The Locker Room

December 8, 2008

Voices of Sanity

Posted by Joseph Coletti at 4:16 PM

The John Locke Foundation has joined a number of other national and state groups to oppose a federal bailout of state and local governments.

Dear Member of Congress:

Over the past few weeks, you've been asked to lend your official support for a new spending plan that would provide bailout funds to states and localities. On behalf of the undersigned grassroots organizations, we urge caution in moving forward with such a plan. State and local government budgets should not be balanced on the backs of federal taxpayers. Doing so would set a horrible precedent, discourage responsible budgeting in the future, and place a greater strain on America’s hard-working families and businesses.

Thus far, most of the bailout money approved by Congress has been targeted toward financial entities. Yet we're seeing more and more interests sinking into the "me too" mode. We're disappointed to see that this camp has grown to include many state and local governments, who are looking to supplement their spending habits via direct subsidies or bond backing from Congress.

On the whole, state outlays have grown at a fast -- some would argue unsustainable -- clip over the past decade. Indeed, spending is up 124 percent over where it was 10 years ago. During this same time frame, state debt increased by 95 percent. Clearly, some states and localities allowed themselves to be caught up in the borrow-and-spend mania.

Now that the economic picture doesn't look as rosy as it once did, some want to continue this upward spiral on the federal taxpayer's dime. We believe that if troubled state and local entities seek lasting relief and stability, they should restructure their activities the way millions of families have had to restructure their budgets.

In his October 29, 2008 testimony before the House Ways and Means Committee, South Carolina Governor Mark Sanford urged Congress to "accept that there may be better routes to recovery than a blanket bailout, including offering states like mine more in the way of flexibility and freedom from federal mandates instead of a bag of money with strings attached." As Dr. Richard Vedder from ALEC's Board of Scholars has said, "A federal bailout is the wrong solution to the wrong problem."

We concur that reducing expensive mandates -- which have cost states $131 billion over the past four years -- would be one way the federal government could reduce pressure on state and local governments without spending more taxpayer dollars.


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Basketball as a tool

Posted by Mitch Kokai at 3:11 PM

Basketball is more than just a fun game to watch and play. It's a tool that can help improve young men's lives.

That's the idea behind the North Carolina Men's League, as league executive director Umar Muhammad explained during today's John Locke Foundation Shaftesbury Society meeting.

Click play below to view Muhammad's description of the positive impact associated with young men playing basketball instead of hanging out on the streets.

5:05 p.m. update: Watch the entire 52:51 presentation by clicking the play button below.

You'll find other John Locke Foundation video presentations here.

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Tax holiday instead of bailout

Posted by David N. Bass at 3:00 PM

Jed Babbin at Human Events suggests that lawmakers approve a tax holiday bill rather than an automakers' bailout.

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Lives of the rich and famous

Posted by David N. Bass at 2:15 PM

Here is an entertaining column by Steve Lopez of the Los Angeles Times. At least, it would be entertaining if the subject-matter were not so serious.

Writes Lopez:

I had lunch with Los Angeles Unified School District Supt. David Brewer earlier this year at a restaurant near downtown Los Angeles and almost choked. Not on the food, but the prices.

I wasn't that hungry, fortunately, so I had the Chinese chicken salad, which cost an eye-popping $28.95. Brewer wasn't famished either, so he just had an appetizer, the crab cakes, and those ran $16.95.

Over lunch, he defended himself against widespread criticism that he's the wrong man for the job and has been a big disappointment. But instead of talking about students, he went on and on about building a "matrix" system and "vertical" as well as "horizontal articulation." By the end of it I had an expensive stomachache.

The L.A. Times picked up the tab, but Brewer had chosen the restaurant and he seemed to know his way around there, so I started wondering if his tastes always run so high-end.

The column goes on to describe Brewer's annual $45K expense account and $3,000 monthly housing allowance, on top of a $300,000 per year salary.

Here are some noteworthy numbers closer to home: Charlotte-Mecklenburg Schools superintendent Peter Gorman gets $320,000 per year, and Wake County Public Schools superintendent Del Burns gets $312,000, according to the N&O.

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Support for global warming policies falling

Posted by Dr. Roy Cordato at 2:00 PM

This article out of Canada reports on a poll conducted by environmental groups regarding support for new policies purportedly aimed at fighting global warming. I say purportedly because, as I have made it clear in the past, I don't think that current efforts on the part of environmental pressure groups has anyting to do with the climate but are really about reengineering people's lifestyles to comport with their view of morality. But I digress. According to the article 11 countries were surveyed, "Australia, Brazil, Canada, China, France, Germany, India, Malaysia, Mexico, the United Kingdom and the United States. There were 2,000 respondents surveyed in China, including 1,000 in Hong Kong." The article goes on to report that:

Less than half of those surveyed, or 47 per cent, said they were prepared to make personal lifestyle changes to reduce carbon emissions, down from 58 per cent last year.

Only 37 per cent said they were willing to spend "extra time" on the effort, an eight-point drop.

And only one in five respondents - or 20 per cent - said they'd spend extra money to reduce climate change. That's down from 28 per cent a year ago.


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Make You All Warm And Fuzzy Over Automotive Bailout

Posted by Chad Adams at 1:00 PM

Labor Department statistics placed the average labor cost for UAW-represented workers at the former DaimlerChrysler at $75.86 per hour. For Ford it was $70.51 and for General Motors it was $73.26.

That includes the hourly pay, plus the benefits they’re receiving and all the other costs to General Motors, Ford and Chrysler, including legacy costs – retirement costs, pensions, and so on – so it’s looking at the total labor costs per hour worked for workers.

For U.S. workers at Toyota, however, the per hour labor cost is around $47.60, around $43 for Honda and around $42 for Nissan for an average of around $44.

Feeling better now about the bailout?  Of course, there are those millions in donations to legislative races including our own senate race here in North Carolina.

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Y'all pony up; I have betrayed and disappointed General Motors

Posted by Jon Sanders at 11:59 AM

General Motors takes a new tack:

DETROIT (Reuters) - General Motors Corp on Monday unveiled an unusually frank advertisement acknowledging it had "disappointed" and sometimes even "betrayed" American consumers as it lobbies to clinch the federal aid it needs to stay afloat into next month.

I have to admit, this new campaign has inspired me, and I offer my own frank admission of guilt:

Dear GM,

I have disappointed and betrayed you. An American, I have nevertheless avoided purchasing your cars over the past decade or so. You see, I've had two Pontiacs over the years that were total pieces of garbage, and since then I have unfairly branded all your cars as such in my own purchasing decisions and avoided them and you like the Plague.

Please, you great American automobile company, forgive me for this betrayal.

As a sign of your forgiveness, please allow me to get, oh, say $10 billion. It's the least I can do to make up for these great wrongs.


Jon Sanders
Repentant American taxpayer

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Bankrupt employers can't insure employees

Posted by Joseph Coletti at 11:15 AM

Another reason to support consumer owned health care: as self-insured companies close their doors, employees are left in the lurch. Federally mandated COBRA doesn't apply because there is no insurer to continue the policy. Worse, when providers cannot get payment from the employer/insurer, they have started going after the newly unemployed individual.

There was already evidence that sick employees were more likely to keep insurance they purchased on their own if they became unemployed, and this provides one reason why.

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Haywood County buys a Farm, but what next?

Posted by Michael Moore at 10:43 AM

This article out of Waynesville, is interesting, because Haywood County kept out bidding for a piece of land that, ended up being having a price tag of $1.1 million for the parcel.  Now the county doesn't have the funds to build the planned recreation facilities.  Here is the discussion among commissioners:

“My attitude now is, we have the land, so I think we need to do whatever we can to develop it,” said Commissioner Bill Upton.

However, the county is currently short on funds to spend on extras like recreation.

“The problem is obviously that the economy is not real good right now and neither is our budget — it’s fairly tight,” said (Commissioner) Kirkpatrick.

“We’d have to start off with grants, to say the least,” said Upton. “We don’t have any extra money to do anything.”

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Is the city's $1 million Mint restaurant about to fold?

Posted by Dr. Michael Sanera at 10:09 AM

Even with the city's $1 million subsidy, the white tablecloth Mint restaurant on Fayetteville Street will soon bite the dust.  According to VarmintBites and Wake Community Network the Mint is losing its head chef, pastry chef and operations director.  Anyone who has walked by the empty restaurant a lunch time will know why. 

Of course, Mayor Meeker and the other city council members who voted for the $1 million subsidy will blame the bad economy. Meeker and company will never take responsibility for wasting taxpayer money on this white tablecloth boondoggle. They will also never admit that their taxpayer funded subsidy was to support rich elite in Raleigh, the only segment of the community that could afford expensive food in this restaurant. The liberals on the council could never admit that they support policies that take from the poor and give to the rich. 

 Even the N&O "gets it," or at least gets part of it.  Today's editorial demands more police for southeast Raleigh to clean up the 300 block of N. Tarboro Street that is plagued with murders and drugs.  Of course, it would ask too much for the N&O to make a link between the City Council spending $1 billion on Fayetteville Street improvements and virtually nothing on police protection for in SE Raleigh.

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Georgia leads on mental hospitals

Posted by Joseph Coletti at 09:58 AM

Georgia plans to privatize its mental hospitals to have new facilities built at less cost to the state and lower operating cost, too.

As in North Carolina, too many patients are dying in Georgia's mental hospitals.

Maybe our Gov. Perdue can take some lessons in mental health policy from their Gov. Perdue.

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Auto bailout to include "Car Czar"

Posted by Dr. Michael Sanera at 09:05 AM

The Foundation for Economic Education (FEE) references a NYT article in its daily email newsletter here. According to the NYT:

Congressional Democrats were drafting legislation Sunday for tight government control of the crippled American auto industry, including the possible creation of an oversight board made up of five cabinet secretaries and the head of the Environmental Protection Agency and led by an independent chairman or 'car czar.'

The FEE response is classic:   "You couldn't make this stuff up."

 The government takeover of the Big Three reminds me of P.J. O'Rourke's comment about health care.  "If you think that health care is expensive now, just wait until it is free."

If you think that the Big Three are screwed up now, just wait until a government committee headed by a Car Czar runs them. 

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Much more economic pain ahead

Posted by George Leef at 08:46 AM

So argues economist Morgan Reynolds here. Reynolds understands the Austrian business cycle theory and can see how the years of cheap money "Maestro" Greenspan gave the country now means that we'll have to suffer through a long period of readjustment. Of course, all the frantic efforts at "stimulus" will just waste more resources.

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He could have said, ‘There’s no free lunch’

Posted by Mitch Kokai at 06:47 AM

Michael Kinsley is no stranger to criticism in this forum, but his latest TIME column demonstrates that he understands one of the key problems with the current rash of bailouts and proposed stimulus plans:
The answer is yes, there is a downside. Even though amounts this large inevitably seem like toy money, it's a real trillion dollars we are talking about spending. Even if we spend the money wisely (on bridges to somewhere), we or future generations will still have to pay it off, with interest. Or, more likely, we will inflate it away, along with the life savings of those who were foolish enough to save all their lives.

Don’t expect politicians to publicize this point. To quote a more consistently compelling columnist, “Economists may say that there is no such thing as a free lunch, but politicians get elected by promising free lunches.”

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If you believe deregulation and conservative ideology caused the economic mess …

Posted by Mitch Kokai at 06:46 AM

… you might be interested to read a brief article in the latest print (dead-tree) edition of National Review.

Kevin A. Hassett compiles a chart that plots a country’s “financial-market freedom” — as measured by the Fraser Institute’s Economic Freedom of the World index — and the change in its stock performance during the past year.

Assigning the “deregulation and conservative ideology” thesis to our president-elect, Hassett finds the following:

If Obama’s thesis is correct, then the economic crisis should be worse in the countries that have looser regulations fueled by a “failed ideology.”

The data show the exact opposite. …

The fitted line [on the chart] is a regression line that captures the basic tendency of the data. If Obama were correct, the line would slope downward, and countries that are economically free would have had bigger collapses in their stock markets. In fact, the line is upward-sloping, which implies that over the past year, countries that are economically free have suffered less than countries that are not.

For more on the president-elect and his potential response to the economic crisis, see this recent John Hood Daily Journal.

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In case you missed her

Posted by Mitch Kokai at 06:45 AM

Becki Gray joined Tim Boyum this weekend on News 14 Carolina’s “Political Connections” program. The topic was North Carolina’s ailing coastal insurance Beach Plan.

Click play below for a snippet of the conversation.

Time Warner Cable subscribers can watch the entire interview and the rest of the program at Carolina On Demand Channel 1234.

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Another form of consumer-driven health care?

Posted by Mitch Kokai at 06:41 AM

The latest Business Week profiles PatientsLikeMe, a two year-old Web-based social network designed to help medical patients — health-care consumers — share information about their cases.

I’m reminded of the phrase “consumer-driven health care,” as touted by Harvard professor Regina Herzlinger.

Click play below to get Herzlinger’s take on the potential impact of a consumer-driven model on health care.

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Today's Carolina Journal Online features

Posted by Mitch Kokai at 06:37 AM

The week's first Carolina Journal Online exclusive features David Bass' report about the response to Guilford County's performance-pay program for teachers and administrators.

John Hood's Daily Journal focuses on the benefits charter schools offer to at-risk students.

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