nation. Looking at his plan from the Tea Party perspective shows a lot to like.

• Streamline the individual tax rates to three brackets — 8%, 14% and 23%.
• Reduce the top corporate tax rate to 25% from 35%.
• Get rid of taxes on capital gains and dividends and eliminating the alternative minimum tax.
• To pay for changes, scrap all the tax breaks, even mortgage interest and municipal bonds.
• Repeal Obamacare.
• Repeal Dodd-Frank. (Codifies "too big to fail.")
  
• Repeal Sarbanes-Oxley.
  
• Reign in excessive regulation at NLRB, FDA, and the EPA.
• Open Alaska and Gulf of Mexico for oil exploration.

This shows why almost any Republican President would be preferable to Obama, Huntsman is certainly not the most conservative or libertarian candidate in the race, but has released a pretty bold proposal.

B-Daddy would add the following

• Liquidate Fannie Mae and Freddie Mac, divest the federal government of responsibility and spin them off into smaller corporations. This would rapidly return the housing market to equilibrium and bring investors.
• Make serious progress on entitlement reform. (Block funding Medicare, raising retirement age, means testing SS and Medicare, etc.) This will let the markets know we are serious about tackling long term issues and restore investor confidence.
  

The picture at the top is a screen capture of the Obama Clock app, available for iPhone. Explanation of the indicators is found here. I am really disappointed it is not on the Android yet.

What I Hated About the Second Iraq War

I supported the decision to invade Iraq by George W. Bush. There, I said it; the libertarian wing of the tea party can forcibly eject me. Early on, I became worried about the direction of the war because of Donald Rumsfeld's personality. Mark Salter's review of Dick Cheney's book reminded me of my bitterness.

I was in the military when Bush was elected and Rumsfeld became Secretary of Defense. At the time, Rummy made it clear that he was out to downsize the military. His vision was for more special forces and aircraft and fewer soldiers, sailors and marines. I remember thinking that this was a risky proposition, because we had learned from Desert Storm that massive numerical superiority along with speed of maneuver could close out a war in weeks, rather than the years we had been bogged down in other ventures. Interestingly, Dick Cheney was Secretary of Defense during that first Gulf War and I would have thought he would have drawn the correct lessons from the "Powell Doctrine," as well as the use of overwhelming force. From Salter:

But for four years, Cheney went along with the “light footprint” strategy of his closest administration ally, Defense Secretary Rumsfeld. The original Rumsfeld-Cheney policy was an under-resourced and poorly planned policy that cost the Bush administration public and congressional support for the war. Rumsfeld had no stronger defender than Cheney, and he resisted the surge until Bush showed him the door.

To win his argument about the future of the military force structure, Rumsfeld, with Cheney's backing, crafted a risky strategy to score points. There have been any number of changes to the organization of the Department of Defense, all designed to make it a more effective war fighting organization. This was the first time we had gambled on using the theater of war to win an argument about the shape of the forces. Rumsfeld had become the consummate Washington insider, who judged success in the corridors of power as more important than battlefield triumph.

I supported the war for two reasons, both of which seemed correct at the time. One, I was convinced that Saddam had weapons of mass destruction, based on his behavior with regards to refusal to allow weapons inspectors into key sites in the country. It now appears that he was either bluffing for bravado, lied to by people too scared to tell him that there were no weapons, or the weapons were smuggled out to Syria near the start of the war. The other and more important reason was that the war was a "world-historical gamble." The trend lines for our national interests in the Middle East had been moving in the wrong direction for a long time. The increasing levels of violence were inimical to our justified desire to maintain the international order. Just allowing events to take their course would eventually result in catastrophe. Dictators were becoming increasing bellicose and more vocally anti-American, funding efforts to destabilize Israel. This was true of Saddam as well. Circumstance and Saddam's violation of treaty (vis-à-vis the inspectors) gave us the opportunity to invade. The intended effect was to topple one unfriendly regime and give pause to the rest. And indeed, that worked, as we saw Gadaffi give up his own WMD program.

But if you are going "all in" as they say in poker, then you go all in. Using insufficient numbers of troops was a key problem. Other mistakes were made to be sure, but the low numbers of troops exacerbated every problem. The looting which we couldn't stop, that started after the defeat of Saddam, seemed to cause a tipping point. The Iraqis unhappy with our presence were emboldened to continue to take on coalition forces. This unhappy war dragged on into the Obama administration. Ultimately, the extended length of the war resulted in more deficit spending and of course greater loss of life. One might attribute $800 billion or more of our current debt to the length of the war. Ultimately, the decisions in how to conduct the war were not conservative at all, if carried out by purported conservatives. We paid a steep price for the failure to quickly close out the war, not the least of which were the elections of massive numbers of leftists to the Congress in 2006 and 2008, and the election of Obama in 2008.

It should give us pause when we consider who should get the Republican nomination to challenge Obama in 2012. On current trends, the race has the making of a route. I fear Republican excess with massive majorities as well. We need a President we can trust to limit, not expand the government, which would include a wary eye towards more wars. It would be ironic if Gary Johnson or Ron Paul were the nominee and ran against Obama as anti-war candidates.

This is All You Need to Know About Theocracy

Proof, as if more were needed, that Islamic theocracy is a spent force comes from today's WSJ. Apparently, a large outbreak of squirt gun fights are threatening the foundations of the so-called "Islamic Republic." The outbreaks have gotten the attention of the authorities, who are questioning toy shop owners about whether the "tools of Satan" were manufactured in America, ostensibly to corrupt the youth of Iran. Apparently the greatest problem is the embarassment caused by pictures of Islamic boys and girls (fully covered) cavorting with squirt guns, and laughing and having fun. But the bearded ones had other ideas (WSJ):

Among Iranian authorities, the fun and games triggered a different reaction. Police raided the park, engaging in a four-hour cat-and-mouse game with the youth, who turned their squirt guns on the cops and threw plastic bags full of water on the policemen's heads, according to participants and media reports.
. . .

Although the water wars and the government response have a comically absurd quality, the recent tension shows how fearful the regime is of its young.
. . .

Earlier this month, police arrested the administrators of the Facebook page for Shiraz Water Wars, and 17 young men and women who were playing in a water park in the southern coastal city of Bandar Abbas were detained, according to media reports. Authorities also paraded young people on television, forcing them to confess—a move typically reserved for political detainees.

I draw hope from the pictures of Iranian youth having fun. It shows the limits of indoctrination and the power of freedom. Maybe the mullahs are right to be afraid, but they should heed Leia's advice to Tarkin.

"Police will deal forcefully with park violators who are threatening the security and peace of our society," Tehran police chief Hussein Sajedina said.

Endorsing DeMaio - One Tea Party View

I don't speak for the tea party movement, no one does. I think that's necessary to understanding the movement as a whole. The best explanation for this comes from the SCTRC web page on the Starfish and the Spider. The principles that bring the tea party movement together are less government, less regulation, and lower taxes and lower costs of government. It is as much a state of mind as a movement. We question why government at all levels has become so big and dominant. We question why government costs so much.

When looking to endorse a politician for mayor of San Diego, I have to ask, among the major candidates, who has been the most vocal advocate of those principles? To me it is obvious that Carl DeMaio is that man. His strong and vocal opposition to Proposition D (1/2 cent sales tax) is the most reliable indicator of where he stands on issues important to the tea party. He has pushed hard for more competition in providing government services. He has been the most visible supporter of the pension reform initiative. Temple of Mut reminded me of this little gem regarding DeMaio.

DeMaio stood up for California Citizens, challenging the airing of the odious union-backed ad that tries to undermine our state’s petition process by false claims of identity theft. Sadly, the (un)The Fair Political Practices Commission has dismissed a request.

My one beef is that he is still willing to use tax dollars to fund some "investment." Part of his response to a question about "redevelopment."

When you have things like the Convention Center expansion, North Embarcadero, that can and should be funded first because they will ignite private investment, On the Chargers stadium, if we’re going to pull that off, it’s not going to be through redevelopment money as much as it’s going to be through public/private partnerships, perhaps some of our existing landholdings in, for example, the existing Qualcomm site, redeveloping it.

I also have reservations about the "Republican establishment," which exists as surely as the tea party movement, even if not officially. I perceive Dumanis and Fletcher as part of that group. As a taxpayer, I have been unhappy with how Republican mayors and city council members have handled underfunding the pensions, the city's Enron like accounting, and until recently, giving away city dollars to professional sports franchises. The 1997 agreement to renovate Jack Murphy Stadium using "lease revenue bonds" has not worked out well for the city and still sticks in my craw. From the 2003 task force report.

Thus, the contract we are dealing with today is the 1995 agreement as modified in 1997 (referred to hereafter as "the Contract"). It would be fair to say - - indeed, an understatement - - that the 1995-97 Contract has not worked out well for the City. The ticket guarantee has cost the City millions of dollars. The trigger/renegotiation clause threatens to cost the City more, and possibly permit the Chargers to leave town. And notwithstanding contract language suggesting that the renovations would bring Qualcomm up to state of the art, the NFL, the Chargers, and certain professional architects and contractors assert that Qualcomm Stadium is out of date already, and that single-purpose football-only stadiums are far superior to Qualcomm. Thus, with the benefit of hindsight, the Contract is highly unfortunate and the $78 million renovation and practice facility may have been uneconomic.

My issue is that the Republican establishment seems bent on rewarding big businesses in the city with little regard for the tax paying public. They don't seem to mind monuments of grandeur that we the taxpayers don't particularly want to fund. Petco Park, another football stadium, a bigger city hall (Sanders endorsed), a big new library downtown; these are all symptoms of the same disease.

Even though many tea partyers are willing to make alliances with Republicans and business types to prevent the labor unions from bleeding the taxpayers dry, expect us to oppose the monument building waste that is the penchant of that group. (I love the Chargers, but if they leave town, tough, I don't want to foot the bill to keep them. Nor do I want to force other taxpayers to do so.) This is a big part of my attraction to DeMaio, he doesn't seem to be part of the established order, unlike Dumanis and Fletcher or Filner on the union side, for that matter. Here is what DeMaio says on much the same theme about the contest collusion between big labor and big business.

There’s a very cozy system at City Hall. Big business and big labor don’t think there’s anything wrong with City Hall. The only thing they think is wrong is that you’re not paying enough. And in areas where they have the ability to do so, like water bills, they’ve increased what you’re paying into city government. They’ve tried with sales tax increases to get you to pay more through taxes. I think it’s an illegitimate system. And you’re going to find that my administration is fundamentally different and operates in a totally different fashion than prior administrations.

Spot on.

Reforming Medicare and Fraud

Medicare is both one of the most costly and popular entitlement program, rivaling social security in annual outlays. Medicare is projected to spend $623 billion in this fiscal year, 2011 compared to $748 billion for social security. What is not widely reported is the high level of fraud and theft involved in a system that is designed to quickly reimburse doctors, albeit at low rates. Further, the reimbursement rates for medical devices are out of control. Many of the fact in this article come from a Reason magazine article by Peter Suderman, Medicare Thieves, which is not available on line.

While there are no reliable numbers on the amount of medicare fraud, the GAO made an estimate of $48 billion in improper payments in a 2011 report. Because this did not include the drug program, and was only an estimate, the actual rate of fraud is potentially much higher. Fraud against Medicare is reportedly very easy to accomplish. In prepared testimony before the House Ways and Means committee, Aghaegbuena Odelugo testified: DME fraud is incredibly easy to commit. The primary skill required to do it successfully is knowledge of basic data entry on a computer. Additionally required is the presence of so- called “marketers” who recruit patients and often falsify patient data and prescription data. With these two essential ingredients, one possesses a recipe for fraud and abuse.
. . .
Physicians are given a “unique physician identifier number” (UPIN) to prove that the physician is who he/she claims to be. These numbers are readily available to the public online. The UPIN can be a useful tool for a fraudulent DME provider to exploit.
. . .
I would like to finally talk about what I perceive to be the most significant flaw in Medicare: the rates of reimbursement. I do not know who decides, or how the decision is made, but the rate of reimbursement for certain pieces of durable medical equipment is beyond exorbitant. An example is the case of the knee braces. These items are available on the market to a DME provider for less than $100.00. Medicare, however, reimburse, if I remember correctly, approximately 1,000% of this cost. Back braces that cost approximately $100.00 are reimbursed at a rate of almost 900%. Wheelchairs that cost less than $1,000.00 are reimbursed at almost 500% of cost. For anyone engaging in fraud, these numbers are too good to be true.

On the last point, even if you are not engaging in fraud, these numbers are too good to be true. One might try to institute various reforms of the system to catch the crooks, but that would be unpopular, as physicians and patients would be left waiting for payment or services respectively. The private insurance markets are much more effective at detecting fraud. Further, the whole fraud issue obscures questions around patient abuse of the system in which they have no financial stake.

This is why I am in favor of Paul Ryan's plan to allow senior's to shop for their own insurance with medicare dollars. It is a necessary first step in reforming the system. First, given the private sector's higher success in combating fraud, the savings can be used to reduce spending on the program. Second, if we were to repeal Obamacare, then the insurance market place could open up novel cost sharing proposals that would stretch senior's insurance dollars for when they really needed costly medical care.

Ultimately, I understand that the U.S. has a robust social safety net. But I think we have gone overboard. We aren't a country that promises cradle to grave support, like socialist Europe. The vast majority of Americans need to enter old age having planned for their retirement, not reliant on social security and medicare as their sole means of support. To this end, I support rationalizing these programs a step at a time, to wean people from them, and give them back more choice.

Weekend Music Chill

We were at the old car show in La Mesa last night, followed by beer, cigars and football at Hoffer's. In short, the perfect guys night out. In honor of a great tradition in downtown La Mesa, I wanted to put up some music in the theme of last night's event, the last one this summer.




I was going to go with another Beach Boys classic "My 409" but this little gem caught my attention. Here is War with Lowrider. (It was tough to find a family friendly video on this topic.)






Max was behind the bar, handing out great recommendations, and Phil, the proprietor, hooked me up with a very nice little Alec Bradley "Family Blend." The Port Brewing "Panzer Imperial Pilsner" could hardly be called a pilsner at about 10% abv, but it was big and very flavorful.

Dumanis Disqualifies Herself

Bonnie Dumanis was interviewed by the U-T editorial board today. Ricky Young, @sdutYoung on Twitter, has a couple of key quotes.

Dumanis to U-T edit board, asked about Prop D, says she voted but ''My vote is personal''

Dumanis says she doesn't remember Prop 23, last fall's effort to undo AB32, so doesn't know how she might have voted.

Gustafson asks for Dumanis' ideas... She starts, ''First of all, there are no new ideas."

By contrast, Carl DeMaio's efforts were key to Proposition D's (1/2 cent sales tax increase) defeat. In fairness, Nathan Fletcher was also on record against the measure, but didn't seem to actively campaign against it. Filner is so in the tank for the unions that I will never endorse him.

My tea party endorsement is never going to go to anyone who won't oppose tax increases until we have done all we can to reduce the size and cost of government.

Personal Experiences: Why We Must Limit Government

As my readers may know, I am a federal employee. I am fortunate to work in one of the best run parts of the federal government. We have had pay for performance for over twenty years, well before any other part of the government. Even the sub-units of our organization post financial results, managers are judged on their profit and loss (although we are required to break even as an organization.) Our employees are mostly well educated and most of them work very hard; there are always many cars in the parking lot at the end of working hours.

In spite of this, we are still inefficient compared to the commercial sector. We are mired in red tape and it hurts our ability to perform our work, and I think we are among the best in the federal sector. K.T. explains the difficulty of working for the feds in an excellent post with comments worth reading as well.

Government employees operate under more regulations than any of them [other regulated industries]. If you don't believe me, stop by any government agency and check out their contracts department. That's where the money gets distributed to businesses to do work. That's where stimulus meets employment.
. . .
Increased government intervention means, at the micro level, more people will spend more time following the rules like the ones laid out in the Department of Interior site linked above.
. . .
The progressive faith in government is built entirely on a foundation of ignorance. It sounds like a good idea to intervene, but in real life it fails because the government wastes people's time. Wasted time reduces economic output. It's as simple as that.

And the coup de grâce, from his comments.

It's not that government employees are stupid, lazy or wasteful, it's that government, by proper design, is inefficient and wasteful. It should be doing as little as possible.

Dean chimes in:

I'm in the initial stages of my DAU training [acquisition training] and after each session, my head hurts.

It hurts from tons and tons of good intent.

The whole article is worth a read.

This is All You Need to Know About Federalism

P.J. O'Rourke famously said, "You can't get good chinese takeout in China and cuban cigars are rationed in Cuba. That's all you need to know about communism." In these United States we can see the effect of stupid policies unveiled in one state, but not others and take note. (I wasn't thinking of Romneycare, but that's not a bad example either.) This is the beauty of federalism.

In January 2011, a massive tax hike was enacted in Illinois by the Democratic controlled legislature and here are the results.



Meanwhile, I found this picture on the BLS website regarding employment in Houston, TX:


Note how Houston continues to add jobs, better than the whole of America which is also adding jobs even at a lower rate, unlike Illinois.

Paging Admiral Ackbar

The scene at right, (Picture H/T LCR), coupled with the news that Gaddafi is still at large brings to mind that the rebels alliance may have fallen into a trap. Gadhafi's forces were getting pounded by NATO air forces when out in the open outside of urban areas. Luring the rebels inside Tripoli may have been an ingenious trap. Since the previous reports of Gadhafi's demise seem premature, who knows what is really happening?






If you wondered what happened to Ackbar after the rebellion succeeded in dethroning the Empire, click here.

Lemonade Freedom Day Follow Up

This was the result of selling lemonade in our nation's capital (H/T Carpe Diem.)



This video speaks for itself. However, the female officer who kept shoving her hand into the video camera appears to be acting above the law. She's annoyed? Who cares; she has no right to commit a crime, in this case assault, under color of authority. I invite any reader who might be in law enforcement or knows someone in law enforcement to tell me if I am wrong.

I know that the police eventually had to make arrests under the letter of the law, but doesn't it show that the law is a crock?

Good Timing for a Grocery Strike? UPDATE

Yesterday's U-T headline announced that San Diego County's unemployment rate had increased to 10.5% during the "summer of recovery."

Unemployment in San Diego County ticked up in July to 10.5 percent, up from a revised 10.4 percent in June, reaching a high not seen for nearly a year, according to data released Friday by the state Employment Development Department.

So imagine my surprise this morning when I read that local grocery workers had voted to go on strike against Vons, Albertsons and Ralphs. One would think that the supermarkets will have no problem getting replacement workers.

More than 90 percent voted to reject the supermarkets' offer, which could affect scores of stores in San Diego County and across Southern California. The vote was open to more than 62,000 workers across Southern California, but union officials did not reveal the exact turnout, only saying it was a "record high."

I presume the key issue is the desire on the part of the grocers to have their employees pay more for their health insurance. Union President Mickey Kasparian, from the same article:

Under the grocery chain’s proposal, some workers would go from having no paycheck deductions to having an average of $92 per month deducted for health insurance, although it would vary depending on family size and other factors, Kasparian said.

Is this the result of the passage of Obamacare? I don't have hard evidence to prove that, but I wouldn't be surprised. Businesses are facing rising health care costs since the passage of the bill that we needed to pass to see what was in it. Everything I have read about the negotiations for the grocery workers lead me to believe that health care costs are the key sticking point. Costs are going up and neither side wants to pay for them.

Meanwhile, the stores are getting ready for a strike, some are putting up signs asking for applications for replacement workers. Since my youngest son has been having trouble finding work, he took the opportunity to go to one of the local stores to fill out such an application. He said it was a difficult endeavor, because he didn't want to ask current employees how to apply to be a replacement worker. Instead, he made his way to the manager's office to fill out an application there. Even though there were media reports of signage asking for replacement workers, this Vons in Clairemont had no such signs. The manager gave out a standard employment application form, no different than under non-strike conditions. Perhaps they are hoping for an 11th hour settlement and don't want to unnecessarily upset current employees.

I lived through the grocery strike eight years ago (2003-2004), and remember the unions not doing very well when the results were in. From the lib.com website.

59,000 UFCW members voted on the three-year contract over the weekend of February 28-29. By any standard, the settlement must be considered an important employer victory. While the supermarkets did lose $2.5 billion in income during the strike, they established a precedent for many pending contracts around the country, and not merely for supermarkets. Wall Street greeted the settlement, and Safeway stock prices remained firm throughout the strike.

The new contract provided for a two-tier system. Current employees will receive no pay increase for the first two years of the contract, but will receive a ratification bonus. In the third year, they will begin making monthly payments for the family health plan. New employees will have lower wages and will receive only limited health coverage. The two-tier contract will thus open the way for pushing older employees out the door. Finally, the contract allowed the supermarkets to fire up to 630 UFCW members for “misconduct” on the picket lines within 36 hours of ratification.

I personally crossed the picket line and was interviewed on local TV about why I did so. The answer was simple, we needed groceries for a party and didn't feel excessive sympathy for the worker's position. At the time, Walmart was starting to move into the grocery business and the big grocery chains needed to contain costs in order to compete. I think the problem for the grocery store workers is that it doesn't appear that high levels of education or training are necessary to perform their work. As a result, they will constantly be under competitive pressure. This is not meant as disparagement, I am on friendly terms with many unionized grocery workers and they treat me very well. They work in a field where economists would say there are low barriers to entry into that workforce, unlike health care, for instance. Ultimately, the price I pay for my groceries is a good part of the consideration of where I decide to shop. Regardless of their helpfulness, prices that are too high will send me elsewhere.

I sincerely hope the strike ends soon, but I don't see how the workers are in any better position to win concessions than they were eight years ago. Further, I wonder how they will explain to their unemployed neighbors that they went on strike because their health care costs went up. Isn't that true for almost everyone?

UPDATE

Apparently, Verizon workers are returning to work without a contract, although negotiations will continue. The striking Verizon workers are in the land line portion of the business, which is under great strain because of the shift to wireless. This makes their situation similar to the grocery workers, being in an industry of increasing competitive pressure. That they felt it necessary to return to work is not a good omen for our local UCFW folks. Health care costs were also a big part of this strike as well. Seems Obamacare isn't a good deal for private sector unions.

Public Service Announcement - Lemonade Freedom Day

Today is Lemonade Freedom Day, (H/T Roger) the brainchild of Robert Fernandes. Even though this is one small effort to push back on the statist elite who would rule every minute aspect of our lives, it is an important effort worthy of our support. Movements like this are part of the overall rebellion of our citizenry against the continually encroaching tyranny of all levels of government. Even if you don't have kids participating, I encourage you to buy some lemonade today from your local stand.

Benefits:

• Teaches kids the fundamentals of capitalism. They take raw inputs and make a product that they sell, hopefully, for a profit. Advanced instruction might include inventory control over things like the ice and lemons.
• It is the perfect poke in the eye to the regulatory regime. IJ has learned the value of finding sympathetic victims of government's over reach.
• It will encourage other grass roots efforts to respond to our government's over reach.

Maybe we should have national garage sales weekend next.

Obama Administration's Illegal Illegal Immigration Plan

The administration announced Thursday that it will cease deporting those identified as illegal immigrants who pose no threat to public safety or national security so that it can focus on catching and expelling criminals who do. That's the purported rationale. Let's look at the overall policy of the administration with a view to actual results.

Step 1. Don't enforce the border. (Too be fair, this was the Bush position as well.) Illegal immigrants continue to walk across a border that is only defended in urban areas, thereby falling prey to thirst, coyotes (the people), and coyotes (the animals). OK, I made up the part about the animals. Net effect, many illegal immigrants make it across the border, some die along the way.

Step 2. Step up enforcement of targeting employers of illegal immigrants. Destroy businesses and jobs by so doing. Note that if employers inquire too closely about immigration status based on race, appearance, or language, they can be targeted in discrimination lawsuits.

Step 3. Don't deport the illegal aliens identified in step 2, leaving them unemployed, but hanging around the U.S.

Step 4. Make sure that the families of the newly unemployed illegals who were not deported receive welfare benefits. This happens primarily because the children born in the U.S. of illegals are entitled to benefits as citizens.

Step 5. Make sure that the illegals receive health care benefits under Obamacare.

. . . a recent award of $28.8 million to 67 community healthcare centers around the country would inevitably end up benefiting illegal immigrants, contrary to Obama’s pledge.

Of that $28.8 million, $8.5 million is earmarked to target migrant and seasonal farm workers — a group that Wilson claims is comprised of illegal immigrants.

Net effect of failed policies: Permanent underclass dependent on government benefits, raising a follow on generation also dependent, destined to vote for the Democrats who provide these benefits. My libertarian friends who are in favor of open borders should look at this result.

Hmmm. Immigration policy leads to more Democrat voters. Government authorized gun running operations kill U.S. agents, leading to calls for more gun control. Obamacare subsidies and regulation appear poised to run insurance companies out of business which would lead to government being only insurer. If I were a cynic, I might say these were intended consequences, not unintended consequences of legally and constitutionally questionable activities of this administration. Good think I'm not a cynic, or I might get more than a little angry.

Weekend Music Chill

Tomorrow is lemonade freedom day, so I was looking for some musical accompaniment. This man also performs some of my favorite romantic music. Here is Herb Alpert & The Tijuana Brass performing "Lemon Tree."



And because I was in the mood for one more romantic tune:



My anniversary is coming up, so these will definitely be on the Sonos playlist.

401(k) - Better for Workers

Is a promise that won't be kept really a promise at all? I was thinking about the issue of defined contribution plans (401(k)) vs defined benefit plans for city workers that will be on the ballot in June 2012. The Voice of San Diego summarized the issue neatly:

It [the ballot measure] was an agreement to unite and to set in motion what could be the climax of a nine-year drama about the city of San Diego's mounting pension liabilities. The city never set aside money to meet those obligations. And the bills due today are suffocating other city services while the distrust the decisions created destroyed the city's ability to ask taxpayers to rescue it.

Essentially, the city is going to be unable to deliver essential services if the trend continues with regards to its pension liabilities. The ultimate end of that path is bankruptcy whereby the promises of defined plans are abrogated. How is that better for workers than benefits that get paid into a fund when earned? For those who would argue that the ballot measure does nothing to change the current problems, because it only applies to future employees please read the whole VOSD article. The plan is not as great as a conservative might like, but gives us the tools to reduce future pension costs.

Another reason that 401(k)'s are better is that the pension fund belongs to the employee, not some retirement board that can be swayed by politics or mendacity. Consider this article regarding the San Diego county pension board from the U-T Watchdog.

Less than a month after the county pension board refused a recommendation to invest $100 million with a former Wall Street trader, the agency’s top adviser is bringing the plan back for another vote.

Former Deutsche Bank trader Boaz Weinstein lost $1.8 billion in now-notorious “credit default swap” investments in 2008.

The pension board’s outside portfolio strategist, Salient Partners of Houston, is suggesting board approval on Thursday of the investment with Weinstein’s new company, Saba Capital Partners.

If you are an employee, counting on the returns from this investment to fund your retirement, and you think the fools who were part of the whole mortgage backed securities game should be in jail not in business, what can you do? Not much, it turns out.

However, a properly managed 401(k) using dollar cost averaging and periodic sector re-balancing, can actually beat market returns. See this article for a short primer.

Or take CALPERS, please. In June 2007:

The California Public Employees' Retirement System, the nation's largest public pension fund, has invested $140 million in such unrated CDO portions, according to data Calpers provided in response to a public records request. Citigroup Inc., the largest U.S. bank, sold the tranches to Calpers.

CDOs are collateralized debt obligations, mortgage backed securities. Further, CALPERS has a history of supporting union interests ahead of total returns for employees. If you are an employee, do you really want an investment board that puts the political interests of unions ahead of your returns?

In summary, I don't understand why unions would be arguing against defined contribution plans, unless it deprives them of power over the work force. America is moving towards this system because it reduces the uncertainties associated with future bankruptcies and offloads the investment risk to the individual, where it belongs. As individuals become better investors, defined contribution plans will actually improve the economy by adding to the investment capital available.

Defeating Obama

This is my 1000th post on The Liberator Today; it is appropriate that I return to the theme of defeating Obama that informed my first attempt at blogging. As I have gotten older, I have taken a more relaxed view of the outcome of any particular election, including the most recent presidential edition in 2008. I noticed that things never seemed to turn out as bad as I feared when the other side one, and were never as good as I hoped when our side won. However, Obama's first term broke this rule, because he had extraordinary majorities in the House and Senate for his first two years in office. This resulted in doubling down on every failure from the Bush administration while foisting the most massive increase in federal reach in the history of the Republic in the form of the health care bill.

However, the health care bill hasn't fully kicked in, even though its ill effects and budget busting effects are already evident. A massive defeat for Obama in 2012 would provide the majorities to perform the biggest roll back of a federal program ever achieved. This will require strength at the top of the ticket. This is why I may be less interested in ideological purity than some others in the tea party movement. However, I also realize that electing a Republican who wouldn't sign a repeal, or who would continue the path of unsustainable deficit spending is no victory at all.

This is the dilemma for the tea party. The front runners Romney and Perry seem to have serious issues with issues of health care and crony capitalism respectively (and other issues as well, but time does not permit.) But those with better positions and records don't look strong enough today to challenge Obama, Ron Paul and Gary Johnson come to mind. Fortunately, its still early and I think the eventual Republican nominee is going to have to repent of something to win the nomination. We should be pressuring the candidates now to recant of their various heresies, and until they do, be supportive of those candidates that have shown seriousness of purpose in reducing federal spending.

The energy of the tea party movement will move the country in the opposite direction that Euro socialist protestors want to move Europe. This country still embraces capitalism to a greater degree than any other large nation, which will allow us to remain leaders of the world for some time to come. We need to continue the counter-revolution against the progressive movement that has been undermining the founders' vision of limited government for over 100 years.