Posts Tagged ‘Budget’

In Which I Point To Hot Air’s Venezuela Update and Say “What He Said”

Thursday, January 22nd, 2015

It was about time to do another update on Venezuela’s failing socialist economy when I dropped by Hot Air and saw that Ed Morrissey had already done all the heavy lifting for me:

“The currency in what should be the richest country in South America has collapsed, as well as its economy, under the dual weight of falling crude prices and the Chavista socialism that has been choking the country for more than a decade.”

More:

Venezuela’s Chavista policies have always ignored economic reality. Socialism is a fantasy economic system, especially as implemented by Hugo Chavez and Nicolas Maduro.

The difference between Venezuela and the nanny-state petro-economy in Norway is that the latter preserves itself by respecting private property and foreign investment. From the beginning, Hugo Chavez attacked both, nationalizing oil production and criminalizing private investors as part of his “Bolivarian” revolution. When it did that, it chased off the talent needed to run oil production and the investment needed for all other kinds of goods and services. For a short period of time, their oil revenue allowed it to succeed in ignorance. When that failed, Chavez and now Maduro reacted to those predictable consequences by predictably imposing all sorts of rationing mechanisms which only decreased incentives for production and investment, especially in the legitimate economy. Now that the price of oil has collapsed, so has the official Venezuelan economy — and a populace used to a high standard of living now endures massive shortages and ever-increasing oppression to cover it up.

Morrissey, in turn, quotes a big chunk of this Matt O’Brien piece in the Washington Post:

Venezuela’s government is running a 14 percent of gross domestic product deficit right now, a fiscal hole so big that there’s only one way to fill it: the printing press. But that just traded one economic problem—too little money—for the opposite one. After all, paying people with newly-printed money only makes that money lose value, and prices go parabolic. It’s no wonder then that Venezuela’s inflation rate is officially 64 percent, is really something like 179 percent, and could get up to 1,000 percent, according to Bank of America, if Venezuela doesn’t change its byzantine currency controls.

What he said. Er, both of them.

Texas vs. California Update for January 6, 2014

Tuesday, January 6th, 2015

Here’s your first Texas vs. California update of 2015:

  • Real personal income increased by 1.4% in Texas in Q3, the most of any state. And that with the oil bust just starting to bite, which I’m guessing helps explain why South Dakota’s personal income decline by .2%. (Well, that and getting six inches of global warming in September….)
  • Texas was the number one magnet state in the country for people moving here yet again.
  • “The real reason for the tuition increase is that the UC system needs funds to bail out the mismanaged pension system that covers retired employees of its ten campuses.”

    This is all the result of the regents’ irresponsible oversight. In 1990, UCRP had 137 percent of the assets it needed to meet its obligations, so regents suspended employer and employee contributions to the pension fund. State legislators also stopped allocating money to UCRP. This “pension contribution holiday” lasted 20 years. To top it off, during this period, university officials boosted pension benefits a half-dozen times. By 2012, more than 2,100 UC retirees were each collecting six-figure pensions for life.

    (Hat tip: Pension Tsunami.)

  • Former Pasadena (California) employees arrested on 60 count, $6 million embezzling charges. (Hat tip: CalWatchdog.)
  • More on outrageous California pensions: “In 2013, an assistant fire chief in Southern California collected a $983,319 pension. A police captain in Los Angeles received nearly $753,861.” (Hat tip: Pension Tsunami).
  • California’s doomed high speed rail boondoggle breaks ground today.
  • More on the same theme from Twitter:

  • Opponents of California’s statewide plastic bag ban have gathered 800,000 signature for a referendum to overturn it, which will also keep the law from going into effect on July 1.
  • California charity hospitals to be sold to for-profit company to keep them open.
  • Greece Inches Closer to the Endgame

    Monday, December 29th, 2014

    Just because the European Debt Crisis hasn’t been in the headlines much as of late doesn’t mean it’s gone away.

    Greece’s government has fallen again and they’ll be holding general elections next month. “Opinion polls point to a victory by the radical leftist Syriza party, which wants to wipe out a big part of Greece’s debt, and cancel the terms of a bailout from the European Union and International Monetary Fund that Greece still needs to pay its bills.”

    The problem is that Greece wants to continue spending other people’s money to prop up a bankrupt welfare state, and the rest of Europe has decided they would really prefer to stop pouring money down that particular rathole. Syriza is against “austerity,” which is to say they oppose the Greek government even pretending to practice fiscal restraint. Because pretending is all they’ve done.

    Remember, real austerity is reducing outlays until they match receipts. All those “austerity” street protests were over lowering Greece’s budget deficit from 9% of GDP to 7.5% of GDP. The rest of Europe didn’t ask them to stop digging their own grave, they just asked them to dig more slower. And this year, Greece’s budget deficit stood at 12.2% of GDP. Evidently even fake austerity is too much to ask of them; even the illusion of fiscal restraint is intolerable. This is why all news that Greece has “balanced” next year’s budget should be taken with several grains of salt.

    So we’ll see another election, and if Syriza wins we’ll see another round of demands for more bailouts and debt writedowns, with Greece threatening yet again to exit the Euro. We’ve seen this movie before. The most likely outcome is that another cabal of EU-phillic insiders in the Greek government will engineer a last-minute cave-in to demands from Brussels and Frankfurt, ram another toothless austerity measure through parliament in exchange for still more credit (and perhaps even a small symbolic measure of debt forgiveness), dissolve the government again following the inevitable public outrage, then have the Greek bureaucracy ignore even those woefully inadequate reforms, setting the stage for the farce to repeat itself in another 12-18 months, or until mean old Aunt Angela finally cuts up the credit card.

    Europe has had several years to acclimate itself to the fact the Greece might exit the Euro, and the possibility of a “grexit” has been priced into the markets for some time now. I do not pretend to understand the intricacies of the European banking system, but my impression is that much of the “stress testing” of European banks this year was to prepare for one or more of the PIIGS leaving the Euro. I suspect that the European elite have minimized their own exposure to a Greek default (which is really all they care about), and that the EU and the European Central Bank has found new, sneaky ways to put taxpayers on the hook for any possible sovereign defaults, strengthening the banking system without addressing Europe’s long-term economic problems (unsustainable levels of debt to support cradle-to-grave welfare states for shrinking populations).

    It would be great if Greece actually undertook real structural reforms of their bloated, dysfunctional government, but I see precious little evidence that they’ve actual done so. Expect more pain ahead, and at least one more bailout…

    Texas vs. California Update for December 4, 2014

    Thursday, December 4th, 2014

    It’s another Texas vs. California update!

  • The real reason the University of California system is raising taxes: “The real driving force behind the tuition hike is the university’s woefully underfunded pension system, which currently serves 56,000 retired employees. It’s a generous system, despite some reductions the university made for new hires in recent years. An Associated Press analysis found 2,129 retired UC employees collect pensions of more than $100,000 a year; 57 receive more than $200,000; and three receive more than $300,000.” (Hat tip: Pension Tsunami.)
  • Here’s the rare Texas vs. California item where both Texas and California get dinged: “Calpers holds about 75% of its portfolio in stocks and other risky assets, such as real estate, private equity and, until recently, hedge funds, despite offering benefits that, unlike IRAs or 401(k)s, it guarantees against market risk. Most other states are little different: Illinois holds 75% in risky assets; the Texas teachers’ plan holds 81%.”
  • A look at the relative pension costs of three bankrupt California cities: San Bernardino, Stockton and Vallejo. (Hat tip: Pension Tsunami.)
  • Magpul, is moving its headquarters from newly gun-hostile Colorado to Austin. This is on top of moving its manufacturing facilities to Wyoming.
  • “Something is happening in California. An unstoppable movement for reform is building, attracting support from conscientious Californians.” Much as I’d like to believe it, I remain skeptical that real education and pension reform can happen in California as long as it remains a one-party Democratic state… (Hat tip: Pension Tsunami.)
  • How California’s three-decades old Proposition 65 is threatening to bankrupt small businesses and enrich trial lawyers.
  • California: Roads? We don’t need no stinking roads. 57% of San Diego County’s projected infrastructure spending is on mass transportation…and critics are saying that’s not enough.
  • I’m surprised that I stumbled on this piece on the Newport Beach Police Department before Dwight did:

    In recent years, daily examples of faithful public service inside the Newport Beach Police Department (NBPD) have been overshadowed by alarming corruption. City officials ignore or downplay the misconduct, but NBPD bosses turned the agency into a darker, stupider version of Animal House. Court records and internal documents show the city’s boys in blue have accepted gratuities in exchange for favors, gotten frat-boy drunk at work, lied under oath, passed out confidential information to pals, encouraged oral sex from female job applicants, committed wild adultery on duty, doctored official reports, hurled feces, dished out horrific domestic violence against wives and girlfriends, engaged in intoxicated bar fights, issued criminal threats, vandalized property, converted powerful agency spy equipment to personal use, and rigged promotion systems to ensure mostly see-no-evil, management-loyal employees rise–and let the hijinks continue.

    Plus open war against whistle-blowers.

  • Speaking of public employees behaving badly, from Dwight comes this story of LA firemen being investigated for faking certifications.
  • Texas home sales reach their highest level in five years.
  • The headquarters of national buyer’s co-op NATM Buying Corp. is moving from Long island, New York to Irving, Texas.
  • Finally, in case you missed it a few days ago, three Texas budget links from the Texas Public Policy Foundation:

  • A detailed call for greater transparency in the Texas budget
  • A look at what an actual conservative Texas budget would look like; and
  • A real Texas Budget Worksheet, with historical budget data.
  • Texas vs. California Roundup for November 26, 2014

    Wednesday, November 26th, 2014

    Who knows how many people will read this in the rush of Thanksgiving travel:

  • Texas’ economy continues to kick ass.
  • In fact, Texas set a record for new jobs for the third month in a row. (Hat tip: The Twitter feed of Texas’ incoming governor.)
  • Texas also leads the nation in oil and gas jobs created. (Hat tip: Texas’ incoming Comptroller.)
  • CalPERS retirees will soon soon outnumber active workers. (Hat tip: Pension Tsunami.)
  • California’s death by pensions.
  • Bankrupt San Bernardino caves in to CalPERS.
  • Still, court rulings make it possible that bankrupt cities may shed pension obligations in the future.
  • You know how California’s Prop 30 tax hikes in 2012 were supposed to prevent university pension hikes? Guess what? “Despite the massive tax hikes ostensibly to keep higher education affordable, the University of California Board of Regents just announced a sizable increase in tuition.” Let’s hope that students at California universities learn the proper lesson: tax hikes are never temporary.
  • Indeed, tuition will increase around $15,000 by 2019.
  • The underfunded liabilities across all California pension systems adds up to $130 billion.
  • Pension crisis divides California Democrats on UC tuition hikes.
  • Demands from union-backed environmental group torpedo plans for a Japanese-owned factory in Palmdale, California.
  • Education reform loses in California.
  • California is spending $33 million to get rid of 800 non-endangered birds.
  • Costa Mesa motel residents sue over a law requiring them to move every 30 days.
  • Some Tweets:

  • Blogroll Addition: Pension Tsunami

    Wednesday, October 15th, 2014

    Since they linked to me yesterday, I’ve finally done what I’ve meant to do for a long time, namely get up off my ass and add Pension Tsunami to the Blogroll. They offer a great daily news roundup on the looming unionized public sector pension crisis that threatens to bankrupt cities and states across the country (especially California).

    I’ve also added the new “California/Pensions/Unions/Etc.” link category and moved Kausfiles there as well.

    Expect more additions to that blog category Real Soon Now.

    Kay Hagan’s Family Dips Their Beaks Into The Stimulus Trough

    Tuesday, October 7th, 2014

    It’s no longer a surprise when Democratic cronies rake in the benefits from pork programs created by Democratic Senators and Representatives. After all, giving out taxpayer money to connected interest groups is pretty much the Democratic Party’s business model. However, the family of North Carolina’s Democratic Senator Kay Hagan has taken it to the next level:

    Sen. Kay Hagan’s husband and son created a solar energy contracting company in August 2010, and then, using $250,644 in federal stimulus grant funds, her husband hired that same company to install solar panels at a building he owns.

    Public records show that Green State Power was formed seven weeks before JDC Manufacturing — a company owned in part by Greensboro attorney Charles “Chip” Hagan III, Sen. Hagan’s husband — received the stimulus grant for the solar project at a 300,000-square-foot facility in Reidsville, N.C.

    A story in late September on the Washington, D.C.-based website Politico revealed that JDC Manufacturing received “nearly $390,000 in federal grants for energy projects and tax credits created by the 2009 stimulus law, according to public records and information provided by the company.”

    The story reported that JDC “was one of 27 in North Carolina to be awarded funds for energy-efficient projects, to the tune of about $250,000. The company received the money in 2011, after the first phase of the project was completed in late 2010.”

    And needless to say, Kay Hagan voted in favor of the pork-laden stimulus her family so richly benefited from.

    From a purely amoral viewpoint, you have to admire the brazen efficiency of sucking down the maximum amount of taxpayer subsidies at every stag of the project pipeline. It’s like The Human Centipede of recycled graft…

    (Hat tip: Instapundit.)

    Texas vs. California Update for September 17, 2014

    Wednesday, September 17th, 2014

    Time for another Texas vs. California roundup:

  • The Texas economy continues to hum along:

    During the second quarter, Texas employers added 148,200 net nonfarm jobs—an average of 49,400 per month. This amounts to an 18 percent share of all jobs created nationwide over this period in a state with only 8 percent of the country’s population and about 10 percent of total economic output. Over the last year, the addition of 382,200 net jobs in Texas was more new jobs than any other state. These employment gains increased the annual job growth rate to 3.4 percent, which is higher than those of the national average and other highly populated states.

  • The city of Los Angeles is at an impasse over police raises: the police union (naturally) wants raises, while the city says they can’t afford them. So what happens next? The issue goes before the Employee Relations Board, which just happens to be packed with union-approved appointees. In one-party Democratic cities and states, it’s always government together with unions against taxpayers. (Hat tip: Pension Tsunami.)
  • “The ugly reality is that so long as the boards of CalPERS and CalSTRS are controlled by public employee union loyalists, pension reforms enacted by state lawmakers and signed by governors will never live up to their billing.”
  • Jerry Brown lies about pension spiking.
  • Why San Antonio’s public-private partnerships are better at dealing with drought than Los Angeles.
  • A FAQ on Costa Mesa’s pension situation. Including answers to such questions as “How could the $228 million in unfunded pension liabilities affect the city budget?”
  • Watsonville, California passes a sales tax hike solely to pay for additional union pension payments.
  • A judge rules that bankrupt San Bernardino can cut firefighter pension benefits in order to exit bankruptcy.
  • A union-sponsored bill tries to increase liabilities for companies that hire contractors.
  • California is evidently cooking up a whole new batch of unconstitutional gun laws.
  • A look at phony baloney jobs numbers for California’s high speed rail boondoggle.
  • Firefly Space Systems is relocating from California to Burnet County, Texas. “King said Firefly was attracted to Texas partly because of its business and regulatory climate.” It doesn’t take a rocket scientist to figure out California offers a lousy climate for business. Or to put it another way: My days of underestimating California’s ability to improve its business climate are certainly coming to a middle…
  • Drone-maker Ashima is relocating to Reno, Nevada from California.
  • If you hadn’t heard, Tesla is building its battery factory in Nevada, not California.
  • An actual good law out of California: A law that prevents companies from suing customers for negative reviews.
  • North Carolina offered twice as much incentive money to Toyota but still lost out to Texas for relocating their HQ.
  • Your dedicated BART employee in action:

  • Ridiculous Bureaucratic Compensation in the UK

    Wednesday, August 6th, 2014

    It’s not just California. The bureaucratic apparatus has a way of feathering its own nests across the globe.

    Take the “town hall tycoons” in the UK, for example:

  • There were at least 2,181 council employees who received total remuneration in excess of £100,000 in 2012-13, a fall of 5 per cent on the previous year’s 2,295.

  • Despite this, 93 councils increased the number of staff who received remuneration in excess of £100,000 in 2012-13.
  • Keep in mind that at current exchange rates, £100,000 is somewhere north of $180,000.

    Texas vs. California Roundup for July 30, 2014

    Wednesday, July 30th, 2014

    Another Texas vs. California roundup:

  • How Los Angeles is killing itself. (Hat tip: Karl Rehn.)
  • Texas places five cities on list of top 10 growing cities: Austin, Dallas, McAllen, Houston and San Antonio.

  • California school officials are still grossly overpaid. Including 31 janitors who make more than $100,000 each. (Hat tip (for this and a few more): Pension Tsunami.)
  • And many of these munificently compensated employees are double-dipping: “More than 1,000 retired instructors who had already begun receiving their state-funded pension continued to work and receive a salary from districts in 2013.”
  • Only in California could a bill that requires 32 years to catch up and fund parts of the California State Teachers’ Retirement System’s current $74 billion in unfunded liability be hailed as a major reform.”
  • Essential school services in California are about to be cut to pay for doubled pension payments.
  • San Francisco landlords are suing the city over a law that requires them to pay as much as two years rent for evicted tenants. Of course, many landlords were evicting people because insane rent control laws make it almost impossible to sell a building that actually has tenants…
  • How the Texas model supports job creation.
  • Evidently male students simply aren’t welcome in California colleges. (Hat tip: Instapundit.)
  • Actual headline: “LA Councilman Convicted Of Voter Fraud Will Continue To Collect $116K Annual Pension.”
  • What a conservative Texas budget should look like.
  • California retail apparel chain Love Culture files for Chapter 11 bankruptcy. Evidently summer bankruptcies for retail stories are very unusual, since this is the time they start stocking up for the holiday season.
  • Another California for-profit university chain shuts down.
  • Oakland Raiders to move to San Antonio?
  • Are inherited IRA’s exempt from bankruptcy hearings in California? It depends on which precedent the judge chooses to follow.
  • Not news: Houston ISD holds job fairs looking for teachers. News: In North Carolina.