Archive for the ‘Welfare State’ Category

Today’s Mid-Day Cyprus Roundup

Tuesday, March 19th, 2013

Update: REJECTED!

Imagine a basketball being swatted back into Angela Merkel’s face…

A few updates on yesterday’s Cyprus bank deposit seizure story.

  • Supposedly the votes aren’t there to ratify the money grab. Which may mean that Angela Merkel and the EU will just keep twisting until the “proper” decision is arrived at.
  • “A one-time, ad hoc seizure of money isn’t a tax. It is confiscation. Or we can use a plainer word for it: theft.”
  • “The decision to expropriate Cypriot savers—even the poorest—was imposed by Germany, Holland, Finland, Austria, and Slovakia, whose only care at this stage is to assuage bail-out fatigue at home and avoid their own political crises.”
  • The Cyprus crisis as a pick-your-own-path adventure. That’s almost as retro as fiscal restraint and balanced budgets.
  • The New York Times says not to worry about Cyprus. OK, now I’m really worried.
  • The EU creditor states have at a single stroke violated the principle that insured EU bank deposits of up $100,000 will be guaranteed come what may, and in doing so they have more or less thrown Portugal under a bus.

    They have demonstrated that the rhetoric of EMU solidarity is just hot air, that they will not force their own taxpayers to share a single cent of clean-up costs for the great joint venture of monetary union – in which northern banks, insurers, pension funds, and indeed governments, were complicit.

    Their refusal to pay is entirely understandable in one sense – and if I were a German taxpayer, I would not care to swallow these losses either – but then the leaders of these creditor countries can hardly expect the world to believe that they will in fact do whatever it takes to hold EMU together. Quite obviously, they will not.

    The sooner this is made clear, the better. The sooner they take the proper course of withdrawing from EMU and organise the break-up the euro in the least disruptive way, the sooner Europe can recover.

    It Begins

    Monday, March 18th, 2013

    Chances are pretty low that you haven’t heard that the EU has decided to seize portions of people’s bank accounts in Cyprus as a condition of a bank bailout:

    When Cyprus’s banks reopen on Tuesday morning, every depositor will have some of his or her money seized. Accounts under 100,000 euros will have 6.75% of the funds seized. Accounts over 100,000 euros will have 9.9% seized. And then the Eurozone’s emergency lending facility and the International Monetary Fund will inject 10 billion euros into the banks to allow them to keep operating.

    It’s hard to express in words just how bad an idea this is. Europe has truly crossed the Rubicon.

    “The establishment of the principle that a government can, and at times of economic strain must, help itself to your savings, and that this is a legitimate tool of statecraft, ought to provoke riots.”

    I’ll go further: riots are not enough.

    If I were one of the people having my wealth confiscated, the proper response to such actions would be join an angry mob hanging the still-twitching bodies of the people who proposed and passed such a measure over the nearest lightpost.

    Think it can’t happen here? Remember, liberals have already floated the idea of seizing your 401K.

    The Eurocrats in Brussels have already decided that they would prefer to seize people savings rather than let the Euro fail, or admit that the European cradle-to-grave welfare state is unsustainable. “The dream of political union matters more to Europe’s governing caste than the well-being of the people they represent.”

    I didn’t post anything yesterday because I was trying to figure out how much money I should put into gold and silver to get ahead of the European bank runs I half anticipated. Indeed, in this case such bank runs would etirely rational But they haven’t started outside Cyprus itself.

    Yet.

    More Cyprus news here.

    It’s All the Same Fight

    Tuesday, March 12th, 2013

    Rand Paul has won some liberal plaudits for his filibuster against extra-judicial drone strikes against Americans on U.S. soil. Fine and dandy. But what liberal don’t realize is that debate, the debate over government spending, the debate over gun control, and the debate over ObamaCare are not separate fights, they’re the same fight over the central issue: what is the proper size and scope of the federal government in a constitutional republic with limited, enumerated powers?

    The founders were deeply and rightly suspicious of centralized government power. They set up a system in which the federal government’s power was not only limited, but balanced against competing power. Not only were the executive, legislative and judicial branches balanced against each other, all were balanced against state governments, and against the power in the people themselves, which is why the Bill of Rights is an enumeration of what the federal government could not do to its citizens. The state exists not to do things for people, it exists to keep things from being done to them.

    Those right have been eroded by the excessive expansion of the federal government, and those checks and balances thrown off by the creation of a permanent parasite class in Washington D.C. that benefits from raking its percentage off the top of an ever-expanding redistributionist state.

    Rand Paul, Ted Cruz, etc. all know, understand, and believe this. To them, the Constitution is a constant, a vessel of liberty to hand down from generation to generation to keep America strong and free. To liberals, the Constitution is an obstacle to be nullified by left-wing federal judges who ignore provisions like the 2nd and 10th Amendments because the limit how much power Democrats can take from the people and give to government.

    The larger government’s sphere, the smaller that of the American people. Drone strikes on U.S. soil are a big, bright line even liberals can understand. But gun control, outrageous deficits, and ObamaCare are all chipping away at the constitutional republic left to us by the founding fathers, day by day. Barry Goldwater once said that “A government big enough to give you everything you want it is big enough to take away everything you have.” Rand Paul and Ted Cruz understand that. Liberals either don’t, or actively want to participate in the taking.

    Texas vs. California Roundup for February 6, 2013

    Wednesday, February 6th, 2013
  • CalPERS: the pension fund that ate California. A tale filled with lies, waste, and outright corruption that’s even worse than I thought (and I thought it plenty bad).
  • Via the indispensable Will Franklin comes this eye-opening comparison of welfare in California vs. Texas. “As you can see, California is practically in a quadrant unto itself, indicating a lot of people receiving a lot each in welfare benefits. Meanwhile, Texas is situated precisely in the opposite corner of the graphic, indicating that a low percentage of Texas’ residents are receiving welfare, and among those who are receiving welfare, they’re receiving smaller benefits than those living essentially anywhere else in the country.” Read the whole thing. And get a gander at the chart.
  • Jerry Brown gets voters to approve a measure that cuts California public employee union pensions a tiny, weensie bit. The result? “California Public Employees’ Retirement System is essentially going to defy the order that pensions will be calculated based on base pay by declaring enhancements and bonuses are part of base pay.” And some unions are suing to opt out. And Brown isn’t even willing to defend the reforms in court.
  • “The highest-paid 10 percent of Southern California Edison employees earned at least $418.8 million in combined total compensation during 2011, and charged at least $11.8 million to their expense accounts, according to a report the public utility filed with the state. SCE’s most recent annual report showed 19 executives and other SCE employees received more than $1 million in total compensation during 2011, and at least 130 others received $300,000 or more in total compensation.”
  • Judge in Stockton bankruptcy: Sure, it’s OK to screw bondholders. Go right ahead.
  • Professional athletes are leaving high tax states like California for low-tax states like Texas and Florida.
  • At least Texans know how much they owe.
  • Here’s the official Texas state document on local debt. Texas cities, alas, haven’t been nearly as frugal as the state legislature has been.
  • Speaking of not being as frugal as they could be, here’s the place to search Texas pension funds. I might delve more into these two links when I have time.
  • Texas Public Policy Foundation on keeping Texas competitive.
  • And if you haven’t kept up with Dwight’s updates on the Bell corruption trial, you really should.
  • California: Completely Screwed

    Tuesday, January 29th, 2013

    Instead of going out and doing the heavy lifting myself on a Texas vs. California update, Victor Davis Hanson [[Corrected. – LP]] has done another of his California is totally screwed pieces, and it’s a cornucopia of facts on California’s decline.

    A few tidbits:

  • Salinas just named an elementary school after a serial cop killer
  • Racist Latino gangs are now driving black families straight out of Compton
  • “Hundreds of thousands of the working and upper-middle class, mostly from the interior of the state, have fled — maybe four million in all over the last thirty years, taking with them $1 trillion in capital and income-producing education and expertise. Apparently, they tired of high taxes, poor schools, crime, and the culture of serial blame-gaming and victimhood.”
  • “One of every three welfare recipients lives in California.”
  • Read the whole thing.

    David Cameron Suddenly Remembers He’s a Tory

    Wednesday, January 23rd, 2013

    Well well well, maybe David Cameron has some cobbles after all.

    Cameron has generally presided over the “wettest” Tory administration the UK has seen since Neville Chamberlain, but today he delivered a veritable pipe bomb of a speech on the future of the European Union.

    First, the problems in the Eurozone are driving fundamental change in Europe. Second, there is a crisis of European competitiveness, as other nations across the world soar ahead. And third, there is a gap between the EU and its citizens which has grown dramatically in recent years. And which represents a lack of democratic accountability and consent that is – yes – felt particularly acutely in Britain.

    Also this:

    If Europe today accounts for just over 7 per cent of the world’s population, produces around 25 per cent of global GDP and has to finance 50 per cent of global social spending, then it’s obvious that it will have to work very hard to maintain its prosperity and way of life.

    While Obama is certainly doing his best to make sure America’s portion of that last figure increases (driving down Europe’s share as a side effect), what Cameron is saying here is both obviously true and absolutely unacceptable to the Euroelite: The European cradle-to-grave welfare state is unsustainable.

    And this:

    People are increasingly frustrated that decisions taken further and further away from them mean their living standards are slashed through enforced austerity or their taxes are used to bail out governments on the other side of the continent.

    Cameron basically stood up and pointed out that the Emperor has no clothes.

    Still more:

    More of the same will not secure a long-term future for the Eurozone. More of the same will not see the European Union keeping pace with the new powerhouse economies. More of the same will not bring the European Union any closer to its citizens. More of the same will just produce more of the same – less competitiveness, less growth, fewer jobs.

    “Hey dumbasses: stop digging!!”

    And still more:

    I want us to be at the forefront of transformative trade deals with the US, Japan and India as part of the drive towards global free trade. And I want us to be pushing to exempt Europe’s smallest entrepreneurial companies from more EU Directives.

    These should be the tasks that get European officials up in the morning – and keep them working late into the night. And so we urgently need to address the sclerotic, ineffective decision making that is holding us back.

    That means creating a leaner, less bureaucratic Union, relentlessly focused on helping its member countries to compete.

    In a global race, can we really justify the huge number of expensive peripheral European institutions?

    Can we justify a Commission that gets ever larger?

    Can we carry on with an organisation that has a multi-billion pound budget but not enough focus on controlling spending and shutting down programmes that haven’t worked?

    And I would ask: when the competitiveness of the Single Market is so important, why is there an environment council, a transport council, an education council but not a single market council?

    And here we have a Tory Prime Minister actually sounding like…a Tory! Who would have thunk it?

    Thatcher or Reagan he’s not, but this is bold stuff given the Eurocentric tenor of post-Thatcher UK governments.

    Oh: He also wants a referendum on EU membership by 2017.

    Reactions from the Eurocratic elite has been predictable: How dare Cameron slander our magnificently robed Emperor? And naturally all of them focus on the referendum than his substantive critique of the increasing collectivist, bureaucratic and unsustainable EU.

    Good show, Cameron old boy, good show. (Golf clap)

    Texas vs. California: January 22, 2013

    Tuesday, January 22nd, 2013

    Another quick roundup of Texas’ economic strength, and California’s blue state decline:

  • California isn’t just running out of money, it’s running out of children.
  • Thanks to more honest accounting rules, six more California counties are now officially bankrupt.
  • Despite which, pension funds are still in denial.
  • If Jerry Brown is skeptical about making government bigger he has a funny way of showing it.
  • Namely, he continues to kick the can down the road.
  • And he’s still handing out outsized benefits to public employee unions.
  • Texas is adding jobs across all income groups, and has more jobs than when The Great recession began. California hasn’t broken even.
  • The Texas economy is outpacing other U.S. states because “it has the financial strength of Germany and the cost competitiveness of China.”
  • LinkSwarm for 1/11/13

    Friday, January 11th, 2013

    Between work and the TPPF Policy Orientation, it’s going to be a busy day, so here’s a quick Friday LinkSwarm:

  • How bad did you think 2012’s economy was? Guess what? It was even worse than you thought.
  • Profile of Jim DeMint’s replacement, new South Carolina Senator Tim Scott: “One of the most threatening places to be in politics is a black conservative…there are so many liberals who want to continue to reinforce a stereotype that doesn’t exist about America. That somehow, some way, if you’re a Republican you’re a racist and if you’re black, there’s no chance for you in society.”
  • Phil Gramm on how wind subsidies screw up the economy.
  • Obama played Ed Koch for a schmuck.
  • George Will on why Republicans should push for a balanced budget amendment. “No politically conceivable or economically feasible middle-class tax rate can fund the entitlement state.”
  • Obama doesn’t think he has a spending problem, just like Lindsay Lohan doesn’t think she has a drinking problem.
  • A story of fake job shenanigans from a government employment center. “We were used by a bogus company to rake in funding by the state. It’s like a full blown industry here to pass around jobless people and keep them from getting real jobs.”
  • 35 years ago, the Chicago Sun-Times exposed the city’s corruption in the Mirage tavern series. Does anyone think Chicago is any less corrupt today? Why don’t they have the balls to do something like that now? (Hat tip: Dwight.)
  • I think Bloomberg just hates people.
  • Washington is booming on your money.
  • The homeless are responsible for 35% of downtown Austin’s violent crime.
  • Texas vs. California: First 2013 Roundup

    Friday, January 4th, 2013

    Judging from the Fiscal Cliff votes, the United States appears to be eager to follow in the footsteps of Greece and California, rushing to unsustainable spending, crushing debt loads and inevitable bankruptcy, rather than following the lead of Texas and the Red State model of debt-free limited government and free enterprise. So let’s see where the two states are, shall we?

  • Via Reason comes a link to the website Pension Tsunami, which contains much of interest for those charting California’s decline.
  • One method California cities are using to continue funding their heroin outrageous pension spending habit is issuing Pension Obligation Bonds, where they sell bonds to pay for pension obligations and then invest them. Indeed, some that got burned by the tactic in the 1990s (like Oakland) are trying again. “Bonds issued in 1997 were, on average, underwater in 2007, even before the stock market crash…’That’s like a compulsive gambler telling you that he has to bet it all on red to make up for his past losses.’”
  • Bankruptcy is the best bet most cities have for getting out of their crushing health and retirement obligations to public workers….Government employee compensation, mostly for health and retirement, is at the heart of nearly all the current and looming municipal bankruptcies across the country.”
  • Federal judge to Calpers: No, you can’t rewrite bankruptcy laws to save outrageous union pensions. Not yours.
  • California: Pensions or Police? Pick one.
  • Stockton attempts to pull a Chrysler, attempting to screw its bondholders in a bid to leave outrageous union pensions untouched.
  • While California wonders how to fill it’s perpetual budget shortfall, Texas debates what to do with its surplus.
  • Over at TPPF, Chuck Devore wonders why Californians don’t stage a tax revolt. “In the meantime, Texas will be more than happy to receive into its welcoming arms people who want to work hard, invest, and create jobs.”
  • Want a glimpse of California’s future? Spain is running out of pension fund to raid.
  • The Real Apocalypse

    Friday, December 21st, 2012

    I hope you’ve been enjoying your mythical Mayan Apocalypse.

    But there’s a real, slow motion apocalypse that’s been going on all around you, and nobody is panicking about it, at least not in the open. I’m not talking specifically about the fiscal cliff, which is only a symptom of the problem rather than the problem itself.

    The real apocalypse is out-of-control federal spending, and the tsunami of debt it’s creating. And I don’t feel “apocalypse” is too strong a word. Excessive debt destroys economies. When the money printing presses run unchecked for years on end, hyperinflation is the inevitable result.

    The only reason we’re not suffering from hyperinflation right now is that Europe is sucking worse than we are. The Spanish economy is failing. The Greek economy has already failed. Were it not for that, it’s likely our huge budget deficits and the Fed’s printing presses would have already caused the Euro to replace the dollar as the world’s reserve currency. And, as Mark Steyn is fond of pointing out, Germany’s economy is big enough to bail out Greece and Spain. No one’s economy is big enough to bail us out.

    Obama and the Democratic Party has wagered our future on the proposition that they can run trillion dollar deficits for years on end without destroying the value of the American dollar. If they’re right, they deserve to win, since everything we know about economics is wrong, and we can just print dollars until we’re all rich.

    But the fundamental laws of economics haven’t been repealed. A reckoning is coming, and it’s going to destroy savings, economies and lives. And professional politicians, the Democratic Party, lobbyists and their mainstream media enablers would prefer to talk about anything else but the looming catastrophe. No wonder they want to talk about gun control and “the war on women.” Anything to keep the con game going until they’ve sucked the body politics dry. Just keep that deficit spending heroin coming.

    The only question about that reckoning is exactly when it’s coming, and exactly how bad it will be. If we’re lucky, it will only be as bad as Argentina 2001. If we’re not, then we’re talking Weimer Germany 1921-23.

    Get ready.