Monday, March 29, 2010

Political Vandalism

I watch the news regularly and recent reports of violence towards congressional offices have been the subject of much comment. Apparently both political parties have been hit with vandalism.

Finger pointing has been rife since the first incidents occurred at Democrats’ offices, including house member G. Giffords of CD 8 here in Pima County and Tucson. Mr. Limbaugh and Ms. Palin use unfortunate phraseology like ‘wipe them out’ and ‘reload’, causing a spate of complaints from those who think they are inciting violence. Ms. Palin has denounced violence. I think she may have meant ‘If at first you do not succeed, try, try again’.

I have no idea who did the violence. Perpetration is difficult to prove. But I do wonder why it was so easy to stir up the violence. Ms. Palin verbally attacks the media, directly challenging their power. Bias appears to be the norm, both in the press and on the podium. With the internet, it is becoming more difficult to slant reporting, since there are so many sources of data. Perhaps perception of bias provokes violence if coupled with economic inequities. People understand bias.

The internet article in the Arizona Daily Star was blatantly biased in saying Cindy McCain was ‘lukewarm’ in her introduction of Ms. Palin. A biased interjection of opinion into what should have been a factual report of a political event, things like crowd size reported accurately, who was there, interviews with local organizers, etc. etc. I don’t really think people are interested in a reporter’s opinion disguised as fact.

So what is the source of the violence? Maybe people don’t like the attitude of the politicians, the lack of jobs, the level of public debt, mandated insurance costs, higher taxes, cuts in public services, more regulation and loss of freedom in the name of protecting us. Take your pick. We have an educated populace, phenomenal communications and an attitude of lifelong learning. A large number of people know a great deal about what is going on in the government, from the internet and a cadre of dedicated media. This educated electorate sees what before was hidden and slow to disseminate. The electorate is perceptive of a lack of accountability in our elected officials for the bailouts, tax rebates and lobbyists.

Perhaps reflection on how action creates reaction, the role of government, the constitution and the freedom of the American people should be required of our elected officials. Did any of them thoroughly survey constituents concerning the important issues of the day? Should all elected officials understand and act on voters’ interests and needs? I think so.

Thursday, March 25, 2010

TAX REBATES AND HEALTH INSURANCE

So the interstate homebuilders are bailed out by refunding tax money they paid during the boom, as if these people really deserved to get this windfall? The moneylenders are bailed out in direct payments to them from tax money that had to be augmented by borrowing. Essentially our government is borrowing money from foreigners in order to rebate money to the homebuilders. Our government borrowed money to give to the banks. Convenient that the bill excludes TARP recipients from these rebates. That would be a little too over the top.

What I see here is that the same people who created the boom are still in power and will still control too much of the money supply, using machinations available to them through political campaign support and lobbying. Why should those who caused the bubble end up with more power?

The Federal Reserve is lobbying to get more power and a court order must be obtained in order to obtain information from them. This all powerful, unelected bureaucracy makes choices that benefit special interests over the economy in general. Names are concealed from the public record. Payments are concealed. Less power needed, not more here.

The interstate homebuilders get tax rebates? This is incredible. I would like to see the end of cookie cutter home construction brought in by these ‘too big to fail’ homebuilders. I can see it now. They get their taxes rebated, they hold the money until the housing market is deemed cheap enough to snap up properties at a bargain, betting that the market will upswing instead of continuing to lose value. A false bottom would relieve them of their cash with diminishing returns. Why should they have the cash? They can ride out the recession on this cash while the smaller businesses are squeezed out.

Favoring interstate firms over locals is ruining the economy. Requiring millions in contracts awarded with borrowed money in order to interest the interstate firms wastes money. Go local. Go incremental. Stop the borrowing. The moneylenders are reaping 40 cents out every tax dollar spent on borrowing here in Tucson. Incremental financing as the funds come in would give taxpayers 40 cents more for every dollar spent. Better the taxpayers have the material value increase, than the moneylenders. If a default spawns ‘poor credit ratings’, then go incremental. Live within the income.

So now the IRS is getting a $20 billion dollar makeover and a drastic increase in their power to punish and collect money from citizens. The tenth amendment is ignored as the Federal legislatures deem it legal to require that citizens buy a money handling service in order to obtain health care. This is a violation of our personal rights to decide how we will spend our money. So now the health insurance firms will have a permanent sellers market, illegally mandated in violation of the tenth amendment. The federal government is creating and controlling economic activity instead of only regulating economic activity interstate.

I feel that we need reasonably priced health care, not a series of mandated brokers handling our money for us.

Sunday, March 14, 2010

DEBT DEBT EVERYWHERE A DEBT DEBT

How to cut local and federal debt

The government must cut spending somewhere before adding a new obligation, popularly known as PAYGO. Unfunded mandates from the federal to the state must cease, particularly in education.

A young doctor will borrow against future earnings to buy an incredibly expensive piece of equipment, and then charge patients to pay for it. Perhaps the government might subsidize the cost of the equipment, rather than distributing the same amount in subsidized patient health care. I think health care professionals would find subsidized equipment financially attractive debt relief.

Student loans are a drag on the economy. Somehow, you should be able to work all of them off in public service, like on the reservations. (For example, teach GED or tutor students to work it off)

Did term limits encourage the mountain of debt? This is a cynical thought that during the cheap credit drama, borrowing on the part of cities in Arizona rose precipitously, giving the borrowers much power in the community, without having to return to the voters for a long career in congress. Absolution of responsibility? Why not borrow? They won’t be here to pay for it because they are term limited. I think politicians ability to indebt the taxpayer should not exceed their term of office. Term limits disrupt entrenchment of special interests, which is a positive effect. Which is worse?

Road building has gone far enough for now. We need to maintain the transportation infrastructure rather than borrow to expand it. No more borrowing for transportation would force a pay as you go plan and reliance on short term contracts to local contractors.

Moneylenders have their place but it should not be at the top of the profit chain. There are too many fees, interest payments, obligations; it costs too much to borrow, too many brokers, too many people who produce nothing cut in front of everybody at the table. Endgame. Somebody big should take a haircut, face a clawback of that money and fraud charges.

Legislation against debt needs to happen. It looks like the city of Tucson is paying $133 million to borrow $80 million. This is not judicious use of taxpayer money. How about limiting debt incurred by politicians to their term or require a public vote on any debt?

Reduce the fleet the government sponsors. Cancel all cars for other than police and fire. This would save insurance, fuel and maintenance plus a cash outlay for new units. Sell off gas guzzlers, private cars etc.

Van Tran in Tucson: how many people are being served at what cost per person? Would this be cheaper contracted out to a private enterprise taxi?

Pima County should not borrow to build more wastewater plants. We are still paying for the last one. Why not start incremental work and use local contractors and pay cash as it comes in? Don’t borrow to build. Pay for the ongoing work as the money comes in and avoid interest charges. If this doesn’t generate enough money then the plans are too grandiose and must be scaled back to the actual income available. The amount of actual income available should drive the scope of the project, not the maximum able to be borrowed and the cash in a lump sum for somebody to play with. It costs money to borrow money and an ambition to control a large amount of money is not adequate criteria to indebt the public.

The TIF Rio Nuevo in Tucson did not produce adequate results from the cash borrowed and the debt remains. Legally this appears to be tenuous as audit results are awaited. How did the people who controlled Rio Nuevo get the power to borrow against the revenue stream? Why is this allowed without a popular vote? Somebody landed control of $80 million and blew it. Who voted to do this? What about the $15 million entrance boondoggle? That’s like financing a new Cadillac and never getting possession of the car but still have to pay the debt.

Mandating insurance turns it into a debt. This assures that a percentage of income is forever inaccessible to the earner. This is a tax also. The net result is that the earner may never have access to this money, but is required to pay it. This is a debt. The insurance companies are taking too much out of the general economy and funneling too much of the money to themselves and health care professionals, who are pumping up the costs by ordering expensive tests/procedures in order to avoid litigation.

Litigation in the medical world is making money for the lawyers at the expense of the insurance companies and medical professionals who must pay enormous insurance premiums. Some claims are legitimate but the parasitic aspect of litigation and the negative results on society is a cause for concern. Limits on litigation must be set in order to protect our medical professionals, while protecting individual rights.

There are more ideas out there. Cut debt, reexamine contracts for legalities and applied limits to more than the market value for rent as a lease payment in Tucson, and renegotiation possibilities for strapped homeowners. Or defaults will continue to rise. Nobody wants to put more money into something that is losing face value, making the debt impossible to pay in today’s economy. If you can get better elsewhere for less money, then that will happen. Buyers have dried up. Cut the rents. Nobody can make money while paying exorbitant rents because the owners have huge debt on the property. So units stand empty.

If you own a rental and that rental remains unrented with an exorbitant rent demanded, does that constitute a tax deduction for the owner? If it does, cancel that deduction. Nobody should make money from the government by leaving units unrented.

Creative thinking needs to happen. Focus on the real necessities. If local default becomes an option, we can start over with the actual income to be applied to the necessities of government, instead of harmful cutbacks in physical necessities in order to meet debt service. Practicality must rule.

Remember that old Alexander Dumas story about the poor woman who borrowed a diamond necklace from a rich friend, lost it, and spent years paying for a replacement only to eventually find out the original necklace had been glass? I don’t want to spend the taxpayers’ lives paying for debts incurred within a few years. This truly impoverishes the community for the duration of the debt. They cannot count on continued inflation and another boom to bail them out of debt made smaller through inflation. That is wishful thinking.

Saturday, February 20, 2010

Hypocrisy at the Arizona Daily Star

Dear Colonel Gent:

I read with interest your letter in the Arizona Daily Star on February 15, 2010. The best line in the letter is “When elected officials decline to take part in public discourse, one has to ask why.”

I looked on the net to perhaps find your e mail address and found your bio, which tells me you are a person to respect. Like many of the Republican Party, I support the military and veterans. This is not a partisan issue. This is an issue of national pride and responsibility. I am also a Daughter of the American Revolution and am proud of it.

I surmise we do have more goals in common. Since you serve on Representative Giffords Military Advisory Council, I surmise that you support the space program. To me the space program is too important to be a partisan issue. Many military people I have met also support the space program.

I also have a great interest in environmental issues and as a consequence, I have supported Representative Raul Grijalva in my district. Possibly you also have such interest in preserving the natural environment.

A noted Iraq War veteran and author in Arizona, State Representative Frank Antenori had the following to say when I requested a statement about the Arizona Daily Star’s editorial policy:

“The Arizona Daily Star's editorial board has clear bias and hidden agenda that distorts or filters information in an effort to influence public opinion in favor of their ideological beliefs. They offer no opposing views on their editorial pages and have consistently suppressed opposing views submitted by readers by refusing to print them. They are now truly living up to the words of Mark Twain, "Those that do not read the paper are uninformed, and those that do are misinformed."”

I believe that Mr. Antenori is correct. Apparently, nothing is more important than partisan politics to the editorial staff at the Star.

My own experiences with the ‘Reader Advocate’ Debbie Kornmiller did nothing to correct this assertation. Ms. Kornmiller has banned me from commenting online because my husband allegedly broke the terms of service while using his private e mail address. No complaints were made about my postings.

Ms. Kornmiller banned me because I am a Republican precinct committeeman who does not always agree with her personal choice of candidates. My blog explains my interests and opinions, if you would like to see what Ms. Kornmiller banned. A past president of the Pima County Republican Womens’ Club has felt ostracized because she was at odds with Ms. Kornmiller. Ms. Kornmiller has also ‘edited’ letters printed in the paper, receiving complaints. I attend several Republican political organizations and often the discussion turns to the biased editorial page of the Star. The problem appeared to escalate after the demise of the Tucson Citizen.

What does this have to do with elected officials declining to take part in public discourse? It has been suggested that the Star have more ‘conservative’ viewpoints represented in the opinion section. I support this idea.

I think what we have here is a breakdown of genuine bipartisanship, reflected in the stagnation of the legislative process. My problem with Ms. Kornmiller is a microcosm of the mentality that is preventing true public and private discourse. The lines of communication are cut. What the opinion page of the Star is offering is not public discourse, but is a heavily edited version of the truth as sifted for you. That’s probably why some decline to comment for the Star. They don’t deserve to be criticized for not answering the Star’s demand for a statement. There are other venues to reach the constituency.

A free flow of ideas is essential for democracy. I think that the key to future success in solving the problems of this country lies in bipartisan or antipartisan agreements. Important issues like the military, veterans affairs, forwarding the space program, health care payment system reform and other issues should generate bipartisan coalitions, but the lines of communication must remain open for this to occur.

I am disappointed in the Arizona Daily Star.

Sincerely,
Dorothy Prater Niemi
LD 27

Monday, January 18, 2010

Capitalism?

Capitalism/Free Enterprise System


The Free Enterprise economic system is not a game of ‘keep away’ played as a child. Free Enterprise is a game designed to keep the system running while making a profit. If the means to a profit eventually destroys the system, then this means is immoral to use. Morality is actually subjective as used by people and the legal system only covers a small portion of business practices. A sense of responsibility has been absent in the past, either that or a blissful ignorance or indifference to the consequences of the business model deemed to earn a profit. Ms. Bair indicated that compensation practices be linked to FDIC insurance rates, as an insurance hazard that promotes risky investments. Is it really true that investment houses funneling investors’ money into mortgage ‘products’ bet against success and collected insurance money when the mortgage ‘products’ failed while the investors they counseled lost their cash? And what about dividend payments? Are these boards and executives feathering their own nest using tax money and the capital invested by others? Many questions remain to be answered.

Of course the excesses produce regulation and restrictions. Yet they still want more derivatives and other investments that produce nothing but commissions for a few, very expensive people. These derivatives and hedges should be relegated to organized gambling in Nevada or let the Indians handle them.

Formerly known as killing the goose that lays the golden egg, this destructive behavior
must be discouraged, in favor of a less phenomenally profitable enterprise that makes a good living and keeps work going. The short term profit taking model should be analyzed carefully before implementation, as to whether the economy will be perpetuated in a healthy condition after the profit taking. Is that so much to ask on a moral level or must the government create regulation? The answer lies before us.

Now the investment banks that were intensely subsidized for a short time are hugely profitable and plan to pay themselves large sums for handling the government money. Unemployment is about 10%, social services are strained, the real estate market overbuilt and foreclosures rising. Local governments talk more taxes and insurance is in danger of becoming a mandated racket, while layoffs continue.

Can all this be blamed on the mortgage bubble? Easy money and no oversight pumped up real estate values so the securities sold by the investment banks would be worth more and they could make more mortgage ‘products’ for their clients while betting that these same securities would be worthless, collecting on insurance paid by the Feds through the ‘too big to fail’ authorization. Clients sold these ‘securities’ lost out as the foreclosure rate surfaced and the lack of loan oversight became a national scandal. Is buying insurance on something you know to be questionable or even worthless a crime? Fraud? Claw back that money.

Populism aside, people feel ripped off, gasoline prices are creeping up and the President is talking taxes on the investment bank bubble. Unbridled capitalism does become Darwinism as the available resources become controlled by a few manipulative individuals. Better yet, if these ‘new entrepreneurs’ can make up their own investment games without oversight, force the government to pick up the losses and come out of it with huge sums to divvy up, just like the train robbers of old, they think they won the game of keep away.

A brief return to the social unrest of the 20th century in the United States in my memory and knowledge of history tells me that the economy is often cause of unrest as manifested by bitter elections, corruption, recession, fewer jobs, riots and more regulation. The phenomena of bus rides past AIG mansions, rumors that Goldman Sachs people find it easier to get a firearms permit, or that GS people had swine flu shots before anyone else fan populist flames. I thank the media for publicizing the outrageous ripoffs and giant payoffs. I hope our Legislators order a full investigation of the ‘too big to fail’ authorizations. If they do not, expect them to be voted out. Difficult for incumbents in times like these.

Responsible capitalism? Is that possible? Regulated responsible capitalism? Foresight and careful decisions will perpetuate our civilization and allow free enterprise to function within a framework of sustainability in this new environment of 2010.

Saturday, January 09, 2010

Tucson City Council

Recall of City Council 2010


What do I think of the recall?

What caused the recall?

A lack of focus in Rio Nuevo contributed to public distrust. One project should be the focus until that project is completed and paid for. Squandering money on consultants resulted in a few benefiting hugely from Rio Nuevo while few jobs were created. Most of the money was skimmed off by those in the know before the job benefits actually reached the people. As for the public structures to be created with this money in Rio Nuevo, they do not exist, the money is gone and the fund encumbered for $80,000,000. We see a very few benefitting at the expense of the rest of us as the city staggers under a mountain of debt service. And there are no new museums or parade grounds for the people to enjoy.

I think an investigation and the ongoing audit will determine where the money went, what it was spent on and who got it. How about a list of people/enterprises that received Rio Nuevo money, in order of amount? This is public information. Let the audit begin when the first Rio Nuevo crew was ousted and the new regime took over.

Insular attitudes, insider mentalities, a lack of long term planning, lack of focus in Rio Nuevo, too much debt, and high unemployment have resulted in a negative public attitude. Recalls are a sign of public unrest and competition for scarce resources. The Rio Nuevo money was a rare opportunity for this community that has come to just another credit line to be obligated with nothing to show for the money. Too many people were cut out of the deal. Too much in the hands of too few. A few jobs for some very expensive people. Free land for select individuals. Rent subsidy for some and not others.

The ‘discovery’ of the $32,000,000 budget deficit just after the election left some people wondering if this information were withheld in an attempt to influence the election.

And now after all this public debt and the recession, we cannot afford more taxes and fees. With the city scrounging in our pockets for money and high unemployment rates, citizens need relief. The recall interests people because the city is insolvent and the Council raised fees and might be considering raising taxes.

Wednesday, December 30, 2009

Tucson Budget Crisis


Year end musings on the sad budgetary state of affairs of Tucson, Arizona, USA.

Tucson had an election and I pray the council will succeed in the difficult task ahead. Some guidelines for solving the budget cutting problem should be in place before the task is attempted. Prioritizing objectives must be done.

In this analysis the special place of the responsibilities of cities must be considered first.
The city of Tucson is responsible for providing essential services. As a definition of essential must be made, I say that the following services are essential.

I. Essential

Law enforcement
Fire protection
Water and sanitation
Garbage collection
Prosecution/incarceration/courts/public defender
Records and Elections
Related Administrative

Other services are ongoing but are not essential in the short term. These must be cut back what percent?

II. Secondary (not in order of importance)

City manager
Real estate
Zoning
Rio Nuevo
Community services
MLK revitalization(no longer low income)
Housing Management
Community development
*Audit Housing Assistance
Convention Center
Director/administration
Event development
Event services
Finance
General Services
Information technology
Neighborhood resources
Parks (explore alternate way to keep open, caretaker system)
Procurement
Transportation

To continue this categorization, the following must be cut heavily or discontinued.

III. Non-Essential (not in order of importance)

Intergovernmental relations: elected officials
Development Services skeleton crew for the downturn
Budgetary Requirements environmental services
General Services architectural and Engineering
Fleet services could be cut overall by having fewer vehicles online
Internal service fund
Is golf a net economic boost for Tucson? How much does golf generate?
Human Resources
Urban Planning and Design
Non Departmental: mishmash of causes needs weeding out
Debt Service


Cutting the budgets of the secondary and non essential services is necessary. The essential services could use an administrative reorganization and review of expenses in order to shave off a percent of their budgets. They should be given further goals to meet.

Debt service is huge and the debts should be restructured to meet existing economic conditions, in order to prevent a default. I would rather pay police and fire protection than pay debt service, if the choice has to be made. If the pundits say Tucson will ruin its credit, perhaps this is a blessing in disguise, since about ¼ of the budget goes to debt service. The city cannot afford this debt load and certainly does not need more debt in any form. Look at it this way: if you count the debt for water systems, the debt service rises to $140,788,980, which is about 29% of total stated expenditures. I wish it were impossible for elected officials to create debt that lasts beyond their term. With so much of the expenditures tied up in debt service, flexibility appears to be limited to employee pay cuts and departmental expenditures in the form of cuts in services to residents.

What a plan! Raise taxes and continue the level of debt service no matter what happens to essential services? Not a good plan. Tell them to take a hike after you have cut these departments and downsized the budget, if that is still needed. We do not neglect the weak in order to pay debt service. We do not lay off Police and Fire to pay debt service.

Difficult decisions are ahead. May you all succeed in this task.

Dorothy Prater Niemi
December 2009