Private roads – Random thoughts from my drive into work

Posted by Jason | Posted in Economics, Government | Posted on 09-02-2010

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The other day I posted a blog about the free market providing roads, police and fire services. You can read it here. While on my way to work this morning, I got to thinking about the roads again. Where I live, we just got a couple feet of snow, and we have more coming today. It has been 4 days since the snow came, but I still had a heck of a time getting to work. Half the roads are still covered, and now the snow is packed down and turning to ice. I’m not talking about side roads here. I’m talking about the main roads.

So, this got me thinking. How would this be treated differently if the roads were private? Well, as far as technology, let’s just say everything is the same, which if roads were private all these years, there would be much more advanced technology. I am assuming the same technology, but there would be different incentives. If you own a road, and you earn income from tolls or some other mechanism that is pay for use, you would make sure those roads were quickly cleared. If they weren’t, you’d lose money. How would you charge a toll if no one can drive on your road? Your entire business model depends on people driving on your road. You would have to get the roads cleared quickly, or suffer huge losses.

Government on the other hand doesn’t really have any great incentive to get the roads cleared. Yeah, they get around to it, but what’s the rush. They may have angry constituents, but by the time election day rolls around, that’s water under the bridge. They need a reason to justify their expanding budgets, so they can’t ignore the issue completely. On the other hand, if they take longer to clean the roads, they can say they needed more help. Then they have more reason for bigger budgets and more employees.

Again, just some thoughts I had on my way into work. This is by no means meant to be a great argument for private roads. Most people can’t comprehend how the private sector could provide roads and then bill for them, so we just stick with the crappy government system where they use road bills to rob us blind and give handouts to their buddies and union supporters.

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Everyday Socialism – Police, Fire, and Roads

Posted by Jason | Posted in Government | Posted on 02-02-2010

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It seems like every time someone is defending socialism they say we already have socialism, and they bring up police, fire, roads, and schools. Now, those of you who follow my blog, know my opinion on schools.  Schools are a horrible example, if your goal is to preach the greatness of government or socialism. Of course, trying to argue against police, fire and roads is not an easy task. But hey, what’s the point of easy arguments, right?

So first, let me ask why these are considered socialist programs? They are not a redistribution of wealth? They are more like insurance for inhabitants of a neighborhood, at least the police and fire departments are. Those inhabitants pay in the form of property taxes, income taxes, sale tax, or however they chose to fund these insurance policies. Those who pay the most for them, property owners, are the ones who benefit the most from them. They protect property (supposed to anyway). Also, as far as roads go, as a neighborhood, state and country, we as citizens want to be able to get places. We want to get to the store, our family members’ houses, vacation spots, etc. We want the police and fire departments to be able to get to our house in an emergency. In order to have roads, we pay the government to make roads. Again, this is not as socialist as say welfare, universal health care, etc.

With that being said, even if these are sort of socialized, does that mean they are better than they could be if they were privatized? How about if they were never a government function in the first place? The problem is most people cannot imagine the world beyond what is constructed around them. The government steps in and takes over what the private sector used to deliver. Then when people say the government should shrink or go away, the sheeple say “yeah, but who’s going to do this, that, or the other thing.” Just imagine if you told a welfare recipient that we need to take our government back to the size talked about in the constitution. They’d say “Yeah, but who’s going to give me money to spend? Who’s going to give me my groceries?” They have forgotten that a job will give you those things.

Now, I really don’t want to get into each one of these in detail. When you bring up topics like this, people want to hammer you with questions about how you would fix some aspect of our society that they believe the government is fixing, but really the government is not. They say things like, yeah but in a free market, you’d have the ultra rich taking advantage of the rest of us, robbing us of our money. Meanwhile, under our government, the ultra rich already do that by government force. What do you think TARP, bailouts, Fed induced inflation, etc is? In the free market, at least you have a choice. The gun of government is not pointed at your head forcing your to hand you money over.

I myself cannot construct a complete system for police, fire and roads. If I could, then we should crown me King of the land, and shower me with gold. What I have done, after not believing these were possible without government, is try to think of possible ways these services could have been provided by the private sector had government no imposed it’s limited view on us. Let’s just go through some thoughts.

Police - To start, the more we force citizens to give up arms, the more police we need. An armed citizen can prevent crimes, can protect his family, and can protect his neighbors. Re-arm citizens and the need for police is greatly reduced. If everyone had a gun, do you think people would be more polite, less inclined to be violent, and commit less crime? Would they risk getting shot, since any person around them could and probably is packing?  In addition to a well armed citizenry, who is to say without government, we couldn’t have private defense agencies. With private defense agencies, there would be competition. In order to gain new customers, agencies would have to compete on price and track record. If one agency has customers being robbed, they’d lose business. If privatizing is just too hard to imagine, one could argue, that the main point of government is to secure our liberties. Since that is the case, policing does have a role in society. Then again, if we can secure our liberties without government, there would be no need for government.

Fire - This is one that socialists love to bring up. Let’s just think if we had no fire departments. Is it possible that they would come about without government force? To start, you could have companies delivering these services. You could have the exact same setup, but they could just be funded differently. It would seem to me that insurance companies could pay private fire companies a fee per insured house in a given area. This would help minimize the insurance company’s exposure. With private fire companies, you would have competition, competing on how fast they got to the fire, how contained the fire was, how much damage did the fire create, whats the cost per household for their services, and who has the best technology to fight fires.

Also, who is to say there wouldn’t be better technology if government didn’t force a certain system on society and spread the cost out amongst everyone. Maybe building materials would be much more fire retardant. If you want a certain insurance rate, you must use fire retardant materials or you must retrofit your house with some fire proofing technology. The innovation of the free market is hard to imagine, but that is because our minds are limited by the government imposed system. I’m sure many people could not have thought up some of the technologies we use in everyday life just ten years ago, but those technologies have not been suppressed by government imposed systems.

Roads - Aaaahhh, roads, what socialists believe is a modern marvel, because it creates public works. Are roads really that hard to imagine without government? Did the government invent roads? Did they not exist prior to government stealing our money to pay for them? Roads may seem hard to privatize, because they are massive. The problem is government is so ineffective, it’s hard to imagine that the roads developed by government are even efficient. They sure are not cost effective. We all have seen the group of men standing around watching just one man work. I’m sure there are many political handouts involved in roads. I can just imagine land speculation is a big thing for well connected people. They probably buy up land knowing that their political friends are going to buy it back for their new road project. Anyway, why would roads not be built if government ceased to exist tomorrow? Would we all just sit in our houses mourning over the lost of our oppressive government? I doubt it, and if there is demand for a means of travel, then their will be solutions. Again, who is to say roads are the way to go? Maybe to avoid the expensive building of roads, private innovators would have developed new traveling technology? Maybe you would have your car from “Back to the Future”. Surely, if the money was not taken out of private hands for the $400 billion road bills, that money would have been better utilized to innovate. OK, OK, I know it’s hard to imagine anything beyond our current view. So, let’s just say roads are here to stay. Who is to say they wouldn’t be built? I would think developers, if they wanted paid to develop, would build roads. If you are developing a plan of homes, don’t people need to get to those homes? If you are building a shopping plaza, don’t you want people to get to the stores? If you want people to get to your plant, office building, etc don’t you need a way for them to get there? Businesses would pay for road development. It is as simple as that. They would make sure the roads they developed were low cost and efficient. That is how the private sector works. Road projects would be steered to those who are the best at building low cost, efficient roads, because it would be paid for right out of the pockets of a developer. His profitability is effected by it.

Ok, this post is getting a little long. I just wanted to throw some thoughts up on this topic, because it’s a favorite of the statist. I myself used to think these things were in the realm of government, but someone on Mises.org’s forums asked me do I think government is more efficient or less efficient than the private sector. With that one question, I had my answer. Government is always less efficient. It does not matter what statists try to pitch. It cannot be efficient, because it requires a gun to your head to impose its vision. Efficiency does not require a gun. Efficiency is chosen freely by citizens looking to get the most out of their labors.

Hopefully, this got you thinking. I’d love to hear some ideas on how others think these services can be delivered.

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NASA Urged Not To Outsource – WSJ.com

Posted by Jason | Posted in Government | Posted on 19-01-2010

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I know this is going to come as a complete shock, but a government panel said that the private companies cannot ferry astronauts into space as safely as government. Geewiz! I cannot believe a government panel would say that government is best.

A key federal aerospace panel warned that NASA could run into serious safety challenges if it relies on private companies to ferry astronauts into space in the near future.

The Obama administration has been devising a plan to outsource a chunk of its manned space program to private companies in order to speed up rocket development, save money and focus federal dollars on longer-term expeditions. But a report released last week by the Aerospace Safety Advisory Panel, an outside safety watchdog for the National Aeronautics and Space Administration, cautioned that the private space companies rely on “unsubstantiated claims” and need to overcome major technical hurdles before they can safely carry astronauts into orbit. It urged NASA to stick with its current government-run manned space ventures, and said that switching to private alternatives now would be “unwise and probably not cost-effective.”

Did I just read that right? Obama, Mr. Socialism himself, planned on outsourcing a chunk of the space program to private companies? Surely, there has to be a payoff in here somewhere?

So the advisory panel said the private sector would rely on “unsubstantiated claims”. Are they telling me government doesn’t do this? You mean like the claim we are going to pay for health care reform by cutting waste out of medicare? How about health care reform will only cost $800 billion? Or maybe we have to bail out our friends on Wall Street to save Main Street?

You have to love the gull this panel has saying that private companies would be “unwise and probably not cost-effective”. Seriously? How many government programs come in under budget? The only thing I don’t like about this is it creates a partnership between government and the private sector. You know what that means. It will be used for political payoffs. No doubt, Jack Murtha already has some favors to return.

But the findings released last week are likely to provide a boost to NASA officials who support keeping nearly all manned space programs in house. In addition, NASA’s largest and longstanding contractors, such as Boeing Corp. and Lockheed Martin Corp., are stepping up efforts to generate White House support against outsourcing more programs. As part of that campaign, they have challenged the safety of the start-up ventures, which are proposing to use rockets that haven’t been fully tested and in some cases, haven’t yet flown.

via NASA Urged Not To Outsource – WSJ.com.

Shocking that NASA officials would want to keep it all in house, and then the real culprits come out. Boeing and Lockheed Martin are pushing to keep it in house. Go figure. Who wants to have to compete? It’s so much easier to rip off the government. It’s definitely easier to grease the palms of a slimeball politician than it is to grease an executive’s palms who’s accountable to the bottom line. Behind almost every government regulation, you find some big business trying to stifle competition.

Did you read that last sentence? It’s a bad thing to propose rockets that haven’t been fully tested and in some cases, haven’t yet flown? Isn’t this how innovation is done? If you only propose things that already exist, you would never move forward. Can you image this panel talking about phone service? Apple is proposing this so-called iPhone that hasn’t been fully tested and hasn’t even made phone calls yet! What a waste. Let me stick with my rotary phone. It’s made tons of phone calls. This is exactly why private businesses should be involved in space. They will innovate!

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Police Officer Responds To “Six-Figure Federal Salary Gravy Train” Post

Posted by Jason | Posted in Government | Posted on 21-12-2009

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Wow, stumbled across this blog post this morning on Mish’s Global Economic Trend Analysis. It’s obvious we are becoming a society dominated by the state. You cannot have government employees making twice as much as the private sector. The incentive becomes working for the government, and not building our economy from the private sector, the sector that actually produces something. Also, with that comes the incentive to grow the state and to defend that state at all costs. When the state comes calling for the highly paid government workers to put down any civil unrest with the general population, the government employees will no doubt try to earn their pay. Anyway, here is a letter to Mish about the absurdity of his salary.

Hello Mish.

I read your article about the salaries of government workers compared with the private sector. I am a police officer. I won’t say where, let’s just say it’s one of the most expensive cities.

I am 29 years old and I make about $130k a year with overtime. Most of the officers make this and some even make $185k a year. A few supervisors in Internal Affairs have made of $200k along with detective sergeants.

To be honest, I think our salaries are totally out of touch with not only the private sector, but with America. It’s absolutely ridiculous. When I became a police officer we were all making way below what private sector employees made. I took the job knowing I will never be rich but knowing I will have a stable job with benefits.

Little did I know my union would secure very good contracts at the expense of pillaging the public. This cannot go on. I have studied and read Robert Prechter’s Conquer The Crash book and how he (and you also) say we will have a deflationary collapse. I agree totally.

I’m just paying off debt while the going is good and have put most of my money in gold (at $800 an ounce). I’ll probably sell that gold soon because it’s getting popular in the media and on the radio. So yes, I just wanted to let you know that these govt/federal/state jobs are ridiculous. I know because I have one. 90% of the workers sit around and work for about 2 hours throughout the day and get paid 6 figure salaries. They have full benefits and pensions, 6 week vacation plans, and sick days galore.

It’s gotten to the point where the private sector cannot compete because these senators keep bringing home the pork for these bloated corporations with unions. The small business man can never compete. This is socialism at its worst that has crept into America over the past quarter century.

via Mish’s Global Economic Trend Analysis: Police Officer Responds To “Six-Figure Federal Salary Gravy Train” Post.

There are only a few ways that all this absurdity is going to end. All of them are bad. Time to prepare for TEOTWAWKI.

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More Bad Ideas From The Job Summit

Posted by Jason | Posted in Economics, Government | Posted on 05-12-2009

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In order to appear as if he’s doing something, Obama held the “Jobs Summit” at the White House. Here are some of the ideas that are supposed to help small business.

On Thursday, about 130 small-business owners, financial experts, union leaders, economists and CEOs from across the country convened at the White House to discuss their best ideas for stimulating job growth — and staving off another uptick in the unemployment rate, which climbed to 10.2% in October.

While many small-business owners and advocates welcome the attention being paid to boosting employment, there were plenty of skeptics in attendance. Some complained that sustained economic recovery — not new jobs bills — are needed to kick-start hiring. Others pointed out that job losses have already moderated in recent months, and called into question the necessity of any moves.

I wonder how quickly the guys who questioned the need for any government involvement were thrown out of the room. Maybe we’ll see them on TV today as the Job Summit Crashers.

Work-Share Tax Credit

A jobs-sharing initiative, which already exists in 17 states, has gained traction among several members of Congress. In August, Rep. Rosa L. DeLauro (D., Conn.) introduced the Keep Americans Working Act, which would allow employers to reduce their employees’ hours in order to hire new workers to pick up the slack. Although employees’ hours would be reduced, their pay would remain the same, as the government would pay the balance. Notably, Paul Krugman, economist and Nobel prize winner, also backed the work-share idea.

They must be looking to Europe’s job market for this idea. Europe has instituted ideas like this in the past and made it illegal to have anyone work over a certain number of hours. This is supposed to spread the hours out among more workers. It’s a stupid idea. It does not take into account all the cost involved. For example, if I have a guy who has been working for several years, he knows how to do his job. I know what his productivity is. If I cut his hours back and hire a new person, that person needs trained, doesn’t know the job, and is less efficient. My company’s productivity will have declined. Not only that, I have to deal with a new person. I know my current employee and his work habits. I know if he’s late, takes days off, has family issues, etc. I have no clue what kind of person I may be bringing in that has to be able to produce as much as my current employee. I also have to deal with another person’s benefits, health-care, etc. Will this person cost me more in health care when government passes health care legislation? Will he drive up my unemployment, because I’m more likely to have to lay him off if the economy declines again? These are all concerns that this does not address.

What it does do is steal money from tax payers and give it to businesses so one person doesn’t have to work a normal work week. This is just crazy. You take money from people who work full-time to give it to another person who you are taking hours from in order to hire someone who is unproductive. Do they realize wealth is based on what is produced, not jobs.

Jobs Tax Credit

By contrast, jobs tax credits are largely welcomed by small-business advocates and economists. One plan from the Economic Policy Institute, a Washington-based research organization focused on labor issues, calls for the government to provide refundable tax credits of 10% to 15% against payroll taxes for each new hire over two years.

Isn’t social security and medicare already bankrupt? How does it help long term to take money away from them? I’m all for getting rid of them both, but that isn’t going to happen. Instead, this just leads to more government debt. Also, 15% of a new hire’s payroll tax is not that much incentive. You typically aren’t going to pay a new hire much money, and the company’s share of payroll taxes is 7.5% of their salary. How much incentive is 15% of 7.5% of their salary going to provide? I maybe reading this wrong, but that is how I read this proposal.

If I have this write, here is what it would look like. You hire a new employee and pay him $30,000 a year. You pay $2250 a year in payroll taxes on him. You get a tax credit back in the amount of 15% of his payroll tax, which is $337.50. Wow, let’s start hiring. Even if they are looking at the entire payroll tax, which is around 15%, it still doesn’t provide much incentive. The new hire seems pretty risky in today’s environment, and a few hundred dollars sure isn’t going to change that equation.

‘Cash for Caulkers’

Former President Bill Clinton and others have suggested a cash-for-clunkers style initiative that would task construction workers and contractors with weatherizing homes. By employing unspent stimulus funds, Clinton’s plan, popularly known as “cash for caulkers,” involves weatherizing houses and apartments, as well as commercial and industrial buildings. Depending on how many property owners take up the initiative, the plan could not only provide jobs to the hard-hit construction sector, it would limit carbon emissions and reduce owners’ energy costs.

Does this sounds like money down the drain or what? I can just imagine the scamming that is going to take place by a group of people, that while many are the salt of the earth, many others are about as shady as you can get. Believe me. I’ve worked construction for my dad when I was in high school and when I got laid off in the tech bubble. This is going to lead to scamming old people, the government, and all of society in general. Then again, maybe I’ll start a fake caulking business and make some extra income.

Public Works Projects

Similarly, a range of economists and nonprofits support instituting some form of directed public jobs works programs. Similar to Depression-era New Deal jobs programs, the government could create jobs in targeted places that have high unemployment. The focus would be on rebuilding infrastructure for roads, clean-up or school repair, says Mark A. Price, a labor economist at the Keystone Research Center, a think tank in Harrisburg, Pa.

Can we just admit that the people who want public works all the time are communists. Let’s not act like it’s anything else. There has already been so much wasted money on road projects. They are tearing up and rebuilding roads that don’t even need it. All this does is destroy the wealth of our country by taking money that would otherwise be going into wealth creation and putting it into things that do not increase our wealth. If we have a road before this begins and a road after this begins, but we spent billions, we are not wealthier. While proponents will claim it creates jobs that will lead to personal consumption, they are overlooking that it is taking that money from other consumers. It’s not even a wash, because the government project isn’t as efficient and productive. Government projects never create wealth, unless you are one of the cronies who gets the project and line your pockets with tax payer money.

Payroll Tax Holiday

Leading up to the first stimulus package, small-business advocacy organizations such as the National Federation for Independent Business supported a six-month payroll tax holiday.

I’m all for tax cuts, but I’m getting tired of tax cuts without spending cuts. Also, are you going to hire people for a six-month payroll tax holiday? If you do, there is a chance again, as stated above, that you are going to have to lay the new hires off shortly in the future, leading to increased unemployment insurance. Also, if I’m a small business, I’m going to take savings on payroll taxes to increase my profits. If my clients aren’t demanding more of my goods or services, I’m not going to hire more employees. Also, what is a payroll tax holiday going to do when you have this health care monstrosity hanging over your head?

Capitalizing Community Banks

President Obama has already dispatched calls for giving small companies looking to expand — and, thus, create jobs — greater access to capital by way of community banks. Making it easier for community banks with less than $1 billion in assets to access funds from the Troubled Asset Relief Program, or TARP, would give small businesses a greater chance of landing loans, says Obama.

via Small Business: The White House Works It – WSJ.com.

TARP should be called To Anyone Requesting Program. It was passed against the will of the public for a specific purpose, and then the government decided on its own that it will do whatever it pleases with it. One of the best things they could do is announce the end of TARP. That would signal that they believe the crisis is coming to an end. Of course they won’t because they love the power that they can exercise with all the TARP money. Look at the power they have exercised over banks, automotive, etc. Last thing I would want is my community bank being at the end of the government’s leash. We’ve already seen how they change the terms of the agreement after the fact.

While all of these would probably produce some jobs, they ignore the negative consequences of each one. They ignore the jobs that will be harmed now and in the long term. They also ignore the economic consequences for the future with more government debt. Worst of all they presume that the government can fix the economy, create wealth, and is needed for economic growth. This is disasterous for the long term psyche of our country. Ronald Reagan had it right when he said, “Government is not the solution to our problem; government is the problem.” Apparently, this has been forgotten.

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Why Obama Thinks All Solutions Come From The Government

Posted by Jason | Posted in Government | Posted on 01-12-2009

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If you wonder why Obama believes only government can cure all our ills, this chart tells you all you need to know.

A friend sends along the following chart from a J.P. Morgan research report. It examines the prior private sector experience of the cabinet officials since 1900 that one might expect a president to turn to in seeking advice about helping the economy. It includes secretaries of State, Commerce, Treasury, Agriculture, Interior, Labor, Transportation, Energy, and Housing & Urban Development, and excludes Postmaster General, Navy, War, Health, Education & Welfare, Veterans Affairs, and Homeland Security—432 cabinet members in all.


via Help Wanted, No Private Sector Experience Required « The Enterprise Blog.

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Race To The Top?

Posted by Jason | Posted in Education, Government | Posted on 25-11-2009

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There has been a lot of buzz about Obama’s Race to the Top program to improve public education. Currently, the Education Secretary Arne Duncan, Newt Gingrich and Rev. Al Sharpton are traveling the country together to promote the program.In this morning’s Wall Street Journal, former congressman Harold E. Ford Jr, a former IBM Chairman and a founder of The Broad Foundations wrote an article calling for accountability for President Obama.

By HAROLD E. FORD JR., LOUIS V. GERSTNER JR. AND ELI BROAD

For decades, policy makers have talked about significantly improving public education. The problem has been clear: one-third of public school children fail to graduate, there are embarrassing achievement gaps between middle-class children and poor and minority children, and the gap between our students and those in other countries threatens to undermine our economic competitiveness. Yet for the better part of a quarter century, urgent calls for change have seldom translated into improved public schools.

Now, however, President Barack Obama has launched “Race to the Top,” a competition that is parceling out $4.35 billion in new education funding to states that are committed to real reform. This program offers us an opportunity to finally move the ball forward.

To that end Mr. Obama and Education Secretary Arne Duncan are pushing states toward meaningful change. Mr. Duncan has even stumped for reform alongside former Republican House Speaker Newt Gingrich. Yet the administration must continue to hang tough on two critical issues: performance standards and competition.

First, I must say Newt Gingrich in pursuit of trying to be bipartisan has become a stooge of the left. If he thinks giving his support is going to get any real reforms, he’s become Charlie Brown hoping Lucy won’t move the ball this time. What’s worse is no one will no if he doesn’t agree with the ultimate outcome, but his name will be used for what will be called a “bipartisan effort”.

Already the administration is being pressured to dilute the program’s requirement that states adopt performance pay for teachers and to weaken its support for charter schools. If the president does not remain firm on standards, the whole endeavor will be just another example of great rhetoric and poor reform.

Competition among the states is also vital to reform. The administration is resisting the temptation to award funds to as many states as possible. And that’s good. To be effective, Race to the Top funds cannot become a democratic handout. Competition brings out the best performance. That’s true in athletics and in business, and it’s true in education.

Wow, all the sudden liberals realize competition among states is vital to reform, and competition is what brings out the best results? Who said progress isn’t being made. If they now realize this, can we make more moves back towards federalism, in which we had states competiting? Better yet, how about we get the federal government out of education altogether? How can you have competition when the government always promotes one size fits all policy on all states? Can we remove much of the federal laws and allow states to compete for the best standards of living? Citizens can then again vote with their feet. When the federal government creates national laws, citizens cannot hold states accountable. It doesn’t matter where you go, you still have to deal with the federal law. Your only choice is to leave the country, which ultimately harms our country.

The old way of doing business would be to spread around the money so no one could be held accountable. The new approach is to give governors authority and responsibility, and then hold them accountable for results.

For decades, adult interests have been at the forefront of public education. Reform has been derailed by adults who wanted to protect the status quo and enjoy lifelong benefits. This time the focus will be on learning in the classroom. What’s important is that the administration is demanding that every child receive an education that prepares him or her for college or for work. Without that we will continue to be sidetracked by insignificant issues.

Again wow, some truth from these guys. Ok, so now I must ask if we know this, then why aren’t we redoing all the federal dollars? Why are we continuing to spread money around?  According to the Department of Education’s website here is how much money they are spreading around with no accountability.

ED currently administers a budget of $62.6 billion in regular FY 2009 discretionary appropriations and $96.8 billion in discretionary funding provided under the American Recovery and Reinvestment Act of 2009

via U.S. Department of Education Budget Office.

Wow, imagine what we could do if we actually focused over $150 billion on the classroom? Instead you have teacher’s unions setting up life long cushy jobs and retirement plans that private sector workers could only dream about.

States that have the track record and leadership in place to implement Mr. Obama’s aggressive reform menu—of enforcing rigorous academic standards, creating data systems that track individual student performance, ensuring teacher quality and effectiveness, and turning around failing schools—deserve the funds to show that our public schools can again lead the world.

We have yet to prove, on a systemic basis, that we can dramatically improve America’s public schools. Race to the Top is a chance to start small, hold states accountable, and expand proven reforms to the rest of the country.

via Harold E. Ford Jr., Louis V. Gerstner Jr.,And Eli Broad: Race to the Top in Education – WSJ.com.

Ok, here is the root of the problem. You are rewarded based on your record of implementing “Mr. Obama’s agressive reform menu”. The problem is the whole damn thing is captive to politics. Assume this policy improves results. After Obama is replaced, you then have to worry about who’s menu is next? I’m not saying Obama’s menu is good, because I don’t know what it is. The problem is you hold the carrots way above where the work actually takes place. The further you get away from the end participants, the harder it is for you to dictate good policy and the harder it is to know what’s working.

If you want real reform, the federal government should get out of education. Governors should then open education to all providers public and private. Parents should be able to take either their own taxes or their allocation of taxes per student to any school they want. This would generate massive competition and a massive improvement in the education of children in this country. Even the writers of this article admit that competition is what generates results. Are they advocating only a little competition? Don’t they want spectacular results, or are they too afraid they’d loss their political power?

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Uncle Sam’s Crowding Out Of Private Lending

Posted by Jason | Posted in Economics, Government | Posted on 24-11-2009

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For anyone who thinks we’ll be pulling out of this recession anytime soon, you may want to think again. Even if we do pull out, it will more than likely be temporary. Unfortunately, the government is crowding out private investment by killing financing to the privates sector. George Melloan, author of “The Great Money Binge: Spending Our Way to Socialism” writes in the Wall Street Journal.

For anyone who wondered if last winter’s federal seizure of the financial services industry would have adverse economic consequences, an answer is now available. The credit market has been tilted to favor a single borrower with a huge appetite for money, Washington. Private borrowers, particularly small businesses, have been sent to the end of the queue.

The Federal Reserve, which supervises some 7,000 banks, has been telling bankers that they must cut risk. The most spectacular step in that effort was the Fed announcement last month that it will evaluate the salaries of bank officers on how carefully they manage risk.

By official definition, Treasury securities are risk-free, so how better to manage risk than to pad your bank’s portfolio with Treasury securities, which is what bankers are doing. Under the new management from Washington, bankers who take a flyer on a venture that might some day become an Apple, Microsoft or Google will risk not only their depositors’ money but a possible pay cut. Banking has been captured by the nanny state, which means that its potential for contributing to economic growth and job creation has been sharply curtailed, even as its potential contribution to government growth has been expanded.

The federally dictated risk-aversion was underway even before the Fed began monitoring banker paychecks. According to the Fed’s September flow of funds report, commercial banks were net buyers of Treasury securities to the tune of $25 billion on an annualized basis in the second quarter. They were net buyers of federal agency paper—think Fannie Mae and Freddie Mac—at an annualized rate of a whopping $185 billion, contributing mightily to federal efforts to keep these miscreants afloat. Meanwhile, private lending, which once was the mainstay of banking, was shrinking at a $392 billion annual rate.

Washington hasn’t been able to milk the taxpayers sufficiently to finance its massive deficit. The Chinese are getting skittish as well. So tapping bank deposits is yet another avenue to a big pot of cash. As for the bankers, they’ve been awarded an easy life. Thanks to the Fed’s zero interest-rate policy, they can make a decent profit on “safe” Treasury and agency securities yielding 3% or more. The too-big-to-fail banks like Citi and Bank of America can draw on their big shareholder, the U.S. Treasury, if their capital needs further supplements. Bankers don’t have to worry about making risk judgments because they’ve been ordered to not take risks. So maybe the Fed is justified in cutting their salaries, since whatever banking skills they had—meaning the ability to assess risk—are no longer needed or wanted. An office boy could buy government bonds.

via George Melloan: Government Deficits and Private Growth – WSJ.com.

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Government job creation?

Posted by Jason | Posted in Economics, Government | Posted on 23-11-2009

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Would someone please ask the government to stop creating jobs before we are all unemployed? Most of these idiots never even held a real private sector job, and yet they are trying to create jobs. Government can only do one thing. It can take money from private citizens at the point of a gun and give it to other private citizens. That will not create jobs.

White House Chief of Staff Rahm Emanuel said in an interview that “there are two engines to our economic message, two ways to generate jobs. One is small business, the second is energy.” The government could promote hiring in those sectors through expanded tax credits or lending. “It’s not about legislation — it’s about the economy,” he said.

House Speaker Nancy Pelosi last week said ideas under discussion in the House included a tax on a variety of financial transactions. Democrats estimate such a tax could raise as much as $150 billion a year, a pool of money that could help offset the cost of a job-growth package.

via Weighing Jobs and Deficit – WSJ.com.

I love these idiots in the White House and Congress. How is small business and energy going to create jobs when you are pillaging both of them, Rahm. Small business  is going to get hammered with all these health care bills. Energy is not allowed to flourish in our country because of special interest groups. The government is pushing cap n trade, while  the sham of global warming has finally come to light with the hacked emails of global warming scientists. Cap n Trade will drive up costs on businesses and families. Congress is also raising taxes for the health care bill, and they are going to let Bush’s tax cuts expire. All of this leads to increased burdens on the private sector, but some how these morons see this as job creating stimulus.

Nancy Pelosi’s solution to job creation is to tax a variety of financial transactions? I guess I shouldn’t be surprised. For some reason, she believes you can tax your way to prosperity. Why do we tax cigarettes again? Oh yeah, because we want people to smoke less. You tax something in order to punish it and get less of it. So Nancy Pelosi wants to tax financial transactions. What do you think is going to happen? You are going to get less financial transactions. That sounds like another great job creating idea.

Would someone pull the plug on Washington already. They have no clue how jobs are created. Please make them stop before everyone is out of work, and we’re relying on these morons for the bread lines.

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Bob Murphy explains why the Fed is not good for the economy

Posted by Jason | Posted in Economics, Video | Posted on 21-11-2009

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Bob Murphy is an awesome free market economist. I’ve learned a ton from his book “The Politically Incorrect Guide to Capitalism” and his blog Free Advice. In this video he explains why the Fed is harming the economy instead of helping bring us out of recession.

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