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World in chaos

Saturday, July 05, 2008

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By MICHAEL HALEY

Napablogger

October 28th, 2009

One final thought before signing off

September 23rd, 2009

Time for local economic stimulus

August 31st, 2009

Community in a world of chaos

August 20th, 2009

Schwarzenegger finally proposes pension reform

I am surveying the latest news to think over what I want to say about the Obama-McCain race at this point and I can’t help but feeling that the world is breaking down into a lot of chaos right now. I know, I know, it always seems that way, nothing new under the sun, but yet right now ... the problems just seem to be piling up. And there is a gathering sense that things are really out of control. And I am not hearing any answers, just the same old tired propaganda.

Health care, gas prices, recession, mortgage crisis, credit crunch, inflation, stock market, California budget deficits, lower tax collections, Medicare bankruptcy, all hitting us in the pocket book. Today the Fed decided not to deal with anything or provide some direction, instead leaving interest rates as they are, doing nothing as the economic woes mount.

And on the cultural front, some of the nastiest stuff I have ever seen in a campaign directed toward Obama by this relentless negative e-mail campaign from out of somewhere in the bowels of GOP-dum. First we get Obama is a low life Muslim with ignorant black relatives from Africa, with pictures to prove it, and today Rove informs us that Obama is an elitist rich country club guy hanging around with martini in hand making snide comments about everyone else.

It doesn’t seem to be working, though, as Obama’s numbers are heading up and up. People aren’t going to get fooled by it, the Republicans are just rattling off every negative liberal stereotype they can think of to try to stop this guy and it isn’t working. We have seen it all before, maybe people are starting to get immune to it.

And all the green stuff going on, my column is going green by the way. Please send greenbacks so I too can claim to have gone green. Once I get enough money my column will appear in green type.

How in the world are we going to pay for all this greenery? We can’t, that’s what and that is why we appear to be heading into a world wide recession or even depression.

Even though I like both candidates as persons, I am not hearing anything from either one of them that sounds like it is going to help much of anything. Obama is planning on big tax increases, which OK if you think we should, but the problem I have with that is that it doesn’t appear that they are really going to solve any problems. A lot more tax money, some reduction in deficits, very little bang for the buck.

Raising rich people’s taxes over 50%, if they aren’t there already, is one thing that conservatives such as myself have long feared. Why? Because it will really hurt the economy. No one is going to start a business if up front they know that even if they do really well they won’t make much money. Why take the risk and spend all the time? And our economy depends on small business formation, that is the leading edge of innovation and creation of wealth. Over 50% taxes will kill small businesses.

What is helping Obama is that he has a plan, and it is specific, if unrealistic. McCain has suddenly seemed to have lost his footing, and is coming across as Obama lite. Giving a speech on how global warming is a threat? Why not try to get the large minority, about 45%, of voters like myself who feel that global warming is unlikely to be true? Obama has done the green climate change talk sooner and better, and we need some kind of viable alternative to that. McCain would not have to deny the reality of global warming, he could just give us a path that maintains the economy a lot better.

Oh yes, McCain called for 45 new nuclear power plants too. But the way he did it, it seemed like he read a poll one night, didn’t have any other ideas and just blurted that out off the top of his head. He gave no sense of having thought this through or having any real coherent long range strategy for energy, just shoot from the hip. Is this guy always like this?

Obama has expressed the sentiment that he agrees with high gas prices, he thinks it is a good thing. What more of an opening could McCain ask for? Instead we get this, well maybe we could drill in states that want to, except for Alaska which is the only state that wants to and has the most oil. Huh? More mush pudding.

The only bright spot I can see in the swirl of confusion and things spinning out of control is that Obama has maintained his commitment to a positive campaign and is indeed elevating the debate. He is giving people a lot of hope on a subjective level. His policies? Well, not so good.

Both McCain’s and Obama’s plans are economy killers, and Democrats seem to be in La La land thinking they can maintain these gas prices, raise taxes this much, do nothing about looming huge fiscal disasters like Medicare and Social Security, and not drive the economy over a cliff. Oh and the fact that they are demanding we go to alternative fuels without a viable alternative fuel to go to.

No wonder it seems like we are losing control, both candidates need to come up with some better and more realistic answers to at least some of the problems we are facing or we are in deep trouble.

145 comment(s)

a teacher wrote on Jun 28, 2008 8:37 AM:

" OK Mike, I have a couple of questions. First off, I haven't heard that Obama was planning to raise my taxes from anyone except the other side. However, suppose that's true.

I did a quick check of tax rates, nothing fancy, and I found that France, Germany and Sweden all have 50+% income tax rates. While they may not be the most powerful economic engines, they seem to be doing pretty well. Specifically, small businesses haven't closed up shop.

I would further argue that the high taxes enable the citizens of their countries to enjoy several services provided by their tax dollars, retirement, and health care, for instance. That is ultimately a help to business since the business does not have tooffer what the gov't already pays for.

I am skeptical of the taxes kill business argument. "

a teacher wrote on Jun 28, 2008 9:02 AM:

" I also have to question your statement about global warming. According to the Pew Center, 71% of Americans polled think that Global Warming is occurring. The question is what is causing Global Warming. Only 41% believe that Humans are causing it.

I have to say, though, I found that poll depressing. This is a scientific issue. However, the poll showed that it is a political issue for Americans with Democrats believing that People cause Global Warming and Republicans either not believing or that it's all natural. To me that is like Democrats believing that the Earth rotates clockwise while the Republicans believe that the Earth rotates counterclockwise.

I would have more respect for the Republican opinion if the Administration wasn't politicizing the data. Did you hear the latest? The EPA sent the White House a report that greenhouse gasses were a danger to people and regulations to controll them could generate revenue of $500 billion to $2 trillion over 32 years. The White House response, they left the email that the report is attached to unopened. They preternded it wasn't there and pressured them to change it. It's laughable.

Even if Obama turns out to be not so good as a president, I have to believe that that kind of thing won't happen in his administration. "

musikluvr wrote on Jun 28, 2008 10:07 AM:

" To Teacher: Based upon your comments about taxes and finances - and if you are a teacher - it is no wonder that our kids graduate from high school and know nothing about business and managing money. And, on global warming - what do polls have to do with it? Weather is a physical function of our planet, not a political issue. Must you politicize everything? "

napablogger wrote on Jun 29, 2008 6:25 AM:

" All those countries have had serious economic problems due to high taxes, Sweden has had to continually lower taxes to try to recover for a long time now.

I just think global warming is as politicized from the left as it is from the right. Last night I just read a list of quotes from famous scientists who think what is being presented is hooey. The idea that the debate is over is wrong. It has just begun.

And thinking that something that requires us to use energy that costs multiples more than the energy we use now is going to improve the economy defies common sense. I just wish people would use common sense more about global warming.

I am out of town til Tues, will try to give better answers when I get back. "

Bill wrote on Jun 29, 2008 12:06 PM:

" Linking green and global warming is a clever non issue for most Americans. It discounts that Americans are basically of a conservationist mind whether or not the think there is or is not global warming. Green is merely another popularization characteristic meant to dramatize a point of view. Nice flowery concepts but mostly puffery.

Americans may like to make light of tree huggers but when they truly thinkabout it theyr realize that there is a truth somewhere in all the rhetoric of the proposers and nay-sayers and that is we live on a planet that has limited resources and we must come to an understanding of those resources or perish.

Energy and environmental policy are not separate issues. Dividing opinion as in us against them serves no purpose but personal or political aggrandizement, we are all in the same boat and the hyperbole over global warming by both sides serves to defeat the reality that the earth is changing and that man does effect the environment, many times beyond repair.

As an aside I don’t think you will see 90% of American crying in their beer over the 10% that have the phenomenal income to pay less than 30% in taxes. "

daveposner wrote on Jun 29, 2008 4:05 PM:

" On the positive side, isn't the energy market doing a wonderful job of encouraging conservation without all the political correctness baggage. People are ditching their SUVs and buying fuel efficient smaller cars; taking fewer trips; learning how to use public transit and so on. Enhancing public transit should be a big part of our energy strategy. That use of taxes would have a pay off.

Not being one myself (not for lack of trying) I think rich people arrange things so that most of their income comes from capital gains tax (though some magic called the "AMT" gets mixed in with that.) Raising capital gains would discourage entrepreneurship which we don't want to do but raising the income tax might encourage more investment. (Of course I base this on my immense credentials in economics.) Tax incentives and more grants for environmental enterprises would probably be a good thing too.

I think both these guys are pragmatists and realists and that's what we need. Of course they'll have to spew the usual BS during the campaign but however it goes I think we'll have a good president. There may be hope yet. "

sickothis wrote on Jun 30, 2008 12:04 PM:

" There are 119 million surface acres of federally administered land in the West. Much of that land is ideal for solar power (think Nevada and Arizona desert). Solar companies have filed more than 130 proposals with the Bureau of Land Management since 2005. They center on the companies’ desires to lease public land to build solar plants and then sell the energy to utilities. the applications, which cover more than one million acres, are for projects that have the potential to power more than 20 million homes (for those that can't do the math that's 0.5% of the available, appropriate land. There is a moratorium on new solar projects on public land, combined with an end to tax credits, that would deal a double blow to the solar industry. Now compare that to the 10,000 standing leases on public land for oil development discussed last week, and the intent for an industry to build huge amounts of infrastructure that would employ 10's of thousands of people. Compare it also to McCain's dubious plan to drill copiously offshore with equipment that does not exist, in extremely sensitive environments, with doubtful returns in less than 10 years. I see a glaring, bright kleig light of hypocrisy. Bring in the oil guys all of our public land is up for grabs. Bring in sustainable alternative energy and OH NO! No WAY can we lease public land. Sheesh. No wonder I'm Sick - o - this. At least Obama has a little intellectual curiosity. "

sickothis wrote on Jun 30, 2008 12:45 PM:

" And Michael - please. How is it that Democrats have any kind of impact on gas prices over say the last 7 years? What was the price of a barrel of Oil when GWB took office? About $30 a barrel (and by the way Newt went positively bat-guano on Clinton for that) What's the news today? $170 a barrel. Ya know why? The weak dollar. What has GWB's policy been since he took office? A weak dollar. "

a teacher wrote on Jun 30, 2008 6:14 PM:

" Mike:Thank God, someone intelligent to talk to! Is it your contention that by raising taxes business people will just fold up shop? I would think that making less money is still preferable to making no money.

How much of Sweden's problem is demographics? More seniors taking money, less youngster's paying taxes. Definitely a problem, but not necessarily the fault of a socialist type system. We have the same problem. "

napablogger wrote on Jun 30, 2008 8:25 PM:

" teacher, the Swedes themselves feel it is high taxes and have spent decades now trying to recover from very high taxes. Once you go there and supply the social services it is hard to go back.

But you know what, it is a legitimate position to want the government to supply things and that is what you might call the European system. I just don't like it. Average people have great benefits and no money. It crimps personal economic freedom, and you also have to be willing to live with very high unemployment. Unemployment in Germany, Spain, U.K. is regularly more than double ours or more.

They have great welfare systems, but many people get stuck in them and never can get out. The kind of job you can do in Germany is determined by the state, here you can try to do any job you want no matter what your high school counselor says about you.

The bottom line is that we have a lot more freedom here, some more failure, and a lot more mobility. We also have less security, from job loss, from health care expenses.

I have read about this and written about it extensively before but the one article I read that really stayed with me is a New York Times article about a guy who went to visit Denmark, held up as a model of happy, well cared for people who pay very high taxes and have lots of free services. What he realized when he went to visit is that no one had the money to even go out to lunch. They are all pinching pennies all the time.

I just don't want that for America. For Europe, maybe it works. "

napablogger wrote on Jun 30, 2008 8:35 PM:

" teacher, thanks for the compliment btw.

It is not my contention that they would fold up shop, altogether, although some may never start. I have to confess that I always heard that and was somewhat dubious myself until I realized one day I had done that myself.

I thought about buying a house as an investment, and realized that when I added up all the costs, including at the time a 35% capital gains tax when I finally did sell, it wasn't worth taking all that risk to only make a little bit of money.

You have to remember, people are investing their life savings and want to make sure it is worth it. All the regulations and tax consequences have a huge impact on whether someone invests or not.

When I was going to buy that house I was well aware I could lose money. I was taking a risk, the only way you can make money.

So I put down money, and then if I get bad tenants, or the rental market gets soft and I can't get the rent I anticipated, then property taxes go up, and then on top of it when I do sell the house for the equity the Feds take a big chunk of the profit, you reach a point where you say, I could lose $100,000 and never recover for the chance to make say $20,000, it is just not worth the risk. So even though you will potentially make money, that is only if all goes well.

To take a risk there has to be a big pay off. Or no one will do it, not for a small pay off. This happens every day and has enormous economic consequences. "

napablogger wrote on Jun 30, 2008 8:46 PM:

" sickofthis, you mentioned yourself one way that the Democrats have had impact on gas prices, solar power has been stopped by environmentalists in the desert because some animals may get blocked by the transmission wires needed to run the power back to usuable destinations. Gov Schwarzneggar has been very frustrated by that.

The point here is that more solar power would equal less gas use, more supply and therefore lower gas prices.

The Democrats have been the champions of the environmentalists who have blocked every single effort to increase energy production. The entire problem in one way or another comes down to inadequate supply, and they have opposed nuclear power, oil refining, even in a lot of instances wind power, solar power, every effort to use the earth in any way for human activity is subject to opposition from them.

Although I am hardly a fan of Bush's, we can't blame him for high gas prices. He has been trying to get more supply on the market since he started office and has been continually blocked by Democrats.

One thing I think is his fault is promoting the use of corn for biofuels which is a waste of energy, and has helped cause food and gas prices to rise.

Come to think of it, what have the Democrats done but block any attempt to do things to reduce gas prices? You could say CAFE standards except the main opponent of that has been the Michigan Democrat John Conyers. "

a teacher wrote on Jun 30, 2008 9:33 PM:

" Mike: I hear what you're saying, but not everyone is an entrepreneur. It seems to me that most people want some security about health, retirement, and they want things like quality education, roads that don't have huge holes in them, police and fire service, etc. That is not welfare.

Increasingly businesses are trying to get out of giving things like pensions or health benefits - example - Airlines trying to ditch their pension agreements. Either that or bussinesses want to offer less pay for the benefits they give. My union will be faced with that as they negotiate this year, no pay raise and an increase in my share of paying for health, it means a pay cut. I can fore see the same situation as your Danish example.

Is it a race to the bottom with the wealthy taking more and more while the rest of us are being asked to accept less and less. How is that a good thing? "

plasticpinkflamingo wrote on Jun 30, 2008 11:11 PM:

" Wouldn't the converse be true, that without higher taxes the business can select their own services appropriate to their employees and market? Once you're in the government straight-jacket you can't move or choose anything. "

John Richards wrote on Jun 30, 2008 11:11 PM:

" If you want to be depressed, read the OT book Ecclesiastes. Basically it says there is nothing new under the sun, and nothing you can do will make much of a difference anyway. There's probably a lot of truth to that, even for modern problems like Global Warming. "

John Richards wrote on Jun 30, 2008 11:21 PM:

" Socialism is just a milder form of communism. Both systems penalize the hard worker and the risk taker by taking a higher percentage of their income. At some point that hard worker will get discouraged and will quit trying so hard. "

a teacher wrote on Jul 1, 2008 10:05 AM:

" PPF: Another double edged sword. Your job can choose not to give you health care, offer substandard health care, change the rules whenever it suits them. Your choice is put up or quit. 20 years down the road, the retirement benefits they promised you might evaporate. Business has no loyalty to it's employee.

My retirement and health care are managed by the Public Employee Retirement System (PERS). It's a gov't/private hybrid. My boss and I contribute equally to the countries largest and most successful hedge fund(I think). It's not the most generous retirement plan, but I can count on it. The public pays some of it, but most of it is based on the returns form private investment of the fund.

For health care, I have a choice of 5 or 6 different plans (I think Kaiser has the best deal, others have a different opinion). I could even opt out and take the cash equivilant. Again, it's not perfect, Kaiser ups it's price every year, Part of contract negotiations is what part I have to pay.

There are two examples of a gov't run retirement and health plan. Not perfect, but not a disaster either. "

a teacher wrote on Jul 1, 2008 10:22 AM:

" Communism is really nothing like Socialism. In Communism, everybody owns everything. In Socialism the gov't runs everything.

The common critique of both, that lazy people get off easy and the hard workers don't profit from their work, misses the point. There is more to a job than the money you earn. I became a teacher because I think it is a worthwhile profession and I am good at it. I work hard, not because I will make more money (I won't), but because the harder I work, the better I do my job.

Today's workplace relies on the carrot and the stick approach. However, the carrots are getting smaller and the stick is getting bigger.

Marx's idea was that in a perfect world, everyone worked for the common good and everyone got taken care of. "

napablogger wrote on Jul 1, 2008 10:34 AM:

" teacher, when I said welfare I meant welfare, not the services or benefits you mentioned.

I have no objection to the government providing services or benefits in general. I do think that they are far more expensive in many cases than they otherwise would be if provided by private enterprise, but there are problems sometimes with that too. There is no black and white answer that we can apply to every situation.

In terms of many wanting that security of a pension plan, etc, I think most people do, who wouldn't want that really? The problem I have is that there seems to be no limit when something is free, which is what the government provides in general, people use a lot more of it and take it for granted.

CalPers is a case in point.

The big public pension funds in general are successful, but many private funds have better managment that get better returns. Unions run CalPers and that means decisions are often made that would not be made if run by private managers, to the detriment of the taxpayers.

Case in point: spiking. Public employees often help each other get into a much higher paying job for the last year of their employment to spike their pensions higher when they retire, because they are based on the last years salary.

Our Governor had a reform commission that tried to reform that, and the union reps on the commission and who also head CalPers blocked it.

It is clearly cheating, and there is nothing anyone can do to stop it because the unions control the fund. The commission was a waste of time. "

sickothis wrote on Jul 1, 2008 11:33 AM:

" Michael - predictable, untenable argument. The bush admin is singlehandedly holding up solar power leases. Period. It is fact.

The Bureau of Land Management says an extensive environmental study is needed to determine how large solar plants might affect millions of acres it oversees in six Western states — Arizona, California, Colorado, Nevada, New Mexico and Utah.

Solar companies have filed more than 130 proposals with the Bureau of Land Management since 2005.

The Republicans controlled the House, Senate, White House, and SCOTUS (Including BLM and EPA). So no - it was not Democrats.

And regarding all those businesses folding: Remember all those small businesses that employed a couple of million more people than now and made all that money during the Clinton years? They didn't fold, now did they. Fear mongering, unsubstantiated and inaccurate spin from the right. "

a teacher wrote on Jul 1, 2008 11:42 AM:

" I don't know that I agree that unions control CalPERS. Influence, yes, control, no.

I also believe that the rule for retirement is your highest three years are used to determine your retirement benefits. That's how it works for us teachers, anyway.

I have no big problem with working the system to your advantage. Business does that all the time to minimize the amount of tax it has to pay. In a perfect world every one would behave. In a perfect world... "

a teacher wrote on Jul 1, 2008 11:51 AM:

" MB: Also, neither my pension nor my health benefits are free. I contribute 50% to the pension fund and 20% to my Health care. And as Kevin points out, that's really my money that the boss kicks in, instead of paying me.

Even if we had some sort of gov't run retirement or health, it wouldn't be free. We would be paying for it with our tax dollars. "

Bill wrote on Jul 1, 2008 12:45 PM:

" Er, Teach before you get in too deep you better study up on your 'isms. Communism owns and runs everything as in a dictatorship of the stylized proletariat, still a dictatorship. Socialism in various forms can be found throughout all western societies especially in democracies. It is a concept older than Marx and often experimented with in early American life especially in smaller independent communities and is not antithesis to the concept of individual property or individual entreprenurial capitalism. "

a teacher wrote on Jul 1, 2008 1:27 PM:

" "Er, Teach before you get in too deep you better study up on your 'isms. Communism owns and runs everything as in a dictatorship of the stylized proletariat, still a dictatorship."

Not really, that's the propaganda version of communism. Marx had a much smaller more idealized version in mind, not what the Soviets did. Everyone works together for the benefit of everyone. Idealistic to be sure.

I think there is no perfect system. It's all about trqde offs. "

plasticpinkflamingo wrote on Jul 1, 2008 1:45 PM:

" Business has no loyalty to it's employee.

And you think government has any loyalty to its citizens? There have been many sad examples of governments treating their citizens horribly.

If I don't like my employer's offerings, I can get another job. If my government treats me poorly, what can I do? Vote libertarian? Not until there are a lot more of us will that help. Moving to another country is not as easy as getting another job. "

Bill wrote on Jul 1, 2008 2:07 PM:

" Is there another version? I think arx has been quite discredited. "

a teacher wrote on Jul 1, 2008 2:09 PM:

" Pink: If we had a free market free for all, how long do you think it would take business to stop offering benefits at all. What would stop them from offering the lowest wages possible? Cut costs, make more money. "

Lee wrote on Jul 1, 2008 2:43 PM:

" A teacher; I definitely agree. Free market is not really free for all.This administration has multiple times said they suggest that business treat some rule for trade or employment, etc but don't require anything and have no consequenses. Reminds me of some children I baby sat for during my college days. I was told by the parents that anything is allowed by their children, Including allowing disqusting smearing. When there children decided I was going to participate in there smearing deal, I put my foot down. Needless to say, I told those parents not to call me again to babysit. "

a teacher wrote on Jul 1, 2008 4:54 PM:

" Bill: I'm not sure what "arx" is, I'm presuming a typo. If you meant communism. I don't think there was ever been an actual communist State. The Soviet Union claimed to be, maybe they even tried, but that's not what they got. I personally doubt that communism would work on a large scale, people would have to change their way of teaching substantially.

But don't jump up and down for capitalism either. The only purely capitalistic system I can think of is the Mafia. Whether capitalism can really meet the needs of a large country remains to be seen. "

Lee wrote on Jul 1, 2008 5:03 PM:

" My husband says I didn't express this enough. I was figuring that people would understand it but just incase. If you don't require any rules to be followed, as Bush and colleges have done, then the natural tendancy is to not follow the rules, ignore them and do as you please like children with no rules or guidance. That creates brats and in the free market case it creates exploitation and greed. "

Bill wrote on Jul 1, 2008 5:04 PM:

" "Unions run CalPers and that means decisions are often made that would not be made if run by private managers, to the detriment of the taxpayers."

what a novel ideayou mean there is actually a corporation tha t is responsive to the needs of the people it serves? "

Bill wrote on Jul 1, 2008 5:25 PM:

" N.B. you make a grammatical error that goes to the crux of the matter with Calpers, It WAS taxpayer money it IS now state employee’s money.

If your argument is about the size of the pensions that is one of the things that attracts state employees, if it is about management then you have only the point that so called private money managers do not respond to the will of the investors i.e. investing in South African Apartheid which may have been more lucrative if morally reprehensible.

If other non public sector unions had followed the openness of Calpers and exhibited the strength of organization it has shown there might be a greater voice for labor in the board room. "

napablogger wrote on Jul 2, 2008 12:08 AM:

" sickofthis--

>>>The bush admin is singlehandedly holding up solar power leases.<<

The BLM is, and you are assuming that Bush ordered it. Probably correct, but not certain. In any case, it is being done for *environmental* reasons. It is environmentalists controlling the agenda, even with a Republican administration. The Wildlife group (Federation, major environmental group) immediately praised this decision.

Unless you are saying that the Republicans are environmentalists.

I think it is possible that the solar leases are being held up by Bush out of gamesmanship by Bush, although no one is saying that yet. Bush's energy plan calls for $1.2 billion more for funding alternative energy, but the money would come from new oil drilling lease fees that the Democrats are blocking. So he is trying some of their game on them.

I never said anything about businesses folding, although I can see why you and teacher might infer that. What I meant is that they wouldn't start to begin with.

People who are considering investing evaluate the odds for success and the pay off before they begin. When they are socked with high enough taxes they don't bother.

You should see the emails I get from business people right here in Napa worried about local taxes and fearing that they could go under due to any increases. It is not a joke or a small point by any means. You multiply that across the country and it is a huge impact.

I have no problem with Obama raising the top marginal rate back to 39.5% as it was under Clinton. But capital gains and payroll taxes and God knows what else and pretty soon you are talking a real recession. "

napablogger wrote on Jul 2, 2008 12:11 AM:

" teacher, the Cal Pers board consists entirely of ex union members who are picked because they are ex union members. They control the pension fund, the head of the Board is someone from Napa in fact. They control CalPers.

Btw, are you sure you are in CalPers and not CalStrs, the teachers pension fund? It is considerably different than CalPers in important respects. Teachers do not get the same level of pensions that many other government employees do. "

napablogger wrote on Jul 2, 2008 12:26 AM:

" Bill, teacher, it is not a grammatical error, all money that goes to the government, to government employees, into pension funds whether it is out of the employee's paycheck or contributed by the local or state government involved, comes from taxpayers. So to me it is all taxpayer money.

None of the money that goes into private pension funds comes from taxpayers. It all comes from the businesses that created the wealth themselves.

In fact, all money, including all tax money comes from private enterprise, so I think it would be more appropriate perhaps to say the the government is funded by business entirely. Businesses generate all wealth, some of which is paid to employees and the government takes some of it from them to itself, in the form of taxes.

Since all wealth is created by private business, all government funding comes from private business, anything that hurts private business ultimately hurts the entire economy.

There is just no way around it and when taxes hurt business you get less business. "

Lee wrote on Jul 2, 2008 8:46 AM:

" NB; Your logic is a bit circular, but you missed one of the most important aspects of the whole deal. A business does not create it's own income with out workers, and those workers need decent pay or they can't buy your "widgets" so you don't make any money and then noone makes any money. You know, "belonging to the company store" went out with the dark ages but when owners and CEO's treat the workers as their slaves, they will kill their own business. That's why some laws and rules are needed and needed to be enforced or you have greed run amok. And the gas problem right now also demonstrates some of that. The gas people themseves say there isn't really a supply/demand problem right now. Futures gamblers who are playing paper games have done their share of driving up the price. Gas oficials have said at many meetings that actually the price of a barrel of oil should be more realistically $50-$60 if you go by true supply and demand. And they have also said that drilling will not solve the problem. "

napablogger wrote on Jul 2, 2008 10:01 AM:

" Lee, the gas people have not said it not a supply problem. Unless you mean the Arab gas people, who don't want the blame put on themselves. Are we taking advice from Saudi Arabia now?

No matter how you slice it it is a supply problem. Futures speculators are basing their speculation on future supply shortages, a supply problem.

If we increase supply or even if there is a belief due to approved new drilling that supply will increase there goes the speculative bubble, if there is one. It is all based on the future expectation that prices will increase, and prices will only increase if supply is low.

Supply is being held artificially low by government policy, there is no way around it.

All wealth comes from business activity, there is no way around that either. Of course businesses have to pay their workers, but my point is that many people think money grows on trees and that you can just treat business any old way and the money will just be there. Not so. "

a teacher wrote on Jul 2, 2008 10:21 AM:

" NB> You're right, it is CalSTRS, I get them mixed up. Of the four retirement plans I've had, it's the best, sad but true.

I take exception to your statement about all money going into my retirement fund being taxpayer money. That money comes from MY paycheck. I don't complain about it (much), because it goes into my retirement. "

Lee wrote on Jul 2, 2008 11:37 AM:

" NB; No I am not talking to the Arabs. My information came from the CEO's of Mobil/Exon, Shell, BP, etc, and also from commodities managers on the trading floors and off the trading floors. Now my other contention; you said all money comes from business. Not without the workers it doesn't. Example, you said your wife inherited 100 acres of vineyard and a home. Your money may come from that but not unless a worker helps with the care of the vineyard. Those grapes don't pick themselves and transport themselves and ferment themselves and bottle themselves. A whats more they don't buy themselves after they are bottled. A very big part of the problem with the economy today is because business owners think only they make the money and they forgot that with out there workers they don't make any money. "

Bill wrote on Jul 2, 2008 12:56 PM:

" N.B. State employees also pay taxes therefore double funding their retirement, more later. "

sickothis wrote on Jul 2, 2008 12:58 PM:

" Michael,

Again you are factually wrong. George Herbert Walker Bush instituted the moratorium on new leases in 1990. The Republicans had the House, The Senate, the White House and the SCOTUS for 6 years. If it was such a great idea, they could have done it then. So no, the democrats are not holding up new leases. "

daveposner wrote on Jul 2, 2008 1:05 PM:

" NB,

"All wealth comes from business activity"?

That's a pretty amazing statement. What do you mean by wealth and what do you mean by "business?" A trivial example. There's a couple that walks Foster road just about every day and picks up trash. I would argue that by doing so they make the property along Foster more valuable and therefore they are creating wealth. Are they a business? Is Teacher not creating wealth by increasing the "value" of her students? "

sickothis wrote on Jul 2, 2008 1:41 PM:

" Oh and by the way - there is absolutely nothing stopping the oil companies from drilling the 10,000 leases they already have. "

a teacher wrote on Jul 2, 2008 1:58 PM:

" Once again, I'm a he not a she. "

glenroy wrote on Jul 2, 2008 6:27 PM:

" The lack of drilling on leased ocean floor is fairly, no simpleton-simple to figure out…oil isn’t there in quantities sufficient to make it pay the cost of extraction…the 80 billion plus barrels that could pay is banned by partisanship over America little d democrats… "

Bill wrote on Jul 2, 2008 6:57 PM:

" Ok teacher, yes it was a typo, Marx and his economic theories have been totally discredited by history, Hegel, reality and just about any measure one can imagine. His misbegotten Labor theory has crippled economic labor thought for over 150 years. It has prevented any real advancement because so many would be do gooders wish to claim his theories as benign. Every time some one suggests a socially advancing idea their cries of Marxist come out of the closet. He is not the father of social theory or progressive thought but has done the greatest damage to them and its time that so called liberals woke up to their apologies for the consequences his theory fostered. Namely over a century of penury in economic thought and denying the idea that labor also fosters wealth physical and intellectual. But all this is off topic. "

Bill wrote on Jul 2, 2008 7:25 PM:

" Fact, all money comes from private enterprise,
The government is funded by business entirely.
Businesses generate all wealth, some of which is paid to employees and the government takes some of it from in the form of taxes.
Since all wealth is created by private business, all government funding comes from private business, anything that hurts private business ultimately hurts the entire economy.

N.B.
If you accept the claim as fact and equate all money as wealth, not property or assets other than cash or those instruments that can be readily converted to cash your convoluted syllogism might hold up. But wealth is not the same as money land and capital in any economic theory hold more value. Money and banking is as subset.

Much wealth is generated by appreciating land value and is not money. Other wealth is generated by the effort of labor to generate value. Intellectual wealth is generated by its effort to generate better circumstances for a variety of purposes. There are numerous other means where value and wealth is generated. Businesses do not generate all wealth individuals do through many means other than the pure control of money by their establishments.

The government also does much to foster wealth by many means and does much to serve the business community. I find you claim to be false and you statement and conclusion not supported by you premises. There is a fallacy in your argument. "

napablogger wrote on Jul 2, 2008 8:03 PM:

" Bill, Lee, I don't understand why this is so hard to get, in fact it is obvious, econ 101. Workers are part of business, labor is a part of business, people walking and picking up trash in their neighborhood live there and own property and are enhancing the values of their property. It is a business.

Otherwise they are charitable persons who are donating a service, and the reason they can afford to do that for free is because they are making money to pay for their time from another business.

Property is only valuable for what you can do with it, build on it, put a business on it, grow a farm on it--all businesses.

Wealth is a general term for all forms of money and assets, and wealth is generated by effort, by business.

Government employees and the government in general does not generate wealth, it spends wealth. Sorry if that doesn't fit your philosophy.

teacher is a taxpayer too, and so are all government employees.

teacher your paycheck is paid by taxpayers. It originates as taxpayer money. Once it is given to you, it is your money as payment for a service.

Exxon Mobile's money is generated by themselves through their own business efforts.

There is nothing wrong with the government collecting taxes and spending citizens wealth. The citizens want the services.

Labor is not owed anything in particular except what the business owner and the worker agree to. The laborer helps the owner generate wealth, yes, but it is neither the laborer or owner that generates the wealth, it is the business that generates wealth. "

napablogger wrote on Jul 2, 2008 8:07 PM:

" sickoftthis, I am not quite sure what you are referring to at this point. First you tell me that the Bush administration is holding up leases for solar, then you tell me that you mean the first Bush? For solar?

I assumed that you meant the news that came out this week about the BLM holding up solar energy leases. Now we are back to 1990??? over what? "

napablogger wrote on Jul 2, 2008 8:17 PM:

" teacher, some good news by CalPers:

>>>CalPERS and Alaska Plumbing and Pipefitting Industry Pension Trust were lead plaintiffs in a the suit filed in Minnesota federal court over the way UnitedHealth dated stock options for top executives, including a $1.6 billion grant to Chief Executive William McGuire. The practice, CalPERS claimed, cost the fund up to $22 million on its investments in UnitedHealth stock - about 6.7 million shares worth about $322 million at the time.<

CalPers socked it to an overpaid CEO--can you believe it, $1.6 billion in a bonus??? Go CaLPers.

I think one point to understand about me saying all wealth is generated by business and that all government funds come from taxpayers, I am talking economics, not politics.

These are simply basic economic facts.

Once you get your paycheck, the money is yours, you deserve it, etc. But the fact is that you get paid by taxpayers to perform a service. You do not get paid by Microsoft, or Exxon, or Chuck E Cheese's.

It needs to be said because it seems like people lose track of where the money comes from. Labor does not generate wealth, the government does not have any money of its own. Businesses and corporations do generate wealth, they generate all the wealth in the world.

That means if you do things that hurt them there is less wealth in the world.

I suppose you could say that natural resources, if you own them or control them, are a form of wealth. But even then you have to do something with them to use them, and that would be a business. "

napablogger wrote on Jul 2, 2008 8:19 PM:

" sickofthis, the point about the oil companies having leases already is a new Democrat talking point. The oil companies deny it. I have never heard it before. Not sure what the truth is here. "

a teacher wrote on Jul 2, 2008 10:00 PM:

" NB: The state contributes $500,000,000 to STRS and probably $1 billion to PERS annually. Not a big slice of the budget. What does it matter to you who runs it, or what the rules they use to determine payouts? It's mostly my money. "

Bill wrote on Jul 2, 2008 10:28 PM:

" N.B. Talking down to us about econ 101is not exactly a support for your premise. My knowledge could possibly exceed yours but i do not choose to flaunt that as "proof" like many who believe their opinion is sacrosanct because the are some type of professional and therefore by the accrual of a specialized degree in any topic they are considered authorites on all topics.

Much Wealth is inherited by people who never earned a dime of it or labored for it or provided any motivation or thought process to husband it other than the happen stance of birth.

We live in a mixed economy where we all contribute to the wealth of the nation not just one sector uber alles. "

daveposner wrote on Jul 2, 2008 11:04 PM:

" NB,

I confess I never took econ so I'm ignorant. Could you help me understand by explaining how say Mother Teresa's or Gandhi's activities were a business? Is your statement perhaps just a "definition", i.e. business is by definition any activity that creates wealth? If not then what is the actual definition of business so that I can understand the content of your statement. "

Bill wrote on Jul 2, 2008 11:08 PM:

" Fact, all money comes from private enterprise: claim

The government is funded by business entirely.
Businesses generate all wealth, some of which is paid to employees and the government takes some of it from in the form of taxes: premises

Anything that hurts private business ultimately hurts the entire economy. Fallacy, called begging the question. Your claim is not supported by your premises and your conclusion is irrelevant. "

Lee wrote on Jul 3, 2008 9:41 AM:

" NB; I think you are the one with the erronious info. The oil companies put the leases that they have that they have not drilled on on their Balance Sheets on the Asset side. By the way,"right out of the horses mouths" under oath. Catch ya all in a few days. Have to go out of town. "

napablogger wrote on Jul 3, 2008 10:42 AM:

" Lee, the oil companies claim that they have leases that they can't use because they would not be profitable, so they use them for tax purposes. I do not know what the truth is, just that both sides make contrary claims. I only note the the Democrats never made much hay out of this til now. "

napablogger wrote on Jul 3, 2008 10:45 AM:

" On the fact that all wealth is created by business, I don't think I can explain it any better than this so I give up. It is an easy concept to understand if you want to. I just don't think you all want to and we could go on like this forever. Sorry if that sounds like a put down. "

napablogger wrote on Jul 3, 2008 10:53 AM:

" teacher, that is the logic that the unions use to justify controlling CalPers, that it is their money. There is no doubt that the boards of all the big employee union pension funds are run by union representatives. That is just a fact.

In my view all the money government has ultimately comes from taxpayers, and all the taxpayers money, my income as well, comes from business. That is also just a fact, however inconvenient that may be to a liberal philosophy of the world.

Money, wealth, whatever term makes sense to you, comes from people working to create it.

I suppose another reason I harp on this is the fact that from a liberal position, at least some liberals, not recognizing that fact feeds the sense of entitlement that people have. That is dangerous.

Unions cannot just demand whatever wages they want regardless of business and economic conditions, because they are not creating the wealth, the economy if you will, to pay for it. Yet many of the liberal writers here appear to feel that they can just demand it because they want it and feel it is fair, without regard to who actually has to pay for it. They feel entitled.

That is a mistake.

Anyway, we are starting to beat a dead horse here so I may not write about this again. However, I will read whatever response you may have. "

sickothis wrote on Jul 3, 2008 1:14 PM:

" WASHINGTON - Nearly three-fourths of the 40 million acres of public land currently leased for oil and gas development in the continental United States outside Alaska isn’t producing any oil or gas, federal records show, even as the Bush administration pushes to open more environmentally sensitive public lands for oil and gas development. AP. June. 1, 2004 "

napablogger wrote on Jul 3, 2008 5:45 PM:

" Dave. forgot to answer your question, Ghandi and Mother Theresa did not work or create wealth. They lived off other people's money.

You don't know what a business is? Really? It is an activity undertaken to make a profit by selling something, or producing and selling something, or selling a service. Or something like that. "

a teacher wrote on Jul 3, 2008 5:46 PM:

" NB: You didn't answer my question, though. I don't know if your statement about who runs my pension plan (or big employee plans) is true or not, but it's irrelevant. I don't understand why that is a problem.

As for unions, they can demand what they want but that doesn't mean that they'll get what they want. It's a negotiation. Unions use strike if they want. Business, or in my case gov't can let them strike. Mostly they negotiate. I don't see how that is a problem. You sound like I should be happy with whatever the gov't says it should pay me and be happy I have a job. "

napablogger wrote on Jul 3, 2008 6:14 PM:

" sickofthis--all you are doing is repeating Democratic talking points, as is the article, which are technically correct but paint an inaccurate picture. Here are a couple of other quotes for you:

Dow Jones June 26, 2008: ...the Office of Management and Budget said the idea that leaseholders are "sitting on" leases rather than using them is an "absurd claim" as oil prices hover near record highs.

"Firms want to drill where they can most profitably extract oil," the OMB said. "A firm that is not drilling in a particular area either cannot find recoverable oil there, or thinks it can find oil that can be extracted at lower cost, or has not yet completed the more than a dozen plans and permits needed to allow drilling," it said.

Chevron CEO David O'Reilly as quoted in the International Herald Tribune, June 20, 2008:

Q: Democrats say oil companies are sitting on unused leases and they should drill there first before more regions are opened up to production.

O'Reilly: "What I would encourage the Democrats to do is to look at the facts. We should not be making these crass statements without facts. There are already existing limitations on leases. Already you have to use them or lose them. It takes time for geological exploration to occur. In our case, over 80 percent of our leases are being actively worked."

O'Reilly went on to add that costs to open up new fields are in the $4 to 5 billion range. That is why oil companies need to make huge profits, because exploration and development is enormously expensive. "

napablogger wrote on Jul 3, 2008 6:31 PM:

" teacher, sorry, why does it matter to me who runs it? First of all, I disagree with you that it is your money. Eventually it is your money, but the funding of the system is done initially with tax money, perhaps we can agree on that much.

In reference to your figures about how much the state puts in, that is for state employees only. Most of the money comes from local governments, in Napa alone we are at about $40-50 million a year to CalPers.

The employees contribute about 9-11% depending, the government about 20-28%, that would be of total payroll. So maybe a third from employees, but my point there would be inititially all the money comes from taxpayers, me in other words, and you.

Why do I care? Because that high a level of pension is killing government budgets and hurting the economy. Because if the unions control it then taxpayers are paying whatever they want us to and we have no voice.

When the unions set the rules they do unethical things like the spiking I talked about earlier. The teachers dont get that, but all the safety and many other employees do. They also make unsound investments in order to help their workers.

They recently invested in government bonds that they know won't meet the investment standards needed to cover pensions, but it gives their workers more work and brings more people into the union. Then the taxpayers get stuck with the bill.

It is the fox gaurding the hen house, and because the Democrats control the state legislature, nothing is ever done about it. "

napablogger wrote on Jul 3, 2008 6:37 PM:

" teacher, well no, I don't think you should be happy with whatever the government pays you. What I am trying to communicate is general information about economics so people understand the impacts of certain decisions.

Since business is the source of all wealth, if you don't take care of business you have nothing. Even the environment goes down the tubes, because it costs money to protect the environment.

In California, people just do not seem to understand that. They hate business and feel that they are the root of all evil. Maybe they are the root of some evil, but they are us and not only that, they pay our mortgage and bills. The provide ALL the money to protect our environment and run our government, so we should bear that in mind when we do things that hurt business.

Sooner or later it will redound back to us. "

a teacher wrote on Jul 3, 2008 9:28 PM:

" NB: I don't see how this is not my money. I contribute 8% of my paycheck and VCUSD matches that(however, as Kevin has correctly pointed out, that is really my salary). It doesn't matter that it originated in taxes, once it's paid to me, it's mine.

There are 300,000 teachers in CA. The average salary is around $50,000. We contribute $2.4 billion to STRS. The state contributes $500 million, so Us teachers contribute 5 times what taxes contribute. Just because you pay my salary, you don't get to tell me how to spend it. "

steph wrote on Jul 3, 2008 9:58 PM:

" Well, you could say that Mother Teresa was an agent of the Catholic church, which is one of the oldest businesses. I wonder how much in charitable donations she brought in, charitable donations that earned a tax deduction and a good feeling.

But that just sounds downright cynical. "

daveposner wrote on Jul 3, 2008 10:19 PM:

" OK NB, Now you're just being silly. "

bettye wrote on Jul 3, 2008 10:44 PM:

" All of you who talk about CalPers need to do a little backgound reading on how it works .. The people who manage it invest our pension money ( yes, we pay into it ) and have done a REALLY good job choosing the investments .. CalPers pays a very large portion back into the state of Calif. We are not a drain on the taxpayers of this state.. Also most people stay with their state job for the benefits ,not for the great salary ..as most could make more in the private sector .. Get the facts about Calpers "

napablogger wrote on Jul 4, 2008 11:06 AM:

" bettye, as I mentioned in my very first statement about CalPers, it has been a successful program. However, private money managers have done better with pension investments.

teacher, first of all I am talking about CalPers, not CalStrs. They are different.

Since it is your money, according to you, what happens if the fund falls short and is unable to pay the pensions, which is happening now?

Will the teachers all get together and pitch in and send pension check money to already retired teachers from out of their personal savings?

Or will the state take money out of the general fund, tax money, and make up the shortfall?

That tells you who is paying for it.

That is why I resent having union leadership running the pension. It is like putting Exxon Mobile in charge of government oil policy, putting developers in charge of land use planning in Napa County. It is an inherent conflict of interest.

If you look into the decisions that have been made, not all of them of course, they are decisions that an objective, independent board would not do.

One is setting a rule that some safety employees can get 109% of their highest salary at retirement. Another is allowing people to cheat on their last salary to pump up their retirement by switching jobs (supposedly) at the last minute.

All CalPers would have to do to stop that is change the rule. They refuse, because they are run by the people who stand to benefit from the rule.

If we are going to do this, then lets' let the corporations run the state government. After all, it is by far their money that the government runs on. "

a teacher wrote on Jul 4, 2008 6:32 PM:

" I don't know NB. What happens when Bear-Sterns poor decisions kills the company? What happens when all the junk mortgages go south, who gets bailed out, who does the bailing? Who bailed out Savings and Loans? Who bailed out Airlines in the wake of 9/11? The gov't doesn't seem to have much trouble bailing out it's base, err, big business when they mess up.

I haven't heard that STRS is failing, in fact, I've heard the opposite. Mr. Bush attempted to "reform" Social Security with plans similar to STRS and PERS. Now I'm getting the impression that not only does the right want to kill SS, they want to control how the money is spent.

It's my money. Wasn't that the slogan? "

Bill wrote on Jul 4, 2008 9:38 PM:

" When my 401k performs poorly is someone going to chip in and send me money? Money managers fail all the time that why their are more failed bussiness people than successful ones.

Corporations should run the government because its their money?

What are you advocating? A strangle hold on human liberty by corporations? So much for patriotism on the fourth of July lets bring back the East India Co. and pretend the American Revolution never happened. "

bettye wrote on Jul 4, 2008 10:53 PM:

" napablogger, please name a few private managers that have been as successful as CalPers in investing pension monies.. I think if the CalPers managers would take over our government spending our country would be in a lot better shape.. We have one of the best pensions in the nation (as far as secure investments) Of course in this economy NOTHING is really secure .. "

Bill wrote on Jul 5, 2008 1:11 PM:

" napablogger wrote on Jul 4, 2008 11:06 AM: If we are going to do this, then lets' let the corporations run the state government. After all, it is by far their money that the government runs on. "
Maybe someone should retake American History 101 and Re-enroll in Econ, 1A and 1B not just the quickie 1 semester courses in lower division. Try Money and banking along with Micro and Macro Economics.
The Tea floating in Boston Harbor did not belong to George III but to the East India Company, which had a monopoly on tea and was a major reason beyond the much ballyhooed tea tax why the colonists rebelled.
Business and entrepreneurship especially by the individual is one thing but the idea that an undemocratic corporate structure is something to be bowed down to is an idea that has Jefferson even Adams and especially Adam Smith rolling in their graves. "

glenroy wrote on Jul 5, 2008 1:54 PM:

" Napabloggers… yours is an effort of fitting a round peg into a square hole….it all reminds me of a retired and very successful local business owner who use to always comment that ‘eagles aren’t turkeys‘…or was it ’turkey’s aren’t eagles’…. though I was never sure exactly what it meant…I took it mean there are few successful business owners and many business failures….

Anyway, I’m more than a little impressed with your tolerance…I think you many have just located the ’black hole’ that exists between the mind of a business person and that of those who believe government is the provider of wealth. Having taught various subjects on Business Management and Entrepreneurship for many years, I’d have to say most high school level business students could easily follow your clear and accurately stated logic. If nothing else, where does government derive income?…from itself?…then how? If that can’t be correctly answered it helps to explain why so many people are dependant upon others.

Maybe it’s nothing more than new tricks and old dogs…maybe not...

It is all good and very entertaining to say the least…or was that a square peg in a round hole.. "

glenroy wrote on Jul 5, 2008 2:03 PM:

" Bettye….Calpers relies on private financial investment advice which is reviewed in-house by staff advisors to make sure the investment is Politically Correct. For the most part Calpers has been successful because they played the market averages and avoided trying to time the market swings…invested long instead of short holding quality stocks through the cycles.

Plus…it was over funded by the tax payers several billion dollars…or at least the state auditors claimed it was over funded….I did not follow the settlement though I’m also insignificantly invested through Calpers. "

a teacher wrote on Jul 5, 2008 5:54 PM:

" GlenRoy explain this to me. You claim "I think you many have just located the ’black hole’ that exists between the mind of a business person and that of those who believe government is the provider of wealth."

So far as I can see, my retirement plan has a small amount of gov't involvement, a contribution that is 20% of what teachers put in. Yet you object to ho runs it. On what basis would you do that. "

napablogger wrote on Jul 5, 2008 11:08 PM:

" teacher >>>What happens when Bear-Sterns poor decisions kills the company?<<

a fair and good point, and my point exactly about CalPers. If the taxpayers have to bail out Bear Sterns, shouldn't the taxpayers have some say so about what they are doing? Say, some better regulations about sub prime mortgages and limits on how they run their investments? I think so.

All I am saying is the same thing about CalPers. Since it is the taxpayers who bail them out when they screw up, we ought to have some say so about how it is run.

Yet we will and do have regulations on brokerage firms and all corporations, but we can't even get CalPers to stop the most obvious form of cheating. That shows you not only who is really in control, (in California at least) but also proves who is running it. "

napablogger wrote on Jul 5, 2008 11:09 PM:

" glenroy, thanks. And tax money grows on trees, haven't you seen it? "

napablogger wrote on Jul 5, 2008 11:13 PM:

" Bill, I am being intentionally sarcastic when I say let the corporations run it. I don't want that but I don't want the unions running the state government like they are now either. "

napablogger wrote on Jul 5, 2008 11:23 PM:

" bettye, most of them have for reasons that glenroy mentioned, CalPers is under certain restrictions that give them a disadvantage. My problem is that being run by those who stand to benefit from other peoples money is an inherent conflict of interest. They end up doing things like supporting uneithica behavior like the spiking I mentioned ealier in the thread.

Their Board President sends out press releases ranting and raving about "big Oil must be stopped" at the same time that they are one of the biggest investors in oil futures that the Democrats are blaming for high oil prices.

They invest money is California bond projects that will create more jobs for union members, but the bonds don't pay the rate that they need to break even on investments, 7.75%. That means ultimately they are at more risk of needing cash infusions from taxpayers to make up the deficits.

Any other group would have to have an independent board. "

bettye wrote on Jul 5, 2008 11:33 PM:

" napablogger , I just recieved my Stste Retiree paper and now I understand all of the comments against our CalPers !! "

jonqcitizen wrote on Jul 6, 2008 1:01 AM:

" Napablogger:
1) Show me the math and back up your assertions. Otherwise, quit spouting this 109% nonsense.
2) Allowing people to cheat on their last salary? The last time I checked more money means more responsibility. Government payroll is very tightly structured and (assuming you are at the top of your pay scale) you don’t make more money without being promoted to a new job classification with new and/or different responsibilities. So for the last year of someone’s career, they have to perform a more difficult and or technically demanding job with more responsibility and somehow this is cheating?

The other flaw in your logic is that you believe the rules set by PERS (who are just lackeys of unions) are the issue. The ACTUAL issue is that if someone is undeservedly promoted for the sole purpose of allowing them to retire at a higher rate, then the system is being abused by an administrator (read MANAGEMENT), and administrators are generally not union employees. "

jonqcitizen wrote on Jul 6, 2008 1:06 AM:

" Oh and another thing. You are basing some of your assumptions upon incorrect information. PERS does not calculate your retirement based upon your last year of work. They base it upon an average of your three highest years. A different benefit may be negotiated, in which they base it upon your single highest year. Not always the same thing. By the way, negotiations are a mutual agreement. The notion that government employee unions waltz in and get whatever they demand is nonsense. If this were true, there would be no labor issues (financial ones anyway), no strikes, etcetera. "

jonqcitizen wrote on Jul 6, 2008 1:21 AM:

" Napablogger wrote:
"All I am saying is the same thing about CalPers. Since it is the taxpayers who bail them out when they screw up, we ought to have some say so about how it is run. "

1) Fact: The last time PERS lost a lot of money (their holdings went from 175 billion to approximately 140 billion give or take a billion), everybody lost money. It was the end of the dotcom era. How is that "screwing up"? Did everybody "screw up"?

2) Fact: Since that time through diversified investments, they have recouped that money and then some. Their current assets are approximately 248 billion. Which private investors did better than that? How did the taxpayer "bail them out"? Surely you are not suggesting that somehow the taxpayer made several deposits that added up to 108 billion dollars?
3) Fact: During the dot com boom, local governments including Napa County paid nothing into PERS while employees continued whatever contribution they were required to pay. If their bill has increased at this point, who is to blame for their failure to set aside the money they would have been paying into PERS had their investments not had such a high return? Oh right, the unions, I forgot. "

jonqcitizen wrote on Jul 6, 2008 4:04 AM:

" Napablogger wrote:

“Unions run CalPERS and that means decisions are often made that would not be made if run by private managers, to the detriment of the taxpayers.”

According to the CalPERS website, the CalPERS Board of Administrators are as follows:

1) Rob Feckner- Elected, employed by the NVUSD as a glazing specialist.
2) George Diehr PhD- Elected, employed at CSU, San Marcos as an instructor.
3) Marjorie Berte- Appointed, Undersecretary of California Business, Transportation and Housing Agency.
4) John Chiang- ex-officio, State Controller.
5) David Gilb- ex-officio, Director of California Department of Personnel Administration.
6) Henry Jones- Elected by retired members, former CFO of the Los Angeles Unified School District.
7) Bill Lockyer- ex-officio, State Treasurer.
8) Priya Mathur- Represents employing agencies, employed as a principal financial analyst for BART.
9) Louis Moret- Appointed by the Senate and Assembly. Spent 15 Years as the COO of Southern California Association of Government. Member of the Los Angeles Fire and Police Pension Board.
10) Tony Oliveira- Appointed as the Local Government representative, he is a member of the Kings County Board of Supervisors and a farmer.
11) Anne Sheehan- Appointed, representing the State Personnel Board, Chief Deputy Director for Policy at the CA Department of Finance.
12) Karato Shimada- Elected, Retired from Oak Grove School District where he was a supervisor of operations.

According to my count, there are four out of twelve that are elected by union members at the most. Quite frankly, I doubt that Jones was really a union man since he was the CFO of a huge agency like the LAUSD. Please explain therefore how the unions run CalPERS. "

ADark1 wrote on Jul 6, 2008 6:34 AM:

" "They say" "The dead will walk the earth in the last days, along with all sorts of miracles.....BUT!!!!

When glenroy and Bill start making sense to me....when "TEACH" and even napablogger has *CHOKE* consistant valid points I'm starting to get nervous...Comeon you guys you're scaring me.

.~.Runs for lefty " in case of emergency first aid kit".....Wooooosaaaaaaaaa!

Phew! All better now!

Seriously, I would ask all of you...where do you draw the line between sound investment with "agencies" as to what is allowed under state and federal mandate? looks to me like 6 on one hand and half - dozen on the other!

Being self - employed is in no way easy, yet it seems to me, we, ( small business owners) are being asked to carry more then OUR fair share of the tax burden for a dwindling economy as well as middle class! What happens when we can no longer compete against the corporate structures and then global economies? ....I'll answer it!

ANARCHY! "

freeport56 wrote on Jul 6, 2008 8:41 AM:

" a teacher-

check out tax policy center.org. They do an unbias study on taxes. They have a .pdf that is a side by side of both candidtes tax proposals. then check out youtube under Obama tax mooron. It is a video of the Las Vegas debat in which charlie gibson outlines the historical facts behind the capital gains tax. Obamas answer should surprise you.

Yes, both candidates have outline their taxing strategies. "

freeport56 wrote on Jul 6, 2008 8:46 AM:

" What happens at the end of an Ice Age?

The ice melts.

How about the recent discovery of volcanoes under the arctic ocean that is causing the ice to melt.

The bottom line, the earths climate changes as a natural part of nature. Studying the climate for only 158 years is not a real measure of 5 billion years of existance. Not to mention that for the past 11 yerars we have no sun spots. They traditionally warm the earth and they are missing. Geologically we are headed into another ice age based on the magnectic readings from the mid-atlantic ridge. All the lies are about one thing shifting scoiety. social change is the lefts new religon. "

glenroy wrote on Jul 6, 2008 2:50 PM:

" Teach…I don’t recall making any comments opposing Calpers…the fact is I have way too much on my plate to bother with Calpers which is an insignificant portion of my investments compared to the investments I personally manage…the black hole exists... "

Bill wrote on Jul 6, 2008 6:28 PM:

" Sarcasm? I can see being sarcastic with me but with Teach? He appears to want to develop a friendly debate no matter how misguided his personal approach is, yet his questions are met with both the inversion of truth as well as meaning and treated in a flippant manner by someone who professes to be an authority without verification.

Applying to you to reason with him over his retirement plan yet sarcasm is his reward. The inability to communicate your concerns in a logical manner leads you to re-explain many frivolous remarks and leads you to a frustrating discourse, not a reasoned presentation of what could be wrong.

Allowing anti union bias to dominate your reasoning defeats any solid points you wish to present. Teach appears more concerned with himself than the general theme of all retirement funds. Ask if Cal-pers is perhaps more solvent than say Social Security or the retirement plans of Enron or World Com along with numerable private employee programs and you have a real bagful.

Defenders of Cal-pers could possibly make an argument that their management is measurably more transparent than any of the aforementioned programs and more so than many mutual funds touted in the various 401k schemes. However it appears that ridicule is better than a sound explanation for your statements. Certainly the number of times you must restate the same claim to justify your frustration in being unable to convince with the battering ram of your opinion the soundness of your crusade against public employee benefits illustrates your own ineptitude.

If there is indeed something wrong, lay it out singly in a reasoned fashion with a logical argument and don’t rely so much on emotion or the appeal to an authority that you don’t possess. "

Bill wrote on Jul 6, 2008 6:39 PM:

" N.B. I am able to glean at least one positive point in all the palaver. If Bear Sterns and many other private corporations were subjected to the scrutiny that Cal-pers is perhaps we would not be on this great international slide to nowhere. Should all corporate financial institutions be subjected to closer scrutiny and regulation? Most certainly glad to see there is some real candle power there. "

bettye wrote on Jul 6, 2008 7:02 PM:

" napablogger, I am still waiting for the names of the successful pension mangers in the private sector, to compare them with our Calpers.. I understand some people are wanting to let the private companies in our retirement system..In the past some ( Gov. Pete Wilson ,for one ) have tried to raid our fund to help balance the state budget..Thank God we had a strong union to fight them off..We have worked for many years to get where we are now.Some of our jobs were not very desirable but we hung in there til retirement age.. So, why should anyone be jealous of our successful pension investments ? Yes, the world is in chaos but bashing Calpers makes no sense .... "

freeport56 wrote on Jul 6, 2008 7:43 PM:

" Just my 2 cents on the "World in Chaos"
The articdle in the S.F. Chronicle about the transfer of Iraqs 550 metric tons (2240lbs) of high grade yellow cake uranium be sent to Canada. 550 metric tons = 1,212,542.44 pounds.

Enough to kill California+. Enough said. "

freeport56 wrote on Jul 6, 2008 8:56 PM:

" a teach-

you may want to revisit that description of communism. While they may call it the "peoples tractor factory" all production quotas are set by the state. The state controls everything.

What Marx had in mind never materialized in Russia. Beside communism is based on so many false theories. if you want the real low down on what communism is all about look up "The Black Book of Communism" It is down right scary "

freeport56 wrote on Jul 6, 2008 8:58 PM:

" someday we will have to break those unions. Taxpayers must be avenged! "

jonqcitizen wrote on Jul 6, 2008 10:00 PM:

" To Bill:

Thank God someone still uses logic and sound resononing. Your post was a breath of fresh air. (applause in the background)

Things are what they are folks. The facts are what they are. If they help you, great. If they don't, that's the way it is. Scarecrows, red herrings and propaganda prove nothing. "

a teacher wrote on Jul 7, 2008 6:13 AM:

" Bill: I don't see myself as misguided. I generally enjoy arguing with Mike, he is far more respectful than some of the others on this board.

Freeport: I don't believe that there has ever been a truly communist gov't. I don't think their can be. The basic message of communism is anti-materialism, possessions are a trap. It's the same as Buddhism and Christianity, really. Christ and Buddha are worth emulating, but it is extremely difficult to reach their level. That is the realm of saints. "

freeport56 wrote on Jul 7, 2008 7:34 AM:

" a teacher-

I agree, I have seen to many people argue for Marxist Communism as it is written. But, they always fail in realizing the political system does not matter. Power and greed always win out and corrupt the system.

Just being a decent human being, be nice to others...etc. Sometimes the simplist behaviors carry the most weight. "

ADark1 wrote on Jul 7, 2008 8:08 AM:

" P.S. Thanks for doing such a great debate!

One of the BEST I've seen here since I started reading the NVR Blog. I smell an award coming out of this one!

BTW, Bill? I've got my eyes on you! :)

Those of you who used facts?

Thanks for educating ME! "

jwk wrote on Jul 7, 2008 12:20 PM:

" MisTeach, By not making the BUSH tax cuts (That Boomed the weak and failing economy he inherited) permanent, it will be the largest increase in American History. Check the facts on The Capital Gains Rates, The Federal Tax Rates, Inheritance Taxes, Corporate Tax Rates, Marriage Tax, Payroll Taxes, FICA and SS, etc. for those of us Who pay taxes and employ the people who maintain and grow our economy. It will be the worst situation in our Life time to operate and/or own a Business. The reason you are skeptical is because you are in an Industry and Union that is failing badly as we spend more $ per student in almost every State in The Nation.. Good Bye Sweet America if everyone on the left is still on Glue come voting time. You ain't seen nothin yet!! "

a teacher wrote on Jul 7, 2008 4:11 PM:

" Hey, joke, it's MR. Teach to you! Tax cuts have done very little to improve our economy, although they have increased our deficit and lined the pockets of Mr. Bush's base, the filthy rich.

Keep drinking that cool aide, dude... "

Raven wrote on Jul 7, 2008 4:32 PM:

" one could argue that by not making the cuts permanent, it would merely be returning the rates to the pre Bush levels...not increasing them "

kevin wrote on Jul 8, 2008 10:18 AM:

" one could, but one would be wrong.... "

sickothis wrote on Jul 8, 2008 10:34 AM:

" What are you basing that expert analysis on, Kevin? "

tiredofcomplainingnapkins wrote on Jul 8, 2008 1:36 PM:

" I don't understand why so many people are against going green? Even if global warming is untrue there is a lot more at stake then the warming of the planet. Look at the economy now, we are held hostage by are dependency on oil. We import so much oil and have no say on the price we pay for it. If we can go green we can lower the dependency on oil and help make are economy strong again by all the funds that will be freed up by low transportation cost, lower power cost, and lower taxes that go towards cleaning and protecting the enviroment. Plus oil will not be around forever, but the sun, wind, tidal movements will be around as long as man is here, lets harness this free power "

John Richards wrote on Jul 8, 2008 3:53 PM:

" Sicko..., you implied that the weakened dollar is mostly responsible for the run-up in oil prices. The US dollar has lost about 7% of its value over the past 12 months, compared to a 100% change in the price of oil. How do you account for the 93% difference? Let's face it, you're so ready to blame president Bush for everything that facts don't matter. "

John Richards wrote on Jul 8, 2008 4:05 PM:

" I don't think people are against going green, but there are legitimate issues about how quickly we make chances and at what cost. To assume that sun, wind, tidal movements, etc., represent "free power" is very naive. The investments needed to design, capture, control, and maintain those new power sources are going to be very expensive. "

John Richards wrote on Jul 8, 2008 4:10 PM:

" A Teacher, one measure that indicates socialist governments in Europe aren't working is their consistently high rates of unemployment, often double and triple the rate in the US. "

tiredofcomplainingnapkins wrote on Jul 8, 2008 8:11 PM:

" John Richards, ya true the natural power would not be free but it would be extremely cheaper in the long run compared to the evergrowing cost of oil and natural gas. Also its true the rate of unemployment is way higher in Europe but the crime is signifacntly lower. The programs European countries provide for there unemployed and disabled are way better than the USA. We have low unemployment here but crime is way worst, how do you explain that? "

John Richards wrote on Jul 8, 2008 11:38 PM:

" I agree that crime rates are higher here but I don't see how that ties in with socialism. Nowadays most crimes are perpetrated by drug addicts. Americans have always had a bit of a John Wayne shoot-em-up complex, which probably accounts for the higher levels of violence. "

jwk wrote on Jul 8, 2008 11:52 PM:

" The Sky is falling, The Sky is falling. Quit Listening to the Liberal Biased Media and reading their Garbage.. They are constantly trying to Bring everyone down and make us miserable, especially when there's a Republican in the White house. Good thing they are slowly going out of Business, laying people off Daily and losing Circulation. Osama/Obama is losing his Campaign employees everytime they lay off.. That's another good thing for the US and The World. There isn't a Great recession/depression. There isn't "Man made Global Warming" We should utilize our own Natural Resources (Drill Here & Drill Now and indefinitely. Fuel prices are what's killing the economy..People are better off everyday than in the past Worldwide" "

Dr. Faustus wrote on Jul 9, 2008 10:23 AM:

" Napablogger –

Since when has anyone of substantial wealth – private for otherwise – ever paid a full tax obligation? Tax brackets exist mostly in our imaginations. Republican’s are forever weeping into their golden cups about the high taxes paid, but it is rarely mentioned that such taxes may amount to no more than 15% of their earnings – and after deductions, the amount could be quite less.

How is this not socialism?

Indeed, the very concept of deductions is a socialist one; what you write off now must be paid by someone else later, i.e. The People.

This is not “capitalism” vs. “socialism.” This is about who gets to play by the socialist rules, and who must play by capitalist ones. Traditionally, “Socialists” argue that the tax code and business regulations should be geared toward subsidizing individuals. Capital-Socialists on the other hand, feel it is far more logical to subsidize business interests and let individuals play by capitalist conventions – a cheaper alternative to traditional “socialism,” as there can never be more businesses then there are people.

I’ll let you ponder what that implies about unemployment.

Socialism for me, Capitalism for everyone else: the motto of American Business. "

sickothis wrote on Jul 9, 2008 10:45 AM:

" John Richards - you're revisionist world view is astounding. The Bush team has purposely pursued a weak dollar policy for years, and the price of oil is reflected in that. I'm not sure what argument you are trying to prove, but that is a whopper.

On March 3, 2008, a Euro was worth $1.58. The dollar has declined in 40% value in the last six years, when a Euro was only worth 87 cents. (Source: Federal Reserve Bank of New York, Historical Exchange Rates) "

napablogger wrote on Jul 9, 2008 1:01 PM:

" Faustus, not sure what some of your comment means, but Clinton eliminated most of the deductions for the wealthy. I know and have known a number of people who make a million plus a year and they pay enormous taxes and can't get out of it. Corporate tax rates in the US are the second highest in the world, higher than most European nations.

The amount of taxes the wealhtiest third of Americans pay comes to about 30% of income.

What's interesting to me about that is through all these up and downs that percentage, 30%, has remained about the same.

The top 40% of wage earners are now paying almost all income taxes. Bottom 60% pay none, some even get some back when they haven't even paid in. I don't see how you then blame the wealthy for not paying.

btw, sickofthis is right about the weak dollar. "

napablogger wrote on Jul 9, 2008 1:03 PM:

" kevin, you crack me up. That was a really funny comment on the chicken run threat too. "

napablogger wrote on Jul 9, 2008 1:06 PM:

" jongquil, the head of the Los Angeles school district not in the back pocket of the unions? Surely you jest. That whole list of people are all on the union payroll or they wouldn't be there.

The only thing I can say is that probably the same thing happens with corporate boards, but at least they are not spending taxpayer money. "

napablogger wrote on Jul 9, 2008 1:13 PM:

" bettye, you just want me to get in a pissing contest that will go nowhere, that is why there is no point naming individual fund managers. I could name fifty that did better, you could name fifty that didn't, what is the point?

Here's one for you, Andrews and Jordan. Does that help?

The point, which is not particularly controversial I might add, is that private pension funds often do better because they are not operating under the same rules as CalPers, as CalPers must do as a public, yes taxpayer funded organization. I have no problem with that.

But I think they need some outside financial management that is not politically motivated and does not make decisisions based on non financial reasons but instead based on giving goodies away to themselves and their own membership. "

napablogger wrote on Jul 9, 2008 1:17 PM:

" tiredofcomplainingnapkins, no one is againt going green, but I agree with John that it is a matter of timing and cost.

If global warming is a fraud, or if it is greatly exaggerated, then we could be doing things like say starving people in the third world unnecessarily, which we are I believe. So it makes a huge difference.

Yes, it will be better to have less traffic, cleaner energy, but don't kid yourself the cost is enormous right now and it is reflected in higher gas prices and food prices, not to mention all kinds of other costs.

One problem I have is that we are perpetually lied to by greenies about all this, all this garbage is out there saying it won't cost anything which is patent nonsense, the cost is already enormous and getting worse.

So conservatives are concerned about the other side of the coin, what the costs will be, but not against going green. "

Dr. Faustus wrote on Jul 9, 2008 3:03 PM:

" “Faustus, not sure what some of your comment means…”

Some of what it means: it means that we subsidize the wealthy. It means we bailout pension funds, bankrupting industries, grant no-bid contracts, subsidize research that is then leased to private for-profit industries, and grant tax loopholes for those with high amounts of wealth. It means that write-offs are synthetic subsidies. It means there is socialism in this country, but only for a select few that have truly “earned” it.

Meanwhile, the greater numbers of us are left to the cool winds of market storms. We must obey or be fired. We must remain “competitive with foreign labor” – n euphemism for accepting a lower standard of living. We must stomach the consequences of our “poor choices.”

Socialism for me; Capitalism for everyone else.

That’s what it means. "

Dr. Faustus wrote on Jul 9, 2008 3:04 PM:

" “I know and have known a number of people who make a million plus a year and they pay enormous taxes and can't get out of it.”

Really? And out of these millionaires, how many have given up being rich?

“The top 40% of wage earners are now paying almost all income taxes. Bottom 60% pay none, some even get some back when they haven't even paid in…”

“Buffett says he pays 18 percent of his salary to the IRS while the rest of his staff pays nearly twice that — 33 percent…” Nov. 15, 2007 ABC News (I cannot give the exact link as required by NVR’s posting rules.)

“The richest families in our country pay a lower tax rate than the people who take care of their children, or who teach in their schools, or who would put out a fire if their "

Dr. Faustus wrote on Jul 9, 2008 5:06 PM:

" Sorry..missed a typo and this quote was snipped.

“The richest families in our country pay a lower tax rate than the people who take care of their children, or who teach in their schools, or who would put out a fire if their house were to start to burn." – Gene Sperling; Center for American Progress Nov. 15, 2007 ABC News "

freeport56 wrote on Jul 9, 2008 5:14 PM:

" Napablogger-Dr. Faustus-

One difference between capitalism v, socialism. Under capitalism we do not have hundreds of youths rioting in the streets uncontrolably destroying everything in there path. Under capitalism we can rise to the top in the american aristocracy. under capitalism we can own guns and defend ourselves. under capitalism we can say what we want. under capitalism we can fire the losers in Dc and hire some new ones "

Bill wrote on Jul 9, 2008 6:42 PM:

" Dr. Faustus nice to read you again. I thought maybe Goethe or Mephistopheles had caught up to you. "

a teacher wrote on Jul 9, 2008 10:12 PM:

" FreePort: First of all, capitalism has nothing to do with gun control or gun rights.

As for youth rioting in the street, I guess ou for got the LA riots after the Rodney King Affair. We have had several riots sparked by racism or some other cause, but driven by economic inequality.

All we've managed to do is to keep the violence localized and contained.

Do you really want an "American Aristocracy". I don't think that was in the original plan. "

napablogger wrote on Jul 9, 2008 10:31 PM:

" Gene Sperling is exactly wrong, what the hell is he talking about? Does he ever pick up a book or is he caught in the endless loop of only reading far left sites that confirm his own biases over and over again? Like most people, left or right.

Warren Buffet said he paid a lower percentage of his taxes than his secretary. But that is because all of his income is from long term capital gains which are taxed at a lower rate as a social good.

THe fact that he and a few other mega wealthy people end up with a lower percentages than their secretaries doesn't change the fact that most other rich people are not in that position nor the fact that he pays enormous amounts of taxes. Way more than his secretary.

We do not subsidize the wealthy, the wealthy subsidize the rest of the country.

We bail out pension funds to keep average people from losing their retirement, we bail out CalPers and public funds as well, and to the tune of lots more money from taxpayers.

We subsidize research to help AIDS victims and cancer patients, to help them, because it takes an enormous amount of money to find new drugs, and the wealthy are pouring way more money into drug research than the government.

Why should the rich give up being rich? Is there something wrong with that? We need more rich people, not less.

The only thing you may be right about in some instances is no bid contracts. The rest is simply twisting isolated facts to make a point that is patently misleading, because it is so one sided. "

napablogger wrote on Jul 9, 2008 10:34 PM:

" By the way, if Buffet's secretary was really paying 33% of her income to the federal government, then she is making well over $200,000 per year. Probably over $300,000. She is in the top 5% of wage earners, one of the people that the left considers rich.

Poorer people get just as many loopholes, in fact more loopholes than the wealthy. "

napablogger wrote on Jul 9, 2008 10:51 PM:

" Faustus, I just went through the IRS tax tables, and my goodness, in order for Buffets secretary to pay 33% of her income in taxes, she would have to be making over 350K a year.

At a salary of 336K a year, her tax rate would be $37,675.50 plus 33% of the amount over 154,800, or about 97K. That is still below 33% at that high salary.

She is one of the wealthy jerks that is ruining it for everyone!!! She is in the top 1% of wage earners!!! Let's get her, she is to blame for all our problems.

Buffet is also not counting all the sales taxes he is paying, all the social security taxes he is paying for his employees who in his secretary's case is 6.5% of her first 100k.

And this is all assuming that his secretary has zero write offs, which is highly unlikely. "

jasper wrote on Jul 10, 2008 12:27 AM:

" Mike

You are just scratching the surface. Yes, all of those domestic economic problems are important. You can add to your list of worries the very serious problems of Fannie Mae and Fanny Mac which are stuck with so many bad loans (the federal government (that’s you and me) bailing out the bankers again.

But our domestic problems are minor compared with increasingly impacts of this global economy - the decreased value of the dollar, the continued loss of US jobs to cheap labor in China and India, the increasingly worrisome emergence of the Chinese as the dominant economic and military force in the Far East, from when comes so many of our resources. And of course, the increasing demand for developing countries for oil (which really determines the price at the pump here) . And finally, the increasing dependence on other countries to buy our treasury paper so we can finance our inflated domestic budgets

These are not ups and downs. These are very serious long-term trends over which we have less and less control.

The other day I asked a long-time China expert if there is anything in which the US competes successfully against the Chinese. His answer was “Nothing. They are doing everything better.”

Mike, we are in deep, deep trouble. "

kevin wrote on Jul 10, 2008 9:06 AM:

" Lets see, 15 years ago Japan was "eating our lunch" and was going to buy everything in America. All the corporations were running around trying to re-organize so they could be more like the Japanese. That went well. The Japanese economy went into stagflation from which they are barely recovering.

30 years ago Russia was the "big" thing. I remember because I studied the language for 5 years because if you wanted to be an engineer, you "had to know Russian". They were going to set the world on fire with their socialist engineering empire. Yeah, right. Another failure to launch.

China has HUGE problems. They have to create 2 million jobs a year just to keep up with their population growth. One economic hiccup, one recession and it could all come apart.

I'm not sure which is scarier, China having a meltdown or NOT having a meltdown. But I know which bet my money is riding on... "

freeport56 wrote on Jul 10, 2008 10:14 AM:

" a teacher-

as a former native Los Angeleno. I am more than familar with what happened in los angeles in 1965 and 1991. What happened in 65' can still been seen by the scars on the s.central buildings that are still there.

As for 1991, a very small part of that uprising had to do with the King decision. The rest was an all out gang free for all. It also showed what cowards the LAPD are. Capitalism has everything to do with our rights, because we are the ONLY capitalist country in the world to have these rights. The only one! Free societies require these types of rights to freely operate. fact of life.

As for the economy, look at what the losers in Sacramento are doing. They are looking at a $10 Billion dollar tax increase, granted for those making in excess of $321k, but without much thought to reduced spending. Nothing like crushing the people that brings jobs to the communities. I guess SAC wants CA just to be a bedroom community with out jobs so we can all get their handouts. "

freeport56 wrote on Jul 10, 2008 10:20 AM:

" If BHO gets elected we will be looking at more in billion and trillions in taxe increases. How does that stimulate the economy? It does not. It creates a higher burden on those wealthy members of society that provide jobs.

Sure I will hear back, "but most of the jobs are provided by small business". Right, but you do not know how much they are making annually. They could be making half a million per year. If BHO raises the capital gains, that crushes home sales, retirement investments, college investment programs. Anything that will make you more money to klive will be taxed. The size of goverment will get even bigger. "

Dr. Faustus wrote on Jul 10, 2008 10:35 AM:

" Napablogger –

“Why should the rich give up being rich?”

Exactly; so your argument that higher taxes discourage people from becoming rich, or staying rich, is false.

As I mentioned above, a favorite Republican opera is “Look How Much I Paid.” As Buffett – and you – demonstrated, the wealthy are paying higher dollar amounts than the poor or middle class; but as a percentage of income they are paying the same or less than their worker counterparts. When it comes to wealth, business, and profits, percentage gains are what counts – all else is smoke and mirrors.

“…All of [Buffett’s] income is from long term capital gains which are taxed at a lower rate as a social good.”

The reason why Buffett pays less in taxes than many middle class workers is irrelevant – it’s simply enough to know that he does.

“We bail out pension funds to keep average people from losing their retirement “

No, we’re helping companies avoid their promises and poor decisions; we are shielding them from market forces. This is selective socialism.

Even as people are talking about ending my social security – for what it’s worth – we are using public monies for private pension bailouts.

While your point about drug research is well taken, I was talking more about nanotechnology and other bleeding edge sciences. Any gains in those laboratories, research centers, and universities go into the hands of industry for pennies on the dollar.

Bill-

Ha! Mephistopheles got me a long time ago. Thanks for the nod; it's nice to be read. "

napablogger wrote on Jul 10, 2008 11:18 AM:

" Jasper, interesting comments. I just wrote another blog article that I am waiting for Dan to post on just this very subject.

I agree with what you are saying, except you are only looking at one side of the equation. A rich China takes some of our business, but it also can become a huge source of exports for us and bolster our economy.

We are going through the transition now which is the lowest point. But in the long term, having a big rich country in the world can only be better for the whole world.

Because the US is rich, our economy supports the whole world. Can you imagine if China is rich like us? They will make us richer in the long run, not poorer.

There is a really good show going on on Discovery channel about China and the US right now. I watched it last night, it is on at 7 and I highly recommend it to anyone who is interested. "

kevin wrote on Jul 10, 2008 3:31 PM:

" Be careful Mike, your starting to sound like a "supply sider". Keep it up and we might make a Conservative out of you yet... "

John Richards wrote on Jul 10, 2008 6:11 PM:

" sicko..., like a slippery eel you are changing the focus of your argument. The argument was not about how much the dollar has weakened over the past six years. The argument was over the recent increase in the price of oil and whether (as you claimed) the weak dollar was responsible for that. You haven't explained why oil prices increased 100% in the past 12 months, while the change in dollar value was only 7% over the same time period. The accurate conclusion is that OTHER factors were much more responsible for the increase in the price of oil. "

Dr. Faustus wrote on Jul 10, 2008 11:45 PM:

" John Richards -

I agree with you here; a weak dollar isn't necessarily the root cause of increased oil prices.

However, I think what Sicko is alluding to is leverage. Commodity contracts are bought and sold using leverage and margins. When the value of a currency is weak - relative to the purchased currency - much larger volumes of cash are needed to purchase the same amount of goods and services.

Leverage allows investors of all kinds to take advantage of vast sums of wealth with little investment - every $100 invested could leverage $1000 in purchasing power. Any up-ticks in the underlying commodities and poof, you realize fantastic gains.

You can also wipe yourself out - even put yourself into debt. Leverage works the other way as well. Any loss in the underlying commodity and your losses are potentially unlimited.

And these ticks I'm talking about are fractional movements, not whole point shifts.

A slip in currency of 7% is translated into millions – if not billions – of dollars lost overall.

These losses have to be made up in some fashion.

At least that's how I see it; I could be wrong.

Can a 7% decrease in value increase underlying prices by 100%?

I don't know; I'm not a quant. "

jwk wrote on Jul 11, 2008 7:42 AM:

" I prefer MisTeach, because what youTeach/Preach is the same old Leftist Liberal Mantra. No new Ideas, No plans, Nothing good for America,"Cause Good for AMerica is bad for your Party", just constant Whining and Dissing the Positive and Good things about America and the Administration. And being a "Milktoast on National Defense, Our Military Fighting machine and Our National Security is a wussy Leftist Defeatist position. Thus the Miss.. "

a teacher wrote on Jul 11, 2008 11:09 AM:

" I prefer being respectful. "

NVGal wrote on Jul 11, 2008 1:02 PM:

" I don’t see the euro and oil that closely correlated. I see them moving up and down to different events, and a lot of the root cause of the recent spikes in both centered on the time frame that the fed started reducing the fed fund rate. I see the euro and oil prices more circular, sort of affecting each other the same, in a tit for tat sort of way. It is my understanding that oil is traded in US dollars, so as oil goes up, it would take more euros to buy, therefore to equalize the foreign exchange difference, the dollar must decline. But from what I see is the price of oil that affects the dollar first, and then the dollar responds. The price of oil is really supply and demand as well as inflation and a huge amount of risk, and the euro is closely related to liquidity.

I also believe that it is very complicated, based largely on a global economy and that if anyone says at this point they understand it, they should be taken in for psychiatric care immediately. "

vocal-de-local wrote on Jul 13, 2008 12:36 AM:

" napablogger, in response to your comment "To take a risk there has to be a big pay off. Or no one will do it, not for a small pay off."

I'm not terribly troubled when real estate investors have "no pay off". Real Estate speculation has turned residential housing, a basic necessity of life (shelter), into a profit making machine.

During the 1940's people typically broke even when they sold their homes five years after purchase. Back then homes were purchased for shelter and for a place to call home. It was a place where a garden could be planted or a wall painted without permission from a landlord.

There was a time when one basic income was all that was needed to purchase a home. Real estate speculation has delivered us to a place where home ownership now requires two incomes, and in many areas, high incomes for qualification. It ties people to certain jobs, often at the expense of their families, and robs them of flexibility for a very long time.

This is not progress. This is stealing the dreams of people and giving them to investors. Maybe if the "big pay off" goes away, an era will return where people can once again purchase a home, not for profit, but for a place to live without becoming a slave to financial institutions. "

umanyar wrote on Jul 13, 2008 5:35 PM:

" I can't help but wonder how we did become a nation of whiners?
The rules for buying a house always were 20% down and its a place to live, not an ATM. Then banks "enticed" those who could not afford to buy homes to get them. Similarly homeowners became "enticed" to borrow against their homes to live out of their means.
But we are all grown-us here, or were, right? A similar argument could be made that banks "entice" students now to borrow beyond their means.
IF the US gov't goes through with this bailout of the US homeowners who sunk themselves, I believe it is time for a new start for everybody.
If this housing bailout goes through, Students should immediately stop paying their private student loans and start demanding a bailout from the US govt as students were "enticed" into unfair loans.
Because IF this bailout goes through, it is a sign to millions of those-still-responsible Americans that it is no longer logical to be responsible with finances. You were "enticed" and you should be rescued.
Students, and others "enticed" into contracts they signed should hold off on their next payments to see what becomes of this...Maybe we all need to whine and get bailouts for all loans in the US? "

a teacher wrote on Jul 13, 2008 10:00 PM:

" umanyar: I think you have a point, but I think you should be asking who is really being bailed out here.

The problem is that loans were made to people who had no business getting them. Those risky loans were then "bundled" with other relatively safe loans to hide their real (lack of) value. Now that many of these home owners are in danger of default, it's the loan holders who are in danger of being left holding the bag. THAT is who is being bailed out.

Bare in mind that in 2001 Congress passed and President Bush signed legislation that change the bankruptcy laws making it more difficult to escape a bad debt. This law was at the behest of the credit card industry who claimed that it was a person's responsibility to pay off their debt. One could argue that the Credit Card industry actively seeks bad credit because they make far more money from interest than anything else. No one was interested in bailing out people who made poor decisions then. What has changed?

Follow the money... "

jonqcitizen wrote on Jul 14, 2008 11:34 AM:

" Napablogger-

The fact that you think all twelve of those people are on the union payroll, leads me to believe there is no point having a rational discussion with you on this topic. Seems like "don't bother me with the facts". "

bettye wrote on Jul 17, 2008 8:50 PM:

" napablogger, I feel your response was not very respectful to an old state retiree . Oh, never mind, I want be reading your blogs in the future .. "

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