Month: October 2008

State

Reason To Be Anti-Incumbent

Post author By David
Post date October 16, 2008
4 Comments on Reason To Be Anti-Incumbent

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I found this little exchange to be insightful from Congressman Bishop:

. . . the two 1st District candidates snapped at each other, with Bowen accusing Bishop of taking $26,000 in the past four months from the radioactive-waste-storage company.

"I did not take $26,000, I took $28,000," Bishop fired back. "And that’s not company money, I can’t take that. It’s from individuals who work for EnergySolutions. And it’s not my biggest source of revenue."

Only someone who is comfortable in Washington D.C. could swallow the idea that dozens of individuals from EnergySolutions contributing $28,000 to the campaign is not a significant endorsement from the company as a whole or that they would do so without believing that the Congressman was working in the interests of the company that pays them.

I wondered who the biggest source of revenue was for Rep. Bishop and I found this list at OpenSecrets. It has Energy Solutions as the top source of revenue although it lists under $17,000 so it must not be current.

I wish I had all the facts, but I have enough to choose. If Rep. Bishop believes what he said then he’s not the kind of man I want representing me. If he does not believe what he said, then the fact that he said it means he is not the kind of man I want representing me.

I am definitely voting for Morgan Bowen – worst case scenario is that I’ll want to replace him in 2010. I’d say there’s more than a 50% chance that I’ll still want him in 2010.

Tags 2008, change congress, Morgan Bowen, public service, Rob Bishop, Salt Lake Tribune

General

Real Capitalists

My reaction to Obi wan’s claim that "pro-capitalist conservatives have pushed for governmental intervention into our capital markets" was that nobody who supported the bailout has any claim to being a capitalist. I find that my position is much more clearly stated by Judy Shelton in the Wall Street Journal:

Honest capitalism requires the following:

Free-market clarity – Consumers must be able to properly judge the inherent value of goods brought to the marketplace if markets are to function properly;

Monetary integrity – Monetary-policy decisions that "stimulate" the economy by issuing too many claims to real production, or "constrict" the economy by reducing the amount of available purchasing power or capital investment, utterly confound the notion of stable money.

Financial validity – What turns the reputable practice of granting credits to deserving borrowers into a high-stakes casino game where the biggest stacks of chips are held by speculators working for the world’s largest banks and investment houses? . . . Exotic financial derivatives that gamble on the anomalies of the global economy — currency movements, interest-rate disparities, governance incongruities — mock the very concept of "investment" to generate future higher returns from production.

Regulatory responsibility – Rule of law is a core requirement for civil society; without it, anarchy reigns. Government regulation does not create wealth, but it is a necessary condition to provide the stable and predictable environment that permits buyers and sellers to carry out economic and financial transactions with confidence.

Entrepreneurial opportunity – Much of the resentment felt by citizens toward the massive investment companies who peddled bad government paper, and the craven politicians who promoted the practice, stems from the perception that capitalism is rigged toward the most powerful. When the owner of a small retail outlet or medium-sized service firm gets into financial trouble — who steps in to help? . . . Equal access to credit is sacrificed to the overwhelming appetite of big business — especially when government skews the terms in favor of its friends.

(emphasis added)

This is what I was trying to say in Financial Foundations Exposed and which makes me reject the notion that capitalists pushed for intervention in our markets. I admit that many of those pushing for that intervention claim to be capitalists, but some of them make the claim as a lie and others make the claim in ignorance. No real capitalist could back the bailout because real capitalists recognize that there is value to be had in failure.

Tags connections, economics, government, money, reactions, Wall Street Journal

National

A Budgetary Hat-Trick

Jason shared a link to Budget Hero and I had to go take a look. If the game is to be believed, all is not yet lost in the quest to get a balanced budget without abandoning all vestiges of the social safety net that we have been spinning for the last 80 years.

I managed – with a little effort – to balance the budget, increase security, achieve energy independence, and eliminate government waste at the same time so that the budget bust date was pushed back from 2033 to sometime after 2070. I don’t know how accurate the game’s assumptions are, but it really gets you thinking.

Go see if you can achieve your goals (you get to pick your own goals) as a budget hero.

Tags connections, economics, fiscal restraint, government, taxes

culture National

Financial Foundations Exposed

Post author By David
Post date October 13, 2008
4 Comments on Financial Foundations Exposed

News reports related to the fluxuations of the stock market are not surprising or inconsistent, but when I stop to consider what they say I find that they are either disturbing or based on faulty assumptions. This holds true whether we are talking about reports of falling or rising stocks and the report on today’s rally is a good example:

U.S. stocks staged the biggest rally in seven decades on a government plan to buy stakes in banks and a Federal Reserve-led push to flood the global financial system with dollars. . . the Dow Jones Industrial Average climbed more than 936 points.

The stocks and stock markets are supposed to give an indication of the value of the companies and economies they relate to. What is it about the plan by the Federal Reserve that makes any company better managed or more successful enough to warrant an 11% increase in value over one day?

The underlying assumption is that the government action is at the root of the deciding factors leading to the investment decisions of professionals and thus it is the hand controlling the puppet of economic production and has the right to interfere in the market as it sees fit. That assumption scares me because if we ever fully accept that premise we open ourselves to more overt government action in the markets. The more blatant the interference we will accept the more arbitrary those actions can safely be until we can find ourselves in an economic 1984 where the government can decide one day that it will give $700 Billion away and buy equity stakes in our financial sector and then the next day it can declare that it has no business interfering with corporate mismanagement and it can’t spare the $700 Billion anyway.

If that assumption is faulty – that government is the driving economic force and the basis for the decisions of investment professionals – then the news reports are misrepresenting the reasons for the rise and fall of stock prices so that we never begin to deal with the real causes of those economic swings, large or small. If professional investors are really deciding that stocks are worth more at the end of the day than they were at the beginning for reasons other than the government intervention then we should be told what indicators are being used to determine that the companies are worth more today than they were yesterday.

Tags economics, media

culture State

Like Sheep . . .

I have been noticing the various political yard signs popping up as we approach the general election and based on what I have seen I am beginning to think that in Utah, the most politically active non-candidates are almost universally leaning Democratic. Considering that Utah is still expected to heavily favor the Republican tickets at all levels I thought of the phrase from Isaiah to describe Utah politics:

All we like sheep have gone astray; we have turned every one to his own way. ( Isaiah 53:6)

So many people here will not take the time to be civically active and informed, but a small portion of them (50% in a good year) will go to the polls and perform their civic duty of selecting anyone with an R next to their name.

Tags civic participation, elections, parties, scriptures

State

Rejecting Amendment E

While amendment D looks to close a loophole in the Constitution, Constitutional Amendment E appears to be opening a loophole. I admit that there is potential to increase the funds available for public education if we allow some of those funds to be invested in private company stocks or bonds. The problem is that this amendment provides no guidelines or safeguards to such a practice and therefore the only guarantee that we have from this amendment is that we increase the risk attached to the funds available for public education.

If the legislature wants to take public money and make use of stocks and bonds to increase the value of our tax revenues I could be pursuaded to accept that, but they had better put some safeguards on the ways our public funds are invested in the Constitution, rather than relying on future statutes to define any protective measures – the original prohibition serves to safeguard public money, when making such a large exception we should be sure that there are some limitations in place.

Tags 2008, amendments, ballot initiatives, elections, State Constitution, Utah

State

Supporting Amendment D

With the insertion of only 12 words Constitutional Amendment D would close a technicality which could be used by some enterprising politicians to wreak havoc on the necessary and often too-political process of redistricting. Now is a good time to do it too because, while redistricting is usually little more than adjusting existing district boundaries, our next redistricting will include the creation of a new district (barring some major surprises). Without this amendment, redistricting could be declared invalid if a special session became necessary on a different subject between the time of the census and the next general session. Also, it could be challenged in the event of the U.S. Census Bureau taking longer than expected to process the census results.

This amendment helps to protect the state from adding any more political maneuvering in this important and often partisan process.

Tags 2008, amendments, ballot initiatives, elections, State Constitution, Utah

State

Rejecting Amendment C

My position on Constitutional Amendment C is much like my position on Amendment A – it is unnecessary tinkering with the constitution. I don’t see any advantage to starting the session a week later than we do currently.

I don’t buy his argument that citizens would "more appropriately honor the late Reverend Dr. Martin Luther King, Jr., President George Washington, and President Abraham Lincoln" if the legislature were not in session on those two holidays.

I also expect that budget negotiations function just like any other project – they will fill every bit of time available no matter how much time we allow. Giving them an extra 8 days after the final tax revenue amounts are available will only mean that the Legislators will feel rushed in considering the budget adjustments for 22 days instead of feeling rushed about the final numbers for 14 days.

Finally, if the session were set for the first week of January I might see an advantage to moving the session back a week, but starting the third week does not seem any worse than starting the fourth week. I understand the arguments given by Sen. Valentine in favor of the time change but, like the budget adjustments, the draft legislation, budget analysis, and other technical work will fill whatever time is allotted. If our legislature needs more time they could try not considering 5 minor Constitutional amendments in a single session. (How much time was spent crafting, holding hearings, debating, and voting on those?)

Tags 2008, amendments, ballot initiatives, elections, State Constitution, Utah

State

Get Ready to Vote

One of the things I hear about in the news are the stories of people being turned away from polling places for not being properly registered to vote or for showing up at the wrong location. In Utah we have a chance to vote with a provisional ballot where there is confusion, but we also have the chance to minimize the confusion. At the website of the Lieutenant Governor you can find out if you are registered to vote and see where your poling place is located. Go there now and confirm your status as a registered voter by entering some basic information about yourself (name, DOB, county, & house number). If you are registered to vote where you currently live you will see your polling place displayed as well as your party affiliation, otherwise you will be instructed to contact your county clerk.

The great advantage of going now is that if you are not properly registered you still have two weeks to get to the county clerk’s office and get registered in time to vote in the general election. If you are registered you will be able to view a sample ballot for your precinct. The sample ballot contains links to information on many of the candidates and issues (such as the amendments I have been writing about). This gives you one month to get informed before casting your vote if you have not already started to do so.

Tags civic participation, elections

State

Supporting Amendment B

I was pleased to find that Constitutional Amendment B was absolutely as straightforward in its proposed wording as the description suggested. It simply inserts one line into the Constitution allowing for more flexibility in adding funds to the existing state trust fund without making it easier for the Legislature to remove money from the fund. Believing that the fund is a positive tool funding our government services I am happy to support a no-nonsense change that can make it easier to augment the trust fund when resources are avaiable to do so.

At first I worried that making it easier to add to the trust fund would encourage the Legislature to keep surpluses of revenue, but then I realized that 1) they already do keep portions of any surplus fund one-time contributions to pet projects, and 2) they still have the same incentive to give tax-refunds when possible to fuel their re-election popularity. The difference now is that they have the option when there are surplusses to put some of the surplus in the trust fund so that it can increase funding for services in perpetuity rather than being limited to large, one-time gifts to specific projects.

Tags 2008, amendments, ballot initiatives, State Constitution, Utah