Archive for the ‘Texas’ Category

LinkSwarm for January 20, 2017

Friday, January 20th, 2017

Welcome to Inauguration Day, when Donald J. Trump is sworn in as the Forty-Fifth President of the United States of America! Celebrate the momentous day with a Friday LinkSwarm.

  • Trump plans to hit the ground running with a number of executive actions his very first day on the job. (Hat tip: Ace of Spades HQ.)
  • Trump started planning his presidential run right after Romney lost. In fact, Trump registered his “Make America Great Again” slogan six days after Romney’s defeat. (Hat tip: Instapundit.)
  • Clinton Family Friend: “Yes, I will be at the review stand at the inauguration and I am going to kill President-elect Trump… what are you gonna do about it Secret Service?” Secret Service: “Enjoy these complimentary handcuffs.”
  • Much of the hatred against Trump is pure class bigotry:

    I don’t think reasonable differences of opinion on the one hand, and the ordinary hypocrisy of partisan politics on the other, explain the extraordinarily stridency, the venom, and the hatred being flung at the incoming administration by its enemies. There may be many factors involved, to be sure, but I’d like to suggest that one factor in particular plays a massive role here.

    To be precise, I think a lot of what we’re seeing is the product of class bigotry.

    Snip.

    Until last year, if you wanted to experience the class bigotry that’s so common among the affluent classes in today’s America, you pretty much had to be a member of those affluent classes, or at least good enough at passing to be present at the social events where their bigotry saw free play. Since Donald Trump broke out of the Republican pack early last year, though, that hindrance has gone by the boards. Those who want to observe American class bigotry at its choicest need only listen to what a great many of the public voices of the well-to-do are saying about the people who votes and enthusiasm have sent Trump to the White House.

    You see, that’s a massive part of the reason a Trump presidency is so unacceptable to so many affluent Americans: his candidacy, unlike those of all his rivals, was primarily backed by “those people.”

    Snip.

    This isn’t just because so large a fraction of working class voters generally backed Trump; it’s also because Trump saw this from the beginning, and aimed his campaign squarely at the working class vote. His signature red ball cap was part of that—can you imagine Hillary Clinton wearing so proletarian a garment without absurdity?—but, as I pointed out a year ago, so was his deliberate strategy of saying (and tweeting) things that would get the liberal punditocracy to denounce him. The tones of sneering contempt and condescension they directed at him were all too familiar to his working class audiences, who have been treated to the same tones unceasingly by their soi-disant betters for decades now.

    Much of the pushback against Trump’s impending presidency, in turn, is heavily larded with that same sneering contempt and condescension—the unending claims, for example, that the only reason people could possibly have chosen to vote for Trump was because they were racist misogynistic morons, and the like. (These days, terms such as “racist” and “misogynistic,” in the mouths of the affluent, are as often as not class-based insults rather than objective descriptions of attitudes.) The question I’d like to raise at this point, though, is why the affluent don’t seem to be able to bring themselves to come right out and denounce Trump as the candidate of the filthy rabble. Why must they borrow the rhetoric of identity politics and twist it (and themselves) into pretzel shapes instead?

    Read the whole thing. (Hat tip: Borepatch.)

  • “In donated shoes and suit, a Trump supporter comes to Washington.”
  • Follow-up:

  • How ObamaCare helped destroy Medicare.

    Physicians across the country have been firing Medicare patients; and according to a late 2015 study from the Kaiser Family Foundation, 21% of physicians are not taking new Medicare patients.

    Much of this trend is based on stiff penalties and financial disincentives from the Affordable Care Act (Obamacare), and 2015’s Medicare Access and CHIP Reauthorization (MACRA) Act.

    MACRA in particular is completely mystifying.

    The law created a whopping 2,400 pages of regulations that Medicare physicians are expected to know and follow.

    Many of the rules are debilitating.

    For instance, MACRA changed how physicians can be reimbursed for their Medicare patients by establishing a bizarre set of standards to determine if a physician is providing “value”.

    As an example, if a patient ends up in the emergency room, his or her physician can incur a steep penalty.

    This explains why my step-dad was dropped by his doctor.

    The healthcare system has been broken to the point that physicians now have a greater incentive to fire their Medicare patients than to treat them.

  • City journal has an extensive profile of George Soros.

    Soros’s global reach and influence far outstrip those of the Koch brothers or other liberal bogeymen—and that underlying it all is a vision both dystopian and opportunistic. “The main obstacle to a stable and just world order,” Soros has declared, “is the United States.” Ergo, that constitutional republic must be weakened and its allies degraded. The Sorosian world order—one of open borders and global governance, antithetical to the ideals and experience of the West—could then assume command.

    Snip.

    n the United States, Soros bankrolls a broad range of political and cultural causes. One is to destabilize the Roman Catholic Church in the United States. In 2015, he dedicated $650,000 for the purpose of shaping Pope Francis’s U.S. visit, using left-leaning Catholic groups to promote gay marriage, abortion, and physician-assisted suicide. Leading the effort was Hillary Clinton’s campaign manager John Podesta, a self-professed Catholic. Bill Donohue, outspoken president of the Catholic League, vainly called for Podesta’s dismissal. “He is fomenting revolution in the Catholic Church, creating mutiny and is totally unethical,” Donohue said. “He is the front man for George Soros to create a host of phony anti-Catholic groups. These are not just bad comments, as some have suggested. These words are orchestrated, calculated and designed to create fissures in the Catholic Church.”

    Another Soros favorite is Black Lives Matter, the radical protest group dedicated to the proposition that police are inherently racist. Working the streets with incendiary rhetoric, at odds with the truth about black-on-black crime, BLM has helped foster “depolicing,” as Heather Mac Donald describes it, in high-crime urban areas. In 2015, after days of rioting in Baltimore in response to the death of Freddie Gray in police custody, an Open Society Foundations memo excitedly commented that “recent events offer a unique opportunity to accelerate the dismantling of structural inequality generated and maintained by local law enforcement and to engage residents who have historically been disenfranchised in Baltimore City in shaping and monitoring reform.” Three straight acquittals of police officers involved in the matter left the prosecution’s case in shreds but made no difference to the Open Society Foundations. It has donated at least $650,000 to Black Lives Matter and pledged more assistance to antipolice factions across the country. These activities prompted the father of one of the Dallas police officers killed during a Black Lives Matter protest to sue Soros (along with other individuals and groups) for inspiring a “war on police.”

    (Hat tip: John Tierney at Instapundit.)

  • I always thought George Soros was running Black Lives Matter, and now here’s some proof: “BLM leader lives in home owned by Soros’ Open Society board member.”
  • Don’t look now, but the Clinton/Sanders rift is still roiling the Democratic Party. Sadly, neither side seems to be willing to give up on Social Justice Warrior victimhood identity politics. (Hat tip: Hot Air, which notes “Democrats have to come to grips with the fact that they stopped speaking for most Americans over the past eight years, and started lecturing at Americans instead. The party got wrapped up in the progressive-academic social-justice agenda to the point that the party made diversity into an obsession at the expense of the real economic issues facing voters outside of the coastal enclaves and college campuses.”)
  • One college Democrat has had enough:

    A National Councilman for the College Democrats of America is jumping ship and considering joining the Republican Party just before President-elect Trump takes the oath of office.

    Michael J. Hout, a junior at the University of Massachusetts, Amherst, told Campus Reform that he believes the contemporary Democratic Party is no longer the best place for an ideological moderate like himself, saying the Party is pivoting towards more extremist rhetoric and appealing more to those who often do not even consider themselves Democrats, such as socialists and independents.

    Snip.

    “This strategy of catering to the whims of those for whom identity politics matters more than anything else, and of allowing for even anti-white, anti-male rhetoric to find a home within the party, is a large part of its untenable strategy moving forward,” Hout explained, predicting that “it will continue to cause Democrats to lose, time and time again.”

    (Hat tip: Director Blue.)

  • Former California Democratic Party chair argues that Democrats should move their headquarters to Detroit to reconnect with middle class voters. I agree, but for a different reason: So they can be forced to see the results of their handiwork firsthand every day.
  • A glimmering of a clue: “U.S. Rep. Joseph P. Kennedy III, breaking ranks with other Democrats who are trashing President-elect Donald Trump and boycotting his inaugural, is imploring his party’s rank and file to figure out why middle American voters went Republican in November….’Folks, we lost their trust and being mortified and mystified about their vote doesn’t bring it back.'” (Hat tip: Instapundit.)
  • Tolerant left gets another Milo speech cancelled.
  • Ignore the shame mob and they’ve got nothing else to throw at you:

    While [Steve] Harvey tries to use his celebrity for something selfless and useful and while the Talladega College marching band gets the world stage to show off the results of its hard work and school spirit, think of their detractors as the latter sit behind their cell phones and sling names like “coon” and “Uncle Tom”[i] in between posting their twerking and ghetto fight videos.

    Ouch! (Hat tip: Instapundit.)

  • Joe Bob Briggs takes aim at the “angry white male” concept.

    Numero Three-o: Why is anger as a voting incentive limited to white males? Don’t black men get angry? When Louis Farrakhan holds a rally, why doesn’t Yahoo News say “Angry Black Men Gather in Chicago”? Why aren’t there any Angry Latino Men or Angry Chinese Men?

    Numero Four-o: More specifically, how do you explain the fact that the Angry White Men who voted for Trump in 2016 are the same white men who voted for Obama in 2008? When they vote for Obama they’re not angry, but when they vote for Trump it can only be because they’re enraged hicks? Gogebic County in Michigan is 92 percent white and hadn’t voted for a Republican since 1972—until this election. The counties in southwestern Wisconsin, all heavily Democratic, went for Trump after a strong Obama vote in 2008 and 2012. Eastern Iowa, Democratic since 1988, went for Trump. Luzerne County, Pennsylvania, which is frequently used as the very definition of “working-class,” went for Republicans for the first time since 1988. Why are all these people classified as “angry” now, but in 2008, when they were angry at George Bush, they were just “voting for change”? Could it be, just perhaps, maybe, they feel betrayed by the Democratic Party? If we’re gonna call them angry, let’s define what they’re angry about.

  • Then again, fake outrage over non-issues is the stock in trade of the center-left.
  • Four reasons why nobody trusts the media. Including that nothingburger of a New York Times hit piece on Rick Perry that relied on no facts whatsoever.
  • For all that CNN flack global warming, they certainly don’t act like they believe it. In addition from moving CNN headquarters from Atlanta to New York City, “Time Warner, the company that owns CNN, just invested in SEVEN new buildings located in Hudson Yards, a part of Manhattan just a block or two away from the water. An area that, according to its own CNN, will soon be underwater, and therefore utterly and completely worthless.”
  • Speaking of CNN, they just hired Valerie Jarrett’s daughter to report on Trump’s Justice Department. “Valerie Jarrett’s daughter quietly joined CNN in September as a reporter in the network’s Washington bureau. She came to CNN with no experience in journalism.” Evidence suggests CNN has naked contempt for both objectivity and those not in the anointed liberal overclass. (Hat tip: Director Blue.)
  • “The primary aim of official propaganda is to generate an “official narrative” that can be mindlessly repeated by the ruling classes and those who support and identify with them. This official narrative does not have to make sense, or to stand up to any sort of serious scrutiny. Its factualness is not the point. The point is to draw a Maginot line, a defensive ideological boundary, between “the truth” as defined by the ruling classes and any other “truth” that contradicts their narrative.”
  • Post-Brexit, an economic boom in the UK. (Hat tip: Stephen Green at Instapundit.)
  • UK PM Theresa May aims at a “hard Brexit.” Andrew Stuttaford (and I) wonder why she isn’t going for the ‘Norway option’ of leaving the EU but staying in the European Economic Area.
  • Marine Le Pen cues up Frexit. “The euro has not been used as a currency, but as a weapon—a knife stuck in the ribs of a country to force it to go where the people don’t want to go.” I disagree with Walter Russel Mead: The EU, as currently constituted, is incapable of being reformed. Reform is impossible without scraping the European Commission, which is impossible without scraping Maastricht, which would scrap the EU. Better to start again from scratch or go back to just the common market.
  • Jihadwatch’s Robert Spencer had a minor piece at The Hill on why Lindsay Lohan’s (rumored) conversion to Islam was a bad idea. I wasn’t even going to link it. The The Hill took it down due to political pressure. Now I have to.
  • As one of his last acts, Obama commutes the sentence of convicted Puerto Rican terrorist Oscar Lopez Rivera.
  • And it’s not just terrorists: Obama commutes the sentences of four South Texas druglords:

    Four family members who ran one of the largest cartel smuggling operations in south Texas had their life in prison sentences commuted and will likely be returning to this border city from where they ran their criminal empire. One of the main destinations that the criminal organizations delivered drugs to was Chicago, Illinois.

    This week, outgoing President Barack Obama commuted the sentences of 209 convicted criminals and pardoned 64 others. The majority of the convictions were from drug trafficking or production offenses.

    Four of those convicted criminals who had been sentenced to life in prison will be released by May 17. They ran a criminal organization made up of close to 80 men and women who worked with Mexico’s Gulf Cartel to move between 100,000 to almost 750,000 pounds of marijuana into the U.S. during a 10-year period. The drugs were moved into Houston and then distributed to Atlanta, Chicago, and other major metropolitan areas.

    According to court records obtained by Breitbart Texas, brothers Cesar Moreno Sr., Eduardo Moreno, Lazaro Moreno, and Luis Moreno along with other relatives and friends had been at the helm of a large-scale drug distribution operation based out of the border city of Roma, Texas.

    (Hat tip: Director Blue.)

  • A tweet:

  • Brian Krebs deduces the author of the Mirai worm.
  • Seattle kills bikeshare program. If it can’t make it in Seattle…
  • 3D TV is dead again. Good. 3D always struck me as an annoying gimmick, even in IMAX.
  • “Woman stabbed man 9 times after he wouldn’t commit to relationship.” I’m pretty sure the guy made the right call there… (Hat tip: Bill Crider.)
  • Man gets head start on the epic douchebag Olympics. “28-year-old James Allen is facing a charge of driving while intoxicated. [He] drove a $385,000 Ferrari off a bridge in Westlake, went airborne for 40 feet and crashed into the woods while speeding on Friday night.” (Hat tip: Iowahawk’s Twitter feed.)
  • Oakland Raiders file papers to move to Las Vegas.
  • “It’s come to my attention that some of you Hollywood types are calling yourselves ‘the Resistance’. Stop. Now.” (Hat tip: Director Blue.)
  • Graduate student sues after being kicked out of school for not supporting left-wing causes.
  • Scott Adams being unable to comment on his own blog due to a software bug has to be the most Dilbert thing ever…
  • Dawnna Dukes Indicted on 15 Counts, Faces 28 Years in Jail

    Wednesday, January 18th, 2017

    The shoe has landed:

    A grand jury has indicted state Rep. Dawnna Dukes on 13 felony corruption charges and two misdemeanors, with a maximum penalty of 28 years behind bars, a courthouse source said Wednesday.

    Dukes, an Austin Democrat, faces two misdemeanor counts of abuse of official capacity and 13 felony counts of tampering with public records, a source with knowledge of the case said. Travis County prosecutors and investigators from the Texas Rangers presented the evidence to the grand jurors Tuesday, who indicted Dukes on the first day that they met to consider the case.

    The indictment comes seven days after Dukes reneged on a promise to step down and took the oath of office for a 12th two-year term representing parts of North Austin, East Austin, Pflugerville and Manor.

    Dukes posted a statement on Facebook following the indictment, which was first reported by Spectrum News: “Of course, I am disappointed but I expected that if I was sworn into office in January 10th that this indictment would follow. All I can say today is that I will be entering a plea of Not Guilty.”

    One abuse of official capacity charge deals with Dukes using her legislative staff for personal purposes. In April, the American-Statesman reported that Dukes had arranged to give a taxpayer-funded raise to an aide to cover gas money for driving Dukes’ daughter to and from school.

    With the other abuse of official capacity charge, the grand jury accused Dukes of using money raised from campaign contributors for personal purposes. Politicians may use campaign money to pay for election activities or for expenses related to carrying out their elected office, but state law forbids them from using it for personal purposes.

    Dukes has made numerous questionable expenditures from her campaign account over the years, including $13,000 in payments to family members, $30,000 on gas and $2,700 to a seamstress, a Statesman investigation in June found.

    $13,000 to family members? Yeah, that’s gonna raise red flags.

    The grand jury accused Dukes of converting to personal use campaign expenditures that were earmarked for the African-American Community Heritage Festival, an East Austin event Dukes co-founded 18 years ago but ended last year after negative attention caused by the investigation. Dukes has listed at least $17,600 in campaign expenditures for the festival, including $303 to an electronics store for “replacement of digital camera broken by staff,” $146 for Mardi Gras beads and more than $7,000 for musical performers, the Statesman investigation found.

    The 13 charges for tampering with public records concerns an allegation that Dukes collected pay from the state during the 2014 legislative interim for days that she did not travel to the Capitol, which is required under House rules. The American-Statesman in May reported that a former Dukes staffer had accused the legislator of filing requests for per diem payments for days that she never traveled to the Capitol and may not have worked at all.

    So Dukes was getting paid for not working. In other words, she was living the Democratic Party dream…

    (Previously.)

    (Hat tip: Dwight.)

    Texas vs. California Update for January 12, 2017

    Thursday, January 12th, 2017

    It’s been a long time since I compiled one of these, so this is going to be monstrously large. Also, just as I was finishing this up, the San Diego Chargers announced they were moving to Los Angeles. Hell, LA has proven in the past it’s incapable of adequately supporting one NFL franchise, much less two…

  • When you look at the full recession records, not just the last few years, Texas is still kicking California’s ass. “Over that time frame, Texas has grown more than THREE TIMES FASTER than California. Actually 3.4 times faster (Texas grew at a 4.1% annual rate vs. 1.2% for California).” (Hat tip: Pension Tsunami.)
  • “A just released study calculates the total state and local government debt in California as of June 30, 2015, at over $1.3 trillion.” (Hat tip: Pension Tsunami.)
  • California faces its first budget deficit since 2012. Or at least it’s first official deficit since then. (Hat tip: Pension Tsunami.)
  • A second judge, this one on the California First District Court of Appeal, rules that public pensions may be modified.
  • The California Democratic Party has gone hard left, and it’s taking the rest of the state with it:

    Increasingly, inside the party, it’s been the furthest Left candidates that win. In the Democrat-only Sanchez vs. Harris race for the U.S. Senate, the more progressive candidate triumphed easily, with a more moderate Latina from Southern California decimated by the better funded lock-step, glamorous tool of the San Francisco gentry Left.

    Gradually, the key swing group — the “business Democrats” — are being decimated, hounded by ultra-green San Francisco billionaire Tom Steyer and his minions. No restraint is being imposed on Gov. Brown’s increasingly obsessive climate change agenda, or on the public employee unions, whose pensions could sink the state’s finances, particularly in a downturn.

    The interior parts of California already rank near the bottom, along with Los Angeles, in terms of standard of living — by incomes, as opposed to costs — in the nation. Compared to the Bay Area, which now rules the state, the more blue-collar, Latino and African American interior, as well as much of Los Angeles, account for six of the 15 worst areas in terms of living standard out of 106 metropolitan areas, according to a recent report by Center for Opportunity Urbanism demographer Wendell Cox.

    Given the political trends here, it’s hard to see how things could get much better. The fact that most new jobs in Southern California are in lower-paying occupations is hardly promising. In contrast, generally better-paying jobs in manufacturing, home-building and warehousing face ever-growing regulatory strangulation.

    Sadly, the ascendant Latino political leadership seems determined to accelerate this process. In both Riverside and San Bernardino, pro-business candidates, including San Bernardino Democrat Cheryl Brown, lost to green-backed Latino progressives.

    For whatever reason, Latino voters and their elected officials fail to recognize that the increasingly harsh climate change agenda represents a mortal threat to their own prospects for upward mobility. Before this week’s election, California policy makers could look forward to Washington imposing such policies on the rest of the country; now our competitor regions — including Utah, Arizona, Nevada and Texas — can double down on growth. Expect to see more migration of ambitious Californians, particularly Latinos, to these areas.

    California is on the road to a bifurcated, almost feudal, society, divided by geography, race and class. As is clear from the most recent Internal Revenue Service data, it’s not just the poor and ill-educated, as Brown apologists suggest, but, rather, primarily young families and the middle-aged, who are leaving. What will be left is a state dominated by a growing, but relatively small, upper class, many of them boomers; young singles and a massive, growing, increasingly marginalized “precariat” of low wage, often occasional, workers.

  • Sanctuary cities might drive California into bankruptcy:

    California is about to face the music as Donald Trump becomes 45th President of the United States. Their Sanctuary Cities violate federal law and after Jeff Sessions is confirmed as Attorney General (and he will be), they are going to either have to knock that off or have funding to their law enforcement and their government stripped away. Sessions can’t wait and I have to say, I will enjoy watching this showdown. Los Angeles Mayor Eric Garcetti said that Trump pulling 37% of federal funding for their governments would cause chaos and upheaval. Yes, it will… it will also cause California to go absolutely toes up bankrupt.

    It’s simple. They can either follow the rule of law, or the free flow of money from DC gets cut off. In 2015, that amounted to about $93.6 billion. That’s a lot of money to turn away because you insist on not following the law. Let’s see how long that lasts. I love the thought of this. It’s about time Sanctuary Cities were stopped and this is an excellent way to do it. New York, Chicago and DC will all face the same choice by the way. Imagine the meltdown. Good times.

  • “California paid LESS to the feds per capita than Texas. California got MORE back per capita from the feds than Texas.” Freeloaders love the Blue State model… (Hat tip: Pension Tsunami.)
  • Another way of looking at California’s economy:

    California has 39 million people — 43% larger than the 2nd largest state (Texas). Such GDP comparisons don’t tell us much in terms of the PROSPERITY of a nation. Or a state.

    The proper comparison is PER CAPITA GDP. Using that more meaningful figure, CA is the 10th most prosperous state.

    But an even MORE accurate comparison is to take the per capital GDP and adjust it for COL. Because of California’s high taxes, crazy utility laws, stifling regulations (paid by consumers) and sky-high housing costs, CA in 2014 ranked WAY down in 37th place. Only 13 states were worse.

    (Hat tip: Pension Tsunami.)

  • Same as it ever was:

    Governor Jerry Brown announced today that the budget was $1.4 billion in deficit. At the end of last year, the state announced that it was giving state employees a raise which would cost taxpayers over $2 billion over the next four years. Do you think there is a connection?

    A story ran locally in Southern California saying that over 105 employees in Santa Monica, a medium sized city, earn over $300,000 a year. The Governor of the state of California earns $174,000 per year. If you do the research, you will find that there are over 200 state employees that earn more than that

    When I was deciding what I wanted to do in my younger years, my mother told me I should go to work for the government, good benefits she said. I knew I would be bored and would die young if I became a government drone. My little sister listened to her. Today, my little sister is retired on a great government pension, I still fight to pay my taxes. Given the pay that even the lowest government official receives, my mother was right.

    Our government pension system is over $500 billion upside down. Retired state employee health benefits add an additional $300 billion or more to that deficit. The system is out of control. Pay and benefits to government employees at state and local levels is incomprehensible, and the government leaders still come to you and I and ask us to foot the bill for their indulgences.

    What is even more evil about the system is that government unions, led by thugs who force people to pay union dues for the privilege of having a government job, take the money from the government employees and put it into the political system to pay for the campaigns of the Governor, statewide elected officials, legislators and city councils with whom these unions then negotiate for the out-of-control pay and benefits. If anyone tries to limit them, as I once tried by tying everybody’s salaries to the Governor’s salary, they are marked for political defeat. And the system perpetuates itself, taxes to employees to unions to politicians, as it did in the Soviet Union, until the whole system collapses.

    (Hat tip: Pension Tsunami.)

  • California has stopped growing:

    Driven by rising out-migration and falling birth rates, California’s population growth has stalled, leading analysts to consider a possible forecast of a so-called “no-growth” period in the future.

    Although Americans nationwide have been flooding south and west for years, the Golden State has become an exception. Nearly 62 percent of Americans lived in the two regions, Justin Fox observed from Census figures. “That’s up from 60.4 percent in the 2010 census, 58.1 percent in 2000, 55.6 percent in 1990 — and 44 percent in 1950. The big anomaly is California, which is very much in the West, yet has lost an estimated 383,344 residents to other states since 2010.”

    “The state’s birth rate declined to 12.42 births per 1,000 population in 2016 — the lowest in California history,” the San Jose Mercury News noted, citing a state Department of Finance report. “In 2010, the last time figures were compiled, the birth rate was 13.69 per 1,000 population.”

  • California Democrats legalize child prostitution.” (Hat tip: Ed Driscoll at Instapundit.)
  • Some are objecting to the term “legalization”.
  • California Democrats vote to line Eric Holder’s pockets:

    Last week California’s progressive lawmakers announced that they’ve put former Attorney General Eric Holder, now a Covington & Burling partner, on retainer as the state’s outside counsel. “This is potentially the legal fight of a generation, and with Eric Holder we’ve added a world-class lawyer,’’ said Senate majority leader Kevin de León.

    This is odd. Typically states hire outside counsel for help with specific cases, but the legislature is paying Mr. Holder $25,000 a month for three months under the initial contract, apparently for 40 hours a month and the privilege of his attention if something comes up.

  • At least one California assemblyman thinks that the Holder deal is illegal. “California courts have interpreted the civil service mandate of article VII of forbidding private contracting for services that are of a kind that persons selected through civil service could perform ‘adequately and competently.'”
  • In California, robots are replacing people in warehouse work. The minimum wage is mentioned, but only in passing.
  • California is the state third most likely to enter a death spiral in a recession. (Hat tip: Director Blue.)
  • “San Diego County Board of Supervisors voted Tuesday to increase their own salaries by more than $19,000 a year, despite public comment from dozens of opponents.”
  • “California state firefighters will receive substantial raises of up to 13.8 percent this year, according to newly released details from a proposed contract that their union negotiated just before Christmas.” Just the thing a state with a budget deficit needs…
  • “The evidence is clear that standards of living are substantially higher in Texas than in California, which has a model of excessive government.” More: “During the last decade, economic growth in the real private sector has increased by 29 percent in Texas compared with only 14 percent in California. Job creation increased by 1.2 million in California compared with 1.7 million in Texas, which has a labor force two-thirds of that in California. Remarkably, Texas’ job creation was roughly one-third of total civilian employment increases nationwide.”
  • Texas ranked third nationally in economic freedom for the sixth consecutive year. California ranked 49th, just ahead of New York.
  • California Democrats vow to go all-out to keep illegal aliens from being deported. (Hat tip: Instapundit.)
  • CalPERs plans to sell $15 billion worth of equities over the next two years. Also: “CalPERS’ current portfolio is pegged to a 7.5% return and a 13% volatility rate” even though the most recent returns were “a 0.6% return for the fiscal year ended June 30 and a 2.4% return in fiscal 2015.”
  • But the shift from Fantasyland to Reality has been a slow and painful one for CalPERS:

    Overseers of the nation’s largest pension trust fund, the California Public Employees Retirement System (CalPERS), last month reduced – albeit reluctantly – its projection of future earnings by a half-percentage point.

    With earnings on investments the last two years barely exceeding zero, CalPERS has been compelled to sell assets to make its pension payments – which far outstrip contributions from state and local governments and their employees.

    Reducing the “discount rate” to 7 percent will force employers, and perhaps employees, to kick billions of more dollars into the system to slow the growth of CalPERS’ “unfunded liabilities,” as the $150-plus billion debt is termed.

    However, the extra contributions generated by lowering the discount rate will not erase that debt, which is likely to keep growing if CalPERS’ investment earnings continue to fall short, as many economists expect. In fact, CalPERS’ own advisers see a prolonged period of relatively low earnings, and say the system shouldn’t count on more than 6.2 percent.

    Rationally, the discount rate should have been lowered by at least another full percentage point. But CalPERS has already increased its mandatory contributions by 50 percent to make up for investment losses during the Great Recession and other factors, and cutting the discount rate to 6 percent would probably mean bankruptcy for a number of local governments, especially some cities.

    (Hat tip: Pension Tsunami.)

  • And CalPERs needs to do a lot more:

    This is why the CalPERS board must do far more — starting with, on a large scale, finally embracing pension reforms and, on a smaller scale, shuttering an over-the-top corner of the CalPERS website that says it’s a myth that pension costs are crowding out “government services like police and libraries.”

    It’s no myth. The Los Angeles Times reported last month that pensions and retirement health benefits now consume 20 percent of revenue in Los Angeles and Oakland and a stunning 28 percent in San Jose. While the state government is in better shape than most local governments, it’s beginning to feel the strain as well. On Wednesday, Bloomberg reported that beginning in April, the state will increase vehicle registration fees from $46 to $56 to help cover the soaring cost of pensions for California Highway Patrol officers. In 2000, the state had to pay about one-eighth of annual CHP pension costs. Now it must pay about half.

  • “Home values in San Francisco have doubled in a matter of four years. Since 2012 the typical San Francisco home went from $600,000 to $1,200,000. The Bay Area is under a tech based hypnotic spell and foreign money just can’t get enough of million dollar crap shacks in San Francisco. As we all know trees do not grow to the sky with unlimited potential and at a certain point the laws of reality have to hit. Only 11 percent of households in San Francisco can actually afford to purchase the typical $1.2 million crap shack.”
  • San Francisco welcomes immigrants…unless they threaten to move next door. (Hat tip: Ace of Spades HQ.)
  • “New housing data show foreclosure activity in California dropped to an 11-year low in 2016. But the state is still working through a backlog of homes purchased with bad loans during the last housing bubble.”
  • How America’s restaurant bubble is about to burst. Actually, the piece focuses mainly on the impossibility of running a profitable fine dining restaurant in San Francisco and other similarly expensive locales. (Hat tip: Zero Hedge.)
  • “How the University of California exploited a visa loophole to move tech jobs to India.”
  • The Census bureau says that Texas continued to grow in 2016. “Another big gainer was Texas, whose addition of about 433,000 people accounted for 19% of the country’s growth. The state, with 27.9 million people, grew from a relatively strong flow of immigrants and people relocating there from other states.”
  • Texas was second relocation destination choice in 2015:

    Texas experienced a net gain of out-of-state residents in 2015, with 107,689 more people moving to Texas than Texas residents moving out of state. This is a 4 percent increase in the net gain of Texas residents from 2014 (103,465 residents).

    The total number of residents moving to Texas from out of state in 2015 increased 2.8 percent year-over-year to 553,032 incoming residents. The highest number of new Texans came from California (65,546), followed by Florida (33,670), Louisiana (31,044), New York (26,287) and Oklahoma (25,555).

    Texas once again ranked third in the nation for number of residents moving out of state (445,343) in 2015. The most popular out-of-state relocation destinations for Texans were California (41,713), Florida (29,706), Oklahoma (28,642), Colorado (25,268), and Louisiana (19,863).

  • Arizona and Florida managed to dethrone Texas for the relocation top spot for the first time in a dozen years.
  • Why is Austin housing more expensive comapred to other Texas cities? “The reasons vary, but boil down to Austin’s relative unwillingness–thanks to NIMBYism and regulations–to build more housing.”
  • It doesn’t help that Austin is experiencing a net influx of 3,000 Californians a year. Seems like more…
  • California ban on modern sporting rifles went into effect January 1. (Hat tip: Director Blue.)
  • “Police in Kern County, California, have killed more people per capita than in any other American county in 2015.” Caveat the first: The Guardian. Caveat the second: Thanks ever so much for that full-frame background video designed to bring by computer to a screeching halt, Guardian
  • How Marfa, Texas turned itself into an art colony.
  • Students at California law schools are doing horribly on the bar exam. “Law schools are admitting less and less qualified students in an effort to bolster their bottom lines. And why do their bottom lines need to be bolstered? Because they have too many faculty relative to student demand for the schools, and are either reluctant or unable to reduce the size of the faculty to “right size” the law school relative to present demand for the JD.” (Hat tip: Instapundit.)
  • Maybe they should start calling it “North American Apparel“:

    Canadian apparel maker Gildan Activewear Inc. has won a bankruptcy auction for U.S. fashion retailer American Apparel LLC (curxq) after raising its offer to around $88 million, a person familiar with the matter said Monday.

    Gildan’s takeover marks the end of an era for the iconic Los Angeles-based company, which was founded in 1998 by an eccentric Canadian university drop-out and grew to become a part of U.S. popular culture thanks to its racy advertising.

    Gildan will not take any of American Apparel’s 110 stores, but will own its brand and assume some of its manufacturing operations, the source said. The deal is subject to a bankruptcy judge approving it on Thursday.

  • State of California: You can’t mention actresses ages, because Reasons. IMDB: Free speech. Bite me.
  • And if you hadn’t seen them already, two previous BattleSwarm stories that touch on the Texas vs. California issue:

  • Interview with TPPF’s James Quintero on the Texas Municipal Pension Debt Crisis
  • The Texas 85th legislative session opens with budget tightening on the agenda.
  • 85th Texas Legislative Session Begins Today

    Tuesday, January 10th, 2017

    Lock up your women and liquor, the legislature is back in town!

    The 85th Texas Legislative Session started today, and one of the biggest concerns is a smaller budget, as detailed by the comptroller:

    For 2018-19, the state can expect to have $104.9 billion in funds available for general-purpose spending, a 2.7 percent decrease from the corresponding amount of funds available for the 2016-17 biennium. If not for the new constitutional provision dedicating up to $5 billion in biennial sales tax revenue to the State Highway Fund (SHF) starting in fiscal 2018-19, projected funds available for general-purpose spending for 2018-19 would be $109.6 billion, 1.7 percent greater than in 2016-17.

    The $104.9 billion available for general-purpose spending represents 2018-19 total revenue collections of $106.5 billion in General Revenue-related (GR-R) funds, plus $1.5 billion in balances from 2016-17, less $3.1 billion reserved from oil and natural gas taxes for 2018-19 transfers to the Economic Stabilization Fund (ESF) and the SHF.

    Tax revenues account for approximately 87 percent of the estimated $106.5 billion in total GR-R revenue in 2018-19. Sixty-two percent of GR-R tax revenue will come from net collections of sales taxes, after more than $4.7 billion is allocated to the SHF. Other significant sources of General Revenue include motor vehicle sales and rental taxes; oil and natural gas production taxes; franchise tax; insurance taxes; collections from licenses, fees, fines and penalties; interest and investment income; and net lottery proceeds.

    In addition to the GR-R funds, the state is expected to collect $74.9 billion in federal income as well as other revenues dedicated for specific purposes and therefore unavailable for general-purpose spending. Revenue collections from all sources and for all purposes should total $224.8 billion.

    Absent any appropriations by the Legislature, the ESF balance is expected to be $11.9 billion at the end of the 2018-19 biennium, below the ESF constitutional limit of an estimated $16.9 billion.

    Following a strong 5.9 percent increase in real gross state product in fiscal 2015, the Texas economy is estimated to have grown by only 0.2 percent in 2016, well below the average growth rate of 3.8 percent per year over the past 20 years. Contraction in activity related to oil and natural gas production has been a drag on state economic growth. Still, the diversity of the Texas economy has allowed for continued growth in employment over the past two years and we expect sustained growth over the coming biennium. Texas stands in contrast to other states with large energy industries, many of which have suffered through declines in employment and economic output.

    Here’s an eyechart visual summary. Click for a bigger version.

    The budget is the meat-and potatoes of the legislature, but we’ll get to some hot-button issues (like sanctuary cities and tranny bathrooms) at a later date.

    The Great Pickup Truck War of 2017

    Monday, January 9th, 2017

    This past week brought one of those small, illuminating skirmishes in the culture wars, this time over that quintessentially Texas vehicle, the pickup truck.

    First came this New York Times piece by Many Fernandez on the Texas Truck Rodeo. If it weren’t for the opening paragraphs, it would be a pretty solid (if not terribly in-depth) piece on pickup trucks in Texas.

    But look at those opening paragraphs:

    DRIPPING SPRINGS, Tex. — Tim Spell has noticed a peculiar condition that affects Texans’ mental, physical and automotive well-being.

    “I call it ‘truck-itis,'” said Mr. Spell, the former automotive editor for The Houston Chronicle. “People in Texas will buy trucks even if they’re not going to haul anything heavier than raindrops. I was interviewing one guy. He had a 4-by-4. I said: ‘You live in Houston. Why do you have this 4-by-4?’ He said, ‘Well, I own a bar, and 4-by-4s are higher, and I can climb up on the cab and change out the letters of my marquee.'”

    It’s like New York Times editors think their target readership wouldn’t dean to read an article on pickup trucks without two opening paragraphs of smug, patronizing condescension. The rest of the piece focuses as much on Texans’ love of pickup trucks as the truck rodeo, and few would take issue with that portion:

    Whether for high-up urban letter-switching or more rural and rugged purposes, pickup trucks are to Texas what cowboy boots and oil derricks are to the state — a potent part of the brand. No other state has a bigger influence on the marketing of American pickup trucks.

    Texas is No. 1 in the country for full-size pickup trucks. More of them were sold in 2015 in the Dallas and Houston areas than in the entire state of California, according to the research firm IHS Markit. There is the Ford F-150 King Ranch, named for the iconic Texas ranch. And the Nissan Texas Titan, the floor mats and tailgate of which are emblazoned with the shape of Texas. And the Toyota Tundra 1794 Edition, featuring leather seats that mimic the look and feel of Western saddles, was named for the year that the JLC Ranch in San Antonio was established.

    The Texas-edition truck is a product of the state’s pull on the truck world. Some truck styles are sold and marketed only in the state as Texas editions, ensuring that pickup trucks, like a lot of things in Texas, are different here than elsewhere.

    “I like to say that you almost can’t overmarket Texas to Texans,” said Fred M. Diaz, a Nissan North America executive and a native Texan.

    All true, and all largely uncontroversial.

    But what really shifted The Great Pickup Truck War into high gear was one simple Tweeted question:

    From the reactions of the chattering classes, you’d think Ekdahl asked “How many of you liberal reporters have stopped raping your children?”

    And there’s been many an interesting roundup on the subject:

  • Sean Davis at The Federalist: “Even after a presidential election in which scores of media personalities were shown to be entirely disconnected from the country and people they report on, the liberal media bubble is alive and well. All it took to reveal the durability of that bubble was a simple question about pickup trucks.”

    Rather than answer with a simple “no,” the esteemed members of the most cloistered and provincial class in America–political journalists who live in New York City or Washington, D.C.–reacted by doing their best impersonation of a vampire who had just been dragged into the sunshine and presented with a garlic-adorned crucifix.

    There were basically three types of hysterical response to a simple question about truck owners: 1) shut up, 2) you’re stupid and/or sexist and/or racist, and 3) whatever, liar, trucks aren’t popular (far and away my favorite delusional response to a simple question from a group of people who want you to believe they’re extremely concerned about “fake news”). It turns out that people who are paid large sums of money to opine on what Americans outside the Acela province think get very upset if you demonstrate that they don’t actually know any of the people about whom they pretend to be experts.

    I have a quibble with that: I doubt many of the liberal reporters snipping at Ekdahl are well-paid.

  • Here’s SooperMexican at The Right Scoop on the topic, including capturing a tweet since deleted:

    The automotive editor for Ars Technica compares truck owning to BEING A HEROIN ADDICT BECAUSE HE’S NOT SENSITIVE ABOUT IT AT ALL:

    .@JohnEkdahl plenty of heartlanders are opioid addicts. Does that mean to report on real Amerikkka you need an oxy habit?

    — Jonathan Gitlin (@drgitlin) January 4, 2017

  • Kevin D. Williamson at National Review:

    The responses were predictable: The sort of smug progressives who are proud of their smugness scoffed that pick-ups, pollution-belching penis-supplements for toothless red-state Bubbas, are found mainly in the sort of communities where they’d never deign to set foot; the sort of smug progressives who are ashamed of their smugness protested that it is a silly question (which it is — that’s part of the point) and made strained connections with pick-up-owning childhood friends back home in East Slapbutt; conservatives mainly said “Har har stupid liberal elites.”

    Snip.

    Russell Kirk, describing his “canons of conservative thought,” argued that to be a conservative is to appreciate genuine diversity, “the proliferating variety and mystery of human existence, as opposed to the narrowing uniformity, egalitarianism, and utilitarian aims of most radical systems.” The Left is living up to Kirk’s expectations: The increasingly sneering attitude of coastal elites toward the more conservative interior, particularly for the poor communities there, is as undeniable as it is distasteful. But conservatives are not immune to these Kulturkampf tendencies, either. No, the whole country does not need to be Williamsburg, Brooklyn. It doesn’t need to be Lubbock, Texas, either.

  • T. Becket Adams at The Washington Examiner: “Following Trump’s win, one would think members of the press would reflect more on what they know and don’t know about the electorate they cover. Though some journalists seem to be doing just that, others appear to be extremely upset with the idea that their industry is insular and operating out of a bubble.”

    Ekdahl’s question doesn’t suggest that owning a pickup truck somehow makes one morally superior or “more American” (it’s sort of pointless anyway for someone living in Washington, D.C., or New York City to own a vehicle, let alone a giant, hulking truck. Good luck parking that thing). His question appears to be about the insular nature of media, and whether those who cover the electorate have a broad and significant understanding of American culture.

    The point is that a significant number of people drive pickup trucks. How many national media reporters can say they know one of these drivers? The question seems like a worthwhile exercise in self-reflection for the press, especially after it was so violently broadsided in November by Trump’s victory.

    Becket concludes with this question:

    Rifles are consistently the most manufactured firearm in the U.S., according to the Department of Alcohol, Tobacco and Firearms.

    The AR-15 is the most popular rifle in the U.S., according to the National Rifle Association.

    How many reporters can say they own or know a person who owns an AR-15?

    Hell, no need to even go that far: How many reporters know someone that owns any gun?

    If there’s one thing missing from the commentary, it’s the unspoken moral code liberals bring to the question. The late novelist Michael Crichton noted that environmentalism is the new religion for unchurched urban elites. To them owning a pickup truck makes one an environmental sinner, a moral lapse no less offensive than committing adultery is to a Baptist.

    Declaring you own a truck is declaring you’re a sinner in the eyes of an angry media…

  • Dawnna Dukes Changes Course, Refuses to Step Down

    Saturday, January 7th, 2017

    Well, this is an interesting turn of events:

    State Rep. Dawnna Dukes, D-Austin, has informed Travis County District Attorney Margaret Moore that she will not step down from her seat in the Texas House as planned when the House convenes for a new session Tuesday, Moore told the American-Statesman Saturday.

    Moore, newly-sworn in as district attorney, said that Dukes had called her to inform her of her decision.

    Moore said he was already scheduled to meet with Texas Rangers investigating ethics charges against Dukes on Tuesday and would proceed with that meeting and then decide whether to go before a grand jury and seek an indictment of Dukes.

    Dukes announced in September that she would not be sworn in for a 12th term when the next session of the Texas Legislature convenes Jan. 10. Dukes cited medical complications stemming from a 2013 car crash as the reason for her departure, but her announcement came soon after the Texas Rangers completed an investigation into her use of legislative staff and campaign money.

    It’s hard to fathom why she’s doing this, unless it’s to somehow gain more leverage for a better plea deal. Or maybe she just has no other potential job prospects that will let her pretend to work from home while not showing up, given that the last time I covered this story she had been absent from the legislature for a year.

    But I can’t help thinking that Dukes’ desire to remain in the Statehouse will make it a lot more likely that she ends up in the big house instead…

    (Hat tip: Matt Mackowiak’s Twitter feed.)

    Rep. Sam Johnson to Retire

    Saturday, January 7th, 2017

    U.S. Congressman Sam Johnson of the Texas Third Congressional district (northeast of Dallas, including Plano and McKinney) has announced that he’s retiring at the end of his term.

    Like Sen. John McCain, Johnson served as a military pilot who was shot down, held prisoner and tortured during the Vietnam War. Unlike McCain, Johnson has been a fairly reliable conservative, earning an 89% ranking from the Heritage Action for America’s scorecard and 82% ranking from Conservative Review, earning particular liberal ire for a bill to reign in the abuses of the EPA.

    At 86, Johnson is well into retirement age. As for replacements, State Senator Van Taylor’s Eighth District is right smack dab in the middle of the U.S. Third, and like Johnson, Taylor is ex-military, having served with the Marines in Iraq. He’s also a staunch conservative, pulling a 100% rating from the American Conservative union, all of which makes him a natural candidate.

    I just sent Taylor a tweet asking if he’s running. I’ll let you know if I get a reply.

    MD Anderson Announces Layoffs

    Thursday, January 5th, 2017

    Well, this is a bad economic indicator for the Houston area:

    Financially ailing MD Anderson Cancer Center will announce today it will cut its workforce by 5 percent through layoffs and retirements.

    Dan Fontaine, Anderson’s chief financial officer, confirmed Thursday morning a little less than 1,000 of the staff of 2o,000 [sic] will be leaving the world-renowned cancer hospital. Some of those people are expected to volunteer to retire, he said.

    Dr. Ronald DePinho, president of the cancer center, Fontaine and other officials set a press conference today to announce the workforce reduction.

    Anderson officials said before Christmas they were considering staff cutbacks as the Houston cancer hospital tries to shore up its finances. During the September-through-November quarter, Anderson posted $110 million in operating losses.

    Officials said in the advisory MD Anderson’s long-term financial health remains strong. Last month, officials said the operating budget is an important indicator of the cancer hospital’s ability to be self-sufficient, but it doesn’t take into account other revenue streams like state funding, charitable gifts and investement [sic] income. At that time, officials said Anderson has $2.8 billion in cash on reserve.

    Snip.

    Other factors also are at play, Fontaine said, including patients’ higher insurance deductibles and a shrinking number of insurers willing to pay for MD Anderson’s expensive cancer treatments.

    Belt-tightening measures already are paying off, he said, noting that the $9 million operating loss in November was far smaller than the $102 million in losses recorded in September and October. Those losses followed seven months of operating losses to end fiscal 2016.

    MD Anderson is one of the premier cancer centers in the world, and my father received treatment there during his terminal illness. I wonder if the relentless cost-cutting required by ObamaCare was a contributing factor, as MD Anderson has been dropped by all ObamaCare plans.

    Also, the folks at the Houston Chronicle should have their proofreaders do a better once-over for breaking stories. Those two typos I’ve noted [sic] for should have been caught…

    Interview with TPPF’s James Quintero on the Texas Municipal Pension Debt Crisis

    Monday, January 2nd, 2017

    James Quintero, the Director of the Center for Local Governance at the Texas Public Policy Foundation, was kind enough to provide some detailed answers to questions I sent him about the municipal pension crisis in Dallas and other large Texas cities. My questions are in italics.


    The Dallas police/fireman’s pension fund issue is generally described as stemming from the fund manager’s risky real estate speculation. Are there any additional structural problems that helped hasten that fund’s crisis?

    When it comes to Texas’ public retirement systems, one of my greatest concerns is that there are other ticking time-bombs, like the DPFP, out there getting ready to explode. It’s not just Dallas’ pension plan that’s taken on excessive risk to chase high yield in a low-yield environment.

    Setting aside the issue of risk for a moment, the DPFP, like most other public retirement systems around the state, suffers from a fundamental design flaw. That is, it’s based on the defined benefit (DB) system, which guarantees retirees a lifetime of monthly income irrespective of whether the pension fund has the money to make good on its promises or not. This kind of system is akin to an entitlement program, warts and all, and is very much at the heart of pension crises brewing in Texas and across the country.

    One of the biggest problems with DB plans is that they rely on a lot of fuzzy math to make them work, or at least give the appearance of working. Take the issue of investment returns, for example. Many systems assume an overly optimistic rate of return when estimating a fund’s future earnings. Baking in these rosy projections is, among other things, a way to understate a plan’s pension debt. In an October 2016 study that I co-authored with the Mercatus Center’s Marc Joffe, I wrote the following to illustrate this very point:

    For example, the Houston Firefighters’ Relief and Retirement Fund (HFRRF) calculates its pension liability using a long-term expected rate of return on pension plan investments of 8.5%. During fiscal year 2015, the plan’s investments returned just 1.53%. Over a 7- and 10-year period the rates of return were 6.4% and 7.9%, respectively. Not achieving these investment returns year-after-year can have a dramatic fiscal impact.

    Even a small change in the actuarial assumptions can have major consequences for the fiscal health of a pension fund. According the HFRRF’s 2015 Comprehensive Annual Financial Report, a 1% decrease in the current assumed rate of return (8.5%) would almost double the fund’s pension liabilities, from $577.7 million to $989.5 million.

    So while risky real estate deals were certainly a catalyst in the current unraveling of the DPFP, I suspect that its refusal to move away from the defined benefit model and into a more sustainable alternative—much like the private sector has already done—would have ultimately led us to this same point of fiscal crisis.

    To what legal extent (if any) is Dallas police/fireman’s pension fund backstopped by the City of Dallas and/or Dallas County?

    Let me preface this by saying that I’m not a lawyer nor do I ever intend to be one. However, Article XVI, Section 66 of the Texas Constitution plainly states that non-statewide retirement systems, like DPFP, and political subdivisions, like the city of Dallas, “are jointly responsible for ensuring that benefits under this section are not reduced or otherwise impaired” for vested employees. Given that, it’s hard to see how the city of Dallas—or better yet, the Dallas taxpayer—isn’t obligated in some major way when their local retirement system reaches the point of no return, which may be a lot closer than people think given all the lump-sum withdrawals of late.

    Likewise, does the state of Texas have any statutory backstop to the Dallas police/fireman’s pension fund, or any other local pension funds?

    For non-statewide plans, I don’t believe so. Again, I’m not a lawyer, but the Texas Attorney General wrote something fairly interesting recently touching on aspects of this question.

    In September 2016, House Chairman Jim Murphy asked the AG to opine on “whether the State is required to assume liability when a local retirement system created pursuant to title 109 of the Texas Civil Statutes is unable to meet its financial obligations.” Title 109 refers to 13 local retirement systems in 7 major metropolitans that are a small-but-important group of plans that have embedded some of their provisions in state law (i.e. benefits, contribution rates, and composition of their boards) I’ve written a lot about this problem in the past (read more about it here).

    In response to Chairman Murphy’s question, the AG had this to say:

    In no instance does the constitution or the Legislature make the State liable for any shortfalls of a municipal retirement system regarding the system’s financial obligations under title 109. The Texas Constitution would in fact prohibit the State from assuming such liability without express authorization.

    …a court would likely conclude that the State is not required to assume liability when a municipal retirement system created under title 109 is unable to meet its financial obligations.

    So at least in the AG’s opinion, state taxpayers wouldn’t be required by law to bail out this subset of local retirement systems. But of course, the political calculus may be different than what’s required by law.

    Compared to the Dallas situation, how badly off are the Houston, Austin and San Antonio public employee pension funds?

    If you’re a taxpayer or property owner in one of Texas’ major cities, I’d be concerned. Moody’s, one of the largest credit rating agencies in the U.S., recently found that: “Rapid growth in unfunded liabilities over the past 10 years has transformed local governments’ balance sheet burdens to historically high levels,” and that Austin, Dallas, Houston, and San Antonio had a combined $22.6 billion in pension debt—and it’s growing worse!

    Using the Pension Review Board’s latest Actuarial Valuations Report for November 2016, we can parse the systems within each municipality to get a little bit better sense of where the trouble lies. Pension debt for the retirement systems in the big 4 looks like this:

  • Austin Employees’ Retirement System: $1.1 billion, Austin Police Retirement System: $346 M, and Austin Fire Fighters Relief and Retirement Fund: $93 M;
  • Dallas Employees’ Retirement Fund: $809 M, Dallas Police and Fire Pension System—Combined Plan: $3.3 B, and Dallas Police and Fire Pension System—Supplemental: $23 M;
  • Houston Municipal Employees Pension System: $2.2 B, Houston Firefighters’ Relief and Retirement Fund: $467 M, and Houston Police Officer’s Pension System: $1.2 B; and
  • San Antonio Fire and Police Pension Fund: $360 M.
  • Of course, it’s important to keep in mind that the figures use some of the same fuzzy math as described above, so the actual extent of the problem may be worse than the PRB’s latest figures indicate.

    What similarities, if any, are there to current Texas municipal pension issues and those that forced California cities like San Bernardino, Stockton and Vallejo into bankruptcy? What differences?

    The common element in most, if not all, of these systemic failures is the defined benefit pension plan. Because of the political element as well as the inclusion of inaccurate investment assumptions in the DB model, these plans are almost destined to fail, threatening the taxpayers who support it and the retirees who rely on it. And sadly, that’s what we’re witnessing now across the nation.

    As far as the differences go, California’s municipal bankruptcies as well as Detroit’s were preceded by decades of poor fiscal policy and gross mismanagement. I don’t see that same thing here in Texas, but it’s also important that we don’t let it happen too.

    California pensions were notoriously generous (20 years and out, spiking, etc.). Do any Texas state or local pensions strike you as unrealistically generous?

    Any plan that’s making pension promises but has no plan on how to make good on those promises is being unrealistically generous. And unfortunately for taxpayers and retirees alike, a fair number of plans can be categorized as such.

    The Pension Review Board’s Actuarial Valuations Report for November 2016 reveals that of Texas’ 92 state and local retirement system, only 4 of them are fully-funded. At the other extreme, a whopping 19 of the 92 plans have amortization periods of more than 40 years. Six of those 19 plans have infinite amortization periods, which effectively means that they have no plan to keep their promises but are instead planning to fail.

    As far as specific plans go, there’s no question that the Dallas Police and Fire Pension System is the posterchild for the overly generous. The Dallas Morning News recently covered the surreal levels of deferred compensation offered, finding that:

    The lump-sum withdrawals come from the Deferred Retirement Option Plan, known as DROP. The plan allows veteran officers and firefighters to essentially retire in the eyes of the system and stay on the job.

    Their benefit checks then accrue in DROP accounts. For years, the fund guaranteed interest rates of at least 8 percent. DROP made hundreds of retired officers and firefighters millionaires. And once they stopped deferring the money, they received their monthly benefit checks in addition to their DROP balance. [emphasis mine]

    It’s probably fair to say that any public program that makes millionaires out of its participants is probably being too generous with its benefits.

    There seem to be only two recent local government bankruptcies in Texas, neither of which were by cities: Hardeman County Hospital District Bankruptcy and Grimes County MUD #1. Did either of these involve pension debt issues?

    I’m not familiar with those instances, but when it comes to the issue of soaring pension obligations, I can tell you that the system as a whole is moving in bad direction.

    In November 2016, Texas’ 92 state and local retirement systems had racked up over $63 billion dollars of unfunded liabilities, with more than half owed by the Teacher Retirement System. That’s a staggering amount of pension debt that’s not only big but growing fast. And worse yet, that’s in addition to Texas’ already supersized local government debt-load.

    How we’re going to make good on all of these unfunded pension promises is anyone’s guess. But I imagine that it’ll involve some combination of much higher taxes, benefit reductions, and fewer city services.

    What limits or constraints does Texas place on Chapter 9 bankruptcy?

    The Pew Charitable Trusts’ Stateline has some good information on this, at least as far as municipal bankruptcy is concerned. A November 2011 report, Municipal Bankruptcy Explained: What it Means to File for Chapter 9, had this to say about the process:

    Who can file for Chapter 9? Only municipalities — not states — can file for Chapter 9. To be legally eligible, municipalities must be insolvent, have made a good-faith attempt to negotiate a settlement with their creditors and be willing to devise a plan to resolve their debts. 

They also need permission from their state government. Fifteen states have laws granting their municipalities the right to file for Chapter 9 protection on their own, according to James Spiotto, a bankruptcy specialist with the Chicago law firm of Chapman and Cutler. Those states are Alabama, Arizona, Arkansas, California, Idaho, Kentucky, Minnesota, Missouri, Montana, Nebraska, New York, Oklahoma, South Carolina, Texas and Washington. 

    Hopefully this is a process that can be avoided entirely, but given the fiscal condition of the DPFP and potentially a few other systems, I’m not sure that’ll be the case.

    Next to Dallas, which municipal pensions would you say are in the worst shape?

    I’m most concerned about the local retirement systems in Title 109. The reason, again, is that these 13 local retirement systems are effectively locked into state law and there’s little that taxpayers or retirees in those communities can do to affect good government changes without first going to Austin. These systems have basically taken a bad situation and made it worse by fossilizing everything that counts.

    In the Texas Public Policy Foundation’s 2017-18 Legislator’s Guide to the Issues, I cover this issue in a little more detail. In the article (see pgs. 122 – 124), I write of these plans’ fiscal issues which can be seen below, albeit with slightly older data.

    texaspensiondebtchart

    (Funded ratios marked in red denote systems that are below the 80% threshold, signifying a plan that may be considered actuarially unsound. Source: Texas Bond Review Board.)

    The fact that these systems either are in or are headed for fiscal muck is a big reason why the Texas Public Policy Foundation is helping to educate and engage on legislation that would restore local control of these state-governed pension plans. People on the ground-level should have some say over their local plans, and that’s what we’ll be fighting for next session. Encouragingly, a bill’s already been filed in the Senate (see SB 152) and there should be legislation filed shortly in the House to do just that.

    Should Texas government agencies switched over to defined contribution (i.e. 401K) plans over standard pension plan, and if so, how might this realistically be accomplished without endangering existing retirees?

    ABSOLUTELY. Ending the defined benefit model and transitioning new employees into something more sustainable and affordable, like a defined contribution system, is one of the best things that the state legislature can do. This is something I’ve long been an advocate of.

    In fact, in early 2011, I played a very minor role in the publication of some major research spearheaded by Dr. Arthur Laffer, President Ronald Reagan’s chief economist, that advanced this same reform idea (see Reforming Texas’ State & Local Pension Systems for the 21st Century). I’ve also written a lot about the need to make the DC-switch, making the case recently in Forbes that:

    DC-style plans resemble 401(k)s in the private sector and the optional retirement programs (ORP) available for higher education employees in Texas. These DC-style plans put the power of an individual’s future in their own hands instead of depending on the good fortune of government-directed DB-style plans. DC-style plans are portable and sustainable over the long term as they are based on the contributions of retirees and a defined government match.

    With DC-style plans, retirees will finally have the opportunity to determine how much risk they are willing to take. They also reduce the risk that the government will default on their retirement or fund those losses with dollars from taxpayers who never intended to use these pensions. By giving retirees more freedom on how to best provide for their family, they will be in a much better position to prosper.

    Because of their efficiency, simplicity and fully funded nature, the private sector moved primarily to DC-style plans long ago. For the sake of taxpayers and retirees dependent on government pensions, it’s time for all governments to move to these types of plans as well.

    As far as dealing with transition costs, some much smarter people than I have written on this issue and found that it’s not as big of a challenge as it’s made out to be. Dr. Josh McGee, a vice president with the Laura and John Arnold Foundation, a senior fellow with the Manhattan Institute, and Chairman of the Pension Review Board, had this to say about the matter:

    Moving to a new system would have little to no effect on the current system. State and local pensions are pre-funded systems, and unlike Social Security, the contributions of workers today do not subsidize today’s retirees. Future normal cost contributions are used to fund new benefit accruals that workers earn on a go-forward basis and are not used to close funding gaps. Therefore, it matters little whether the normal cost payments are used to fund new benefits under the current system or a new system.

    (Source: The transition cost mirage—false arguments distract from real pension reform debates.)

    Another pension expert, Dr. Andrew Biggs with the American Enterprise Institute, published research that found that:

    In this study, I show that if a pension plan were closed to new hires, over time the duration of liabilities would shorten, and the portfolio used to fund those liabilities would become more conservative. However, the effects of these transition costs are so small as to be barely perceptible.

    (Source: Are there transition costs to closing a public-employee retirement plan?)

    I’m confident that with the right plan in place, Texas’ state and local retirement systems can make the switch to defined contribution and we’ll be all the better for it.


    Thanks to James Quintero for providing such a detailed analysis!

    And since we’re on the topic, here’s a roundup of news on the Dallas Police and Fireman’s pension fund crisis:

  • The Texas Rangers have launched a criminal probe into the shortfall.
  • City Journal offers details on the unreasonable generosity of the Dallas plan (which covers some of the same DROP issues Quintero mentions):

    Dallas created the police and fire plan in 1916. The system’s trustees eventually persuaded the state legislature to allow employees and pensioners to run the plan. Not surprisingly, the members have done so for their own benefit and sent the tab for unfunded promises—now estimated at perhaps $5 billion—to taxpayers. Among the features of the system is an annual, 4 percent cost-of-living adjustment that far exceeds the actual increase in inflation since 1989, when it was instituted. A Dallas employee with a $2,000 monthly pension in 1989 would receive $3,900 today if the system’s annual increases were pegged to the consumer price index. Under the generous Dallas formula, however, that same monthly pension could be worth more than $5,000. No wonder the ship is sinking.

    The system also features a lavish deferment option that lets employees collect pensions even as they continue to work and earn a salary. Moreover, the retirement money gets deposited into an account that earns guaranteed interest. Governments originally began creating these so-called DROP plans as an incentive to encourage experienced employees to keep working past retirement age, which in job categories like public safety can be as young as 50. In Dallas, the pension system gives workers in the DROP plan an 8 percent interest rate on their cash, at a time when yields on ten-year U.S. Treasury notes, a standard for guaranteed returns, are stuck at less than 2 percent. According to the city, some 500 employees working past retirement age have accumulated more than $1 million in these accounts—on top of the pensions that they will receive once they officially stop working.

  • The Dallas Morning News says that there’s plenty of blame to go around:

    Over the years, the Dallas Police and Fire Pension System fund has amassed $2 billion to $5 billion in unfunded liabilities, the result of bad real estate investments and blatant self-enrichment from prior management. Coupled with a possible setback in ongoing litigation over public safety salaries, Dallas is in the most financially precarious position in its history.

    City officials are openly uttering the word bankruptcy, not just of the pension fund but the city itself. As Mayor Mike Rawlings told the Texas Pension Review Board this month, “the city is potentially walking into the fan blades that might look like bankruptcy.”

    The state Legislature created this mess by not giving the city a meaningful voice in the fund’s operation and allowing the former board of the pension fund to unilaterally sweeten its membership’s promised benefits without concern to the overall fiscal damage being done. Now it must help the city clean up the mess.

    Dallas already provides nearly 60 percent of its budget to support public safety services and recently contributed $4.6 million to increase its share of pension contributions to 28.5 percent — the maximum allowed under state statute. However, if Dallas loses the lawsuit over salaries and no changes are made to the pension fund, the city could take an $8 billion hit. That is roughly equal to eight years of the city’s general fund budget.

  • That said, the bond market doesn’t seem to think Dallas is near bankruptcy.
  • And it’s not just Dallas:

    Austin, Dallas, Houston and San Antonio collectively face $22.6 billion worth of pension fund shortfalls, according to a new report from credit rating and financial analysis firm Moody’s. That company analyzed the nation’s most debt-burdened local governments and ranked them based on how big the looming pension shortfalls are compared to the annual revenues on which each entity operates.

    “Rapid growth in unfunded pension liabilities over the past 10 years has transformed local governments’ balance sheet burdens to historically high levels,” the report says.

    Chicago had the most dire ratio on the national list. Dallas came in second. According to the report, the North Texas city has unfunded pension liabilities totaling $7.6 billion. That’s more than five times the size of the city’s 2015 operating revenues.

    Both those cities may turn to the public to partially shore up their shortfalls. Houston Mayor Sylvester Turner wants to use $1 billion in bonds to infuse that city’s funds. Dallas police officer and firefighter pension officials also want $1 billion from City Hall, an amount officials there say is too high.

    Meanwhile, Austin ranked 14th on the Moody’s list with unfunded pension liabilities of $2.7 billion. San Antonio ranked 22nd with a $2.3 billion shortfall.

  • LinkSwarm for December 23, 2016

    Friday, December 23rd, 2016

    I hope everyone has plans for the Christmas weekend, even if they’re only “eat as much food and watch as much football as humanly possible.”

    Enjoy a Friday LinkSwarm:

  • Suspect in Berlin jihad truck attack shot dead. I was going to do one of my increasingly irregular jihad updates, but Stuff and Things got in the way.
  • One possible benefit of a Trump presidency: a restoration of federalism:

    America owes President Barack Obama an enormous debt of gratitude for showing how truly dangerous the federal government can be when our Constitution’s checks and balances start failing. With the active collusion of congressional Democrats, President Obama’s presidency has been one long series of body blows to the separation of powers that has protected our democracy since the Founding.

    The results have been stark. Never has a president trampled so much on the prerogatives of Congress. Obama’s executive orders, suspending parts of our immigration laws and even his own prized Obamacare, have been sheer usurpations, going far beyond even the breathtaking delegations of legislative authority granted by the brief Democratic supermajority in Congress in 2009–10.

    Sad to say, Obama’s trampling on the prerogatives of state governments has been even more unprecedented, and potentially far more damaging. His agencies’ “Dear Colleague” letters, addressing such sensitive issues as local school districts’ bathroom policies and the standards by which institutions of higher education review claims of sexual assault, have wrested away the core functions of state leaders, local boards, and even administrators.

    The separation of state and federal authority is one of the most essential principles of our Constitution. It explains the Constitution’s structural allocation of powers as much as the division between legislative, executive, and judicial functions. If we lose the separate and independent existence of state governments, we will lose our Constitution.

    And Wisconsin governor Scott Walker is walking point on the issue.

  • Trump’s election marks the overthrow of the media: “This election didn’t merely expose the failure of six months of campaigning by the Democratic Party. This election exposed the failure of SIX DECADES of leftist propaganda to have any cumulative effect at all.”
  • Ten ways Obama broke the American system. (Hat tip: Director Blue.)
  • “Outside California, Trump outdistanced Hillary by 1.41 million votes, 47.8% to 46.6%. As I have noted before, Hillary’s support was so geographically narrow that she won a popular vote majority in only 13 states (plus DC), the fewest of any major-party candidate since Bob Dole.”
  • Remember how Minnesota congressman Keith Ellison looked like a shoe-in for DNC head after Howard Dean withdraw from the race? Yeah, not so much. Although some of the dirt (like his ties to Louis Farrakhan) are decades old, there’s enough of it that lots of Democrats are getting cold feet about his candidacy:

    Despite the support of the first couple of populist progressivism — Elizabeth Warren and Bernie Sanders — the controversy has emboldened the opposition: Last week, Labor Secretary Tom Perez, a buddy of President Barack Obama (who called him “wicked smart” last week), jumped into the race. The effort to boost Perez, paradoxically and to Ellison’s irritation, is led by operatives allied with the country’s first black president, who view the Minnesotan as too tied to the identity politics they think cost Hillary Clinton the election.

    “We like Keith,” one longtime Obama political ally, who was pushing Perez, told me in November. “But is he really the guy we need right now when we are trying to get all of those disaffected white working-class people to rally around our message of economic equality?”

  • Texas officially removes Planned Parenthood from Medicaid.
  • “Feminism Is a Synonym for ‘Shut Up.’

    A major goal of feminism is to silence opposition. Because their ideology cannot withstand informed and articulate criticism, feminists therefore requires a dishonest vocabulary of jargon that functions to disqualify and discredit their opponents. A man expressing disagreement with a feminist will invariably be accused of “sexism” or “misogyny,” and if he persists in his criticism, he will be accused of “harassment.” What these terms actually mean — other than as pejorative labels, deployed to smear the movement’s enemies — is seldom examined. It is quite often the case that men who ostensibly support feminism engage in abusive behavior toward women (e.g., Jian Ghomeshi), whereas men who oppose the movement are branded “misogynists” for no other reason than their willingness to state their criticism honestly and openly.

  • “New York State Employee Demands Death For Trump Supporters, Still Employed.” Bonus: Openly calling for Republican women to be raped and cheering the death of American soldiers. (Hat tip: Ace of Spades HQ.)
  • 5 Arrested After Egyptian Police Bust Staged Photo Shoot Of “Wounded Aleppo Children”.
  • Funny how “hate crime” hoaxes are the fake news the media wants to keep reporting:

    n all four cases, there were reasons for the media to doubt the stories. In all four cases, the narrative of white and/or conservative and/or Trump-supporting and/or bigoted “people of privilege” persecuted and/or harassed and/or discriminated against some variation of minority. In all four cases, the hoax was reported before confirmed and later it was revealed by law enforcement or conservative media that we had all been duped.

    Here’s the core of the problem. Mainstream media has a narrative agenda that has failed miserably. They did everything they could to hand the White House and Senate to the Democrats. In the past, that’s all that needed to happen; if the media united behind a cause, they could bend the will of the people. In the case of the 2016 election, their agenda backfired, so they now have two choices. They could learn their lessons and return to a bygone day when reporters actually reported and commentators made absolutely certain their perspectives would not be confused with news.

    Predictably, mainstream media has chosen option two. They’re doubling down. The lesson they think they learned from their mistake is that they can’t allow a sliver of doubt to creep in. They actually think they were too easy on Donald Trump. They think they didn’t push enough of their narrative on Senate races. They think they now need to promote their agenda in full force, working overtime if necessary.

  • The media lies again.
  • Baby Boomers increasingly having their Social Security garnished to cover their student loans.
  • Snow falls in the Saraha.
  • Scott Adams on cognatize blindspots and worst-case-scenarios on global warming.
  • Obama to world: (10,000 word speech all about him.) World: (Ignores him). President Elect Trump: “Hey! Don’t do that! World: “Yes, Mr. Trump.” (Hat Tip: Chuck DeVore on Twitter.)
  • Of course, the entire issue is a final attempt for Obama to stick it to Benjamin Netanyahu out of personal vindictiveness, never mind how badly it might affect U.S. and Israel foreign policy. Because Obama is a spiteful, petty little creep.
  • Know who Obama doesn’t hate? Cocaine dealers. “President Barack Obama has commuted the sentences of 657 cocaine dealers since Aug. 3, a Daily Caller analysis reveals. That represents nearly 80 percent of the commutations the president has given since August.” I’m a “legalize it, regulate it, tax it” sort of guy, but the fact that admitted cocaine user Barack Obama would commute more cocaine dealers over mere mere marijuana users or dealers is more than a little odd. (Hat tip: Director Blue.)
  • “Snopes Co-Founder Accused Of Embezzling Company Money, Spending It On Prostitutes.” And as Fark would say, “the rest he just wasted.” Bonus: Alleged prostitute is now allegedly a Snopes staffer. (Hat tip: Director Blue.)
  • Navy decision to use PC titles reversed. (Hat tip: Stephen Green at Instapundit.)
  • F4-J retired from flying. From aerial target to ground target. (Hat tip: Instapundit.)
  • This is the sort of story headline writers live for: “Pensioner pleases neighbours with his massive flashing cock.” (Hat tip: Ace of Spades HQ.)
  • Cthuloid horror devours the Pope.
  • Merry Christmas, everyone!