Archive for the ‘Mommy Government’ Category

California companies fleeing the Golden State

This is only counting the big companies. Here in Utah the population of former California residents is huge… Can you imagine all the small businesses and overall spending that has left that state because of all the mayhem created by the left? Amazing stuff.

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From the WSJ Opinion page today – see if that matches to what you see every night on CNN…

“In 2010, Megan Sampson was named an Outstanding First Year Teacher in Wisconsin. A week later, she got a layoff notice from the Milwaukee Public Schools. Why would one of the best new teachers in the state be one of the first let go? Because her collective-bargaining contract requires staffing decisions to be made based on seniority.

Ms. Sampson got a layoff notice because the union leadership would not accept reasonable changes to their contract. Instead, they hid behind a collective-bargaining agreement that costs the taxpayers $101,091 per year for each teacher, protects a 0% contribution for health-insurance premiums, and forces schools to hire and fire based on seniority and union rules.

My state’s budget-repair bill, which passed the Assembly on Feb. 25 and awaits a vote in the Senate, reforms this union-controlled hiring and firing process by allowing school districts to assign staff based on merit and performance. That keeps great teachers like Ms. Sampson in the classroom.

Most states in the country are facing a major budget deficit. Many are cutting billions of dollars of aid to schools and local governments. These cuts lead to massive layoffs or increases in property taxes—or both.

In Wisconsin, we have a better approach to tackling our $3.6 billion deficit. We are reforming the way government works, as well as balancing our budget. Our reform plan gives state and local governments the tools to balance the budget through reasonable benefit contributions. In total, our budget-repair bill saves local governments almost $1.5 billion, outweighing the reductions in state aid in our budget.

While it might be a bold political move, the changes are modest. We ask government workers to make a 5.8% contribution to their pensions and a 12.6% contribution to their health-insurance premium, both of which are well below what other workers pay for benefits. Our plan calls for Wisconsin state workers to contribute half of what federal employees pay for their health-insurance premiums. (It’s also worth noting that most federal workers don’t have collective bargaining for wages and benefits.)

For example, my brother works as a banquet manager at a hotel and occasionally works as a bartender. My sister-in-law works at a department store. They have two beautiful kids. They are a typical middle-class Wisconsin family. At the start of this debate, David reminded me that he pays nearly $800 per month for his family’s health-insurance premium and a modest 401(k) contribution. He said most workers in Wisconsin would love a deal like the one we are proposing.

The unions say they are ready to accept concessions, yet their actions speak louder than words. Over the past three weeks, local unions across the state have pursued contracts without new pension or health-insurance contributions. Their rhetoric does not match their record on this issue.

Local governments can’t pass budgets on a hope and a prayer. Beyond balancing budgets, our reforms give schools—as well as state and local governments—the tools to reward productive workers and improve their operations. Most crucially, our reforms confront the barriers of collective bargaining that currently block innovation and reform.

When Gov. Mitch Daniels repealed collective bargaining in Indiana six years ago, it helped government become more efficient and responsive. The average pay for Indiana state employees has actually increased, and high-performing employees are rewarded with pay increases or bonuses when they do something exceptional.

Passing our budget-repair bill will help put similar reforms into place in Wisconsin. This will be good for the Badger State’s hard-working taxpayers. It will also be good for state and local government employees who overwhelmingly want to do their jobs well.

In Wisconsin, we can avoid the massive teacher layoffs that schools are facing across America. Our budget-repair bill is a commitment to the future so our children won’t face even more dire consequences than we face today, and teachers like Ms. Sampson are rewarded—not laid off.

Taking on the status quo is no easy task. Each day, there are protesters in and around our state Capitol. They have every right to be heard. But their voices cannot drown out the voices of the countless taxpayers who want us to balance our budgets and, more importantly, to make government work for each of them.

Mr. Walker, a Republican, is the governor of Wisconsin.”

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This is nothing new but still… it amazes me how people can see the world in such different ways.

For instance, I woke up today and read this CNN gem:

“Take Vermont. Only a few months ago, unemployed Vermont residents could collect up to 86 weeks of jobless benefits.

Now, they are eligible for only up to 60 weeks.

The reason is that Vermont’s unemployment rate has dropped below 6%. Good news for those lucky enough to find work, but small consolation to the jobless still looking for a position.”

Now, this is probably as good as it gets. This is the ‘cup half-empty/half-full’ difference between me and these people. 6% unemployment is what we used to call ‘full employment’ in the good ol’ days of Clinton. Ah, but that was before. Nowadays Tami Luhby, senior writer from CNN looks at 6% unemployment and all she can see is that those poor unlucky people who are looking for a job will get only 60 weeks of money from their peers.

Time for the elite 94% ship in a bit more, right?


On a different but not less outraging note, I was channel browsing yesterday and ended up catching this ‘House Hunter International’ episode named ‘Searching Nicaraguan Riviera’ (I think you can watch it online from the link above).

That show tells the story of this couple of ‘nomad surfers’ who are looking for a condo in Nicaragua. Harmless right? Good for them. However, throughtout the episode we keep hearing this line that what they are doing is ‘retiring early’ and only living month to month by doing odd jobs. ‘We decided to enjoy life now and work harder later’. Cut to the scene where they catch a wave and buy some lobster from a local dude.

Hey, I bet that most of the public will think this is a smart, honest couple. Smart? Maybe. Honest? That depends.

You see, our system works because people save for their own retirement early. Without compounding that money in a 401k or whatever financial instrument you prefer, it is basically impossible to save enough money to keep you afloat once you can’t work anymore.

Of course, this is not a written rule. It is what we used to call ‘the way things work’. Until some time ago parents would tell kids that’s what they had to do and if they don’t they would end up poor and miserable like uncle Richard.

Unless someone else pay your bills right? Yeah, all those stupid schmucks who spent their youth building cities, researching cure for devastating diseases or simply coming up with the new iPad or a hybrid car.

Is this fair? Is that the egalitarian society that my tax dollars are financing?


At the end of the day, I see only one salvation for our current democratic system. Welfare of all kinds will have to be more limited and targeted. From medicare to social security, from food stamps to public schools and unemployment insurance, we *need* to find a way to account for the means and not only the end. We should help the few who were truly unlucky (who clearly are out there) and not the ones who decided to ‘retire early’. Be it by surfing in Nicaragua, spending their life living in their parents basement or pretending to be artists just to avoid any actual productive work.

You see, Liberals only care about your current situation. You are unemployed, you get X amount of dollars. You are over 65, you get Y amount of dollars. It doesn’t matter who you are or what you’ve done up until that point.

That is unsustainable and if nothing else, incredibly unfair.

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In november of 2009 Newsweek was telling Americans to be prepared: the financial crisis could leave Europe even stronger than America. Ah, those good old times when Greece was only a vacation country with little white houses and naked old people lying on the beach.

But now the good old Socialist System is showing its true colors. The Financial Times now tell us that instead of watching the rise of a new dominant power, we are experiencing the death of the European dream.

And you are sadly mistaken if you think this is just about the PIGS of Europe: France is also in trouble with its huge debt and the UK debt is actually higher than Greece’s as a percent of GDP. Germany seems to only somewhat sustainable exception but let’s not forget that its economy depends big time on exports. And who are Germany’s biggest trade partners?
•France … US$99 billion (10.2% of total German exports)
•U.S. … $85.5 billion (8.8%)
•U.K. … $76.7 billion (7.9%)
•Italy … $67 billion (6.9%)

So I really can’t see how they can pull this off for too long.

Everything indicates that both the US and Europe will need to enter an “era of austerity“. As always, the main challenge is political. On the US, big spending cuts will be needed and taxes will probably go up. I see the case of Europe being much worse because taxes are already so high and you can see what happens to people when you say you will cut life long entitlements.

At the end, this is the closest we can get to the death of socialism. It won’t be pretty.

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This is golden. It just confirms my theory that there is not one Republican politician who is communicating this health care debacle the right way. The ‘let’s help the poor’ mantra from Dems is so clearly bogus and yet people are falling for it because no one explains what really is going on. This is a pure and simple redistribution bill. From productive, ‘job locked’ people to the ‘creative types’ of the world.

Pay it up, suckers!

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One thing I forgot to mention: Greece (and for that matter, all Europe) also has a problem on the other end of the cost equation: taxes.

The country already has a top income tax rate of 40 percent, and a value-added tax of 21 percent. In addition, employers pay 28 percent of salary for social security and employees pay 16 percent (more info here). It is no surprise that tax evasion is such a big problem.

So let’s hope this is yet another clue to Democrats and their pet economists.

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“Already, the government’s proposals for deep spending cuts have stoked strong resentments in a country where one out of three people is employed in the civil service that, until now, has guaranteed jobs for life.”

From NYT, via MR.

How about the US you wonder? According to this (sorry, I won’t spend 2h of my weekend on the BLS website confirming the data) in 2007 about 8% of the workforce was employed by the government.

I am sure The One will take this number higher, but still I think it would take some decades to reach close to 30%. I wonder what is the number for Bananaland. Looking at the bloggers I would guess around 50%? And they are damn proud of it! :-)

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Ok, Delta is choosing to be late so here is another news that would make Ayn Rand crazy: The European Union has declared that tourism is a human right.

My incorrigible optimism makes this ridiculous news to mean that even if we had Obama as President for 20 years we wouldn’t be close to be as crazy lefty as Europe is. This Greece situation is no coincidence.

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I watched the whole health care debate yesterday, and it was quite enlightening. And mostly concerning.

Republicans put up a decent show, trying to bring attention to all flaws and corruption around the current bill. Obama on the other hand, also did a good job to at least appear interested in some sort of back and forth. However, the one point Obama (and other democrats) were specially successful yesterday was to challenge Republicans to clearly state the ideological difference between their proposals. And Republicans failed to do so.

You see, trying to focus on cost or procedure here is what democrats want. They want to establish that, all things considered, health care is a right. That one point would justify their agenda, no matter what form it takes. At one point, a Democrat (can’t remember who) said something like “our goal here is to make sure that health care is provided equally. Sick people should not be forced to pay more than healthy people for care”.

That my friends is the crux of the matter. Not access, not price – but equality. Once you establish that a resource (in this case, health care) is not affected by market forces (which determine that sick people *should* pay more than health people, just like reckless drivers pay more for car insure than safe drivers) the battle is over. Health care becomes a non commercial good. That ultimately means the end of private health care.

Why Republicans shied away from this challenge? I think there are a few reasons at play here. First, the current system does allow insurance companies to abuse their power. Cancelling existing policies or adding loopholes on complicated contract language compromised the treatment of sick people who were responsible and were following the rules. So it becomes easier to convince the public that since insurance companies are not following the rules we should simply screw them back, instead of trying to fix the loopholes. Second, the Republican support for Medicaid/Medicare and especially the expansion done under Bush to cover prescription drugs (Medicare Part D) broke the public’s perception that government should not be handing out ‘free’ medical services to people. It became simply a matter of who should receive what, and that is exactly what Democrats want. So now that they simply want to change the variables at play, any kind of ideological rebuttal is almost impossible.

So my take on this whole thing is: Overall, the battle is lost. Republicans are still a positive force here (remember that one year ago we were discussing the public option, which now is dead) but some sort of reform will go through. Eventually, this reform will lead to higher taxes and the decline in quality of the medical system. It will most probably be a smaller change than initially feared, but a big one nonetheless.

Elections do have consequences.

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So it looks like someone finally noticed what I have been crying about for years: the total and complete lack of a ‘liberal’ (aka American conservative) political option in Brazil.

However, I think that this goes beyond economic policy. I think that in Brazil we have a leftist culture that is totally ingrained and absorbed by the public in general. This culture is what ultimately makes a free-market/conservative option utterly impossible to appear and much less succeed in any way.

For instance: Fatalism rules in Brazil. You ask anyone on the streets or a politician or a computer programmer why they think Brazil is not a developed country they will definitely blame someone else. It is either Portugal’s fault (a very popular option when I was a kid in school), the IMF (also a very popular choice in the 80s – Brazil’s left used to say that the country’s inflation was directly connected to the IMF’s debt!), America, ‘politicians’ (as if the people who elected them had nothing to do with it), etc, etc.

Furthermore, the entrepreneurial spirit in Brazil is dwarfed by the power of government. It is not just that taxes are too high… The whole system is so convoluted and corrupt that in order to have a business people have to choose between operating outside of the law (at some level at least) or to buy out their way into the government’s arena (i.e., bribes and illicit favors). There is no incentive, neither from the people in power nor from people in the private sector, to completely dismantle this leviathan. It has become part of the system and it feeds from it.

So how can you expect the country to truly embrace capitalism with this frame of mind? Honestly, I am always truly surprised on how much Brazil has advanced despite all of this.

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1 – No, economic growth is not ‘here to stay’. It will go up, down, up and then down. Welcome to capitalism.
2 – Of course the growth was ‘faster-than-expected’. Nobody in the media really thinks we could get out of this slump anyway.
3 – Yes, winter weather batters the heartland. Just like summer will scorch it, and global warming will kill us.
4 – Funny thing that Obama is waiting so long to trial the 9/11 guys. I thought that, along with Guantanamo, was all Bush’s fault. By the way, did you notice how POTUS didn’t mention Guantanamo at all at the SOTU address? Maybe because he will take 3 years instead of 1 to close it? Or maybe because he will still be holding a bunch of terrorists indefinitely?
5 – Do we really need to keep talking about Saddam? He is dead. The war was won. Next.
6 – Bin Laden blames U.S. for climate change. You can’t accuse him of not being up to date on things. I think they should have invited him to Copenhagen, he must be very hurt about it.

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Fantastic meltdown! When Chris Matthews is the one making sense you know things are out of control!!! Howard Dean was about to cry… From 5:23 forward the thing is simply amazing!

“You are saying that no matters who wins an election your argument wins!”

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U.S. loan program may have made things worse

‘Money’ shot:
Since President Obama announced the program in February, it has lowered mortgage payments on a trial basis for hundreds of thousands of people but has largely failed to provide permanent relief. Critics increasingly argue that the program, Making Home Affordable, has raised false hopes among people who simply cannot afford their homes.

As a result, desperate homeowners have sent payments to banks in often-futile efforts to keep their homes, which some see as wasting dollars they could have saved in preparation for moving to cheaper rental residences. Some borrowers have seen their credit tarnished while falsely assuming that loan modifications involved no negative reports to credit agencies.”

Ah, liberals. Always in the business of trying to trick you out of reality.

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FBI Reports Huge Decrease In Murders As Firearm, Ammunition And “Large” Magazine Sales Soar
“Last week, the FBI issued its preliminary 2009 crime report, showing that the number of murders in the first half of 2009 decreased 10 percent compared to the first half of 2008. If the trend holds for the remainder of 2009, it will be the single greatest one-year decrease in the number of murders since at least 1960, the earliest year for which national data are available through the Bureau of Justice Statistics. Also, the per capita murder rate for 2009 will be 51 percent lower than the all-time high recorded in 1991, and it will be the lowest rate since 1963—a 46-year low. Final figures for 2009 will be released by the FBI next year.”

No U.S. combat-related deaths in Iraq in December
“December was the first month since the beginning of the Iraq war in which there were no U.S. combat deaths, the U.S. military reported.”

Ah, and check out Brooks’ latest column: “The God That Fails”. I find myself agreeing with Brooks a lot these days. He is the kind of conservative who has not gone crazy with the anti-Obama wave, while keeping the whole ‘mommy government’ ideology from the Obama crowd in check. Great stuff.

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Ah, how much can change in one year.

Remember how Obama was all about change? How we were going to improve regulation, curb CEO abuse, stop with the unlimited power by the executive and most of all, increase transparency so the government is not corrupted by self-interest?

Well, well. I wonder how the President could explain (once he comes back from his second vacation in Hawaii) this new announcement by the Treasury Department that the government can now exceed the current $400 billion cap on emergency aid to Fannie and Freddie without seeking permission from Congress. Oh wait, this is not all. The announcement came on Christmas Eve, and right after Fannie and Freddie announced approval from their company’s federal regulator to pay $42 million in Wall Street-style compensation packages to 12 top executives for 2009.

I know I predicted Obama would become more and more like Bush as time passes but I was thinking more about the good aspects of Republicans… Next thing you know this guy will start saying nukelar.

One last thing: in his interview with 60 minutes a few weeks ago, Obama said that Wall Street ‘just doesn’t get it‘ when the subject is reform. Well Mr. President, I think they do get it. They get it really well.

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Brazil Discussing Violent Game Ban

Weird, I thought politicians were all progressives in Brazil (at least according to their own President). And the funniest thing is this guy trying to justify a videogame ban law on the “principle of equality”. Does he mean equality to all backwards countries in the world who shun anything they don’t understand?

Meanwhile, the ‘conservative’ US continues to deal with this issue in a much more civilized (and obvious) way – ratings, just like we do for movies.

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Brand new Gallup poll: More in U.S. Say Health Coverage Is Not Gov’t. Responsibility

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Two years ago I mentioned that Global Warming was turning into a religion.

Well, now it is official. At least in the UK.

God help us…


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I thought this one was funny (in a bad way).

So what I got from this new “strategy” around avoiding tax evasion here is (Brazilian friends please correct me if I am wrong):

Every time a consumer buys something, the store is obligated to offer a receipt that is assigned to the customer´s tax ID (CPF). Then, when customers declare their taxes at the end of a fiscal year they can receive a “rebate” based on the total amount of those receipts. So basically the government hopes that customers become a tax enforcer of sorts.

Amazingly, this crazy scheme seemed to make perfect sense for my fellow Brazilians. Why, some people are thriving on this! They ask for every single receipt, sometimes they even instruct other people (who don´t pay taxes) to use their tax Ids so to “maximize” the benefit.

My simples question was: has the government even considered lowering these taxes to decrease evasion? Has anyone thought of all the new costs associated with this new crazy policy?

This goes beyond not knowing Occam’s razor. This looks like a bunch of bureaucrats playing economists.

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