Archive for the ‘Waste and Fraud’ Category

Debbie Wasserman Schultz Just As Good at Cybersecurity as at Running the DNC

Thursday, May 25th, 2017

Debbie Wasserman Schultz has long been the gift that keeps giving for Republicans. Her tenure at the top of the DNC saw dramatic declines Democratic Party officeholder at a time when Obama was still (theoretically) personally popular. Now her incompetence may be endangering not just the Democratic Party, but American security.

Remember earlier this year when three Pakistani brothers (Abid, Imran, and Jamal Awan) who managed office IT for Democratic members of the House Permanent Select Committee on Intelligence and other lawmakers were abruptly relieved of their duties on suspicion that they accessed congressional computer networks without permission?

Refresher:

Jamal handled IT for Rep. Joaquin Castro, a Texas Democrat who serves on both the intelligence and foreign affairs panels.

“As of 2/2, his employment with our office has been terminated,” Castro spokeswoman Erin Hatch told TheDCNF Friday.

Jamal also worked for Louisiana Democrat Rep. Cedric Richmond, who is on the Committee on Homeland Security.

Imran worked for Reps. Andre Carson, an Indiana Democrat, and Jackie Speier, a California Democrat. Carson and Speier are members of the intelligence committee. Spokesmen for Carson and Speier did not respond to TheDCNF’s requests for comments. Imran also worked for the House office of Wasserman-Schultz.

Then-Rep. Tammy Duckworth, an Illinois Democrat, employed Abid for IT work in 2016. She was a member of House committees dealing with the armed services, oversight, and Benghazi. Duckworth was elected to the Senate in November, 2016. Abid has a prior criminal record and a bankruptcy.

Abid also worked for Rep. Lois Frankel, a Florida Democrat who is member of the foreign affairs committee.

Also among those whose computer systems may have been compromised is Rep. Debbie Wasserman Schultz, the Florida Democrat who was previously the target of a disastrous email hack when she served as chairman of the Democratic National Committee during the 2016 campaign.

In addition to the brothers Awam, two more staffers, Hina Alvi (Imran Awan’s wife, who worked for Rep. Gregory Meeks (Democrat, New York) and Rao Abbas, were also fired. “The five current and former House staffers are accused of stealing equipment from members’ offices without their knowledge and committing serious, potentially illegal, violations on the House IT network.”

(Though reports often list five members, Natalia Sova, another Awan wife, also worked as a staffer.)

So when they were accused of stealing and improperly accessing information, they were fired, right? No. Because they were Muslims:

Meeks said he was hesitant to believe the accusations against Alvi, Imran Awan and the three other staffers, saying their background as Muslim Americans, some with ties to Pakistan, could make them easy targets for false charges.

“I wanted to be sure individuals are not being singled out because of their nationalities or their religion. We want to make sure everybody is entitled to due process,” Meeks said.

“They had provided great service for me. And there were certain times in which they had permission by me, if it was Hina or someone else, to access some of my data.”

[Rep. Marcia] Fudge [Democrat, Ohio] told Politico on Tuesday she would employ Imran Awan until he received “due process.”

“He needs to have a hearing. Due process is very simple. You don’t fire someone until you talk to them,” Fudge said.

On Wednesday, Lauren Williams, a spokeswoman for Fudge, wouldn’t provide details about Imran Awan’s firing but did confirm he was still employed in Fudge’s office as of Tuesday afternoon.

The bottom line is simple – these House Democrats decided it was better to be at risk of hacking and extortion than to be accused of racism.

Then it came to light that “House IT Aides Fear Suspects In Hill Breach Are Blackmailing Members With Their Own Data.” Turns out that the Awan brothers were incompetent at their jobs, but House Democrats refused to fire them or consider cheaper employees.

Also this: “Court records show the brothers ran a side business that owed $100,000 to an Iranian fugitive who has been tied to Hezbollah, and their stepmother says they often send money to Pakistan.”

More on that lovely individual the Awan brothers do business with:

The Daily Caller News Foundation Investigative Group has reported that while working for Congress, the Pakistani brothers controlled a limited liability corporation called Cars International A (CIA), a car dealership with odd finances, which took–and was unable to repay–a $100,000 loan from Dr. Ali Al-Attar.

Philip Giraldi, a former CIA officer, wrote that Attar “was observed in Beirut, Lebanon conversing with a Hezbollah official” in 2012–shortly after the loan was made. Attar has also been accused of helping provoke the 2003 U.S. invasion of Iraq as a leader of Iraqi dissidents opposed to Saddam Hussein.

After moving to the U.S., Attar made his money practicing medicine in Maryland and Virginia and defrauding Medicare, Medicaid and insurance companies by billing for non-existent medical procedures. The FBI raided his offices in 2009 and the Department of Health and Human Services sued his business partner in 2011.

Attar was indicted in March 2012 on separate tax fraud charges after the IRS and FBI found he used multiple bank accounts to hide income. He fled back to Iraq to avoid prison.

“He’s a fugitive. I am not aware of any extradition treaty with Iraq,”

Then the story of the Awan brothers’ security breech took yet another strange turn:

Rep. Debbie Wasserman Schultz threatened the chief of the U.S. Capitol Police with “consequences” for holding equipment that she says belongs to her in order to build a criminal case against a Pakistani staffer suspected of massive cybersecurity breaches involving funneling sensitive congressional data offsite.

The Florida lawmaker used her position on the committee that sets the police force’s budget to press its chief to relinquish the piece of evidence Thursday, in what could be considered using her authority to attempt to interfere with a criminal investigation.

The Capitol Police and outside agencies are pursuing Imran Awan, who has run technology for the Florida lawmaker since 2005 and was banned from the House network in February on suspicion of data breaches and theft.

“My understanding is the the Capitol Police is not able to confiscate Members’ equipment when the Member is not under investigation,” Wasserman Schultz said in the annual police budget hearing of the House Committee On Appropriations’ Legislative Branch Subcommittee.

“We can’t return the equipment,” Police Chief Matthew R. Verderosa told the Florida Democrat.

“I think you’re violating the rules when you conduct your business that way and you should expect that there will be consequences,” Wasserman Schultz said.

As one of eight members of the Committee on Appropriations’ Legislative Branch subcommittee, Wasserman Schultz is in charge of the budget of the police force that is investigating her staffer and how he managed to extract so much money and information from members.

In a highly unusual exchange, the Florida lawmaker uses a hearing on the Capitol Police’s annual budget to spend three minutes repeatedly trying to extract a promise from the chief that he will return a piece of evidence being used to build an active case.

“If a Member loses equipment and it is found by your staff and identified as that member’s equipment and the member is not associated with any case, it is supposed to be returned. Yes or no?” she said.

Police tell her it is important to “an ongoing investigation,” but presses for its return anyway.

The investigation is examining members’ data leaving the network and how Awan managed to get Members to place three relatives and a friend into largely no-show positions on their payrolls, billing $4 million since 2010.

The congresswoman characterizes the evidence as “belonging” to her and argues that therefore it cannot be seized unless Capitol Police tell her that she personally, as opposed to her staffer, is a target of the investigation.

When TheDCNF asked Wasserman Schultz Monday if it could inquire about her strong desire for the laptop, she said “No, you may not.” After TheDCNF asked why she wouldn’t want the Capitol Police to have any evidence they may need to find and punish any hackers of government information, she abruptly turned around in the middle of a stairwell and retreated back to the office from which she had come.

Very curious indeed.

It seems that Wasserman Schultz (and very possibly other Democratic congressmen) would prefer to see American intelligence compromised rather than have embarrassing personal information revealed. One wonders if the dismissed staffers were conveying information to overseas jihadis, or if they had incriminating information on any of the DNC, Obama or Hillary Clinton scandals so much in the news.

Stay tuned…

Texas vs. California Update for May 22, 2017

Monday, May 22nd, 2017

We’re in the home stretch of hammering out the Texas biannual state budget, which has to be completed by May 29. Until then, enjoy another Texas vs. California roundup:

  • Stop me if you’ve heard this before: Texas is once again ranked the best state for business, while California is ranked the worst. (Hat tip: Will Franklin’s Twitter feed.)
  • California’s big-government model eats its young:

    In this era of anti-Trump resistance, many progressives see California as a model of enlightenment. The Golden State’s post-2010 recovery has won plaudits in the progressive press from the New York Times’s Paul Krugman, among others. Yet if one looks at the effects of the state’s policies on key Democratic constituencies— millennials, minorities, and the poor—the picture is dismal. A recent United Way study found that close to one-third of state residents can barely pay their bills, largely due to housing costs. When adjusted for these costs, California leads all states—even historically poor Mississippi—in the percentage of its people living in poverty.

    California is home to 77 of the country’s 297 most “economically challenged” cities, based on poverty and unemployment levels. The population of these cities totals more than 12 million. In his new book on the nation’s urban crisis, author Richard Florida ranks three California metropolitan areas—Los Angeles, San Francisco, and San Diego— among the five most unequal in the nation. California, with housing prices 230 percent above the national average, is home to many of the nation’s most unaffordable urban areas, including not only the predictably expensive large metros but also smaller cities such as Santa Cruz, Santa Barbara, and San Luis Obispo. Unsurprisingly, the state’s middle class is disappearing the fastest of any state.

    California’s young population is particularly challenged. As we spell out in our new report from Chapman University and the California Association of Realtors, California has the third-lowest percentage of people aged 25 to 34 who own their own homes—only New York and Hawaii’s are lower. In San Francisco, Los Angeles, and San Diego, the 25-to-34 homeownership rates range from 19.6 percent to 22.6 percent—40 percent or more below the national average.

  • California continues to slouch toward socialized medicine. “California’s current system relies in large part on employer-sponsored insurance, which is still the source of health care coverage for tens of millions of people. That coverage would disappear under SB 562. Instead of receiving coverage financed by their employers, working Californians would see a tax increase of well over $10,000 per year for many middle-income families.” (Hat tip: Legal Insurrection.)
  • “If you live in California, have a job and pay taxes Governor Jerry Brown would like you to know that you’re a freeloader and he’s tired of your complaining.”
  • “Congratulations, California. You keep electing these same Democrats over and over again. and then you act surprised when they make you one of the most heavily taxed populations in the country. And when you finally raise your voices to protest the out of control taxation and spending, the state party’s titular leader is brazen enough to come straight out and tell you what he really thinks of you.”
  • Has the Democrats latest gas tax hike created an actual tax revolt in California? (Hat tip: Ace of Spades HQ.)
  • One lawmaker is the target of a recall petition over the tax hike: “Perceived as the most vulnerable of the legislative Democrats who passed Gov. Jerry Brown’s gas and vehicle tax package by a razor-thin margin, freshman state Sen. Josh Newman, D-Fullerton, faced an intensifying campaign to turn him out of office, potentially depriving his party of the two-thirds majority that allowed them to pass Brown’s infrastructure bill in the first place.”
  • Vance Ginn’s monthly summary of Texas economic data. Lot’s of data, including the fact that all major Texas cities created jobs in 2016 except Houston, which was down just a smidge.
  • San Bernardino could go bankrupt again.
  • Buying a house in Southern California is insane. (Hat tip: Stephen Green at Instapundit.)
  • California starts selling bonds for the doomed “high speed rail.”
  • 40-60 “youth” flash mob robs passengers on Oakland BART train. The complete absence of descriptions or pictures cues the astute modern American reader in to the ethnic makeup of the mob. (Hat tip: Ace of Spades HQ.)
  • “Gov. Jerry Brown and state Treasurer John Chiang have a plan to help cover the state’s soaring pension payments: Borrow money at low interest rates and invest it to make a profit. What could go wrong?” I can see it now: “Come on seven! Baby needs a new High Speed Rail!” Also this: “The problem was exacerbated because Brown’s so-called pension “reform” of 2012 failed to significantly rein in retirement costs. Statewide pension debt has increased 36 percent since his changes took effect.” (Hat tip: Pension Tsunami.)
  • “Riverside utilities dispatcher triples salary to nearly $400,000 with state’s 10th largest overtime payout.” (Hat tip: Pension Tsunami.)
  • And speaking of California public employees working overtime:

    The time cards Oakland city worker Kenny Lau turned in last year paint a stunning, if not improbable, picture of one man’s work ethic.

    Lau, a civil engineer, often started his days at 10 a.m. and clocked out at 4 a.m., only to get back to work at 10 a.m. for another marathon day. He never took a sick day. He worked every weekend and took no vacation days.

    He worked every holiday, including the most popular ones that shut down much of the nation’s businesses: 12 hours on Thanksgiving and eight hours on Christmas.

    In fact, his time cards show he worked all 366 days of the leap year, at times putting in 90-plus-hour workweeks. He worked so much that he quadrupled his salary. His regular compensation and overtime pay — including benefits, $485,275 — made him the city’s highest-paid worker and the fourth-highest overtime earner of California public employees in 2016.

    (Hat tip: Pension Tsunami.)

  • The Los Angeles Unified School District has decided it can break federal immigration laws at will. “No immigration officers will be allowed on campus without clearance from the superintendent of schools, who will consult with district lawyers. Until that happens, they won’t be let in, even if they arrive with a legally valid subpoena.” There’s no way such a genius decision could possibly backfire on them… (Hat tip: Director Blue.)
  • How California hurts the poor by jacking up traffic fines. (Hat tip: Pension Tsunami.)
  • “San Diego using loophole to hand out large raises during pay freeze.” It’s a blatant attempt to evade Proposition B.
  • An auditor funds the University of California President’s office of Janet Napolitano had a secret slush fund:
    • The Office of the President has accumulated more than $175 million in undisclosed restricted and discretionary reserves;
      as of fiscal year 2015–16, it had $83 million in its restricted reserve and $92 million in its discretionary reserve.

    • More than one-third of its discretionary reserve, or $32 million, came from unspent funds from the campus assessment—an annual charge that the Office of the President levies on campuses to fund the majority of its discretionary operations.
    • In certain years, the Office of the President requested and received approval from the Board of Regents (regents) to
      increase the campus assessment even though it had not spent all of the funds it received from campuses in prior years.

    • The Office of the President did not disclose the reserves it had accumulated, nor did it inform the regents of the annual undisclosed budget that it created to spend some of those funds. The undisclosed budget ranged from $77 million to
      $114 million during the four years we reviewed.

    • The Office of the President was unable to provide a complete listing of the systemwide initiatives, their costs, or an assessment of their continued benefit to the university.
    • While it appears that the Office of the President’s administrative spending increased by 28 percent, or $80 million, from fiscal years 2012–13 through 2015–16, the Office of the President continues to lack consistent definitions of and methods for tracking the university’s administrative expenses.

    An Ex-Obama Administration official with a secret slush fund? What are the odds?

  • Texas continues to attract net in-migration from every region.
  • California wants to tax rockets launched from California into orbit, based on miles traveled away from California. I’m sure many of Texas own spaceflight companies will welcome any business California drives out…
  • Speaking of spaceflight, Elon Musk’s Space X, just like Telsa, is more emblematic of subsidies and special favors than the free market:

    Tesla survives on the back of hefty subsidies paid for by hard-working Americans just barely getting by so that a select few can drive flashy, expensive electric sports cars. These subsidies were originally scheduled to expire later this year, and Tesla is lobbying hard to make sure that taxpayers continue to pay $7,500 per car or more to fund their business model. Tesla even tried to force taxpayers to pay for charging stations that would primarily benefit their business. That is not what Musk’s high priced image managers will tell you, but it’s the truth.

    SpaceX is even worse — its business model isn’t to invest its money developing competing space products that meet the same safety and reliability standards as the rest of the industry. Instead, its business model is to get billions in taxpayer money and push, bend, and demand regulatory special favors. Then, it produces a rocket that is more known for failed launches, long delays, and consistently missed deadlines.

  • How California’s air emission rules went to far.
  • “California may end ban on communists in government jobs.” (Hat tip: Ace of Spades HQ.)
  • Bachrach Clothing Stores File for Bankruptcy Protection in Los Angeles.”
  • “California solar installer HelioPower filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the District of Nevada.”
  • Hudson Products relocating from Tulsa to Rosenberg, Texas.
  • “Bay Area bookseller Bill Petrocelli is filing a lawsuit against the state of California, hoping to force a repeal of the state’s controversial ‘Autograph Law.’ The law, booksellers claim, threatens to bury bookstore author signings under red tape and potential liabilities. Petrocelli, co-owner of Book Passage, filed Passage v. Becerra in U.S. District Court for the North District of California, pitting the bookstore against California State Attorney General Xavier Becerra.” As a bookseller on the side, I can tell you that California’s law is particularly asinine and is completely ignorant of the signed book trade.
  • LinkSwarm for May 12, 2017

    Friday, May 12th, 2017

    Lots of border control news at the top of today’s LinkSwarm:

  • “According to figures released yesterday, the number of illegal aliens crossing the U.S. southwestern border has dropped by an astonishing 76% since President Trump took office.” (Hat tip: Director Blue.)
  • Authorities Arrest 1,378 in ICE-Led Operation Targeting Gangs.” More: “The majority, 955, of those arrested were U.S. citizens, while 445 were foreign nationals from around the world.” Also: Three were Obama’s “Dreamers.”
  • “If the Trump administration is serious about controlling illegal immigration and illegal alien driven crime, it should begin by going after employers who hire illegal aliens. The move would not only help to prevent the exploitation of illegal immigrants, but it would also help to foster higher-paying jobs for American workers.” (Hat tip: Director Blue.)
  • Maryland Democrats shocked, shocked to discover that legal immigrants who followed the rules aren’t wild about sanctuary city BS for illegal aliens. (Hat tip: Louder With Crowder via The Other McCain.)
  • “James Clapper: Still no evidence of any Russian collusion with Trump campaign.” (Hat tip: Director Blue.)
  • From the House to the Big House: Former Florida Democratic Representative Corrine Brown was found guilty on fraud and tax evasion charges.
  • Democrats had a real shot at winning the Omaha Mayor’s race…until the DNC came in and pulled all support to punish pro-life heresy.
  • “Aetna, one of the nation’s largest health insurers, has announced that it will exit all Affordable Care Act exchanges in 2018 after experiencing massive losses in 2016 and 2017.” (Hat tip: Ace of Spades HQ.)
  • On the Democratic Party’s civil war:

    If Obama is really responsible for Democrat losses, then the party and its donors just bought first class seats on the Titanic. That’s why Democrat autopsies of the defeat remain so explosive. Blame can be apportioned to white people, to racism, Islamophobia and to Global Warming, but not to Barack Obama.

    Keith Ellison was the best messenger Sanders had to take a shot at Barry. Black loyalty to Obama is still the third rail of politics. And Ellison is one of the few black people in the Sanders inner circle. Obama’s pricey Wall Street speech offered the opportunity for a more direct attack from Bernie Sanders.

    “I just think it is distasteful,” Bernie slurred on CNN. “At a time when we have so much income and wealth inequality … it just does not look good.”

    The attack went to the heart of his differences with Obama. Unlike the Clinton era, the split is no longer between the left and the radical left. Obama and Sanders are both representatives of the radical left.

    But they don’t represent the same radical left.

    Bernie embodies the old left. Its mantra is class warfare. There is a great deal of talk about billionaires, working people and the ruling class. Obama pays lip service to that same rhetoric, but his is the program of the intersectional left. The intersectional left is far more interested in identity than class. It defines its organization around a coalition of racial, sexual and other minorities. Where Bernie wants to talk to the working class, the intersectional left wants to hear from transgender Muslim women of color.

    The differences aren’t just intellectual. They define the tactics and agenda of the Democrats.

    When Tom Perez, Obama’s DNC boss, recently read pro-life Democrats out of the party, he was following the Obama blueprint. Bernie meanwhile went on campaigning for a somewhat pro-life Dem. Bernie does not really care about abortion, gay rights, transgender bathrooms and the social issues of the intersectional left. The old Socialist follows the older slogan of the hard left. No war, but class war.

    Snip.

    Democrats and the left had long ago replaced pure class warfare with identity politics warfare. Intersectionality entirely displaced and demonized the old Dem white working class base.

    And the Dems paid the price.

    Obama’s reign torched most of the last of that white working class base. Trump’s victories would not have been possible if the Dems had not become a party of wealthy bicoastal urban and suburban elites who were out of touch with the South and the Rust Belt. And who were proud to be out of touch with a bunch of “ignorant racist, sexist homophobes” still “clinging to their guns and religion”.

    The clash between Bernie and Obama is also over the autopsy of Hillary’s defeat. Did the Dems lose because they failed to turn out the base as effectively as Obama had or because former Obama voters had come out for Trump? Should the Dems try to appeal to working class whites with a class warfare pitch or work harder to turn out the intersectional coalitions of minority voters?

    (Hat tip: Director Blue.)

  • The U.S. is arming Syrian Kurds fighting the Islamic State despite Turkish opposition. Good. (Hat tip: Stephen Green at Instapundit.)
  • 10% of French voters turn up at polls only to spoil their ballot in disgust.
  • Mark Steyn covers the French election:

    The French have voted to postpone their rendezvous with destiny. But kicking the croissant down the road means another half-decade of demographic transformation that lengthens the odds against ever winning the numbers to halt it….

    Yet the fact is that, with the arrival of President Macron in the charmed circle, the leaders of Europe’s biggest economies and of all the European members of the G7 are childless: Germany’s Angela Merkel, Britain’s Theresa May, Italy’s Paolo Gentiloni, and now France’s Macron.

    This would have been not just statistically improbable but all but impossible for most of human history. Whatever Euro-politics is about, it’s not, as Bill Clinton was wont to say, the future of all our children. Indeed, of the six founding members of the European Union – France, Germany, Italy, Belgium, the Netherlands, Luxembourg – five are led by childless prime ministers: joining Merkel, Gentiloni and Macron at the no-need-for-daycare Euro-summit are the Dutch PM Mark Rutte and the Luxemburger Xavier Bettel. Mark Rutte is single and childless. Xavier Bettel of Lux is married, but gay and, hélas, for the moment without progeny….

    That’s the demographics of Western Europe writ small. The Eurocrats are a Continental version of the Shakers: They’re apparently forbidden to breed, and can only increase their numbers through conversion. From Nice to Cologne to Rosengård, a significant proportion of New Europeans seem to think that, au contraire, they’ll be the ones doing the converting.

  • Sally Yates was the real blackmailer.”
  • Nevada Democratic Senator Catherine Cortez Masto wants choose senators based on diversity rather than all those annoying elections. (Hat tip: Ace of Spades HQ.)
  • Canada arrests 104 men on child sex trafficking charges. The Other McCain notices a certain pattern to the names of those arrested that will be familiar to those that followed the Rotherham child sex trafficking scandal:

    Suresh Patel, 49; Muhammad Jaffer, 22; Muhammad Sarchami, 31; Hernando Carvajal, 29; Intekhab Shaikh, 42; Sakhi Alekozai, 29; Shamim Abowath, 54; Ruchir Shah, 34; Nima Latifpour, 25; Sanjay Ninan, 42; Jaipal Sidhu, 26; Adeniran Adekola, 33; Ming Wong, 39; Zan He, 33; Segundo Fernandez, 54; Anpalagan Kanapathipillai, 39; Navaneetharan Packianathan, 25; Rajorshi Bhaumik, 34; Miguel Feliciano, 38; Virushan Premanathan, 25; Suhayl Rajan, 24; Sivanesan Veerasingam, 50; Jamshid Jalilian, 25; Zhi Situ, 22; Tejash Patel, 33; Quang Tran, 37; Ravikumar Ghandhi, 31; Ahmad Hassan, 21; Anshu Manocha, 33; Sivaratnam Sinnappillai, 39; Naidu Matas, 54; Paramjit Sandhi, 35; Hari Bhaskar, 55; Ramy Kawar, 39; Zu Liang Xiao, 28; Ali Mansourinajand, 24; Ramiz Multani, 25

  • AC-130 gunship now comes with a 105mm Howitzer option. (Hat tip: Ace of Spades HQ.)
  • Wargaming a second Korean war. (Hat tip: Stephen Green at Instapundit.)
  • U.S. Air Force’s robotic X-37B space plane finally lands after circling Earth for “an unprecedented 718 days.”
  • UT stabbing spree followup: The stabber “was suffering from mental illness and didn’t seem to be targeting anyone in particular during his Monday afternoon spree, police said Tuesday.”
  • “‘Chicago Is A War Zone’: Police Suicide Rate Surges To 60% Above The National Average.”
  • Gun-blogger Bob Owens dead of apparent suicide. Unlike many in the blogsphere, I didn’t know Owens personally, but we did follow each other on Twitter. RIP.
  • Windows 10 on ARM supports x86 apps, and Microsoft says your 32-bit applications should run just fine. Won’t make me use it, but for some people…
  • Behold the #BowWowChallenge.
  • Bucket-eye view of critters drinking water.
  • LinkSwarm for February 24, 2017

    Friday, February 24th, 2017

    Welcome to another Friday LinkSwarm! Here in Texas, Spring has sprung, full stop.

  • The elites are revolting:

    It’s no coincidence that the most vocal outcry against President Trump’s measures have come from urban elites and the corporations that cater to them. It’s easy to spot the class divides in the scoffing at Andrew Puzder, CEO of the company behind Carl’s Jr. and Hardee’s, getting a cabinet position instead of Facebook’s Sheryl Sandberg who had been tipped for Treasury Secretary by Hillary.

    Carl’s Jr and its 4 Dollar Real Deal are a world away from Facebook’s Gehry designed Menlo Park headquarters. Or as a WWE tournament is from Conde Nast’s Manhattan skyscraper.

    It’s hard to imagine a clearer contrast between coastal elites and the heartland, and between the new economy and the old. On the one side are the glittering cities where workforces of minorities and immigrants do the dirty work behind the slick logos and buzzwords of the new economy. On the other are Rust Belt communities and Southern towns who actually used to make things.

    Facebook’s top tier geniuses enjoy the services of an executive chef, treadmill workstations and a bike repair shop walled off from East Palo Alto’s Latino population and the crime and gang violence. And who works in Facebook’s 11 restaurants or actually repairs the bikes in the back room? Or looks through the millions of pictures posted on timelines to screen out spam, pornography and racism?

    Behind the illusion of a shiny new future are Mexicans getting paid a few dollars an hour to decide if that Italian Renaissance painting you just shared violates Facebook’s content guidelines.

    If you live in the world of Facebook, Lyft, Netflix and Airbnb, crowding into airports shouting, “No Borders, No Nations, Stop The Deportations” makes sense. You don’t live in a country. You live in one of a number of interchangeable megacities or their bedroom communities. Patriotism is a foreign concept. You have no more attachment to America than you do to Friendster or MySpace. The nation state is an outdated system of social organization that is being replaced by more efficient systems of global governance. The only reason anyone would cling to nations or borders is racism.

    The demographic most opposed to President Trump is not a racial minority, but a cultural elite.

    This isn’t a revolution. The revolutions happened in June in the UK and in November in the US. Brexit and Trump were revolutions. The protests against them are a reaction.

  • In the midst of freaking out, Instapundit notes that our elites are displaying why they’re unfit to rule:

    Why all the anger over Trump?

    As I’ve pondered this, I’ve gone back to Tyler Cowen’s statement: “Occasionally the real force behind a political ideology is the subconsciously held desire that a certain group of people should not be allowed to rise in relative status.”

    I think that a lot of the elite hatred for Trump, and for his supporters, stems from just such a sentiment. For decades now, the educated meritocrats who ran America — the “Best and the Brightest,” in David Halberstam’s not-actually-complimentary term — have enjoyed tremendous status, regardless of election results.

    An election’s turn might see some moving to the private sector — say as K street lobbyists or high-priced lawyers or consultants — while a different batch of meritocrats take their positions in government. But even so, their status remained unchallenged: They were always the insiders, the elite, the winners, regardless of which team came out ahead in the elections.

    But as Nicholas Ebserstadt notes, that changed in November. To the privileged and well-educated Americans living in their “bicoastal bastions,” things seemed to be going quite well, even as the rest of the country fell farther and farther behind. But, writes Eberstadt: “It turns out that the year 2000 marks a grim historical milestone of sorts for our nation. For whatever reasons, the Great American Escalator, which had lifted successive generations of Americans to ever higher standards of living and levels of social well-being, broke down around then — and broke down very badly.

    “The warning lights have been flashing, and the klaxons sounding, for more than a decade and a half. But our pundits and prognosticators and professors and policymakers, ensconced as they generally are deep within the bubble, were for the most part too distant from the distress of the general population to see or hear it.”

    Well, now they’ve heard it, and they’ve also heard that a lot of Americans resent the meritocrats’ insulation from what’s happening elsewhere, especially as America’s unfortunate record over the past couple of decades, whether in economics, in politics, or in foreign policy, doesn’t suggest that the “meritocracy” is overflowing with, you know, actual merit.

    In the United States, the result has been Trump. In Britain, the result was Brexit. In both cases, the allegedly elite — who are supposed to be cool, considered, and above the vulgar passions of the masses — went more or less crazy. From conspiracy theories (it was the Russians!) to bizarre escape fantasies (A Brexit vote redo! A military coup to oust Trump!) the cognitive elite suddenly didn’t seem especially elite, or for that matter particularly cognitive.

    In fact, while America was losing wars abroad and jobs at home, elites seemed focused on things that were, well, faintly ridiculous. As Richard Fernandez tweeted: “The elites lost their mojo by becoming absurd. It happened on the road between cultural appropriation and transgender bathrooms.” It was fatal: “People believe from instinct. The Roman gods became ridiculous when the Roman emperors did. PC is the equivalent of Caligula’s horse.”

  • You have to read this Glenn Greenwald piece on what’s wrong with the Democratic Party. “The more alarmed one is by the Trump administration, the more one should focus on how to fix the systemic, fundamental sickness of the Democratic Party. That Hillary Clinton won the meaningless popular vote on her way to losing to Donald Trump, and that the singular charisma of Barack Obama kept him popular, have enabled many to ignore just how broken and failed the Democrats are as a national political force.” Never mind that Greenwald ignores one of the big elephants in the room (the Social Justice Warrior/victimhood identity politics brigade doing such a bang-up job alienating American voters). His description of the other elephant in the room, the party’s fundamentally corrupt and anti-Democratic nature, is fairly acute.
  • The number of Republicans passes the number of Democrats in Gallup’s Party ID tracking poll. This has happened a few times before, but the mere 25% for Democrats does appear to be the lowest rating ever.
  • All the Trump Derangement is masking the Democratic Party’s own civil war. “There is no Barack Obama among the ranks of current Democrats. He simply does not exist. That truth, and Hillary’s defeat, means the years ahead will be ones of rebuilding and rebranding. So far, it’s not going well.” (Hat tip: Director Blue.)
  • Seven days in February. “Why were former Obama-administration appointees or careerist officials tapping the phone calls of an incoming Trump designate and then leaking the tapes to their pets in the press?” Also this: “The Democratic party has been absorbed by its left wing and is beginning to resemble the impotent British Labour party. Certainly it no longer is a national party.”
  • “The Social Security Administration paid $1 billion in benefits to individuals who did not have a Social Security Number.”
  • “This is what Chuck Todd and others like him fail to accept or comprehend: The mainstream media have delegitimized themselves. Republicans and independents watched for eight long years as Todd and others of his ilk did their best to help and support the last administration; not only refusing to hold President Obama to account (the way they are imploring each other to do with Trump) but providing cover for him.” (Hat tip: Ace of Spades HQ.)
  • Turns out that patiently explaining to the deplorable redneck freaks of JesusLand why they’re ignorant rubes that need to be ruled for their own good doesn’t win votes.
  • MSNBC: Controlling what people thing is our job.
  • A look at the shell games played by the dark money left. (Hat tip: Director Blue.)
  • With President Trump, America has an administration that is finally willing to name radical Islam as the enemy.
  • Women celebrate being liberated from the Islamic State. (Hat tip: The Other McCain.)
  • President Trump contemplates designating the Muslim Brotherhood as a terrorist organization and the New York Times freaks out. (Hat tip: Director Blue.)
  • Texas preschool teacher fired for tweeting to “kill some Jews.” (Hat tip: Stephen Green at Instapundit.)
  • Marine Le Pen is winning over French women. In addition to refusing to wear a headscarf, “Le Pen again vowed to protect French women after the mass sexual assault by groups of men in Cologne, Germany, just over a year ago in an op-ed that tied together immigration and women rights.” (Hat tip: Director Blue.)
  • Part of Geert Wilders’ security detail has been suspended for possibly leaking details of Wilders locations to Jihadest groups. “Secret Service chief Erik Akerboom said he could not confirm the man’s identity but confirmed media reports he has a ‘Moroccan background.'”
  • Fourth circuit court decides to just ignore Heller.
  • The AFL-CIO is is cutting staff “amid continuing declines in union membership.” Faster, please. (Hat tip: Instapundit.)
  • Paul Krugman, the Cleveland Browns of economists. (Hat tip: Director Blue.)
  • If you’re looking for a pundit with a clear-eyed vision of where President Donald Trump is going, Ross Douthat is not your man.
  • NASA contemplates a bold leap forward to 1968.
  • Men who SWATed, sent heroin to Brian Krebs’ house sentenced.
  • Cahnman’s Musings has a roundup of what various school district Superintendents make. It’s an interesting list, though I personally would not have broken it up by Texas House committee chairman. I’m not surprised that they average a low six figures, or that the Superintendents of Houston and Dallas ISD make in excess of $300,000. Why I don’t understand is why the Superintendent for Galena Park ISD, a working class school district with 22,549 students and a single 4A high school, makes $270,531, or 90% of the what the HISD Superintendent makes…
  • Feminist derangement syndrome: “I was walking into a gas station for a bottle of water when the man behind me stepped up to open the door for me. With that act of kindness, something inside me snapped and I flew into a blind rage. I began screaming at him at the top of my lungs.” (Hat tip: Ed Driscoll at Instapundit.)
  • Trump Administration to Social Justice Warriors: No tranny bathrooms for you!
  • “I would say 98 percent of the women in the WNBA are gay women” says ex-WNBA player Candice Wiggins, who says she was bullied and harassed for being straight. This is not exactly a surprise, thought that 98% number may be slightly high. I casually followed the WNBA back when the Houston Comets were dominating the league, but haven’t paid attention since they folded. Today half of the teams still lose money. But I’m sure their popularity will skyrocket any day now…

  • Vice President Mike Pence helps repair vandalism at a Jewish cemetery.
  • I have heard the bots reverting, each to each. I do not think that they will revert for me…
  • Are you smuggeling illegal butter, comrade?
  • Democratic State Senator Carlos Uresti’s Offices Raided by FBI, IRS

    Thursday, February 16th, 2017

    Via Dwight comes word that the offices of Democratic State Senator Carlos Uresti have been raided by the FBI and the IRS:

    Agents have been confiscating documents from the office of the Democratic lawmaker.

    “I can confirm the FBI and IRS are lawfully present and conducting a lawful law enforcement activity,” FBI spokeswoman Michelle Lee told the Express-News.

    Lee also said no arrests have been made so far.

    Uresti is currently facing a grand jury investigation into possible public corruption charges related to his involvement with FourWinds, a San Antonio oil-field services company accused of defrauding investors.

    While Uresti is “innocent until proven guilty,” having both the FBI and IRS lawfully conducting lawful law enforcement in your office is not a good sign.

    When last we checked on Sen. Uresti, he was sharing a bathroom with a female staffer not his wife and involved in the UT admissions scandal.

    Here’s more on the FourWinds story, which I had not been previously following:

    The one-time marketing director for a bankrupt San Antonio frac-sand company with ties to state Sen. Carlos Uresti has been criminally charged in an alleged scheme to defraud investors.

    On Wednesday, Eric Nelson was charged in an information with conspiracy to commit wire fraud for allegedly altering a FourWinds Logistics’ bank statement to inflate the amount of money in the account. The bank statement was then mailed by an unnamed co-conspirator to prospective investors, according to the charging document.

    Nelson has agreed to a plea deal, according to sources, but records show that it is sealed. His attorneys declined to comment.

    The San Antonio Express-News in August chronicled the demise of FourWinds, which had more than $14 million in claims against it. Investors have alleged that CEO Stan Bates wasted their money on personal expenses, expensive gifts, exotic car rentals and lavish vacation, according to a court document. Bates has denied the allegations.

    Uresti provided legal services for FourWinds and served as its outside general counsel for four or five months in 2014, he said in an interview this summer. He received FourWinds shares, as well as a $40,000 loan from the company that he failed to disclose initially. He also collected a $27,000 commission on a Harlingen woman’s $900,000 investment in a joint venture with FourWinds. The woman ended up losing about $800,000.

    Really, who of us hasn’t forgotten a $40,000 loan? “Oh yeah! That little thing! Sorry, totally slipped my mind!”

    Uncle Sam’s mills grind slowly, but exceedingly fine. One way or another, I suspect Republicans will view Uresti’s west Texas District 19 as a pickup target in 2020…if not sooner…

    Texas vs. California Update for February 15, 2017

    Wednesday, February 15th, 2017

    Welcome to another Texas vs. California Roundup!

  • California Governor Jerry Brown wants to hike gas taxes by 42% to bail out CalPERS.
  • Brown’s pension reforms have failed:

    Since 2012 passage of his much-heralded changes to state retirement laws for public employee, the pension debt foisted on California taxpayers has only grown larger.

    The shortfall for California’s three statewide retirement systems has increased about 36 percent. Add in local pension systems and the total debt has reached at least $374 billion. That works out to about $29,000 per household.

    It’s actually much worse than that. Those numbers are calculated using the pension systems’ overly optimistic assumptions about future investment earnings.

    Using more conservative assumptions, the debt could be more than $1 trillion.

  • And speaking of Brown: Math is hard.
  • Why California can’t repair its infrastructure: “California’s government, like the federal government and most other state and local governments, spends its money on salaries, benefits, pensions, and other forms of employee compensation. The numbers are contentious — for obvious political reasons — but it is estimated that something between half and 80 percent of California’s state and local spending ultimately goes to employee compensation.”
  • Put another way: “Governor Moonbeam and the other leftist kooks in charge are flushing a staggering $10 billion down an unneeded high-speed rail project, on top of the still more staggering $25.3 billion per year they spend on the illegal aliens they have gone out of their way to welcome.” (Hat tip: Director Blue.)
  • California can’t afford green energy:

    California has the highest taxes overall in the nation, worst roads, underperforming schools, and the recent budget has at least a $1.6 billion shortfall.

    Moreover, depending on how the numbers are analyzed California has either a $1.3 or a $2.8 trillion outstanding debt. This is before counting the maintenance work needed for infrastructure, particularly roads, bridges and water systems. Yet tax increases aren’t covering these obligations.

  • Three of the ten least affordable cities in the World are in California: Los Angeles, San Francisco and San Jose.
  • Austin named best city to live in the U.S. But wait! San Jose ranks third! I can only assume that “affordability” was not a significant criteria. Dallas/Ft. Worth ranks 15th (one ahead of San Francisco), Houston 20th, San Antonio 23rd (one behind San Diego).
  • “A sizzling residential real estate market fueled by incoming Californians, low supply, high demand, flat salaries, and local property taxes are pricing people out of homeownership in Austin.” More: “The Texas A&M Real Estate Center examined the Austin local market area (LMA) over five years. In January 2011, the Austin-Georgetown-Round Rock area median home prices were $199,700. By January 2015, that median hovered at $287,000. At the end of 2016, university real estate analysts found the home mid-price point at $332,000.” Of course, in my neck of the woods, $332,000 will buy you a 2,500 square foot house, while in San Francisco, you’d be lucky to find a 500 square foot condo…
  • “An IGS-UC Berkeley poll shows that 74 percent of Californians want sanctuary cities ended; 65 percent of Hispanics, 70 percent of independents, 73 percent of Democrats and 82 percent of Republicans.”
  • Of the top 20 cities for illegal aliens, five (Los Angeles, San Francisco, San Jose, San Diego and Riverside) are in California, while three (Houston, Austin and Dallas/Ft. Worth) are in Texas. I’m actually a bit surprised to see that San Antonio isn’t on that list, while Seattle and Boston are. “American citizens who paid into the system don’t receive benefits like long-term medical care because — in part — we’re all subsidizing aliens.”
  • California pays $25.3 billion in illegal alien benefits, or $2,370 per household. (Hat tip: Director Blue.)
  • By contrast, Texas pays $12.1 billion in illegal alien benefits, or $1,187 per household. (IBID)
  • “In testimony provided before the California Senate’s Public Safety Committee, Senate President Pro Tem Kevin De Leon (D-Los Angeles) decided to admit that “half of his family” is residing in the United States illegally and with the possession of falsified Social Security Cards and green cards.”
  • “California spent on high-speed rail and illegal immigrants, but ignored Oroville Dam.”
  • Pensions are breaking budgets across San Diego. (Hat tip: Pension Tsunami.)
  • “Despite California having some of the best recreation spots in the world, we have systematically reduced our business in California by 50%, and I have a moratorium in place on accepting new business (I won’t even look at RFP’s and proposals to avoid being tempted.)”
  • That same blogger on why his company pulled out of Ventura, California. Like this:

    It took years in Ventura County to make even the simplest modifications to the campground we ran. For example, it took 7 separate permits from the County (each requiring a substantial payment) just to remove a wooden deck that the County inspector had condemned. In order to allow us to temporarily park a small concession trailer in the parking lot, we had to (among other steps) take a soil sample of the dirt under the asphalt of the parking lot. It took 3 years to permit a simple 500 gallon fuel tank with CARB and the County equivalent. The entire campground desperately needed a major renovation but the smallest change would have triggered millions of dollars of new facility requirements from the County that we simply could not afford.

    And this:

    A local attorney held regular evening meetings with my employees to brainstorm new ways the could sue our company under arcane California law. For example, we went through three iterations of rules and procedures trying to comply with California break law and changing “safe” harbors supposedly provided by California court decisions. We only successfully stopped the suits by implementing a fingerprint timekeeping system and making it an automatic termination offense to work through lunch. This operation has about 25 employees vs. 400 for the rest of the company. 100% of our lawsuits from employees over our entire 10-year history came from this one site. At first we thought it was a manager issue, so we kept sending in our best managers from around the country to run the place, but the suits just continued.

  • California has some of the highest taxes in the nation, but can’t pay for road maintenance:

    Texas has no state income tax, yet excellent highways and schools that perform above average, way above California’s bottom-dwellers. Yet both states have similar demographics. For example, in the 2010 U.S. Census, Texas was 37% Hispanic, California 37.6%.

    Texas is a First World state with no state income tax that enjoys great roads and schools. California is a Third World state restrained from getting worse only by its umbilical-cord attachment to the other 49 states, a cord the Calexit movement wants to cut, but won’t get to.

    California is Venezuela on the Pacific, a Third World state and wannabe Third World country; a place with great natural beauty, talented people, natural resources – and a government run by oligarchs and functionaries who treat the rest of us as peons.

    (Hat tip: Pension Tsunami.)

  • “Texas Ends 2016 with 210,200 Jobs Added Over the Year.”
  • All Houston does economically is win.

    The Houston metropolitan area’s population now stands at 6.6 million with the city itself a shade under 2.3 million. At its current rate of growth, Houston could replace Chicago as the nation’s third-largest city by 2030.

    Why would anyone move to Houston? Start with the economic record.

    Since 2000, no major metro region in America except for archrival Dallas-Fort Worth has created more jobs and attracted more people. Houston’s job base has expanded 36.5%; in comparison, New York employment is up 16.6%, the Bay Area 11.8%, and Chicago a measly 5.1%. Since 2010 alone, a half million jobs have been added.

    Some like Paul Krugman have dismissed Texas’ economic expansion, much of it concentrated in its largest cities, as primarily involving low-wage jobs, but employment in the Houston area’s professional and service sector, the largest source of high-wage jobs, has grown 48% since 2000, a rate almost twice that of the San Francisco region, two and half times that of New York or Chicago, and more than four times Los Angeles. In terms of STEM jobs the Bay Area has done slightly better, but Houston, with 22% job growth in STEM fields since 2001, has easily surpassed New York (2%), Los Angeles (flat) and Chicago (-3%).

    More important still, Houston, like other Texas cities, has done well in creating middle-class jobs, those paying between 80% and 200% of the median wage. Since 2001 Houston has boosted its middle-class employment by 26% compared to a 6% expansion nationally, according to the forecasting firm EMSI. This easily surpasses the record for all the cities preferred by our media and financial hegemons, including Washington (11%) and San Francisco (6%), and it’s far ahead of Los Angeles (4%), New York (3%) and Chicago, which lost 3% of its middle-class employment.

    (Hat tip: Pension Tsunami.)

  • Texas conservative budget overview vs. the 2018-2019 proposed budget.
  • On the same subject: how to reduce the footprint of Texas government.
  • “Berkeley funds the Division of Equity and Inclusion with a cool $20 million annually and staffs it with 150 full-time functionaries: it takes that much money and personnel to drum into students’ heads how horribly Berkeley treats its “othered” students.”
  • New LA housing initiative to undo previous housing initiative. Frankly all of them sound like market-distorting initiatives guaranteed to backfire…
  • “California’s bullet train could cost taxpayers 50% more than estimated — as much as $3.6 billion more. And that’s just for the first 118 miles through the Central Valley, which was supposed to be the easiest part of the route between Los Angeles and San Francisco.”
  • “For the past five months, BART has been staffing its yet-to-open Warm Springs Station full time with five $73,609-a-year station agents and an $89,806-a-year train dispatch supervisor — even though no trains will be running there for at least another two months.” (Hat tip: Pension Tsunami.)
  • “After studying “tens of thousands of restaurants in the San Francisco area,” researchers Michael Luca of Harvard Business School and Dara Lee Luca of Mathematica Policy Research found that many lower rated restaurants have a unique way of dealing with minimum wage hikes: they simply go out of business.”
  • Meet Gordon, the robot barista. How’s that $15 an hour minimum wage working out for you, San Francisco?
  • “Nestle USA announced today that it is moving 300 technical, production and supply chain jobs to the Solon [Ohio] plant as part of the company’s plan to relocate its headquarters to Arlington, Virginia, from Glendale, California.”
  • Auto dealer AutoAlert is moving it’s headquarters from Irvine, California to Kansas City.
  • Peter Thiel to run for governor of California?
  • The Oakland Raiders may not be moving to Las Vegas after all, because billionaire Sheldon Adelson backed out of the stadium deal, accusing Raider owner Mark Davis of trying to screw him.
  • Now there’s talk the Raiders may rexamine moving to San Antonio.
  • Or even Dan Diego.
  • Lawsuits are flying over the Dallas Police and Fire pension fund debacle. (Hat tip: Pension Tsunami.)
  • 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.
  • 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.

  • This Week in Clinton Corruption for October 21, 2016

    Friday, October 21st, 2016

    It’s getting to the point that not only can I not keep up with the torrent of email leaks documenting Hillary Clinton corruption, I can’t even keep with the people keeping up with the leaks!

  • State Department tried to bribe FBI to unclassify Clinton emails“:

    A top State Department official offered a “quid pro quo” to an FBI investigator to declassify an e-mail from Hillary Clinton’s private server in exchange for allowing the bureau to operate in countries where it was banned, stunning new documents revealed Monday.

    The FBI documents show that Undersecretary of State Patrick Kennedy pitched the deal to the unnamed agent, allegedly as part of an effort to back up Clinton’s claim that she did not send or receive classified documents on the server in her Westchester home.

    “[Redacted] indicated he had been contacted by [Kennedy], Undersecretary of State, who had asked his assistance in altering the e-mail’s classification in exchange for a ‘quid pro quo,’ ” according to the documents, which summarized interviews the feds conducted in the summer of 2015 while investigating Clinton’s e-mail practices.

    “[Redacted] advised that in exchange for marking the e-mail unclassified, STATE would reciprocate by allowing the FBI to place more Agents in countries where they are presently forbidden,” the document added.

    One State Department staffer described feeling “immense pressure” to complete the review quickly and to not label anything as classified.

  • FBI agents say that director James Comey hindered the investigation:

    “This is a textbook case where a grand jury should have convened but was not. That is appalling,” an FBI special agent who has worked public corruption and criminal cases said of the decision. “We talk about it in the office and don’t know how Comey can keep going.”

    The agent was also surprised that the bureau did not bother to search Clinton’s house during the investigation.

    “We didn’t search their house. We always search the house. The search should not just have been for private electronics, which contained classified material, but even for printouts of such material,” he said.

    “There should have been a complete search of their residence,” the agent pointed out. “That the FBI did not seize devices is unbelievable. The FBI even seizes devices that have been set on fire.”

  • And the FBI summary report shows that Hilalry indeed broke the law. (Hat tip: Director Blue.)
  • Independent charity auditor found that the Clinton Foundation was a favor machine:

    But most serious disclosure in the review was that donors expected a “quid pro quo” in return for their contributions. “Some interviewees reported conflicts of those raising funds or donors, some of whom may have an expectation of quid pro quo benefits in return for gifts.”

    “This was bright line illegal,” Wall Street analyst and philanthropy expert Charles Ortel told The Daily Caller News Foundation. “This is a rogue charity that was out of control for years. And the trustees elected to not correct them. We’re not talking about people with no knowledge of the laws. These are people who can’t claim ignorance.”

  • Hillary Charged Morrocan Government $12 Million for a Private Meeting.” Obviously they were desperate for some yoga tips…
  • More on that meeting:

    The email from Huma Abedin, Clinton’s Deputy Chief of Staff at the State Department, was addressed to Podesta and campaign manager Robby Mook. Hillary Clinton was a director of the foundation at the time.

    Singapore and Hong Kong officials reportedly were also vying to convene the CGI meeting in their countries, but the North African nation ultimately hosted it in a five-star hotel in Marrakesh, Morocco, in 2015. Abedin told Podesta and Mook that Morocco was not CGI’s “first choice.”

    The actual meeting was paid for by OCP, the Moroccan-government-owned mining company that has been accused of serious human rights violations. Clinton vigorously supported the Moroccan King when she was Secretary of State and the U.S.-financed Export-Import Bank gave OCP a $92 million loan guarantee during her tenure as Secretary of State.

    The mining company also contributed between $5 million to $10 million to the Clinton Foundation, according to the charity’s web site.

    (Hat tip: Ace of Spades HQ.)

  • And of course there’s nothing suspicious at all about State Department officials discussing a $1 million donation to the Clinton Foundation from Qatar. (Hat tip: Director Blue.)
  • Only 5.7% of Clinton Foundation donations actually go to charity. (Hat tip: Director Blue.)
  • Clinton Foundation staffers talk about conflicts of interest within the Clinton Foundation.
  • The Clinton Foundation’s efforts in Columbia were a big success…at least for the bank account of Bill Clinton financial partner Frank Giustra. For regular Columbians? Not so much.
  • Woman on Hillary’s payroll brags about starting riots, hassling Trump supporters.
  • More on the same subject. DNC operative Aaron Minter: “So the Chicago protest when they shut all that, that was us.”
  • The dirty tricks are so blatant that even The New York Times was forced to notice. (Hat tip: Instapundit.)
  • Is this the fifth link I’ve provided to Hillary’s secret Goldman Sachs speeches, or the sixth? To tell you the truth, in all this excitement I kind of lost count… (Hat tip: Director Blue.)
  • Clinton is not the tech privacy candidate.
  • Eight Hillary lies debunked. (Hat tip: Director Blue.)
  • AP conspires with Obama Administration, Clinton functionaries to hide Iran deal from public.
  • Her crimes, his words.
  • Hillary Clinton’s non-answers to the Judicial Watch lawsuit. (Hat tip: Director Blue.)
  • Bill Clinton accused of yet another sexual assault by yet another woman.
  • “Believe the victims — unless they’re Bill’s.” (Hat tip: Instapundit.)
  • Meanwhile, at the other end of the field, Trump accuser has the same phone number as the Clinton Foundation.
  • Even Democrats freaked out about Hillary’s agressive gun control stance. (Hat tip: Director Blue.)
  • Hillary Clinton’s security detail laughed after she broke her elbow because she treated them like shit.
  • Latest Wikileaks dump exposes George Soros’ contact information.
  • “Most Say Media, Not Russians, Tilting the Election.” (Hat tip: Director Blue.)
  • “Electing Hillary Clinton will be an endorsement of permanent political corruption and consent for the use of government as an instrument to extinguish dissent.”
  • WikiLeaks poisons Hillary’s relationship with left.” That headline is sort of like “Audit poisons Bernie Madoff’s relations with investors.” (Hat tip: Stephen Green at Instapundit.)
  • LinkSwarm for September 30, 2016

    Friday, September 30th, 2016

    Another Friday, another LinkSwarm. On a personal note, I am once again looking for a Senior Technical Writing position in the greater Austin area. If you have any leads in that direction, please let me know.

  • Polls show Hillary losing ground after debate.
  • Likewise, LA Times poll shows a slight bump for Trump.
  • Professor says there are 13 keys for an incumbent to lose the White House. By my count, Democrats suffer from just about all of them.
  • Minnesota, the only state to vote for Walter Mondale in 1984, is now a battleground state. (Hat tip: Director Blue.)
  • Democrats give up on Ohio. (Hat tip: Stephen Green at Instapundit.)
  • Nineteen dead people registered to vote in Virginia. Yet more of that voting fraud Democrats swear up and down doesn’t exist… (Hat tip: Director Blue.)
  • Republicans cave on everything and leave town. But somehow it’s Trump that’s going to sully the spotless reputation of the Grand Old Party…
  • But at least congress overrode Obama’s veto of bill allowing 9/11 survivors to sue the Saudis 97-1. One wonders why Obama even bothered vetoing the bill, given how he had already stabbed the Saudis in the back with the Iran deal.
  • Blue Cross/Blue Shield drops out of ObamaCare exchange in Nebraska.
  • More illegal aliens on the way. (Hat tip: Praire Pundit.)
  • Two Maryland Democrats fight over which is more responsible over making Baltimore burn.
  • Chicago schools are boned. (Hat tip: The American Interest.)
  • Taxis vs. Uber.
  • Will Franklin of WILLisms put a lot of work into this school choice video:

  • Texas among four states to sue to stop the transfer of ICANN to an international governing body.
  • “Target Corporation’s transgender bathroom pander costing its shareholders billions.” (Hat tip: Ace of Spades HQ.)
  • Scott Adams think that the Middle East is just building a wall around the Islamic State.
  • Ace of Spades declares war on the Republican leadership:

    Apparently, some in this party really do think they’re going to hand the election to Hillary, and, bizarrely, they think this will bully the rest of us into knuckling under to their agenda in 2020.

    Rather than simply getting payback and tanking their candidate in return.

    This party is on the verge of self-destructing. The upper class of the party is upset that the lower class has finally had its say, and they’re determined that should never be permitted to happen again.

    Why then would anyone of the lower class ever vote for the GOP again? Are they required to sign a piece of paper confirming that they are Lessers who should know their place in order to have the privilege of voting against their own interests?

    He’s also turns his fire on #NeverTrump:

    we have a hundred people who claim to be #NeverTrump and #NeverHillary but, strangely enough, never talk about the downsides of a Hillary presidency. Oh, they’ll talk up how much of an authoritarian Trump is, but not Hillary’s sense of entitlement, grievance, vengeance, and her own history of authoritarianism and lawlessness in covering up her crimes.

    They talk all day about “Principles,” but discard the most basic principles — such as keeping a proven lawbreaker out of the White House, or just honestly admitting which candidate they’re actually supporting to their readers — as convenience may recommend.

    In fact, right now they’re howling about Ted Cruz’ “calculations” in endorsing Trump, while not admitting their own pose of “Being Against Both Equally” is in fact a completely contrived lie they’ve calculated will permit them to agitate for their candidate (Hillary) while not compromising their career prospects within Conservatism, Inc. too much.

    How much can I agitate for Hillary while still retaining plausible deniability?

    How much can I agitate for Hillary to appease my anti-Trump donors while still keeping enough pro-Trump readers that my anti-Trump donors will feel they’re getting enough eyeballs per dollar of their patronage?

    The party — not just the party;the writers who are supposed to have telling the truth as their first mission, but instead of become nonstop liars all the time decrying Trump as a liar himself — has declared war on all of the Lessers beneath their station, those not in The Media and who should, therefore, not have quite as much of a say in things as they themselves have.

    They’ve made themselves into exactly what they pretend to oppose — and exactly what I do in fact oppose.

  • Canada launches prescription smack. Part of me wants to see how the experiment turns out. And part of me wants to start offering junkies one-way bus tickets to the Great (China) White North.
  • Other Canadian craziness: Montreal to euthanize all non-owned pit bulls. Way to jerk those knees, French Canadians.
  • Navy changes the way it categorizes sailors.
  • Burning Man camp vandalized.
  • More of that vaunted liberal tolerance we hear so much about these days. “Kill yourself bitch.” (Hat tip: Will Shetterly.)
  • There’s a proper and an improper way to turn down an orgy. Proper: “No thank you.” Improper: Getting stabby. Don’t they teach kids basic manners these days?
  • I picked up some signed William F. Buckley, Jr. books cheap.