Archive for the ‘Welfare State’ Category

Venezuela’s Economy Burns

Thursday, February 4th, 2016

While one of the two leading Democratic contenders for President openly calls for socialism, let’s check in on how one socialist paradise is doing:

The only question now is whether Venezuela’s government or economy will completely collapse first.

The key word there is “completely.” Both are well into their death throes. Indeed, Venezuela’s ruling party just lost congressional elections that gave the opposition a veto-proof majority, and it’s hard to see that getting any better for them any time soon — or ever. Incumbents, after all, don’t tend to do too well when, according to the International Monetary Fund, their economy shrinks 10 percent one year, an additional 6 percent the next, and inflation explodes to 720 percent. It’s no wonder, then, that markets expect Venezuela to default on its debt in the very near future. The country is basically bankrupt.

Inflation has gotten so bad that Venezuelans are now paying more than 1000 bolivars to the dollar on the black market. Which is why the government is flying in planeloads of money. As P. J. O’Rouke said of similar hyperinflation in Nicaragua’s own socialist paradise economy: “You have to go to Moscow University two or three times to make money worth this little.”

But with the opposition party having defeated the socialists in parliamentary elections, they can turn things around, right? Well…

Socialist president Nicolas Maduro has changed the law so the opposition-controlled National Assembly can’t remove the central bank governor or appoint a new one. Not only that, but Maduro has picked someone who doesn’t even believe there’s such a thing as inflation to be the country’s economic czar. “When a person goes to a shop and finds that prices have gone up,” the new minister wrote, “they are not in the presence of ‘inflation,’ ” but rather “parasitic” businesses that are trying to push up profits as much as possible. According to this — let me be clear — “theory,” printing too much money never causes inflation. And so Venezuela will continue to do so. If past hyperinflations are any guide, this will keep going until Venezuela can’t even afford to run its printing presses anymore — unless Maduro gets kicked out first.

But for now, at least, a specter is haunting Venezuela — the specter of failed economic policies.

Philip K. Dick once noted that reality is that which, if you ignore it, doesn’t go away. Socialists may not believe in hyperinflation, but hyperinflation very much believes in socialism…

Texas vs. California Update for January 19, 2016

Tuesday, January 19th, 2016

Been a while since I did a Texas vs. California update, due to Reasons, so here’s one:

  • Texas ranks as the third freest state in the union, behind New Hampshire and South Dakota. California ranks second to last, just ahead of Massachusetts.
  • Texas added 16,300 Jobs in November.
  • How’s this for heavy-handed symbolism? California’s legislature plans to close one of its doors to the public, but continue to allow access to lobbyists. Because you’ve always got to see your real boss when he comes around…
  • California’s unfunded liabilities for CalPERS and CalSTARS spiked by $24 billion is fiscal 2014/2015. (Hat tip: Pension Tsunami.)
  • The much ballyhooed pension reform plan won’t make it on the ballot this year. Supporters are now aiming for 2018. Who knows how broke California will be by then… (Hat tip: Pension Tsunami.)
  • That’s probably because the game is rigged against pension reform. (Hat tip: Pension Tsunami.)
  • Jerry Brown unveils a budget in California. The budget increases are relatively modest, by California standards, but $2 billion into the rainy day fund isn’t even remotely going to cover California’s huge unfunded pension gap, and most of the structural bloat in the budget remains.
  • More on the same theme:

    While all the numbers are constantly in flux, in 2014-15, the California Public Employees’ Retirement System saw its status fall from 76.3 percent funded to 73.3 percent, likely due to the fact that investment returns fell far below expectations. The long-neglected California State Teachers’ Retirement System, as of June 30, 2014, was 69 percent funded. Combined, the systems report unfunded pension promises of more than $160 billion.

    The current budget shows steep and consistent increases in state funding to the two systems. Whereas CalPERS is set to receive $4.3 billion in state contributions in the 2015-16 fiscal year, which ends June 30, it could receive $4.8 billion the following year. CalSTRS is to receive $1.9 billion this year and about $2.47 billion next year.

    In comparison, CalPERS and CalSTRS received $3.1 billion and $1.26 billion, respectively, in 2011-2012.

    While it is perfectly reasonable for costs to rise over time, the rate that costs have risen for the two giant pension funds is mainly a consequence of California trying to play catch-up for years of inadequate forecasting and planning, aggravated by investment losses. But because the pension systems are run for public employees – CalPERS’ board is full of former public employee union leaders – the necessary changes and adjustments have been made far too late to avoid calamity.

    (Hat tip: Pension Tsunami.)

  • On the actual mechanics of pension reform, and the impossibility implementing them at the state level in California. (Hat tip: Pension Tsunami.)
  • Part 2, examining the possibility of reform at the local level. (Ditto.)
  • “California government, however, serves one purpose. It always reminds America what not to do.” Also:

    California has given us three new truths about government.

    One, the higher that taxes rise, the worse state services become.

    Two, the worse a natural disaster hits, the more the state contributes to its havoc.

    And three, the more existential the problem, the more the state ignores it.

    California somehow has managed to have the fourth-highest gas taxes in the nation, yet its roads are rated 44th among the 50 states. Nearly 70 percent of California roads are considered to be in poor or mediocre condition by the state senate. In response, the state legislature naturally wants to raise gas taxes, with one proposal calling for an increase of 12 cents per gallon, which would give California the highest gas taxes in the nation.

  • Federal judge rejects San Bernardino’s bankruptcy proposal, saying it doesn’t contain enough information.
  • Sacramento continues to ignore the needs of rural residents. (Hat tip: Ed Driscoll at Instapundit.)
  • Half of California’s driver’s licenses are issued to illegal aliens.
  • After years at the top of the relocation list, Texas was only the 9th biggest relocation destination in 2015.
  • On the other hand, Texas was still the top destination according to Allied Van Lines.
  • But businesses continue to flee California:

    In California, costs to run a business are higher than in other states and nations largely due to the states tax and regulatory policies and the business climate shows little chance of improving. It is understandable that from 2008 through 2015, at least 1,687 California disinvestment events occurred, a count that reflects only those that became public knowledge. Experts in site selection generally agree that at least five events fail to become public knowledge for every one that does. Thus it is reasonable to conclude that a minimum of 10,000 California disinvestment events have occurred during that period….For about 40 years California has been viewed as a state in which it is difficult to do business. Gov. Jerry Brown’s Administration’s less than candid approach regarding the business climate has misled the Legislature, the news media and the public about the flight of capital, facilities and jobs to other states and nations.

    The study also shows that Texas had the most new facilities opening up in the nation in 2014, with 689. California, despite being the most populous state, tied for 12th with 170.

  • 85% of Marin County’s special district workers collected over $100,000.” Bonus: Their pensions are underfunded too. (Hat tip: Pension Tsunami.)
  • Troubled California Wine Retailer Files for Bankruptcy. Premier Cru owes customers almost $70 million for wines it never delivered.”
  • This county-by-county breakdown of recession recovery is full of (very slow loading) data, and I haven’t come close to digesting it yet.
  • Texas vs. California Update for December 7, 2015

    Monday, December 7th, 2015

    Finally, some news from California that doesn’t involve radical islamic jihadis killing innocent people…

  • California lost 9,000 business HQs and expansions, mostly to Texas, 7-year study says. “It’s typical for companies leaving California to experience operating cost savings of 20 up to 35 percent.” (Hat tip: Pension Tsunami.)
  • Remember those “temporary taxes” that made California’s state income taxes the highest in the country? Well, to the all-devouring maw of a broke welfare state, no tax is temporary.
  • Los Angeles County: center of American poverty:

    The Census Bureau’s 2012 decision to begin releasing an alternative measure of poverty that included cost of living has appeared to have far-reaching effects in California as politicians, community leaders and residents react to the new measure’s depiction of the Golden State as the most impoverished place in America.

    The fact that about 23 percent of state residents are barely getting by has helped fuel the push for a much higher minimum wage and prompted renewed interest in affordable housing programs. It’s also put the focus on regional economic disparities, especially the fact that Silicon Valley and San Francisco are the primary engine of state prosperity.

    While the tech boom and the vast increase in housing prices it has triggered in the Bay Area are national news, prompting think pieces and thoughtful analyses, the poverty picture in the state’s largest population center isn’t covered nearly as fully. Although the fact is plain in Census Bureau data, it’s not commonly understood that Los Angeles County is the capital of U.S. poverty. A 2013 study by the Public Policy Institute of California and the Stanford Center on Poverty and Inequality based on 2011 data found 27 percent of the county’s 10 million residents were impoverished, the highest figure in the state and the highest of any large metro area in the U.S.

  • Why California’s cities are in trouble: “The problems here, as the bankruptcies of San Bernardino and other cities have shown, are mismanagement and high costs incurred as a result of the state’s public-employee unions.” (Hat tip: Pension Tsunami.)
  • How CalPERS created a ticking time bomb. (Hat tip: Pension Tsunami.)
  • CalPERS also paid $3.4 billion in private equity firm fees since 1990, despite returns that were not that great. (Hat tip: Pension Tsunami.)
  • And CalPERS also has a huge problem with self-dealing and conflicts of interest. (Hat tip: Pension Tsunami.)
  • Texas’ largest employer is Wal-Mart. California’s largest employer is the University of California system.
  • But I doubt Wal-Mart has 35,065 employees who make more than $100,000 a year…
  • What good is California’s open meetings law if officials still feel free to ignore it? “Six decades after Brown Act passage, elected leaders still hold illegal meetings.” (Note: The Brown Act is named after Assemblyman Ralph M. Brown, D-Modesto, not either Jerry Brown.) (Hat tip: Pension Tsunami.)
  • Though Texas is doing much better at fiscal restraint than California, TPPF notes that Texas’ could still use additional spending restraint:

    “Though Texas legislators did an excellent job by holding the total budget below population growth plus inflation during the last session, the state’s weak spending limit remains a primary cause of excessive budget growth during the last decade,” said Heflin. “Legislators can strengthen the limit by capping the total budget, basing the growth on the lowest of three metrics, and requiring a supermajority vote to exceed it. These reforms would have helped keep more money in Texans pockets where it belongs.”

  • All segments of Texas housing market show strong gains in 2015.”
  • Mojave solar project operator files for bankruptcy.
  • “Fresh off of a major expansion, iconic San Francisco craft brewery Magnolia Brewing Co. filed voluntarily for Chapter 11 bankruptcy.” So a brewery that opened in 1997 is “iconic”?
  • “Fuhu Holdings Inc, a maker of kid-friendly computer tablets, has filed for Chapter 11 bankruptcy protection, according to a court filing on Monday.” Eh, included for completeness. That sounds like a bad business model for a startup no matter what state it was in…
  • Fresno Democratic assemblyman resigns to make more money in the private sector. Evidently a year to wait until his term expires was just too long to avoid climbing aboard the revolving door gravy train…
  • Downside to Bankrupting Your Nation?

    Monday, November 30th, 2015

    So go ahead, bankrupt your nation to keep your failing welfare state afloat a little longer! What’s the worst that could happen?

    Well, how about turning your daughters into prostitutes to survive?

    Young Greek women are selling sex for the price of a sandwich as six years of painful austerity* have pushed the European country to the financial brink, a new study showed Friday.

    The study, which compiled data on more than 17,000 sex workers operating in Greece, found that Greek women now dominate the country’s prostitution industry, replacing Eastern European women, and that the sex on sale in Greece is some of the cheapest on offer in Europe.

    “Some women just do it for a cheese pie, or a sandwich they need to eat because they are hungry,” Gregory Laxos, a sociology professor at the Panteion University in Athens, told the London Times newspaper. “Others [do it] to pay taxes, bills, for urgent expenses or a quick [drug] fix.”

    Correction: It wasn’t “six years of painful austerity” that brought hem to this pass, it was six years of avoiding painful austerity, and refusing to cut government outlays until they matched receipts, that turned all of Greece into Whore Island.

    (Hat tip: Ann Althouse.)

    This Week in Jihad: Post-Paris Attacks Edition

    Monday, November 23rd, 2015

    I stopped doing the regular This Week in Jihad update because: A.) It took a lot of damn time, and B.) Sites like JihadWatch were doing it better.

    But since the Paris attacks, a metric ton of Jihad-related links have come streaming out of the firehose, so here’s a new This Week In Jihad just so a I have a place to put them all:

  • Mark Steyn, as always, is on point:

    When the Allahu Akbar boys opened fire, Paris was talking about the climate-change conference due to start later this month, when the world’s leaders will fly in to “solve” a “problem” that doesn’t exist rather than to address the one that does. But don’t worry: we already have a hashtag (#PrayForParis) and doubtless there’ll be another candlelight vigil of weepy tilty-headed wankers. Because as long as we all advertise how sad and sorrowful we are, who needs to do anything?

    Snip.

    What it is is an attack on the west, on the civilization that built the modern world – an attack on one portion of “humanity” by those who claim to speak for another portion of “humanity”. And these are not “universal values” but values that spring from a relatively narrow segment of humanity. They were kinda sorta “universal” when the great powers were willing to enforce them around the world and the colonial subjects of ramshackle backwaters such as Aden, Sudan and the North-West Frontier Province were at least obliged to pay lip service to them. But the European empires retreated from the world, and those “universal values” are utterly alien to large parts of the map today.

    And then Europe decided to invite millions of Muslims to settle in their countries. Most of those people don’t want to participate actively in bringing about the death of diners and concertgoers and soccer fans, but at a certain level most of them either wish or are indifferent to the death of the societies in which they live – modern, pluralist, western societies and those “universal values” of which Barack Obama bleats. So, if you are either an active ISIS recruit or just a guy who’s been fired up by social media, you have a very large comfort zone in which to swim, and which the authorities find almost impossible to penetrate.

  • A staggering 92% of all voters now regard radical Islamic terrorism as a serious threat to the United States. This includes 73% who say it is a Very Serious one, up 23 points from 50% in October of last year.” Your move, Democrats…
  • What it’s like to live in a neighborhood that’s being islamicized into a no-go zone. The author starts out as a standard fuzzy-headed liberal “thrilled” by his neighborhood’s “multiculturalism.” Then reality sets in:

    Over nine years, as I witnessed the neighborhood become increasingly intolerant. Alcohol became unavailable in most shops and supermarkets; I heard stories of fanatics at the Comte des Flandres metro station who pressured women to wear the veil; Islamic bookshops proliferated, and it became impossible to buy a decent newspaper. With an unemployment rate of 30 percent, the streets were eerily empty until late in the morning. Nowhere was there a bar or café where white, black and brown people would mingle. Instead, I witnessed petty crime, aggression, and frustrated youths who spat at our girlfriends and called them “filthy whores.” If you made a remark, you were inevitably scolded and called a racist. There used to be Jewish shops on Chaussée de Gand, but these were terrorized by gangs of young kids and most closed their doors around 2008. Openly gay people were routinely intimidated, and also packed up their bags.

  • Cracked writer reads every issue of the Islamic State’s full-color magazine Dabiq. On the one hand, there’s some useful information here. (“Attention Internet: People who celebrate pictures of civilians they’ve killed as well as pictures of their own friend’s murdered corpses don’t give a shit what you call them.”) On the other, the writer seemed to go into the assignment painfully ignorant of some of the most basic facts about the Islamic State (like their radical hatred of Shiites).
  • Dear everybody comparing Syrian “refugees” to Jews fleeing Nazi Germany: Your analogy is bad and you should feel bad:

    The first, and most obvious, difference: There was no international conspiracy of German Jews in the 1930s attempting to carry out daily attacks on civilians on several continents. No self-identifying Jews in the early 20th century were randomly massacring European citizens in magazine offices and concert halls, and there was no “Jewish State” establishing sovereignty over tens of thousands of square miles of territory, and publicly slaughtering anyone who opposed its advance. Among Syrian Muslims, there is.

  • “Ending a fight means our will must be stronger than our enemies’ – and I’m not convinced that right now, we as a nation are up to it. ISIS isn’t convinced either, and until we convince them by killing them, this will not end well for us.”
  • More mass graves of elderly women in the Islamic State.
  • Daniel Pipes says that don’t expect the Paris attacks to significantly change European opinions on Jihad. Europe is far too committed to continuing to hit the snooze button.
  • More than 90 percent of recent refugees from Middle Eastern nations are on food stamps and nearly 70 percent receive cash assistance, according to government data.” No wonder Democrats love them so much…
  • “I would be darned to listen to all three of those candidates to discern a clear Democratic line of how you’re actually going to fight terrorism. They were very vague, very non-specific, and I think they have a lot of work to do.” Hard to fight radical Islam if you’re unwilling to even speak its name…
  • Questions the Obama Administration won’t let immigration officials ask Syrian “refugees“: “Are you a member or supporter of the Muslim Brotherhood or Tablighi Jamaat?”
  • Gunmen attack hotel in Mali shouting “Allah Akbar.” Obviously those vicious Amish terrorists are at it again…
  • British General: “We need to approach this issue of Muslim extremism as we might approach World War Two.”
  • A total of 13 Syrians have been stopped at the Texas border in the last week.
  • Via Louder With Crowder comes this video of a woman who speaks Arabic hearing what these “refugees” say amongst themselves:

  • And after all that, I probably have another boatload of Jihad links to put up…

    Texas vs. California Update for November 12, 2015

    Thursday, November 12th, 2015

    Time for another Texas vs. California roundup:

  • Is the Los Angeles Unified School District headed for bankruptcy?
  • If it does, pensions are one of the main culprits. (Hat tip: Pension Tsunami.)
  • A tale of two pension plans. Atlanta successfully reformed theirs. San Jose didn’t. (Hat tip: Pension Tsunami.)
  • All five of the most expensive housing markets in the U.S. are in California.
  • California ranks among the bottom five in standardized school tests.
  • Part four of a long, detailed piece on the fall of Pacific Grove, and why it matters. (Hat tip: Pension Tsunami.)
  • Spending $15 billion for a tunnel for fish in the midst of a drought isn’t going over well with California voters.
  • Who is the water-wasting Wet Prince of Bel Aire?
  • The fight over California mining company Molycorp’s bankruptcy.
  • Roses are Red/Violets are Blue/The State of California has/Blood samples from you.
  • The WNBA’s Tulsa (formerly Detroit) Shock relocate to Dallas. In other news, the WNBA is evidently still in business.
  • TPPF’s Dr. Vance Ginn on why the Texas model works.
  • LinkSwarm for November 6, 2015

    Friday, November 6th, 2015

    Another Friday, another LinkSwarm:

  • What’s Obama’s strategy in Iraq and Syria? He doesn’t have one. “Without a clear overarching strategy to resolve the conflict.” Say what you want about Bush, he wanted to win in Iraq. Obama wants to do just enough to not get blamed for losing.
  • Hungarian Prime Minister Viktor Orban is not wild about George Soros encouraging waves of Islamic refugees in Europe.
  • Speaking of Islamic refugees, shotguns (which don’t need a permit) are selling like hotcakes in Austria. Whatever could be the reason?
  • “The Democratic party is mainly a coalition of interest groups, and the current model of Democratic politics — poor and largely non-white people providing the muscle and rich white liberals calling the shots — is unsustainable…Democrats gleefully predict that demographic changes are going to give their party a permanent majority. The unspoken corollary to that is that white liberals think they’re going to remain in charge of it.”
  • Forget all those Republican obituaries: Democrats are the ones being booted out of office.
  • Victories in Houston and Kentucky were stinging rebukes to cultural war overreach by the left.
  • Ted Cruz, Jedi Debater.
  • Jeb Bush needs an intervention.
  • Pennsylvania’s Democratic Attorney General, facing criminal indictment and calls to resign on all sides, instead send out porny emails.
  • Announce that you’re abandoning your Vegan diet because it was making you sick? That’s a death threat.
  • Owner of bankrupt Atlantic City casino threatens to house thousands of Syrain refugees there.
  • Denmark to Bernie Sanders: Stop calling us socialists, you pinko!
  • Free market economics: It even makes formerly socialist food banks run better!
  • Students entering Yale are evidently ignorant as fark all. (Hat tip: Borepatch.)
  • Dashcam video proves black Texas professor lied about being racially profiled. Hat Tip: Instapundit.)
  • Matt McCall takes another run at Rep. Lamar Smith.
  • I’ll take Least Surprising Sports Headlines for $400, Alex: “Former Raiders first-round pick convicted on three counts of murder.”
  • Texas vs. California Update for November 2, 2014

    Monday, November 2nd, 2015

    California continues to suffer from drought while central Texas just suffered through torrential rains. Time for another Texas vs. California update:

  • Texas Adds 26,600 Jobs in September.
  • Texas and Florida rank at the top of education index for biggest states, while California ranks last.
  • The University of Texas is ranked the number one public university in America.
  • Meanwhile, at the University of California system: “The number of those making at least $500,000 annually grew by 14 percent in the last year, to 445, and the system’s administrative ranks have swelled by 60 percent over the last decade – far outpacing tenure-track faculty.” (Hat tip: Pension Tsunami.)
  • Another example of California’s perpetual trial lawyer enrichment act: “cumulative trauma” awards for employees after termination, even if they’ve never reported symptoms before. Shouldn’t every former member of the Raiders, Chargers and 49ers file a lawsuit?
  • Why CalPERS contributions are soaring. (Hat tip: Pension Tsunami.)
  • So now the California high speed rail boondoggle is going to cost $68 billion and require 36 miles of tunnels, including some dug right through an active tectonic fault. That’s ten times the length of tunnel Boston needed to dig for the Big Dig. And the cost is equivalent to the Gross Domestic Product of Sri Lanka. For a train line. It would probably be cheaper to buy cab rides for everyone traveling between Los Angeles and San Francisco, but that wouldn’t provide enough opportunities for graft…
  • “The parent company of the Orange County Register and Riverside Press-Enterprise filed for federal bankruptcy protection.”
  • Also filing for bankruptcy, yet another West coast grocery chain, Fresh & Easy.
  • Another bankruptcy filing: Fresno’s One Club Casino. California casinos are different from Nevada casinos, and I believe One Club is what is called a “card room”. Still, when you can’t make a profit off gambling…
  • California plastics company opens plant in Pflugerville. “Medway, founded in 1974, will also relocate its research and development laboratory to the new Pflugerville facility. Though Medway Plastics will continue operations in California, the company may consider relocating its headquarters to Pflugerville within the next five to eight years, the company said.”
  • Plans continue apace to build a Texas Gold Depository.
  • California Ballot initiatives weaponize emotion to centralize power.
  • And the Eternal Greek Farce Starts Up Again

    Wednesday, October 28th, 2015

    Stop me if you’ve heard this one before:

    Germany’s Suddeutsche Zeitung reported that just two (or is it three, this past summer is one big blur) months after Greece voted through its third bailout, one which will raise its debt/GDP to over 200% on a fleeting promise that someone, somewhere just may grant Greece a debt extension (which will do absolutely nothing about the nominal amount of debt), its creditors have already grown tired with the game and are refusing to pay the next Greek loan tranche of €2 billion.

    Specifically, the payment of the first €2b tranche of €3b is now sait[sic] to be delayed because Greek Prime Minister Alexis Tsipras failed to implement reforms on schedule, Sueddeutsche Zeitung reports, citing unidentified senior EU official.

    And evidently one of the latest sticking points is that Tsipras wants to prop up deadbeat home loans for houses worth as much as $331,185.

    Greece edges close to default. Greece’s creditors demand reform. Greece agrees to reforms at last minute. Greece gets bailout. Greece fails to implement reforms.

    Rinse. Repeat.

    “Right Wing” Party Wins in Poland

    Tuesday, October 27th, 2015

    This seems to be a week for cracks in the EU’s facade of democratic unity to start appearing all over the place. First Portugal finds out that they’re not allowed to have democracy when it conflicts with EU mandates, and now Polish elections have thrown a spanner into the works.

    The Law and Justice Party has won 38% of the vote, and looks to have won enough seats (232 seats out of 460) to form a parliamentary majority without including any other party, marking the first time since Democracy was restored in 1989 that no left-wing party will have a role in the ruling government. Law and Justice is described as “Euroskeptic” and “Right Wing” because it opposes the EU’s current pro-Muslim immigration policies and seeks closer ties to the U.S. (among other reasons), but is also “promising to raise the minimum wage and increase welfare spending,” which is hardly a “right wing” (or smart) policy.

    But the area where Law and Justice could have the biggest influence is in wrecking the EU’s global warming policies. “Law & Justice generally opposes wind and solar energy and favors an energy policy that emphasizes tariffs targeted at Russian natural gas.” Poland also generates 90% of their electricity from coal, which bodes ill for meeting the EU target of 27% “green” energy by 2030.

    Law and Justice is also markedly more wary of Germany, and less willing to appease Russia, than their centrist Civic Platform predecessors, almost as if they had some sorts of historical reasons for their views.

    One wonders where the next EU crack will appear…