Mr.Mayor - Where is the curfew?

There are at least three guaranteed characteristics of anyone in Chicago politics:

1.    They have the answers, and

2.    They have the arrogance and chutzpa to present the answers with great determination and knowing, and

3.    They always make sure they are taken care of and protected and that the same goes for their families.

The streets of the south and west sides of Chicago are not safe for the residents of the communities crisscrossed by those streets.

The politicians and bureaucrats know where to go, when to go and when to stay away from the unsafe streets.  When they do go they are protected – with their own guns; with the guns of the police who accompany them and with their entourages.

The residents operate under a vastly different set of rules –

·         No guns

·         No police escorts

·         No entourages

·         No storm trooper helmets, vests and automatic weapons

·         No laws to protect them if they take their safety and the safety of their children in their own hands

If your child can be shot on her front porch or skipping rope on the sidewalk in front of her home, can you find solace in the tough but empty words of a politician or a police chief or any cop who says it’s this persons fault or that persons fault?

We think not.  We think the mayor and police chief can do one of two things.  Either resign, or get off their well protected fannies and take the following steps:

1.    Declare a dusk to dawn curfew in the neighborhoods noted above

2.    Place two national guardsmen on every block in every neighborhood until further notice

3.    Suspend the Chicago police union contract until further notice – declare a state of emergency and notify each officer that they can either quit or operate under state of emergency orders until further notice.  Terminate all police arrangements to protect any politician current or retired.  It is a disgrace for any police officer to be so engaged when law abiding citizens are unsafe in their own neighborhoods

4.    Give each family in the neighborhood a damaging but non lethal weapon to defend them and their families during the day and let them openly carry it.  Provide immediate training in the use of said weapon(s)

5.    Pass a defense of home law to relieve each law abiding family of any responsibility for defending their home against any threats

6.    Shoot to kill any curfew violator after a clear and recorded warning (Chicago loves to record its citizens but does not extend such similar courtesy to its politicians, police and bureaucrats - time to make this change)

7.    Create safe access for law abiding adult or employed citizens to come and go during curfew hours

Chicago is a disgrace to the country.  Many of its streets are “no-man’s land” and under the control of gangs similar to those operating openly in Mexico.  Good police officers risk their lives to do their jobs in this situation – many will not go there.  The new police chief made himself ridiculously visible fighting a gathering of 100 or so unarmed protesters a few weeks ago safely surrounded by hundreds of storm trooper attired police.  The police banged the heads of these kids attired in their shorts and sandals and then retired to air conditioned surrounding for self congratulatory sharing.  Where is this massive presence at 2:00 am in the Austin, Garfield, Lawndale, Englewood and Kenwood neighborhoods to name just a few?

A few years ago one of the local TV stations did a 3 minute clip on how the cops can make a street safe.  Check it out at:  http://www.youtube.com/watch?v=o5migYVB9c4

Paul LePage Speaks Truth to Power

It is interesting to meet a man who is powerful in his own territory – a governor of one of America’s sovereign states, yet who speaks with great humility and intelligence as just one of us – one of “we the people.”

It is not often that a man with this standing, stands up to power and speaks the truth.  We have noticed that there are more governors who are becoming comfortable with saying no to Washington.  That is good; very good because the hope for America now rests with the strength and forbearance of strong, economically successful states that adhere to American fundamentals.  The California and Illinois templates are doomed to failure.  Many others still choose to play the game; go along to get along; always on the make for one more handout; one more “federal government program” to ensnare the people a bit deeper into the briar patch of dependency.

Not so with Paul LePage.  We introduced you to this man one month ago with a posting entitled, “Do you know Paul LePage?”  (See: http://thefundamentalsus.blogspot.com/2012/06/do-you-know-paul-lepage.html ).

We begin today by asking you to spend a few minutes to listen to Mr. LePage’s recent radio address about America, dependency, Obama and his solutions and other pertinent observations about being a citizen of this country in these very strange and distorted times.  Please go to:  http://www.dirigoblue.com/wp-content/uploads/2012/07/Government-run-Health-Care-.mp3

Also, Mr. LePage offers a website to keep current with his actions for Mainers.  It is a wonderful repository of good ideas and common sense (go to:  http://www.maine.gov/governor/lepage/ )  TheFundamentals has taken the liberty of snitching some of the ideas and common sense from Mr. LePage’s website and presenting them below with full attribution.  We have found no one who can say as much in as few words as Mr. LePage:

“It’s time to get Maine working again, and that means tearing down the roadblocks that establishment politicians have built over the past 40 years. Smaller, smarter government is the key to new jobs and financial security for Maine families.”

“Reducing Maine’s excessive tax burden so Maine families can keep more of their own money is the right thing to do. You know how best to spend or save your hard-earned wages, not government.”

“Welfare should be a temporary helping hand to get Mainers back on their feet – not a lifestyle and ticket to permanent dependence on government.”

An interesting fact.  Did you think that Maine was one of our original thirteen colonies?  It was not.  It was actually a part of the commonwealth of Massachusetts until 1820 when it voted to secede from Massachusetts (excellent judgment Mainers!) and then joined the US of A as our 23^rd state.  Did you know that Maine was just one of two states that did not support Franklin Roosevelt in the 1936 election?  The other was Vermont.  So much for “as Maine goes so goes the nation.”  More recently Maine has supported the last five Democrat candidates for president including the incumbent.  One of the many peculiarities that fascinates this essayist are the voting idiosyncrasies of Americans – Obama for president; LePage for governor?  By the way, over 90% of Mainers are non Hispanic whites.  The official state treat of Maine is the “Whoopie Pie.”  This is what a whoopie pie looks like:

The world’s largest whoopie pie ever was made in Maine last year.  It weighed 1,062 pounds.  There is hope for America.

Taxing Times for Regular Americans

This essayist gets a kick out of the politicians and bureaucrats and now, even more of a kick out of all the union folk representing government employees who now make much more than private sector workers while enjoying European style vacations and days off, health care benefits and, most of all, ridiculously generous pension plans and payments, telling us that the solution is higher taxes, higher government fees and higher everything flowing to them. 

Let’s take a look at what a real, regular American family earns and pays in taxes.  First we go right to the census bureau (home of really well paid, hard working, public servants who have almost guaranteed job security; all sorts of union rules protecting them from any form of difficult job pressure – lots of high civil service grades paying $80, $90 even $100,000 per year and then, on top of all that, they also get all the free benefits and the generous pensions) and they tell us that the typical American family earns $72,000 a year.  So let’s start with this $72,000.00 (a lot less, by the way, than many government family's).  And let’s give them a household of four – spouse and two kids.  What do they pay with those middle income earnings of theirs to our various hard working public servants across the land?

First, the feds.  Right off the top goes 5.65% (goes up to 7.65% on 1/1/2013) for social security and Medicare.  Never even see it - $4,100.00 gone.

Also, the IRS tells us that this family will pay federal income tax around $4,320.00;  goes to Washington DC, straight out of the paycheck; never seen; never enjoyed; absconded before the worker even gets to count it out and turn it over.

Now this family owns a home.  Bought it fifteen years ago; paid $225,000 and it was worth $450,000 for a few days in 2006 but now it is valued at $275,000.  The local government and the school board and the police and fire pension funds and the library and the mosquito abatement folk all get to add their needs to a property tax bill sent out once a year.  Totals 2% of the value now set by the local appraiser which is $300,000.  So, out goes another $6,000.00.

This family also buys things to support their life style.  Mind you, not a lot of things because you can see that two governments have already relieved them of $18,740 of their earnings or 25%.  When they buy things they pay state and local sales tax at the rate of 7%.  We estimate that they spend about $20,000 each year subject to that tax so out goes another $1,400.00.  And, they live in a state with an income tax – most Americans do, 41 of the states have income taxes.  Their state charges them 3% of their federal “adjusted gross income” which is about $50,000 so another $1,500.00 is gone.

Let’s do a quick tally of where our “middle American family” stands after the needs of the “public servants” have been met from their paycheck proceeds:

Gross Earnings                                                                 $72,000.00

Taxes/Government:

            Social security/Medicare                $ 4,100.00

            Federal Tax                                       4,320.00

            Property Tax                                      6,000.00

            State/local Sales Tax                         1,400.00

            State Income Tax                               1,500.00

                        Sub total                               17,320.00

                              Left over, so far                                   54,680.00                                        

Now, we are not quite done yet but we are already at 24% of our private sector working typical American family earnings are going to governments – one way or another; one place or another.  Over seventeen thousand dollars is levied on them by many different government agencies and those costs keep rising regardless of whether the family is able to earn more.

This family has to pay for its own health care insurance; not entirely but they make a significant contribution each month to its cost unlike most “public servants.”  Each month they pay $450.00 or a total of $5,400.00 for the year.  And as you may be thinking, there are many other forms of government fees and taxes they pay – on their electric, telephone, natural gas and cable TV bills.  They also pay a big tax at the gasoline pump each week.  And, less we forget, they pay license fees for their car and they need to pay other local fees for the bikes, the dog and even the parking meter when they run into the doctor’s office.  Whew!  It adds up to about $950.00 each year.

So, let’s recap.  The family wages start out at $72,000.00 and can be recalculated down to $54,680.00 (see above) after social security, federal tax, property tax, state sales and income tax.  Then they pay for health insurance and other hidden fees and taxes and they end up with $48,330.00.  33% of their earnings go out before they can even address their own issues.  ONE THIRD OF WHAT THEY EARN.  They may want their kids to go to good schools, not the ones run by the local teachers union; they may want to contribute to their church; maybe even take a vacation – not to some foreign destination but just to the state park.  First though, they have to pay their mortgage and they have to buy different forms of insurance and they have to pay for their utilities and many other necessities. Their grocery bill rises almost weekly because of the runaway inflation that the high paid, ride around in limousines with all sorts of security, bureaucrats tell them does not exist.  On top of that, this family used to make a few hundred dollars on their savings account and they used to be able to teach their kids to save because the savings would grow with interest payments each quarter.  No more.  No more interest for either them or their kids.

America is destroying its middle class in a way unheard of or unseen in its 236 year history.  It is taking money from regular people and wasting it on record levels of government employees earning record levels of salary and benefits and receiving pension payments earlier and at levels our privately employed family cannot even imagine much less comprehend.  The other consequence of this spending - there's no money for roads and schools and other needed public services.  Money has been spent on bureaucrats instead of products and services.

You can tax the rich, tax everything they make, and you still will not have enough money to pay all the government employees and all their generous benefit programs and all their bureaucratic activities.  So, don’t tell TheFundamentals that you are going to offer relief to regular Americans by taxing the rich.  The only relief for regular folk, working people will come through significant cuts in spending on government employees and programs.  Until then, the times will be very taxing for those of us in the middle. 

Chief Justice Roberts

This essayist had occasion on Wednesday, April 18, 2012, to read the entire front section of the Chicago Tribune.  Not just the front page but all 20 pages.  Let us recap the stories quickly:

News items:

·         Dixon, IL – city comptroller charged with misappropriating $30 million of city funds for personal purposes in this small town with an annual budget of $8-9 million.  She’d been in the job for 30 years and her theft was discovered during a recent 4 month absence.

·         Chicago – 56 year old former head of Chicago police union pleads guilty to stealing more than $1 million from union dues for personal activities.

·         Chicago – mayor requests immediate action on his proposal to get private companies to pay for public works projects.  Few understand the proposal to which Emmanuel says, “we’ve debated this long enough…I’m not in the position of analysis…I’m…getting things done.”  Many Chicagoans are reminded daily of the last mayor and his private/public transaction selling the city’s parking meters for 75 years to a private group for what some have calculated as less than half their economic value.

·         Chicago – 2 lawsuits against police misconduct – one stemming from 2007 beating of female bartender by off duty cop and one going back to 2006 when cops released a young mentally handicapped woman in a bad neighborhood whereupon the local youth beat her, raped her and she mysteriously fell from a high rise building to the ground

·         State of Illinois – state representative returns to Illinois house after being charged with taking a $7,000 bribe.  Fellow legislators welcome and congratulate him.

·         US of A – former GSA official and associates questioned by congress after years of wasteful spending on personal activities. 

·         And, of course, on any day the city and state both try to avoid facing two real problems – bureaucrats and bureaucracies borrowing money they cannot pay back, in many cases to fund their own pension checks, and students going to school with no measurable educational results.

After reading all these stories about corruption, self dealing and just simple abuse of power, what do we read in the same section of the paper the very same day, coming from the highest court in the land ---

·         US of A – Supreme Court rules that even a private lawyer employed by a municipality enjoys the same immunity from prosecution extended to municipal employees when “they are doing their job.”   Chief Justice Roberts says that immunity is needed for “ensuring that talented candidates are not deterred from public service.”

Roberts thinks the issue is attracting and keeping people interested in public service.  Is Roberts just stupid or is he part of the cabal that keeps this kind of crap going and going and going?   Message to Roberts: the problem is not getting and keeping people interested in public service.  It is getting rid of the lousy ones and holding them personally accountable for their misdeeds and self serving behavior.

This essayist believes that Roberts believes his own nonsense because he has never lived for any period of time in a world of public service accountability – where one is held responsible for what they do.  Responsibility can take the form of legal action – both criminal and civil; take the form of employment downgrading, suspension and termination; or, just plain everyday routine application of fundamentals such as reporting on objectives; being required to move on after a set term limit; limited in the time you can serve in any one position; being disciplined for small or medium errors and misjudgments and being required to take vacations so that someone else can do your job for a while and make sure everything is okay. 

Roberts does not know anything about accountability and yet, he runs the highest court in the land whose job is to administer ultimate accountability.  One of the men most in charge of accountability does not grasp the concept of accountability.   Legal immunity in public employment is a basic abuse of the American government concept of the people being sovereign; not the state.

The solution to the public service nonsense examples above is not at all difficult.  Eliminate collective bargaining for all “public service” jobs’; mandate term limits for all elected officials; demand balanced budgets and outside performance audits and hold all public employees personally accountable for their misdeeds on the job.  And, find a chief justice who can at least define accountability in terms consistent with the premise on which his country was founded.

Postscript – the essay above was written on April 24, 2012 (not published until today) at which time we could only detect that Roberts did not grasp the enormity of the problem facing America.  So, at that time, we made some reasonable, albeit for Washington DC, very challenging observations about this man in this very important job.  This week we learned that our view of him was dead on target.  All he knows is government; all he turns to is government; he believes that government is the solution. He has just this last week used incredibly combobulated thinking to go along with the most disastrous, voluminous and undecipherable piece of legislation produced by congress in our time.  To place the future of American health care in the hands of bureaucrats in Washington DC will result in the same outcome that we are experiencing from placing our financial future in their hands.

America has now found the perfect imbalance of its constitutionally designed checks and balances and so-called balance of powers.  The executive under Obama; the congress under all three – Pelosi, Reid and Boehner; the central bank under Bernanke and the supreme court under Roberts are a disaster of incalculable consequence. 

There is not an ounce of spine in all of them.  There is not an ounce of comprehension of why limits on government are necessary.  They believe in centralized, mammoth government.  Not a one of them will stand up to the geometric expansion of a failed central government. 

Roberts is 57 years old; he can easily be in that job for 20+ years. 

The Stockton Story

Some facts about Stockton, CA:  2010 population – 292,000 of whom 40% are Latino; 23% white; 22% Asian and 12% black.  Household income - $48,000 which is below the California average of $61,000.  54% own their home and 18% have a bachelors degree or higher (CA ave. is 30 %.)

Thefundamentals has followed the Stockton story for some time now.  If you read this article: http://www.latimes.com/news/local/la-me-stockton-bankruptcy-20120627,0,2285815.story  you will actually find a few key words that summarize the very essence; the basics; the fundamentals of what caused the mess (bankruptcy) in Stockton.  Here is our quick recap –

“Build and spend like there is no tomorrow – add debt assuming there will always be more revenue – make commitments to public unionized employees that are vastly in excess of anything the taxpayers can ever attain on their jobs – give the elected officials  the same package so they will approve it – never cut back; never give up any negotiated benefit or pension or work rule or wage contract – never cut back on anything; instead, if you’re on the gravy train, follow the argument that you earned it; you deserve it; it is owed you and no one can take it away, ever for any reason – when things get tough whine and complain – tell tales of woe and give examples of hardship – anything it takes to make someone feel sorry for you.” 

There is an alternative.  You can go to the recent essay in TheFundamentals about the cities of San Diego and San Jose (see TheFundamentals, June, 19, 2012) and read about two cities – two larger cities that faced the same causal situation and rose up with overwhelming majorities to simply say – enough; we will not let a small group of entitled, over paid public employees destroy our town simply because they have a few labor laws and loud mouthed organizers and well developed fear tactics on their side.

The story of Stockton is the story of Detroit.  It is the story of Vallejo, CA; Central Falls, RI; Jefferson County, AL and every other town that has public employees belonging to a labor union with rising debt.  The unions may be part of the SEIU or the AFL-CIO or the AFSCME or maybe an independent local group with no major affiliation.  The unions consist of policemen, firemen, sewer workers, teachers, municipal water supply workers, clerks, library personnel and every other position in between. They can issue dog licenses, car licenses, business licenses, kitchen rehab permits and liquor licenses or they can come around after the fact and check out your permits and licenses – all in the name of rules, regulations, laws and the public good.

But there is one license that they do not believe in.  One permit they do not issue.  One rule they do not enforce.  It is the license, the permit, the rule of common sense.  Of financial and fiscal responsibility.   Of setting limits on monetary commitments that match the revenue capability of the town.  The revenue capability of the town is not a theoretical or hypothetical calculation.  The revenue is there to serve the people; not the employees.   It is not some hopeful number based on ambitious projections of growth and an always increasing property tax base or business revenue base or population growth estimate or national GDP projections issued by politicians through their bureaucratic hires or by the irresponsible chairman of a central bank or even by the fancy folk with the economics degrees from eastern colleges.

This very minute, as you read these words, there are hundreds of cities and towns and counties across the United States where these words are ignored and the citizens are being forced to empty their already reduced savings accounts to pay for salaries, wages, benefits and pensions that they will never themselves attain or enjoy.  All because the elected officials failed to set limits; failed to stop union organization; failed to say no.  Instead they themselves go along with wages, benefits and pensions for municipal employees that are not affordable.  These are bubbles folks – unaffordable, wasteful spending and costs.  They must come to an end regardless of what Obama or Bernanke or Geithner hope for or say.  Unless you have a local or state government with a fiat (paper) currency trying to maintain the bubble.  Cities and towns do not – all they have is the ability to try to get the currency issuer, usually the central government, to print and distribute currency to keep the bubble alive – which is exactly what the combination of Obama and the other two named above are doing now.  But they cannot possibly do it on a large enough scale to save the Detroit’s, the Chicago’s, the Newark’s and the Stockton’s.

Someone once said, “May you live in interesting times.”

Stockton is living in very interesting times.  Wouldn’t it be nice if the American media, what we call the Hollywood media because of their captivation with all things entertaining, would spend hours on this story and leave the inconsequential nonsense for the tabloids?  Often we wonder if the Hollywood media attended the same eastern colleges that produced the three fools named above.

This is the story.  Nothing new here.   Adults acting like undisciplined children – no limits; no responsibility; just live for today and the devil take tomorrow.

That’s the Stockton story.

An Inside Look at America's Health Care Bubble

Early on in our essay preparation and presentation, TheFundamentals displayed this chart:

And so, we asked the questions, “How can per capita spending on health care in the United States be so much higher than anywhere on the globe and yet not produce better results as measured by longevity?  How can America afford such excessive spending for no measurable, consequential results?   Could America’s health care system be loaded with overhead and other costly features that don’t do anything to cure ailments but rather treat ailments for the benefit of health care providers?”    

Here is a recent chart showing health care employment over the last 20 years:

What do we learn from this chart?  Even during recessions (shaded areas) more and more people are employed in health care services – it has gone from about 8 million in 1990 to over 14 million now.  Way in excess of population growth.  By 2020, health care employment is projected to increase by at least 5 million more "workers."

One of the health care industry's most prestigious publications, the New England Journal of Medicine, has published an article that reaches some startling conclusions about it own industry.   We present a few quotes below (you can read the brief article at:  http://www.nejm.org/doi/full/10.1056/NEJMp1204891 )

“The goal of improving health and economic well-being does not go hand in hand with rising employment in health care.”

“Salaries for health care jobs are not manufactured out of thin air – they are produced by someone paying higher taxes, a patient paying more for health care, or an employee taking home lower wages because higher health insurance premiums are deducted from his or her paycheck.  Additional health care jobs leave Americans with less money to devote to groceries, college tuition, and mortgage payments…”

“There is, however, mounting evidence that our health care system could deliver better care without spending more and that there are tremendous opportunities for improvements in productivity – which suggests that the increase in resources devoted to health care has not generated commensurate value.”

“Treating the health care system like a (wildly inefficient) jobs program conflicts directly with the goal of ensuring that all Americans have access to care at an affordable price.”

Talk about stating the obvious – unless one is deluded or just dishonest.  The comments above are as applicable to health care spending as they are to education spending, generous state and city pensions and, the granddaddy of them all --  FEDERAL GOVERNMENT SPENDING.

A highly regarded professional journal looks at it own service industry and concludes  – “additional health care jobs leave Americans with less money” and “resources devoted to health care has not generated commensurate value” and “wildly inefficient jobs program.”  Something is badly wrong.  But can you imagine a SEIU or AFSCME or AFL-CIO newsletter speaking such truth?  Or a politician or bureaucrat who is fleecing the taxpayer with his or hers massive benefits and pension payments?  Think about the recently retired Daley of Chicago who managed to manipulate the Illinois and Chicago pensions to take over $180,000 each year!  And he is one of the lower paid fellows!!

Someone has to pay for it.  Bernanke does it with his bubble financing activities under the guise of deflation concerns.  Obama does it with his spending and then looks to Bernanke to buy the debt.  Krugman says its good economics.  Do more.  How much more debt they they need to lay on taxpayers?  Remember, only half of working Americans even pay federal income taxes anymore.  They are blowing bubbles. America is simply bankrupting itself in an orgy of fiscal promiscuity which manifest in bubbles – government spending, health care spending and education spending. 

We give the NEJournal of Medicine credit for an honest look and a self serving expose – we all know that this nonsense must come to an end and it is a lot easier to correct something before it collapses.   If only the Hollywood media would cover this story!  Where is anyone in the media on this topic?  Where is Romney?  Does he think he can win by not addressing issues such as ridiculous health care treatment programs that are bankrupting America?

What is Wrong with this Picture?