Union representatives, ticked off by Albuquerque Mayor R.J. Berry's plan to cut city workers salaries, have come out swinging, calling the fight against the budget plan, war.
“Are we not at war?” Andrew Padilla asked.
So, help me understand this Mr. Padilla...
Mayor Berry proposes to keep union workers employed, but with a modest 3% pay cut, and you issue a battle cry. However, nearly one out of ten people in Albuquerque are unemployed and a great many more are underemployed, and neither you nor your union leader brethren screamed and hollered when the legislature proposed one broad based tax increase on top of another.
We live in the information age. A quick web search, and you can find information about almost anything. Overall, I think this is a good thing. In my mind knowledge is power. The ability to learn and find answers quickly makes overcoming some previously insurmountable challenges surmountable.
Yet, there is one place in our society where open sharing of information is seemingly going in the wrong direction. Ironically, this place is called the "public sector."
New Mexico’s Open Meetings Act is meant to help ensure public involvement and to prevent backroom deals in state and local government, but violations of the law are widespread, an investigation by The Independent has found. School boards, universities, town councils, county and state commissions, and boards across the state have broken the law, casting a shroud of secrecy over government officials’ deliberations and bargaining.
Violating the Open Meetings law can contribute to a culture of political secrecy and corruption, Foundation for Open Government Executive Director Sarah Welsh told The Independent. It also raises questions about the legality of decisions reached based on issues discussed during illegally convened closed sessions.
And, it's not just the violation of open meetings that is troublesome:
Sarah Welsh, the sunshine group’s executive director, recently made her own request for some of the public records DFA had provided to Weh with redactions. The agency provided the records to Welsh without redactions, which allowed her to see that DFA had inappropriately blacked out routine information – such as handwritten notations of account numbers or notes such as “OK to pay” – before providing the documents to Weh.
“They provided different information to me and to the Weh campaign, which is not the way it’s supposed to work,” Welsh said.
Story after story have shown that increasingly all levels of public government feel free to act with impunity in keeping the public in the dark:
Attorney General Gary King is accusing Gov. Bill Richardson of violating the state open-records act by withholding the names of those in the 59 political jobs Richardson said he eliminated.
"It seems implausible that your office would make a formal announcement (about the layoffs) when it had no set of records to support its numerical assertion," Chief Deputy Attorney General Albert Lama wrote in an opinion this week. "It creates the impression that some staff member in the Governor's Office possesses, contrary to your response letter's assertions, records pertaining to the 59 exempt employees ...
At some point, the voters are going to say enough is enough. And, it's increasingly looking like that point may occur this November.
The day after we filed to pay our income tax (direct taxes) and in reflection of the "across the board" tax increases (indirect taxes) that were pushed and past this last legislative session, it is good to reflect on why some business groups might have pushed for these widespread tax increases.
After I wrote yesterday's post, I read a selection from From Out of Step: The Autobiography of an Individualist, by Frank Chodorov; The Devin-Adair Company, New York, 1962, pp. 216-239 entitled Taxation is Robbery. It is definitely worth reading, and I thought I would draw your attention to this piece in particular:
Tacit support for indirect taxation arises from another byproduct. Where a considerable outlay in taxes is a prerequisite for engaging in a business, large accumulations of capital have a distinct competitive advantage, and these capitalists could hardly be expected to advocate a lowering of the taxes. Any farmer can make whiskey, and many of them do; but the necessary investment in revenue stamps and various license fees makes the opening of a distillery and the organizing of distributive agencies a business only for large capital. Taxation has forced the individually-owned and congenial grog-shop to give way to the palatial bar under mortgage to the brewery or distillery. Likewise, the manufacture of cigarettes is concentrated in the hands of a few giant corporations by the help of our tax system; nearly three-quarters of the retail price of a package of cigarettes represents an outlay in taxes. It would be strange indeed if these interests were to voice opposition to such indirect taxes (which they never do) and the uninformed, inarticulate and unorganized consumer is forced to pay the higher price resulting from limited competition.
I know I'm on a big versus small kick that might seem to be getting old to some, but I think this theme deserves a lot more attention than the traditional partisan rhetoric. It is the shifting economic paradigm of our times.
I've noted time and time again that a change has occurred in America that is quite unsettling. The dynamic shift that concerns me is the alignment of big business and big government interests against those of small businesses and individuals. Now, maybe this has always existed, but I don't think so - at least not to the level that is currently evident.
It used to be that government interests (tax collection and regulation) were contrary to the majority of business and individual interests, but this has now changed. What has emerged is a return to days of old (i.e. landed aristocracy and ruling monarchs indenturing the masses and suppressing entrepreneurship). Consider that "too big to fail" businesses are now encouraging increased taxation and regulation that will:
stifle competition from upstarts with regulatory barriers to entry
burden potential challengers with profit draining regulation
create new revenue streams by artificially increasing costs of individuals (think cap and trade)
The latest evidence of this trend is the new compliance focus of the IRS:
According to Dean Zerbe, alliantgroup National Managing Director and former Tax Counsel on the Senate Finance Committee, "As if April 15th isn't frightening enough for small business owners, now comes news that the IRS has increased audit hours for small and medium businesses by 30% over the last five years, while at the same time decreasing the number of hours spent auditing large corporations by 33%."
Keep in mind, that taxpayer bailouts went to the largest of corporations. Those same corporations are now reaping the rewards of free money:
For 2009, the Fortune 500 lifted earnings 335%, to $391 billion, a $301 billion jump that's the second largest in the list's 56-year history, approaching the increase in the robust recovery of 2003.
The number of Americans filing for unemployment insurance for the first time jumped for the second week in a row, according to government data released Thursday.
There were 484,000 initial jobless claims filed in the week ended April 10, up 24,000from an unrevised 460,000 the previous week, according to the Labor Department's weekly report.
And, it's not just jobs that continue to disappear. Those losing their homes also continues to increase:
In the first three months of 2010 foreclosure filings rose 7%, to more than 930,000, compared with the previous quarter, according to the online foreclosure marketing firm RealtyTrac. That is a 16% jump over the first three months of 2009.
Foreclosures started off the first quarter with modest gains but spiked in March to a record 367,000 filings. Plus, nearly 258,000 of those filings were for bank repossessions, the highest quarterly total RealtyTrac has ever reported.
I probably should be writing something about the candidate finance reports filed yesterday, but there really isn't much to say that hasn't already been covered by Heath Haussamen and others. General rule of thumb is that up to the point of diminishing returns, which hasn't been hit yet, he or she with the most money in the bank wins. Comparing Democrat to Republican dollars at this point is premature, but among the primary races (both D and R) those bucks in the bank are going to make all the difference.
This might seem like an overly simplistic analysis, but it's true nonetheless. Staying with the theme of keeping it simple, enjoy this review of simpler times:
More often than not, the discussion of bigger versus smaller government comes down to arguments around:
paying more or less in taxes
individual rights versus the greater good
I'm just as guilty as everyone else for minimizing the discussion to these points. However, something I read this weekend reminded me that what often gets lost in the discussion is that the argument for smaller government is really about individual responsibility. I have touched on it before - especially as it relates to parenting and education. But, it's worth revisiting again.
I believe that the vast majority of people in this world are good. I believe that given the opportunity to do what's right and just, most people will do the right thing. If they see somebody in need, they will lend a helping hand, not because they are required to by law, but because it's the right thing to do.
Of course, this isn't just something I believe, it is something I see re-affirmed everyday. I see it every week when adult volunteers step up to coach community children in various sports or help out in classrooms. I see it when I look at the good works done by various religious and social organizations. I see it when people write checks to support the needs of the homeless, the hungry or special needs children along with many other very worthwhile causes.
Unfortunately, one of the problems with continually growing the size of government is that it erodes this sense of individual responsibility to provide solutions to the challenges facing our communities. If we continually increase taxes to take care of everything, it is not long before we as individuals no longer feel personal responsibility to be part of the solution. Instead, we begin to feel that we've paid our taxes to support [fill-in the blank], so our part is done.
However, the reality of the situation is that in a great many cases, the government solution to solving the same problem is inefficient and overly bureaucratic. Primarily, this occurs because whenever government is involved in providing a solution the one thing that is guaranteed to follow is regulation upon regulation mandating "how to do it right." Those mandates lead to investment in compliance as opposed to solving the problem at hand. Interestingly enough, when it comes to compliance, most people will seek to do the minimum required. Yet, ask those same people to volunteer to solve a problem, and they will work on it until it is done.
So, back to what triggered this post. Former Congresswoman Heather Wilson posted a recent speech on her Facebook wall that she gave at the Air Force Academy, which included the following statement:
In my experience in the Congress, it seemed to me there were two kinds of people in public life: those who want to be somebody and those who want to do something.
I'd argue that this doesn't just apply to those in Congress. It extends to everyone. Being somebody is easy, and in the grand scheme of things, meaningless. Andy Warhol noted, "In the future everybody will be world-famous for 15 minutes." Now, there is some fame (i.e. being somebody) that lasts more than fifteen minutes, but despite the duration, if it is not coupled with doing something, it is equally meaningless.
Getting elected to public office, transforms you overnight from "nobody" to "somebody." The same is true for a professional athlete or movie star. But, "being somebody" is fleeting. Once you're gone, your fame is irrelevant. Sure, there are those whose legacy continues beyond their life, but it is not because they were somebody as much as they did something - made a contribution to society that impacted people's lives.
Larger and larger government removes the motivation to truly do something and make a contribution. It shifts the drive to do something from the people to the government. It attempts to rob us all of the pleasure and satisfaction of individually making a lasting contribution. In history, every "great" society that has gone down this path has ultimately collapsed to a shell of it's former self. It's time for the pendulum in this country to shift back to acknowledging the value of the individual before it's too late.
Times are tough, and when that's the case certain obvious flaws become amplified. Take for example the challenges currently faced by the Albuquerque Public Schools (APS) as a result of the budget crunch. APS is looking at where to make cuts, and Superintendent Winston Brooks presented one suggestion that seems pretty reasonable on paper. Cut the double dippers (i.e. those who are already drawing a pension).
Albuquerque Teachers Federation President Ellen Bernstein said she understands why the district is targeting rehires, but that there are problems with the plan.
She said double dippers "have the same rights as all beginning employees," and that the district should conduct layoffs by seniority, regardless of whether employees are also drawing a pension.
Seniority. That's what it all boils down to for the union. Value to the kids - irrelevant. Teacher performance - irrelevant. Even that battle cry of the left for the greater good is irrelevant when compared to the union's commitment to protecting the status quo (AKA seniority).
Any wonder that this system continues its downward spiral?
On April Fools Day I received an email newsletter from David Murphy of Salestraq, which unfortunately wasn't an April Fools joke. In it, he tells anecdotes of people he knows who have not paid their mortgage for 11 months and yet have not been foreclosed by their financial institutions. That's pretty scary in that it means there is potentially a second shoe yet to fall.
And, the link he provides to the dynamic TransUnion Data Map seems to confirm that the worse is not yet behind us. It shows the national average 60-Day mortgage delinquency rate at 6.89%. But, if you factor in many people are not being foreclosed that are significantly beyond this, it is not unreasonable to expect this to get much worse before it gets better.
The other thing that jumps out at anyone looking at the TransUnion map is that credit card defaults are much, much lower with the 90-Day Delinquency rate at 1.21%. That really doesn't make sense when you think about it. So, where does this leave us?
Revenue collections for the current budget year are running $76 million below what had been anticipated, according to the Legislative Finance Committee.
That spells potential trouble for public schools, colleges, courts and state agencies, although it could be July or August before it's clear if weak revenues will force more budget reductions.
If revenues fall short for the fiscal year ending in June, then New Mexico's cash reserves must make up the difference to balance the budget.
Those reserves are the state's financial safety net.
Now, consider that mortgage foreclosures mean less property tax revenue collected, and if unsecured debt defaults increases it means less consumer spending and lower GRT. On top of all this consider that unemployment in the state continues to increase, and I hate be all doom and gloom, but I don't see how this means the worse is behind us.
I was born a New Yorker and have lived in more places than I can count on one hand. My wanderings included a total of more than two years in Ecuador and nine years in California. The latter being significant as that is where I met the love of my life. Of course, she determined that our progeny would be the tenth generation of her family to be raised in New Mexico. So, this is where my roots will grow long.
