February 28, 2009

Skit Suggestion for Next Year's Newspaper Guild Follies

Monique Chartier

Speaker Murphy places muzzles on the other seventy four House members.

Not very subtle. But neither are the half dozen proposed House rules designed to squelch debate, only one of which, Bob Watson pointed out on Friday's Dan Yorke Show, has been withdrawn.

[Marc has more here.]

Do We Really Want to Be Found?

Justin Katz

Others among the Anchor Rising contributors have more Facebook experience than I do, but I find aspects of the phenomenon unsettling. Mark Patinkin touches on one in his column today:

I think the problem was that I hadn't entered any personal details on the site, thinking that would be weird for a man my age, but I went back in and did add a few basics, like the schools I went to.

Immediately, Facebook told me 24 people from my 1970 high school class had signed up, and so had 74 from my college class. They were all told I was now registered, and a number began to be in touch.

This explained why Facebook is successful. Even if I'd come across these folks' e-mails, I doubt I'd have written them out of the blue to say hello, but for reasons I don't fully grasp, on Facebook, it's natural to do so.

I wouldn't suggest that folks oughtn't have the right to do such networking, but I wonder what thus-far intangible detriments there might be to decreasing Americans' ability to reinvent themselves in new locations. Especially in Rhode Island, some folks never leave the regions of their birth, but the capacity for distance is healthy.

Maybe I'm a fuddy-duddy in Internet years, but it seems to me that being Googlable is the adequate balance. There's that moment of decision to seek somebody out (and believe me that I've been on both sides of the wrong choice). Sending a reminder to all of my high school classmates that I'm still alive? I don't know; bumping into too many of them was one of the reasons that I slipped away from New Jersey.

Of course, before I sat down to pen this post, curiosity got the better of me, and I registered. The moment I'd completed the process, people whose names I recognize from around Rhode Island popped up requesting to be my "friends." Does that mean that I was on some sort of a watch list?

More disconcerting, given my recent activities, was the ability to look at others' friends. I searched for graduates of my high school, and thus begins the thread. Rob leads to Andrew leads to Jay leads to Stephanie, who works for a major record company (which would have been very good to know back before life had pushed me off the rock star fantasy). And I could send messages to all of them; what a weapon these friends lists might provide to political enemies. What rumors might they spread back through one's biography by sending messages to friends of friends of friends. What dirt they might tease out from the past were they to dig.

My reaction upon seeing the names and pictures of people I once knew returns to my initial thought. To me, these thirty-somethings, most of them fifteen years removed from immediate experience, evoke impressions of their younger selves, and my effect on them would likely be the same. What will it mean for our society when one can never escape — when we must prove continually that we have changed?

Everything Is Rosy, Now Obama's Found Rosy

Justin Katz

So that two-trillion-dollar deficit? Turns out it might be the optimistic scenario:

The administration insists it isn't so, but some private economists are wondering if the Obama administration has brought "Rosy Scenario" back to town.

In unveiling his budget, President Barack Obama pledged to bring "honesty and fairness" back to the budget process by getting rid of the gimmicks past administrations had used to hide the real costs of government programs and proposed tax cuts.

But many economists who examined the economic assumptions that undergird the spending plan believe that Obama may have resorted to one of the oldest gimmicks around — relying on overly optimistic economic assumptions to make it look like you are dealing with soaring budget deficits when in reality you are only closing the gap on paper.

I suppose nobody should have expected that the president would be able to change the world on the cheap, and as Mark Steyn reminds us, that is the project on which our nation has now embarked:

If you find it hard to keep track of these all these evolutions, the President in his address to Congress finally spilled the beans and unveiled our new hero in his final form: the Incredible Bulk, Statezilla, Governmentuan, a colossus bestriding the land like a, er, colossus. What superpowers does he have? All of them! He can save the economy, he can reform health care, he can prevent foreclosures, he can federalize daycare, he can cap the salary of his archenemies the sinister Fat Cats who "pad their pay checks and buy fancy drapes." No longer will the citizenry cower in fear of fancy drapes: Pay no attention to the man behind the curtain! With one solar panel on the roof of his underground headquarters, Governmentuan can transform the American energy sector and power his amazing Governmentmobile, the new environmentally friendly supercar that soon we’ll all be driving because we'll be given government car loans to buy the government cars! He'll have hundreds of thousands of boy sidekicks, none of whom will ever be allowed to drop out of high school because (in the words of his famous catchphrase) "that's no longer an option!" "Gee, thanks, Governmentuan!" says Diplomaboy the Boy Wonder, as he goes off to college to study Gender As A Social Construct until he's 34.

Frank Just as You'd Expect

Justin Katz

One could have expected that Barney Frank would know that he was playing to his own crowd at last night's Ocean State Follies, and it also wasn't surprising that his humor has a meanish, hyperpartisan tinge: stream, download. The clearest indication of his attitude came toward the end when somebody on the restaurant staff dropped some dishes and Frank's ad lib inclination was to crack about his or her working above "classification."

Socialism's gonna be fun with this gang!

February 27, 2009

So These Are the Follies...

Justin Katz

Well, I've already spotted just about everybody in Rhode Island politics and related fields that I know that I know, and even a good portion of those whom I know that I'll recognize. Curiously, as I pass by legislators, I find myself compulsively checking on my wallet.

As tends to happen, every natural instinct makes me inept at these things. For anecdote, I was about to say hello to URI President Robert Carothers (curious, as I am about his opinion of my doings since the era in which he wrote me a graduate school recommendation) when a familiar unionist face stopped me to chat. When I turned back around, Mr. Carothers was walking away, and I found myself chasing him. I turned around so as not to appear, well, stalkerish.

Perhaps the single greatest thing about blogging is that it gives me an excuse to do what I'm inclined to do anyway: Avoid schmoozing by sitting down at my table and talking to myself, only now I can type.



Etiquette question: Is it rude to blog during dinner? I guess if the politicians never stop scoping out the room, the bloggers can get away with doing their own thing. The show has yet to start.

Apart from the local celebs, Rep. Langevin is at the table immediately diagonal from me. Senator Whitehouse has been wandering around . Non-Senator Chafee bobbled by.

A handful of women dudded up in tight leather clothes — clearly looking to impress people who like for folks to try to impress them — have reminded me to shake my head that these people in state politics take themselves so seriously. Do the rabble-rousers always think thus of the powerful?

9:23 p.m.

Bob Kerr is not in attendance this evening because of a somewhat serious health issue on Wednesday night. I offer well wishes.

On a related note, Matt Jerzyk let me know that Bob Walsh — gubernatorial candidacy notwithstanding — is still not fully recovered, although the prognosis is good, I take it.

9:27 p.m.

Beginning the show on a down note, the opening song is "Everything's Going to Hell Here in Rhode Island."

9:47 p.m.

Mocking John DePetro, whom I saw earlier, with a song called "Throw the Wife Under the Bus":


And making fun of the Cicilline Bros. with "Been Indicted":


10:20 p.m.

Still here. Some humorous stuff, some local stuff over my head. I must say — and I think this is an annual quality — there's something conspicuous about the heavy dose of scorn pointed toward WPRO. Conspicuity here indicative of jealousy, I'd suggest. On the other hand, with the particular attention paid to the governor, there is a bit of that "our side versus theirs" feel.

10:31 p.m.

Clearly, we in the East Bay aren't doing our job. I don't think we've earned one reference in this thing.

10:46 p.m.

What? Aren't they supposed to have some sort of surprise special guest? What does this failure of expectations portend?

10:51 p.m.

It's Congressman Barney Frank.


I was hoping that it was President Lincoln and Sarah Palin:


10:53 p.m.

It says something poignant about the state of Rhode Island that the super high-anticipation special guest at the big mucky-muck event of our state seems often to be a national politician from Massachusetts.

Ka-Boom! Tiverton Residents Sue for Refund of Illegal Tax Increase

Justin Katz

Things are going to get even a leetle more interesting in our sleepy corner of the state:

Danielle Coulter, a chiropractor and Tiverton School Committee member just elected to office last November, has filed a lawsuit against the Tiverton’s tax assessor.

She claims that last year’s property tax levy in excess of the tax cap was excessive and unlawful, and she asks the court for relief from paying the taxes on property at 34 Lawton Avenue which she and her husband Robert D. Coulter are listed as owners.

Their property is assessed for tax purposes at $395,700 and they pay, according to tax assessor records, $4,455 in taxes.

Mr. Coulter is a lawyer with a Providence law firm and was elected last November to the town Budget Committee, on which he serves as vice-chairman.

Explaining the process that "has brought about this suit," Ms. Coulter said "I am simply appealing my tax bill, everyone has that right."

"The suit is not about money," she said. "The overall amount in question is $193. If returned to us it will be donated to the Tiverton Land Trust. The Financial Town Meeting process is in question. This is about fairness and following the law. It is my belief that the town was lied to in the initial FTM, regarding the timing needed to reconvene the next FTM." ...

Ms. Coulter made other allegations in her complaint about last year's town meeting that she said was "fraught with irregularities ... (that) amounted to a deprivation of due process."

I can't promise to give my refund to charity, but I might donate some of it to a joint Coulter reelection fund.

Literary Precedent for a Truth Commission

Monique Chartier

As Marc said, quite the name and concept for Senator Whitehouse's proposed commission. Can a "Truth Czar" be far behind?

Look, it is certainly possible that stuff went on beyond the borderline silliness intitially reported to have occurred at Abu Graib. And without a doubt, the idea of rendering prisoners to another country for torture should be cursorily examined and then definitively ended, if assurances yesterday by the new head of the CIA, Leon Panetta, are not sufficient.

In short, there may be grounds for inquiry. Why not a Senate hearing? Slightly less dramatic, slightly less over-reaching than Senator Whitehouse's highly ambitious commission, which is a bit too evocative of Winston Smith's ironically named place of employment.

The Ministry of Truth -- Minitrue, in Newspeak -- was startlingly different from any other object in sight. ... [1984, George Orwell]

Warwick Contract Update

Marc Comtois

Russel J. Moore at the Warwick Beacon has an updated story on the pending Warwick union contracts:

The concessions from unions were originally reported in newspapers, and on televisions newscasts and on radio stations to save taxpayers just over $9.7 million. But the actual concessions from the city bargaining units (police, fire, and municipal workers) will save taxpayers about $6.35 million.

The remaining $3,375,398 will be attained from savings from the city’s management employees. The savings will be attained from the 28 retiring management employees that would go unfilled, a 3-percent pay cut they will receive for the rest of the year, and a required increased pension contribution by employees.

While those savings represent a clear benefit to taxpayers, they’re not part of the bargaining agreements the city council will be asked to ratify on Friday evening. The administration, as it did last July when it mandated management employees increase their healthcare co-share payments to 10 percent, can unilaterally impose these cost savings measures on them at any time. {Emphasis added.}

The City Council meets is tonight at 6 PM at City Hall. There is some skepticism:
City Councilman Steve Merolla (Ward-9) said while the co-share payments are increased in this agreement, he’s still not thrilled with the fact that they’re still much lower than most private sector employees pay. The co-share payment for a single plan for all city employees will increase from $11 per week to $14 per week. For a family plan, the cost will increase from $11 per week to $28 per week.

While it will increase the percentage of the cost for a single plan to just over 12 percent, and the percentage of the cost of a family plan to about 10 percent, those percentages will decrease in the future years as the cost of health insurance continues to spiral, Merolla pointed out.

“These health insurance co-pays are structured so that they’ll be paying a lower percentage of the cost in future years,” said Merolla.

State workers pay 20-25 percent of the cost of their healthcare based upon seniority.

City councilman Joseph Solomon (Ward-4), while never one to tip his hand, seemed skeptical about the deal. Solomon said he has “many questions” about the tentative agreement that he plans to ask at Friday night’s meeting.

“I do have many questions with respect to what he’s given to us and when I receive the answers to those questions I will be able to make a decision based on that knowledge, not what I got from reading newspapers, watching television, or listening to the radio,” said Solomon.

Don't Speak, Don't See

Justin Katz

Marc mentioned yesterday that the chairman of the Rhode Island House Finance Committee wishes to control debate on the floor of the House. In other news, the chairman of a House commission on pension reform, Timothy Williamson, again refused to release the product of a publicly financed actuarial study of potential retirement savings:

The state's pension advisers dangled potential savings ranging from $22.6 million to $38.2 million in a single year in front of a legislative study commission yesterday, amid promises by the chairman that this year-long, stop-and-go foray into the world of public employee pensions in Rhode Island will wrap up its inquiry by the end of next month.

Rep. Timothy Williamson, D-West Warwick, again refused to make public a letter summarizing the findings of the state-paid actuaries at Gabriel Roeder Smith & Co., and the methodology they used to arrive at their conclusions.

Williamson asserted that the letter, which the actuaries had in front of them as they testified at last night's televised State House meeting, had been written to him personally, in his role as chairman of the commission, and so it was not public. One of House Speaker William J. Murphy's top State House legal advisers, Richard Kearns, backed him up, which kept the letter out of the public arena last night.

The actuaries are being paid a reported $52,000 by the General Assembly for their work, but as of last night, only some of that completed work had been made public.

Given the numbers that were cited — that the numbers were cited — one wonders what's being withheld from public view.

By Virtual Campaign Announcement, I Think He Means the Real Announcement of a Virtual Campaign, and Not the Virtual Announcement of a Real Campaign...

Carroll Andrew Morse

...for the moment, at least.

Robert Walsh, executive director of the Rhode Island Chapter of the National Education Association, has announced, er, something in a diary entry over at Rhode Island's Future

By now, many of you are asking yourselves a simple question – is Bob Walsh crazy enough to actually consider running for Governor, or is he up to something else? Would Rhode Island voters even vote for a Brown graduate, former banker, East Greenwich resident for Governor? Could a candidate with deep roots in both the labor and progressive communities win a multicandidate Democratic primary against so many current office holders at a time when people are so cynical about anyone currently holding elected office? How about an actual campaign organization – does he have the contacts with the experienced campaign managers, fundraisers and field operatives to actually make this work? How would he hold up in debates...

Maybe 2010 won’t be my year to run for Governor, and this will actually be my attempt to create a forum where issue-by-issue, a real discussion can be held in the virtual Rhode Island Future world about the development of a real progressive campaign platform, so that can become the standard by which progressives judge the many candidates vying for our support. Maybe some of those candidates will even adopt ides developed right here.

Hmmm. "Maybe"?

Keep the commentary civil folks.

High Taxes Coming

Marc Comtois

From ABC News:

President Obama's budget proposes $989 billion in new taxes over the course of the next 10 years, starting fiscal year 2011, most of which are tax increases on individuals.

1) On people making more than $250,000.

$338 billion - Bush tax cuts expire
$179 billlion - eliminate itemized deduction
$118 billion - capital gains tax hike

Total: $636 billion/10 years

2) Businesses:

$17 billion - Reinstate Superfund taxes
$24 billion - tax carried-interest as income
$5 billion - codify "economic substance doctrine"
$61 billion - repeal LIFO
$210 billion - international enforcement, reform deferral, other tax reform
$4 billion - information reporting for rental payments
$5.3 billion - excise tax on Gulf of Mexico oil and gas
$3.4 billion - repeal expensing of tangible drilling costs
$62 million - repeal deduction for tertiary injectants
$49 million - repeal passive loss exception for working interests in oil and natural gas properties
$13 billion - repeal manufacturing tax deduction for oil and natural gas companies
$1 billion - increase to 7 years geological and geophysical amortization period for independent producers
$882 million - eliminate advanced earned income tax credit

Total: $353 billion/10 years

So the idea is to stimulate the economy within a couple years...and then raise taxes? We'll see how that works out. Bob Krumm offers this wry analysis:
If the government took 100% of earnings from those making more than a half-million dollars a year, it would add only $1.3 trilion to federal tax receipts. Even the most ardent demand-side economists who usually scoff at the Laffer Curve, will have to admit a 100% tax rate is going to yield significantly smaller receipts.

Barack Obama’s plans to hyper-inflate the government bubble while he taxes the rich at confiscatory levels, is so certain to collapse the economy that I can only conclude that he is a brilliant Rovian plant whose purpose is to finally drive a stake into the heart of the era of big government.

Links to more analysis can be found at the TaxProf blog.

Administering Results for Negotiations

Justin Katz

It would go too far to speculate that this sort of thing is widespread:

Statewide testing procedures were violated at Whiteknact Elementary School last October when at least 14 third graders were given extra time, the state Department of Education has concluded.

And now school officials are looking into whether another violation occurred when the standardized tests for students in grades 3 through 5 were administered at Whiteknact. ...

Barbosa also said her daughter, also a Whiteknact student, told her that the person who administered the standardized tests in her classroom prompted the students with answers. Barbosa did not disclose what grade her daughter is in Tuesday night and she could not be reached Wednesday morning.

Students' success on these tests has a direct bearing on contract negotiations, and especially given other tactics of unionized workforces, it's reasonable to suggest that perhaps some third party should direct and supervise the test taking.

February 26, 2009

Obama Doomsayer!

Justin Katz

Dick Morris is hit or miss, and I can't say I'm sure which it is with this column:

In addressing this panic, the president of the United States must truly be the leader of the world — showing the way back to confidence.

Instead, Obama has been instrumental in purveying fear and spreading doubt. It is his pronouncements, reinforced by the developments they kindle and catalyze, that are destroying good businesses, bankrupting responsible people and wiping out even conservative financial institutions. Every time he speaks, he sends the markets down and stocks crashing. He doesn't seem to realize that the rest of the world takes its cue from him. He forgets that he stands at the epicenter of power, not on the fringes campaigning for office. This ain't Iowa.

Why does Obama preach gloom and doom? Because he is so anxious to cram through every last spending bill, tax increase on the so-called rich, new government regulation, and expansion of healthcare entitlement that he must preserve the atmosphere of crisis as a political necessity. Only by keeping us in a state of panic can he induce us to vote for trillion-dollar deficits and spending packages that send our national debt soaring.

There's a note of truth to that, but time must pass — and escalating, leveling, or waning pain — before such pronouncements can be judged.

And then, of course, there's Obama's first deficit:

(via Drudge)

Hillary Clinton's Parting Words to the Chinese - Let's Look at the Tape Again

Monique Chartier

From Bloomberg via Drudge:

Treasuries fell for a third day as the government sold $22 billion of seven-year notes in the last of three auctions this week as it issues an unprecedented amount of debt to spur the U.S. economy.

Secretary of State Clinton's plea that the Chinese government continue to purchase US paper now comes into sharper perspective. It's important to encourage/schmooze your biggest customer when you're about to roll out a record-breaking amount of product.

By the way, if issuing all this government debt spurs the economy, what happens to the economy when we go to pay it back?

RI House Leadership: "Shut Up and Sit Down!"

Marc Comtois

That's the line WPRO's Dan Yorke is using to characterize a new effort by the RI House Democratic leadership to stifle free speech (because, you know, they're barely holding on to control up there....). Yorke was tipped off about this from Rep. John Laughlin and got confirmation in a conversation with Rep. Bob Watson. The House leadership tried to do the same thing last year and Yorke successfully led the charge against the bill. The section of the bill in question, submitted by Rep. Eileen Naughton, states:

(20) Amendments, articles or sections of the State budget shall concern only appropriations, expenditures, revenue or matters related thereto. No matter which has been the subject of a bill, resolution or amendment heard or considered in a House committee shall be offered as an amendment to the budget bill either in the Finance Committee or before the House, without the prior written consent of the Chair of the Finance Committee.
So that means that Rep. Steve Constantino, House Finance Committee Chair, has speech veto power. If he didn't like your idea in "his" Committee, he's not going to let you bring it up on the floor of the House. I'm not sure if this is the height of insecurity or arrogance. Or both?

The Problem with Retrospect

Justin Katz

A rule of thumb for government manipulations of the economy ought to be that regulations be as minimally invasive and starkly drawn as possible. That's the principle that has kept the following paragraph from a Providence Journal editorial buzzing in the back of my mind since yesterday:

Some take-home lessons: A prudent society imposes regulations to stop lenders from selling mortgages destined to fail. It doesn't feed an asset bubble, in this case housing, by keeping interest rates absurdly low. And it doesn't tolerate a financial system that takes vast risks and hides them because of campaign contributions to elected officials.

The last clause, about political corruption, is obvious, but the rest steps into some sticky retrospective ground. Allowing government determinance of what investment and loan practices are "destined to fail" is destined to constrict the economy. Popping bubbles assumes that no economic change is possible. And why shouldn't risks be allowed when made with private dollars?

Far less invasive and more easily managed, I'd say, would be regulations that prevent organizations from achieving "too big to fail" status and then allowing them to fail when their risks don't resolve well.

At What Point Do We Begin Using the Phrase "Out of Control"?

Justin Katz

Turning debate into bickering over legislation that would increase departmental budgets by eight percent, Rep. James McGovern (D, MA) offered this irrelevancy:

"The same people who drove the economy into the ditch are now complaining about the size of the tow truck," said Rep. James McGovern, a Democrat from Massachusetts, pointing out the large increase in deficits that President George W. Bush and GOP-controlled Congresses amassed.

I guess responding to a wrong with a wronger makes it right. Reading the Nation section of the newspaper is beginning to feel like watching teenagers run up the family's credit cards while the parents recover from a peculiar illness that had caused financial delusions.

On the healthcare side, the change in the flow of money couldn't be more dramatically drawn:

Obama's budget proposal would effectively raise income taxes and curb tax deductions on couples making more than $250,000 a year, beginning in 2011. By not extending all of former President George W. Bush's tax cuts, Obama would allow the marginal rate on household incomes above $250,000 to rise from 35 percent to 39.6 percent, said an administration official.

To raise more money, Obama wants to reduce the rate by which wealthier people can cut their taxes through deductions for mortgage interest, charitable contributions, local taxes and other expenses to 28 cents on the dollar, rather than the nearly 40 cents they could claim otherwise.

That proposal is deeply controversial, particularly with nonprofit institutions that depend on wealthy donors and with lawmakers representing high-tax states such as New York and New Jersey.

The plan also contains a contentious proposal to raise hundreds of billions of dollars by auctioning off permits to exceed carbon emissions caps Obama wants to impose on users of fossil fuels to address global warming. Some of the revenue from the pollution permits would be used to extend the Making Work Pay tax credit of $400 for individuals and $800 for couples beyond 2010 as provided in the just-passed economic stimulus bill.

About half of what officials characterized as a $634 billion "down payment" toward healthcare coverage for every American would come from cuts in Medicare. That is sure to incite battles with doctors, hospitals, health insurance companies and drug manufacturers.

Some of the Medicare savings would come from scaling back payments to private insurance plans that serve older Americans, which many analysts believe to be inflated. Other proposals include charging upper-income beneficiaries a higher premium for Medicare’s prescription drug coverage.

Even after all those difficult choices, Obama’s budget would still leave the federal government heavily in the red, with deficits remaining above $500 billion over the second half of the decade — even after a series of wrenching policy choices.

Running with the just-make-it-so liberal fantasy that policy can simply be dictated to society without consequence, the current regime is going to stultify economic growth and foster dependence. Well, America, you asked for change, and you're going to get it; let's hope we all survive the experience.

Link Cornucopia

Marc Comtois

Expect a run on Portugese Water Dogs.

We have a Senator striving to form a "Truth Commission." Brilliant, name. Sheesh.

We have a Representative calling his state's Supreme Court a "disgrace" because they...followed the law?

We have a tribal leader who can't give up the ghost of a casino (even if he won't say that's what this is all about); a battle he has fought and lost for at least a decade.

Schadenfreude: Colby Cosh is a GenXer who is taking some delight in these times. Warning: generational warfare.

Congrats to both PC and URI. Maybe there will be basketball in March in Rhode Island after all.

Dealing with Stimulation

Justin Katz

Appearing on last night's Matt Allen show, Monique shone some light on strings attached to stimulus money — such as the reversal of welfare reform — and advised caution in accepting and deploying it Stream by clicking here, or download it.

February 25, 2009

Stimulus Funds: Take your Time, Gov!

Monique Chartier

Governor Carcieri has asked for another extension to submit the state budget.

Spokeswoman Amy Kempe said earlier today: "The budget submission will be delayed to allow the governor to meet with House and Senate leaders to discuss the impact of the federal stimulus law.

This is not a process that should be rushed. It turns out that budgetary serpents swim beneath the tempting surface of this federal largesse. Governor Bobby Jindal, for example, has formally declined certain stimulus funds that would have expanded Louisiana's unemployment insurance coverage because

accepting the money would have required a change in state law and, after federal money runs out in three years, would have led to a $12 million increase in taxes on his state's businesses to keep funding the benefit.

Tennessee Governor Phil Bredesen has also just expressed reservations about these funds.

On another front, the stimulus law provides for the repeal of welfare reform. In view of the role that decades of generous social programs has played in Rhode Island's budget deficits and disproportionate taxes, do we want to take the large step backward of accepting federal funds that would compell us to repeal our own newly-minted welfare reform?

Other fiscal threats undoubtedly lurk in the stimulus package. Let's take the time to use some analytic sonar before jumping in.

Mark Zaccaria: Money, Politics, and PR Legerdemain in the Public Sector, Part 2

Engaged Citizen

Mark Zaccaria concludes his response to Bruce Bartlett's postulates on the relationship between deficits, monetary policy, interest rates with some specific economic suggestions of his own…

Raise Interest Rates: Money is like water, in that if you want it to flow you have to tilt the table. With effective rates at zero there is no incentive whatsoever to risk private capital on innovation or new infrastructure. Even if the start-up you back is a success it could be that all you’ll get in return is the original check you invested in it. Using federal capital is not the answer. Deficit spending will always go to pork and pet projects because of the political process that has to take place to authorize it in the first place. (Remember: Inefficient Spending).

I am certainly not counseling a return to the double digit primes of the Carter Administration. To get money now sitting on the sidelines back into the game and then to get it moving more quickly there has to be an incentive. So far the best one ever devised is Profit.

Create Industries, not just Programs: Recently the federal government arranged for massive loans to be made to Chrysler and GM to keep them afloat in their present configurations. Their present configurations are the problem. That loan money will be spent to perform high cost manufacturing of products consumers don’t want. If the government had, instead, created a tax credit or other individual incentive to BUY any American automobile it would have created demand that favored the low cost producers and those with the best products to sell. That still might have cut Chrysler and GM out of the transaction, but it would have made them move a whole lot faster to shed inefficiencies and focus on strengths. To put it another way, nobody ever runs as fast as they do when their hair is on fire. As it stands, politicians may claim some short term victory because employees of these two behemoths will get their pay checks for a couple more months. It just puts off the inevitable, though, and you have to wonder if the loans were a better idea than just having a bonfire with the Hundred Dollar Bills on the East Lawn of the White House. The fire would at least rein in the money supply slightly.

Federal action on the requests from the car makers is just one example of a policy that has to change…because it won’t work. Look at what’s happening to the big banks. They are being nationalized through deficit spending to bail them out. I say nationalized because their new venture capitalist, the US Government, is imposing all sorts of requirements on them. You may think its just deserts to force limits on executive pay or make them send back a private jet or two. When the US Government insisted that the payment of dividends be suspended until its loans were repaid, however, it effectively downgraded the investment value of the banks’ common stock to zero. Have you been watching? As I write this Citi Group is trading at just above $2.00 per share, a 52 week low (of course), down from nearly $30.00 per share last year. Bank of America? Today it’s trading around $3.50 per share, down from well over $40.00 last year. The Shareholder of last resort? You and Me, in the form of our federal government. I call that nationalizing the banks.

The programs the government devises are inherently flawed because they do not take market forces into account, only political forces. It’s time for government to start promoting manufacturing and get out of the business of owning equities. And what’s the best way to do that?

Reduce Government Spending: The trillion dollar emergency bailout will not work but it will run up the balance on our National Credit Card such that we will all be indentured servants of the government for generations. It is exactly the wrong thing to do. If the government reduced spending it would also reduce BORROWING. That would leave more money available for productive use by the private sector, the one more likely to make efficient decisions with money.

Reduce Marginal Tax Rates: When you cut taxes you create new taxpayers. The net dollar impact of that larger taxable base is an increase in the overall number of dollars flowing to the US Treasury. That may sound counterintuitive but it has worked every time it’s been tried. Look at the Kennedy Tax Cuts in 1961, or the Regan Cuts in 1981, or the Clinton edition of tax cuts in 1997. The money may not have always been used wisely but it has always materialized.

This time let’s bring in the extra income and resolve to use it in the best interests of re-establishing a conservative financial foundation for the United States of America.


Mr. Bartlett has far more big government experience than I do, but that very fact may prejudice his judgments. He may be like a military general fighting the last war rather than this one. Things may be sufficiently different today to make the policies that worked for Mr. Bartlett in the past unusable today. Two of those changes are the massive accumulated debt and the nearly complete globalization of the economy. New times demand a new analysis of the environment and fresh approaches to having government fulfill its most fundamental responsibility: to protect the people.

Mark Zaccaria is a small businessman in North Kingstown. He is a former member of the North Kingstown Town Council and was the Republican Candidate for the state’s District 2 seat in Congress in 2008.

Truth in Humor

Marc Comtois

Many have probably already seen this, but it's profound enough to post here:


Dispelling Myths About Bipartisanship

Justin Katz

Can we now be clear about what it fundamentally means to strive for "bipartisan" action?

Reed said economists "on both sides of the political divide" concluded "this stimulus was necessary, that we had to stop the job losses, we had to get people back into the marketplace, that there was a very real fear of even worse job losses." He said the package represents "a rather rapid response to the most significant problem facing the country, which I think speaks volumes of the president's leadership and his ability to get difficult things done."

But he cautioned that more must be done, such as "additional efforts to increase lending by the banking community."

While campaigning, Obama decried partisanship, and once in office, he tried to gain support for the stimulus package from Republicans in Congress. But the package passed without a single vote from House Republicans, and it received support from just three Republican senators — Maine's Susan Collins and Olympia Snowe and Pennsylvania's Arlen Specter, whom conservatives deride as RINOs (Republicans In Name Only).

In response to Republican criticism of the stimulus package, Reed questioned the GOP's claim to fiscal conservatism, noting the national debt rose sharply during President Bush’s administration. "I think after presiding over the economic policies that led us to so much of this," he said, "their standing to be critical is really diminished. But I think what they did is they adopted a political posture, not one based on a pragmatic analysis of the markets and what had to be done."

So should Obama keep striving for bipartisanship?

Brown University political science Prof. James Morone had an op/ed piece in The New York Times on Tuesday, saying that while Obama seems eager "to restore a culture of cooperation in Washington," it's not going to be easy because "that golden bipartisan era never existed."

"Great presidents do manage to push past partisanship — not by reaching out to the other party, but by overwhelming it with a new vision," Morone wrote. "Franklin Roosevelt did not offer a hand to the defeated Hooverites." Rather, FDR's success stemmed from "the collective, social-gospel vision he articulated from the start."

"Bipartisan" is a desirable marker of actions that are so clear and popular that even the necessary political tension that should exist in a healthy society does not apply to them (at least fully). If the weighty and complicated matters of our day sail along with the winds of a bipartisan spirit, it means that our government is not functioning properly.

Here's the Plan

Monique Chartier

We move to Houston.

We collect $3,000 each from their fine city council.

We direct the funds to their prescribed use by paying off our AmEx bills.

We each collect the $300 from AmEx!

(Who says over-the-top bailouts and panicked corporations are a bad thing?)

Comparing Warwick Contracts

Marc Comtois

For perspective (which ever way that you, dear reader, wish to take it), here is a quick comparison of the re-negotiated Warwick contracts. Warwick Mayor Avedesian and his administration re-negotiated the fire, police and municipal contracts (pending City Council approval this Friday) and extended them to 2012. (In September 2008), the Warwick School Committee and Administration re-negotiated the teacher contract thru 2011.


* For Fire, Police and Municipal workers, this is the effective annual raise after salary give backs for the last four months of Fiscal Year 2009, which amounted to 5% for police, 3.5% for firefighters and 3% for municipal employees. The teachers renegotiated on the heels of their new contract just taking affect. This took them from their original 3.5% raise to a 2% raise with differential deferred.

Health care co-pay is for individual/week and is a set dollar amount, not a percentage.


1) Health care really needs to become a percentage of salary, not a flat dollar amount.

2) Don't forget the STEPS. Raises are built into step increases.

UPDATE: I took some time and, utilizing the "Transparency Train", looked at the current contracts that are being extended. Currently, the Police (p.14) and Fire (p.36) have this step increase structure built in:


Now, these aren't year-to-year steps--as with the Teacher contract (p.107)--and the impact isn't as great. For example, those in the middle years of each step are really just getting the publicized raise (0% and then 2.25%). Those lucky enough to make the jump will receive more. (The municipal union contract--p.72--is similarly structured ).

Contract Steps: A Tutorial

Marc Comtois

When we here about 3% raises in union contracts, what does that mean? Seems obvious: people will make 3% more next year over this. But with union contracts, that's not the case. In most union contracts with which I'm familiar, each position has a defined table of step increases based on years served. When we here about 3% raises, for example, that 3% is being applied to the STEPS not to the people.

For municipal and teacher contracts (Police and Fire contracts can be different--going "up a step" doesn't occur yearly, for instance), that usually means pre-defined increases for the first ten steps (or years). After that, people are "frozen" at step 10 and continue to receive the annual step 10 escalation (which is basically the publicized % raise we always here about).

To a non-union member of the public, this can be confusing, which isn't helped by the way such pay increases are routinely reported.

Here's an example: This chart is for a generic municipal position (fyi: the numbers aren't real, just an example) based on the tentative agreement in Warwick, with the typical salary/step structure laid out for 2009->2012 based on current salary in 2009, 0% "raise" in 2010 and 2.25% raises in 2011 and 2012.


An actual, flesh-and-blood first year employee makes $30,000 in 2009, $32,500 in 2010, $35,788 in 2011 and $39,206 in 2012. Even if there were no "raises" in 2011 and 2012, that worker would still see raises ($35,000 in 2011 and $37,500 in 2012) as they progressed year-to-year. So, you see, the structure of the steps has a "hidden" raise built in.

Here's a real-world example. This is the step structure of an old teacher contract from a Rhode Island community.


As you can see, for the most part, the raises for each STEP were uniform ("Step Incr."). This is what gets reported as the % raise. So, you might hear that the teachers received, on average, a 3.6% raise from Year 1 to Year 2 and a 3.4% raise from Year 2 to Year 3.

But the actual teachers received raises much higher than that ("Real Incr."). Here's the same chart, but with the actual year-to-year career path of a sample "rookie" teacher highlighted.


So, moving from Year 1 to Year 2 doesn't result in the publicized 3.6% raise, but a 12.6% raise, thanks to the built-in Step increases. And so on.

Finally, those outside of the "stepladder" (people with over 10 year service, usually) are "frozen" at Step 10 and receive the % increase that is always publicized (in essence, these are the only employees to which the public number applies). Eventually, they also usually receive a longevity bonus every year, based on how many years they've served. As an example, from the same real world contract:


(Thanks to commenters "MikeinRI" and "Patrick" for helping me to clarify my thinking with this!)

ADDENDUM: Bill Felkner from OSPRI passes this along:

When we posted the teacher contracts we did a short analysis of each one, tallying up the step and “raise” – what we found is that the districts average about 10.5% per year. If you go to our fiscal database (http://www.oceanstatepolicy.org/transparency.php) and browse to each district, you will find a category for Contract Evaluation. Click on that and you will see the total step+raise for each one.

Town Council Contemplates Budget Approval

Justin Katz

The most interesting part of the Tiverton Town Council meeting, Monday night, came when the council discussed whether to "approve" the budget that it was providing to the Budget Committee, something that they've been reluctant to do (perhaps for political reasons):

  • Entire discussion: stream
  • Jay Lambert expresses concern that the budget doesn't give an indication of revenue and its relationship to spending: stream, download
  • Don Bollin notes the obligation to approve the budget and the historical precedent to send along a work in progress: stream, download
  • Louise Durfee accuses Lambert of using suspect numbers for what was really only a hypothetical estimate for rhetorical purposes. Lambert: "Even if you don't like the style of a messenger, don't ignore the substance." stream, download
  • Durfee argues that the current budget proposal represents a decrease given CPI. "You could make the argument that it's a little too low." stream, download
  • Don Bollin suggests that "contractual obligations" represent a "pretty solid number you have to have in there." "I can't trim a budget based on what I would like to see happen in negotiations... It's easier to have the money put back should the results we want happen." Of course, this ignores that the union takes the budget number as a baseline for negotiations. stream, download
  • Lambert raises the point that some residents will be tangibly harmed by the current budget. Cecil Leonard suggests that he's beginning to be concerned that the council has already cut too much and explains that nobody wants to cut services. stream, download
  • Durfee talks about moving the financial town meeting to a later date for informational purposes. "We cannot do that without the approval of the budget committee, TCC people, school committee, and council as one block, because it won't work if we go to a meeting and somebody says, 'You're not going to recess this; I'm going to cut your budget." She further raises the specter of people dying because cuts force the fire department to refuse service on a rotating basis. stream, download
  • Resident Chris Cotta offers comments, as does Councilman Ed Roderick: stream, download
  • Closing discussion. Durfee: "They [the budget committee] have already worked on the town budget. They have taken their deductions. That hasn't stopped them at all. They have a flat 16.5% reduction on municipal services. They have a proposed $2 million cut — $2 million cut on municipal services." stream, download

February 24, 2009

An Ear to the National Scene

Justin Katz

Personally, I've never been a fan of state of the union addresses. They're political speeches dressed up as government updates. A lot of partisan applauding. A lot of commentary as if what the president says sets some bold, unexpected plan for the country.

And yet we go on living.

The few minute's of President Obama's first "Address to Joint Session of Congress" that I heard on the way home from a frigid (but warming) post–school committee chat confirmed the quality that leads me not even to enjoy these speeches as political theater (whatever the president's party):

But to truly transform our economy, protect our security, and save our planet from the ravages of climate change, we need to ultimately make clean, renewable energy the profitable kind of energy. So I ask this Congress to send me legislation that places a market-based cap on carbon pollution and drives the production of more renewable energy in America. And to support that innovation, we will invest fifteen billion dollars a year to develop technologies like wind power and solar power; advanced biofuels, clean coal, and more fuel-efficient cars and trucks built right here in America.

So we're going to make green energy "profitable" by artificially increasing the price of alternative sources of energy and by pouring government subsidies into it. I'm not sure that's how it's supposed to work. But this president is nothing if not keen to usurp (and stir to brackishness) the beliefs and arguments of his opposition.

East Providence Meets the March 1 Deadline

Monique Chartier

... to issue teacher layoff notices.

Tonight, the School Committee voted 4-1 to approve the recommendation by Superintendent Mario Cirillo to send lay off notices, effective September 1, to fifty five teachers.

Most of the time, in most cities and towns, only a fraction of those receiving notices are actually laid off. School Committee member Steve Stantos emphasized

This is not something anybody wants to do. ... There are some excellent teachers on this list. Hopefully, we do get them back.

But by way of pointing out that this may well not happen, Director of Human Resources Lonnie Barham observed out that "we have not had this kind of fiscal situation either".

One final point. Upon being asked the criteria for the layoffs, Mr. Barham replied, "Least senior teachers". It was noted that this was pursuant to the terms of the (expired) contract.

[H/T Will Ricci at Ocean State Republican for breaking this news late Sunday night.]

Nothing in Warwick Tonight

Marc Comtois

Citing various rules, laws and those pesky "open meeting" requirements, the Warwick City Council moved to consider the tentative agreements between the City and the members of the municipal, police and fire unions at a later date so that the public would have a chance to review. The Finance Committee will hold a hearing on the matter on Friday, February 27 at 5:30 at City Hall. The full City Council will meet at 6 PM the same night to fully consider the matter.

School Committee Night

Justin Katz

When I walked in, the Tiverton School Committee was discussing the issuance of a few more layoff/non-renewal notices related to a possible move of the fifth grade (it sounded like) to the elementary schools. The move hasn't even been considered, but the notices have to meet a deadline.

7:14 p.m.

I may have noted this before, but the superintendent is expecting a 4% decrease in Blue Cross/Blue Shield costs. Nothing specific, yet, but an estimated savings (off next year's budget) of $100,000, based on higher premium payments than claims.

7:25 p.m.

Town Administrator Jim Goncalo and Town Council President Don Bollin are here to address the committee reporting on the town council's budget doings.

7:30 p.m.

Goncalo met with all unions except fire seeking concessions. "If we are unable to acheive concessions, we'll have to take more extreme measures."

Bollin is asking for concessions from the school committee (as it were), specifically for some return of money allocated for, but not spent on, pensions ($548,000 from pension payment reductions related to the governor's cutting of education aid).

7:33 p.m.

The committee is going to have substantive discussion in executive session. They're concluding that the governor's supplemental budget is a wash for the school district. Mr. Bollin argued that, by the way budgets flow, the change wouldn't be as "revenue neutral" as they assume.

7:36 p.m.

Thanks to the can-kicking General Assembly, everything's in limbo. Everybody's trying to work out budgets on hypotheticals. The example is stunning.

7:38 p.m.

Don Bollin reported that the town is hearing, as it tries to find potential cuts, questions (complaints) about whether the school department is doing anything at all to help with current budget problems, and the answer thus far has been "no."

7:42 p.m.

Let it be noted (although nobody of official capacity has done so) that the school committee would have certainly been able to assist the town with its budget shortfal — Bollin: "We've gotten to the point that we're actually not going to pave a road," for example — if it had not given hundreds of thousands of dollars away to the teachers, including in retroactive pay.

7:55 p.m.

On discussion of why the committee can't be detailed in its minutes, the schools' attorney discourages detail for reasons of practice and liability. The law requires only "the essence" of the meeting.

8:01 p.m.

The issue of the minutes came up because committee member Danielle Coulter thought some summary of the points and arguments of the committee and others regarding the recent contract debate should have been included, not just the vote tally. The attorney agrees that the law appears to require at least a bullet-point format of discussion.

8:06 p.m.

There's some extensive debate going on about the difficulty of providing summary minutes. As a guy who sits in the audience and summarizes key points (from my point of view, of course), I find the objections bemusing.

8:16 p.m.

TCC & budget committee member Rob Coulter is addressing the committee with a follow up on inappropriate actions on the school district's part in encouraging voters to approve the budget at last years financial town meeting.

8:19 p.m.

Oddly, the current school committee has not been updated on the exchanges between the superintendent and the Department of Education. After the initial request from the state for a statement, Supt. Rearick informed the committee, but he says that he was waiting for a response from RIDE before offering an update.

8:28 p.m.

As seems usually to be the case, substantive discussion about the law and the operation of the school district will be performed in executive session.

There was some unnecessary contention. Rob asked whether it's committee policy to adhere to a charter amendment (passed but not ratified by the state) prohibiting public funds for advocacy, and Sally Black said that Supt. Rearick had already confirmed that.

Rob made the obvious point that the committee hadn't made an official statement, and Carol Herrmann noted that the district's attorney had advised them not to do so prior to closed discussion.

My summary reads mildly, but the tone and expressions bespoke the underlying tensions of the town.

Science Education Breaks Through the Negotiation Firewall

Justin Katz

It appears that the most recent of the their multiple weeks off during the school year mellowed Johnston science teachers with regard to the new program that had recently been announced as foiled:

During their winter break, local science teachers changed their minds and decided to participate in a project to improve science education across Rhode Island, a school official said yesterday morning.

As of 10 a.m. yesterday, 14 science teachers and 9 special-education teachers had signed up for the program, gratifying the same officials who recently accused the teachers' union of trying to sabotage Johnston's leadership role in the statewide effort.

"I don't know what changed but I’m very pleased," Assistant Supt. Kathryn Crowley said. "I think they're going to benefit greatly from participating in this program. I thank them all."

Ms. Crowley should thank enraged Rhode Islanders, as well.

Mark Zaccaria: Money, Politics, and PR Legerdemain in the Public Sector, Part 1

Engaged Citizen

North Kingstown's Mark Zaccaria, active small businessman and Republican Party Second District Congressional Candidate in 2008, has taken up the challenge of expounding upon Bruce Bartlett's basic view of why deficit spending is needed now. Mr. Bartlett has said that…

I do not believe that budget deficits are inherently stimulative. However, when we are in a liquidity trap, as we were in the 1930s and I believe we are today, deficits are essential to make monetary policy effective. Monetary policy provides the real stimulus. But it doesn't work when interest rates are close to zero.
Mr. Zaccaria responds...

When asked to fill in the blanks regarding deficits, monetary policy, and interest rates that were left by no less a person than Bruce Bartlett, a respondent is probably guilty of one of two sins. Any otherwise normal mortal taking up that challenge can probably be charged with either a colossal excess of ego or an other-worldly level of naïveté. I will plead guilty to the latter and leave it to you to indict on the former.

Actually, naïveté can be spun as a strength in any economic argument where numbers in the trillions are being tossed around. Naïveté, by its uncomplicated nature, simplifies all fractions and reduces all proofs to their most elemental form. So here goes.

Bartlett is correct when he states that federal deficits, in and of themselves, are not inherently inflationary. If the government runs a trillion-dollar deficit it certainly gets to buy more than it would have just sticking to income from tax revenues. No doubt there will be instances of suppliers raising prices because they can. But where does that trillion come from? It is sucked out of the private sector where it would otherwise be spent by you and me. If Inflation is too many dollars chasing too few commodities then the deficit, alone, won’t do that. For every dollar the government spends in deficit there’s a dollar forcibly extracted from the private sector. Net change in the Money Supply: Zero.

Deficits are bad, of course, but the reason they are is that they crowd out private investment. The private sector is much more likely to make its spending decisions based on the potential for profit. The government must make spending decisions on the basis of political imperatives. The government almost always makes buying decisions that are inefficient, at best, in terms of profit or the creation of wealth. Don’t react with righteous indignation to that term -- another expression for it is gross domestic product.

The private sector only makes inefficient buying decisions some of the time.

Treasury bonds have a stronger guarantee than the bonds of a Fortune 500 Company. So treasury bonds commonly attract capital to inefficient deficit spending, thus preventing it from being used to increase productivity through new infrastructure or new R&D.

So if everyone agrees that deficits are bad, how do we get rid of them? Some politicians try to paint themselves as mature and responsible when they propose additional taxation as a means to bring in cash to cut the deficit. Nice try. Those additional taxes will just go to support the inefficient spending spree the government is on. At least with treasury bonds someone gets some sort of a return on their investment. The money you pay out in taxes is just gone.

Increasing taxes to cut the deficit has the same bad effect as allowing the deficit to begin with, except that you and I don’t even get dinner and a movie first.

The way to cut the deficit is to cut spending. Period.

Fine, but what about the Global Economic Meltdown currently in progress? Shouldn’t the government ‘do’ something to make it better? Agreed. But doing the wrong thing may be far worse than doing nothing at all.

Bartlett claims that the key failure of the Roosevelt Administration in the Great Depression was that they didn’t do enough deficit spending. He suggests that FDR should have spent whatever it took to offset the gap between potential productivity and the much lower rate of actual productivity. He may be right. America in 1929 was a far different place than the America we live in, in 2009.

During the Great Depression we had a virtually all cash society. If you didn’t have the money in your pocket to buy something you went without it. In that environment you can see where any new cash injected would have resulted in new spending. Today, though, we live in a nation and a world with a tremendous amount of accumulated debt. Today’s found money will not go to additional consumer spending. It will go instead to paying off old debt that’s already on the books. And there’s enough of that to suck up more deficit spending by the government than even the Obama Administration has ever fantasized about.

Remember what we just decided, above: deficits are bad, and most especially when the country is as far in the hole as we find America today.

The problems we face today are problems of monetary policy. The overly aggressive moves by the US Federal Reserve Corporation and other central banks to lower interest rates have fought the demon of Inflation so successfully that they have decreased the Velocity of capital to near zero. Today money isn’t moving. Having the Federal Reserve Corporation print lots more of it won’t get it moving, it will just set the stage for real inflation later by bloating the Money Supply. (Remember: Too Many Dollars Chasing Too Few Things to Buy)

We need to get the money we’ve already got moving again. If we simply dump a lot of deficit dollars into the pool today we will buy ourselves some infrastructure goodies and a whole lot of new government bureaucracy but little, if any help will be provided to average citizens. And when we’ve spent all those deficit dollars? We will be right back to where we are today, but with a much bigger national credit card balance.

In his piece on the subject former US Treasury official and Regan White House staffer Bruce Bartlett calls a number of current GOP Senators to task for asserting that the New Deal did not end the Great Depression, World War II did. Bartlett’s problem with that position is that during WWII the US Deficit climbed to levels something like 20% of GDP, and that it was all that deficit spending that did it.

While Bartlett’s facts are straight his analysis of them misses one important point, in my naïve opinion. During the 1930’s what federal deficit spending that was done was used to fund WPA, and CCC, and a number of other Alphabet Soup programs to put people to work on the federal payroll. Those people largely produced things that no private company ever would have. Thus the deficit spending of the 30’s took resources away from the productive economy.

During the War the money was spent on the all-out industrial production of goods and services. Perhaps the federal shopping list was tilted heavily towards guns and ammunition, but it also included vehicles, foodstuffs aplenty, clothing, tools of all types, and huge orders for durable goods. During WWII the federal government created industries with its deficits, not just spending programs.

Rule #1: Manufacturing is the only way to Create Wealth

To continue the astonishing, historic increases in the worldwide Standards of Living that were triggered by the emergence of American industrial production we have to keep making things. And just producing something is not enough (as General Motors is now learning). The product has to be something people will buy. The product has to be something that performs a needed task fairer, faster, funnier, or at a lower cost than whatever’s out there now. So it takes more than just factories. It takes new product definitions and the engineering muscle to make those ideas into actual hardware (or, these days, software).

Coming in Part 2: "So here’s the medicine..."

Mark Zaccaria is a small businessman in North Kingstown. He is a former member of the North Kingstown Town Council and was the Republican Candidate for the state’s District 2 seat in Congress in 2008.

Martingale Watch

Carroll Andrew Morse

Today's New York Times (h/t Kathryn Jean Lopez) reports that the multi-billion dollar bets that the government has made on several too-big-to-fail institutions don't look like they are going to pay off -- but that the big institutions have a plan that they think can turn things around: just have the government put even more money down, and eventually it has to payoff…

The government’s boldest rescue to date, its $150 billion commitment for the insurance giant American International Group, is foundering. A.I.G. indicated on Monday it was now negotiating for tens of billions of dollars in additional assistance as losses have mounted.

Separately, the Obama administration confirmed it was in discussions to aid Citigroup, the recipient of $45 billion so far, that could raise the government’s stake in the banking company to as much as 40 percent.

The Treasury Department named a special adviser to work with General Motors and Chrysler, two of Detroit’s biggest automakers, which are seeking $22 billion on top of the $17 billion already granted to them.

At this point, is there anyone who seriously believes that the collective thinking behind too-big-to-fail bailouts is significantly different from the thinking of a gambler doubling down at the roulette wheel every time he loses as he plays a doomed martingale strategy?

Quick Synopsis and Analysis of Warwick Agreement

Marc Comtois

Here's a snapshot analysis of the tentative agreement between the City of Warwick and the fire, police and municipal unions, based on info from various sources.

The Good:

Pay cuts: Pay cuts of 5% for police, 3.5% for firefighters, 3% for municipal employees for the duration of this fiscal year. No raises in FY 2010; 1.5% pay increases every 6 months from July 1, 2010 through January, 2012. These are reasonable.

Consolidation: According to Mayor Avedesian, approximately 40 retirements are anticipated and those positions won't be filled and the duties will be consolidated. He framed this as a concession from the union, which would usually insist on filling these positions. It is a step in the right direction, especially considering past history.

The Sketchy:

Deferrals: Reduced holiday pay which can be exchanged for compensatory time or taken at retirement. A deferral of clothing and uniform allowances. We won't pay now, we'll pay later.

The Disappointing:

Health Care: Increase in employees’ contribution to health insurance premiums of about 10%. Edging towards reality in this area is a must, but this falls far short. The increases are in set dollar amounts, not in terms of percentage. Today's 10% contribution could very well be down to 5% by the end of the contract. However, should the General Assembly pass the quickly-becoming-mythical 25% statewide public-employee healthcare co-share, the City of Warwick (and the Mayor) will be bailed out.

The Missing:

Pension/retirement adjustments: I haven't seen any information regarding raising retirement ages, etc.

A "No Layoff" clause: There isn't one and that is obviously a GOOD thing. According to Mayor Avedesian, the wrong version of the tentative agreement was passed to the City Council.

Passing the wrong agreement to the City Council was a major fumble, but so was the overall failure to get ahead of the news cycle on this. The days of information not getting out to the public until the Monday Morning Presser are way over. The internet and email don't take a break over the weekend.

ADDENDUM: Relatively speaking (here, for instance), its understandable why Mayor Avedesian is happy with the results. A lot of animals have gotten out of the barn over the last few decades, so to speak, and to expect to get them all back in at once isn't realistic. Some real concessions were made by the unions and it is worth noting their willingness to negotiate in comparison to those in other communities. So, it's a step in the right direction even if it doesn't go far enough for many of us (like the health care portion). That being said, it hasn't been approved yet and perhaps the City Council will make some improvements (from a taxpayer's standpoint).

The Representative for the First Congressional District Will Probably Not Lack an Opponent Next Year

Monique Chartier

Yesterday afternoon, the RI Republican Party sent out this slightly coy e-mail.

Some Questions for Rhode Islanders in the First Congressional District

Do you think its time we replace Patrick Kennedy in Washington?

Would you like to see a real challenger emerge who has a proven track record fighting for Rhode Island?

A leader who was elected to three terms in the General Assembly?

A politician who is so effective and so good at building consensus that he has run unopposed by the majority party twice in a row?

Is serving in the Army Reserve for 26 years and retiring as a senior officer (lieutenant colonel) and helicopter pilot important experience to bring to Washington?

Would you like to have a successful small business owner, with real world experience represent you in Washington?

Is it time for the First Congressional District to have a Congressman we can all be proud of again?

If you answered yes to these questions, then I encourage you to send an e-mail to State Representative John Loughlin at rep-john@cox.net and tell him, "Run John, Run!!!"

John served 26 years in the Army Reserve and is serving his 3rd term in the Rhode Island House, he is a successful small businessman. An Eagle Scout from Pawtucket, a graduate of Lincoln Sr. High School and a leader who reaches across the aisle to build consensus and get things done for his district.

If this is the kind of Rhode Islander you would like to represent you, e-mail him today. In fact, you may want to invite him to your next Republican town committee meeting and see for yourself.

You can learn more about John at http://www.johnloughlin.org

Run John, Run!

Following upon Rep Loughlin's letter in Sunday's ProJo critical of Congressman Kennedy's support of the pork-laden stimulus bill, we can probably put two and two together without reaching for a calculator.

Hammering the Tax-Cut = Pay-Increase Principle

Justin Katz

Those seeking some reason for optimism may find it (in small measure) in Neil Downing's language:

More than 400,000 Rhode Island workers will soon receive what amounts to a pay raise.

Employers by April 1 must begin withholding less federal income tax from paychecks.

Thus, workers will soon be taking home more than they are now — about $10 more a week for someone who is single, about $15 more a week for someone who is married.

If taxpayers begin to think in those terms, maybe they'll start to wake up. The federal, state, and municipal governments could all give us raises — which would be more substantial than a few cents per hour — in these hard times by cutting spending.

February 23, 2009

Why Firefighters (in Woonsocket, anyway) Will Not Accept a Pay Cut to Save Jobs

Monique Chartier

This morning, WNRI's Dave Kane, not exactly a wild-eyed anti-unionist, asked in all sincerity for an explanation as to why Woonsocket firefighters had declined to discuss a pay cut with Mayor Susan Menard when their refusal to do so meant definite layoffs.

He received the following e-mail, apparently from a former president of the Woonsocket International Association of Firefighters, reprinted here with permission.

Dave please tell your listeners they don't have all the facts. They say we don't care about saving the jobs of our co-workers. The city wants us to take a pay cut and co-pay and other give backs. Only to have a contract that brings us to june 30th.

Then what? We all lose over a $125 a week. And she will still layoff. What do you expect us to do? We know we have to give back. We are prepared for that. But the [Mayor] wants both. That's what people don't know.

The Continuing Adventures of the Tiverton Town Council

Justin Katz

I was a few minutes late (again), and I've got some new technology that's taking me a while to work through. Luckily (in this limited context) one of the topics in which I was particularly interested — Rep. John Loughlin's update on state budget developments — will not occur. Apparently, Portsmouth is more important. (Just kidding, John.)

7:22 p.m.

Of notable local budget news: the town's proposed budget is still over the cap, although a few offices squeezed out a $43,000 more dollars (administrator, clerk, and treasurer). Town Administrator Jim Goncalo has scheduled meetings with all of the relevant unions, although to my knowledge, he hasn't been authorized to go Lombardi on them.

7:31 p.m.

On the agenda, this evening, was a request from the Recreation Committee to begin advertising for summer positions. Councilor Louise Durfee called up a representative (Chairman Gary Rose, I believe) to ask whether he's gone before the Budget Committee, yet, because they're proposing a 16.5% cut across the board, don'cha know. Knowing looks and hints about conversations.

7:45 p.m.

Here's the audio of that exchange: stream, download.

8:00 p.m.

Technology note: Laptop batteries lose their duration even if they're almost never used as laptops. Town hall note: the outlet next to me does not appear to work...

Back to my stealth blogging gear.

8:24 p.m.

Representatives of the Recreation Committee are back in front of the council to ask for permission to accept donations of land and money to begin the process of developing a soccer complex (which comes with minimal expense, none from the town, to begin with). Ms. Durfee took the opportunity to talk about the notable experience of going before (or even attending) a Budget Committee meeting.

"They're looking to cut everything." Well. Yeah.

8:52 p.m.

Councilor Jay Lambert asking that the council be clear about its budget submission: "Just because you don't like the style of the messenger, don't ignore the substance." Meaning the budget committee.

Durfee thinks the budget is "arguably" low, arguing from the spending side, without regard to taxes.

President Don Bollin is arguing that collective bargaining determines budget amounts, even with contracts open. (I'd argue that the unions use the budgeted money as a baseline.)

Bollin is also wary of following in East Providence's footsteps even though resolution of those issues are about a year out.

Cecil Leonard counts himself among those who worry that the council is already cutting too much.

9:07 p.m.

Chris Cotta approached the council to agree with everything the council has said, but to follow through on the process.

City Council to Consider Measure Making Itself the Rhode Island within Rhode Island

Monique Chartier

If Rhode Island has had one of the worst business climates in the country due to taxes and fees, at tonight's City Council meeting, Cranston may seek to similarly distinguish itself on the state level.

The other is a resolution that would seek the General Assembly’s authorization to require all businesses in the city to obtain a city license, for a fee.

Cranston already has high property taxes. Why compound that reputation with licenses fees?

Though he probably did not coin the expression, someone said something recently that I had not previously heard: "Capital follows tax policy". Hopefully, Rhode Island as a whole is beginning to learn this. Cranston may need a brush-up course.

Mayor Avedesian w/WPRO's Jim Hummel

Marc Comtois

Warwick Mayor Scott Avedesian was on WPRO with Jim Hummel (filling in for Dan Yorke) to explain the recent tentative agreement between the City of Warwick and the municipal, fire and police unions. (What follows is a raw, running liveblog)

Mayor Avedesian stated that the negotiations started before Christmas based on how it looked economically. Then a lull until a couple weeks ago. Mayor told the unions he could either lay off people or we can negotiate. Situation similar to No. Providence (ie; potential, protracted legal action). In the end, salary reductions equaling 5% for fire, 3.5% for police, 3% for municipal.

Hummel mentioned the potential 25% co-pay requirement currently sitting in the Legislature. Did it factor. Avedesian said, yes, should the legislature enact the 25%, it will supersede this contract agreement.

Hummel noted difference between public/private. Latter would say this isn't going far enough.

Avedesian said this is more than Health Care, also pay, holiday pay, uniforms, pension costs going up.

$1.9 million savings for rest of FY09.
$9.7 million for entire thru 2012

Expect more retirements from jobs that won't be filled (about 45 people). Consolidations in various departments will occur.

Hummel, mentioned that some people would think that, if you can absorb that now, maybe we shouldn't have had those positions anyway. Avedesian, stated the difference is that usually the union will push us to fill it. Now the unions don't have as much hand.

Hummel asked about the fact that this looks like a rush job to some people, to which Avedesian replied that it was time critical. Additionally, the Council could move to suspend rules to have public hearing (sounds like they probably will). Avedesian says the normal process would have been too slow.

Avedesian pessimistic about Obama bucks and bemoaned the lack of control with regard to the schools.

Finally, prompted by a caller's question, Hummel clarified that he was told by the Mayor's staff that lay-offs HAVE NOT been negotiated away.

Lombardi Beats the Path

Justin Katz

In dealing with his town's unions in series, North Providence Mayor Charles Lombardi is imparting a lesson:

Mayor Charles A. Lombardi dismissed 20 town workers last night after their unions failed to meet a 7 p.m. deadline for accepting deep cuts in wages and benefits.

In all, 10 municipal workers and 10 public works employees lost their jobs. Lombardi also plans to lay off 30 firefighters following a Superior Court hearing tomorrow.

If the firefighters don't get the message, then perhaps unions in other Rhode Island cities and towns will. The money tree has wilted; there will be no more temporary fixes that worsen our predicament; you can divvy what remains or take your brethren's unemployment, and the municipalities' lost services on your shoulders.

Personally, I think it would be more helpful in the long run for the unions to continue to fight and to reveal their nature. But beginning to change their nature would work, as well.

Mayer and Hubbard on What a Stimulus for Regular Folks Would Look Like

Carroll Andrew Morse

Columbia University Business School Professors Christopher Mayer and Glenn Hubbard believe that the best way to arrest the slump in the housing and mortgage industry at the heart of the present financial crisis is to have Fannie Mae and Freddie Mac (already nationalized by the government) offer low-interest loans that would be accessible by anyone with respectable credit -- even by people who are not in trouble or behind on their mortgage payments. Professors Hubbard and Mayer, as B-school professors, provide a very precise definition of "low-interest"…

In September of last year, we began to call for the government live up to its promise to fix the mortgage market when it took over conservatorship of the GSEs. We proposed bringing mortgage spreads back to their historical level of 160 basis points over the 10-year U.S. Treasury yield, with the promise that such a move would help stabilize the housing market and reduce consumer borrowing costs, as well as injecting a much-needed stimulus into the economy of nearly $200 billion per year in lower mortgage payments. We have never argued for a fixed mortgage rate, but a rate defined as a spread over 10-year U.S. Treasury rates.
And, as Professors Hubbard and Mayer explain, this idea would also work as a direct economic stimulus…
Under the newest version of this plan, more than 40 million borrowers would save over $400 per month by refinancing. In...Kentucky, 500,000 borrowers would save $250 per month. In...Nevada, 477,000 borrowers would save $443 per month. In the hard-hit states of California and Florida, about 4.5 million and 3.2 million homeowners would save $700 and $393 per month, respectively. These figures translate to a total fiscal stimulus that totals $200 billion per year that borrowers would benefit from within months. It is the equivalent of a significant permanent tax cut for middle-income Americans, with a much greater effect on consumer spending of a one-time rebate.
A full description of the plan and some responses to its critics are below the fold…

R. Glenn Hubbard and Christopher J. Mayer(*): We still need to fix the mortgage market!

Last week President Obama announced his plan to help the housing market. Despite heightened expectations and initially positive reports, the stock market has resumed its downward spiral. The housing package was incredibly generous to homeowners who are having trouble making mortgage payments, but it offers little help to the large majority of Americans who are making their payments on time and may be living in a house worth less than their mortgage amount. And the plan does nothing to provide reasonably priced credit to the new home buyers that are needed to absorb the inventory of vacant houses that are leading to deteriorating neighborhoods and falling house prices.

Part of the stock market’s response to the disappointing policy announcements has been the Administration’s unwillingness to seriously take on the overall housing market, which is the 800 pound gorilla in the room. The Administration stated, “The present crisis is real, but temporary. As home prices fall, demand for housing will increase, and conditions will ultimately find a new balance.” Such an attitude appears cavalier, given that housing credit is excessively tight and expensive based on historical norms. The current credit markets are not an example of free markets working, but of the worst national credit crunch since the Great Depression.

While politicians stand by, house prices continue to spiral downward. House prices have already overshot their equilibrium values. Every month, more than a hundred billion of consumer wealth is wiped out and the balance sheets of banks and financial institutions collapse as their mortgage portfolios fall further in value. While everyone talks about the TARP money into the banks and AIG, they ignore the additional $200 billion we just had to put into Fannie and Freddie to keep them afloat. Almost surely the GSEs and the banking system will require even larger taxpayer payouts in the future. The best way to stabilize the banking and financial system is to stop further losses from happening. Without dealing with the underlying housing problem, it is hard to imagine moving forward.

To understand how to fix this problem, it is useful to go back to how we got here. High leverage associated with securitization and over-extended financial institutions caused subprime mortgage losses to reverberate throughout the credit markets. Starting in the summer of 2007, nearly $1.5 trillion per year of consumer credit funded by securitization disappeared. By the fall of 2008, the failure of credit markets caused a complete collapse in any credit-dependent consumer markets. Car purchases fell 50% or more as auto loans became nearly impossible to get. Foreign students had to drop out of American colleges as they could not get loans. Consumer and business credit card lines were sharply cut back. In all of these cases, an economic slowdown was exacerbated by lack of credit.

The mortgage market, which relied heavily on securitization, was hit as hard as other credit markets. Privately issued mortgage-backed securities disappeared entirely. Even government-sponsored entities like Fannie Mae and Freddie Mac have had trouble raising money. Spreads on the bonds that the GSEs issue to fund mortgages rose nearly one percentage point above historical levels. Unlike private asset-backed securities, the rising spreads did not reflect credit risk. GSE bonds are guaranteed for losses from underlying mortgages. The only risk on these bonds is that they will be prepaid early due to falling interest rates. Yet even as interest rates fell and prepayment risk declined, the spreads on GSE bonds rose. Although spreads on government loans were high, these mortgages were cheaper than private mortgages, which were unavailable to all but the very best borrowers. Even for GSE loans, credit standards have tightened to excessive levels. The average loan-to-value ratio for a new loan issued by Fannie Mae was 27% in the third quarter of 2008.

In September, 2008, the government placed the GSEs in a conservatorship with the goal of fixing the mortgage market. Yet the government’s conservatorship of Fannie Mae and Freddie Mac had little effect on mortgage rates. As inventions to explicitly guarantee other types of bank borrowings and expand deposit insurance took hold, bond buyers and investors ran toward any debt with no risk and explicit government guarantees. Within weeks of the government’s conservatorship, mortgage spreads rose to even higher levels than before.

Watching these events, in September of last year, we began to call for the government live up to its promise to fix the mortgage market when it took over conservatorship of the GSEs. We proposed bringing mortgage spreads back to their historical level of 160 basis points over the 10-year U.S. Treasury yield, with the promise that such a move would help stabilize the housing market and reduce consumer borrowing costs, as well as injecting a much-needed stimulus into the economy of nearly $200 billion per year in lower mortgage payments. We have never argued for a fixed mortgage rate, but a rate defined as a spread over 10-year U.S. Treasury rates.

In recent opinion pieces, this proposal has been criticized on several grounds, including the fact that it would amount to nationalizing the housing finance system, it would cost taxpayers hundreds of billions of dollars, and that we misunderstood housing trends. Our plea on all three accounts: not guilty.

First consider the “nationalization” claim. Like it or not (we do not), that has already happened. The government now originates more than 90 percent of home mortgages. The few remaining jumbo mortgages have rates over 7 percent, even with record low Treasury interest rates. The only reason that mortgage spreads have declined recently is that the Federal Reserve has committed to purchase up to $500 billion of GSE securities. Yet, the Federal Reserve will need to purchase these bonds in even larger amounts in coming months. We should not pretend that Fed purchases are somehow costless and risk-free, even if government accounting does not show an explicit cost of these purchases to taxpayers. How will the fed unwind its balance sheet? What about future risk of inflation? What is the risk if long-term interest rates rise? The fed purchases these bonds with cash, exposing taxpayers to appreciable interest rate risk. Our plan does not have these risks.

Now to the next critical question: Why should we subsidize mortgage rates? The answer is, of course, we should not – and our proposal does no such thing.

Consider the 30 million mortgages currently outstanding on which the government now already owns credit risk. For these mortgages, the government is simply passing along lower borrowing costs to consumers. Without a credit crunch, this would happen absent government intervention. In refinancing the 30 million existing mortgages originated through the GSEs, the government would earn a spread of 160 basis points above the 10-year U.S. Treasury rate. Lower mortgage payments could also reduce millions of new defaults and foreclosures, saving taxpayers additional amounts. Far from a subsidy, this is almost surely a profitable transaction for taxpayers who are already saddled with more than $5 trillion of mortgage guarantees issued in previous years.

The current Obama proposal is a small step in this direction, but is still much too limited and expensive for consumers. It requires consumers to apply for a refinancing, an expensive and slow process that requires consumers to pay lenders thousands of dollars in fees and points, get a new appraisal, and file new paperwork. This is a boon to the mortgage industry, but also unnecessary. The government already has the credit risk for all of these loans. As well, by limiting the process to borrowers who live in houses with a loan-to-value ratio below 105%, they exclude borrowers in the hardest hit parts of the country like California, Nevada, and Florida, where credit is needed the most but millions of borrowers are too far underwater to benefit from the program. Overall the Administration estimates that up to 5 million borrowers will qualify. The restrictions unnecessarily leave 25 million remaining GSE borrowers out in the cold and charge the 5 million too much money.

The new housing proposal does absolutely nothing for the estimated 20 million non-GSE borrowers who are current on their mortgage. The government could help these homeowners by lowering mortgage rates and ensuring that credit terms are not excessively tight. The conventional spread of 160 basis points covers credit risk, prepayment risk, and underwriting costs. At the low interest rates our plan would produce prepayment risk would be modest. We are aware of no evidence – and our critics have produced no such evidence – that credit risk would exceed 160 basis points to cause a taxpayer loss. The Treasury should use long-term funding to support the mortgage lending, hedging taxpayer risks if interest rates go up in the future.

Finally, critics argue that we misunderstand house price trends. Our model of evaluating the impact of interest rates on house prices compares the cost of owning a house relative to renting, the same model used for most Wall Street analysts and most theoretical analyses of asset prices in finance. As a matter of economic theory (and empirical evidence), it is inconceivable to argue that interest rates have little impact on house prices and housing demand. Ask any American about their decision to purchase a house or refinance a mortgage, and he or she will tell you the same thing.

Independent economic forecasters and financial futures markets suggest that, without action, house prices will continue falling into 2010 by an additional 20-25 percent. With unemployment rising and the economy contracting, lower rates will at most help stabilize house prices, not re-inflate the housing bubble. But this stabilization will limit further damage to banks’ balance sheets that could increase the likelihood of nationalization.

Senators McConnell and Ensign, as well as the other supporters in the Senate, deserve our praise for standing up to support this important policy intervention that will help our country. Under the newest version of this plan, more than 40 million borrowers would save over $400 per month by refinancing. In Senator McConnell’s home state of Kentucky, 500,000 borrowers would save $250 per month. In Senator Ensign’s state of Nevada, 477,000 borrowers would save $443 per month. In the hard-hit states of California and Florida, about 4.5 million and 3.2 million homeowners would save $700 and $393 per month, respectively. These figures translate to a total fiscal stimulus that totals $200 billion per year that borrowers would benefit from within months. It is the equivalent of a significant permanent tax cut for middle-income Americans, with a much greater effect on consumer spending of a one-time rebate. Democrats such as Representatives Cardoza and Dingell should receive equal praise for considering such a plan in the House.

The housing market remains at the heart of many woes in our financial system. We cannot right the ship of the economy and the financial system with housing markets in disarray. Our proposed time-limited plan can restore normal mortgage markets, giving both an economic boost and time to figure out how to prevent a future such crisis. And we can do so with only a small cost to taxpayers. So what is the downside?

(*) Mr. Hubbard, dean of Columbia Business School, was chairman of the Council of Economic Advisers under President George W. Bush. Mr. Mayer is a professor of finance and economics and senior vice dean of Columbia Business School.

Professor Christopher Mayer on the Obama Housing Plan

Carroll Andrew Morse

Christopher Mayer, Vice-Dean and Professor at Columbia University's Graduate School of Business, has offered the public a detailed critique of President Barack Obama's mortgage and housing Plan. Professor Mayer explains that the crisis is, in large measure, the result of an incentive structure in the mortgage industry that currently makes modifying the loan agreements for a bunch of homeowners more risky for mortgage servicers than going ahead with a bunch of foreclosures.

Professor Mayer believes that President Obama's plan begins to address this problem, but not in the most optimal way possible…

Professor Christopher Mayer on the Obama Housing Plan

Last week President Obama revealed his plan for tackling the US housing crisis. It will use financial and non-financial incentives to encourage lenders to modify mortgages and help homeowners avoid foreclosure. The plan is a step in the right direction, but only a half-step. In its current form, it makes unrealistic assumptions about mortgage markets, and is unnecessarily expensive to boot. With a few important changes, however, the plan could save many more homes. As well, the excessively generous provisions to pay homeowners to make their mortgage payments on time and the call for bankruptcy cramdown raises the appreciable risk of moral hazard.

President Obama’s plan rightly recognizes that securitized subprime and Alt-A mortgages lay at the core of the housing crisis. These mortgages were pooled together, bundled into securities, and then sold to investors. While they represent only 15% of all outstanding mortgages, they account for more than 50% of all the foreclosures starts. The problem is that, when a subprime or Alt-A homeowner becomes at-risk of foreclosure, she can’t find a lender to talk to. Her mortgage is owned by hundreds of dispersed lenders, each with a small stake (“tranche”) in her loan. The homeowner can talk to one person—the servicer, who collects her monthly payments—but this servicer has few incentives (and sometimes no authority) to discuss a mortgage modification. It’s costly to perform a modification—estimates put the cost at $750 to $1,000. And because modifications sometimes fail to prevent foreclosure, they are risky too, making it hard for servicers to recoup the costs of doing the modification in the first place. Foreclosures, by contrast, are cheap: if the servicer incurs any costs, they are compensated by investors.

The Obama plan begins to change this situation by giving servicers incentives to pursue mortgage modifications instead of foreclosure. The plan would pay every servicer an up-front fee of $1,000 for performing a modification and an additional $1,000 every year that the modified loan avoids foreclosure, for up to three years. Servicers can earn $4,000 for keeping homeowners in their homes. These amounts are more generous than needed, based on our research, but they will go a long way toward reversing existing incentives that push servicers away from modifications and toward foreclosure.

But they don’t go far enough. First, the Obama plan is paying for modifications, not success. Success is avoiding foreclosure, and that can be done in a variety of ways. For some loans, for example where the borrower has a mortgage facing a reset to a higher rate, early interventions to avoid a reset may be optimal. For others, maybe a borrower whose income has fallen due to a job loss in the family, early interventions may no longer be possible and large modifications may be necessary. Only servicers have the right information to know the right modification for a particular situation. Obama’s plan, by contrast, imposes a one-size-fits-all approach, telling servicers what to do. We could end up with too many, overly-aggressive mortgages that impose large burdens on investors. And, remember, thanks to TARP bailouts, we taxpayers own many of these investors. A superior plan would pay for success, not modification, by paying servicers for every loan that avoids foreclosure. Servicers could be paid an amount equal to 10 percent of monthly homeowner payments, on all outstanding loans. This would give servicers a stake in their mortgages, and give them freedom to decide the best way to save homes.

Also, it’s one thing to offer incentives; it’s another for servicers to respond. And there are various legal obstacles that will mute any servicer response. In roughly fifty percent of mortgage securitizations, the servicer is forbidden from performing modifications that reduce principal or interest. Even when the servicer faces no explicit barriers to modification, it still faces serious litigation risk. Though the Administration acknowledges the problem, its plan does very little to address it. It’s not realistic to assume that litigation will go away. Just ask Countrywide, which is now modifying loans pursuant to a consent decree.

What’s needed is a “safe harbor” that insulates servicers from liability when they pursue modifications in a reasonable, good-faith belief that they are improving recoveries for investors. Rep. Kanjorski has proposed a bill that does this; a safe harbor was also part of Sen. Dodd’s and Martinez’s amendment to the Senate Stimulus bill (the amendment was booted as the House and Senate reached a compromise).

What’s also needed is a program for dealing with second liens. Roughly 8.9 million homes have both second liens and debt exceeding 92 percent of the home’s value. Unless second liens are paid to go away, they will deter efforts to modify a primary mortgage. Why modify the primary mortgage if that will just free-up cash to pay the second lien? We have proposed that the government offer second liens up to $1,500 in incentives to drop their claim on the property, a claim that right now has little value with house prices plummeting and the prospect of receiving nothing in a foreclosure. Fannie Mae and Freddie Mac have a similar program that, while slightly more generous for second liens, has been highly effective at eliminating problematic second liens.

Instead of dealing with these problems, and giving servicers realistic incentives, Obama’s plan spends excessive sums on unnecessary payments to lenders and borrowers. It’s important to keep in mind that, under Obama’s plan, servicers are paid to modify mortgages only when that makes both homeowners and lenders better off than a foreclosure. Yet, though servicers are paid billions of dollars to make lenders better off, the Obama plan would pay still more to lenders. Billions of additional dollars will be paid to lenders, in order to encourage reductions in interest or principal. These payments are unnecessary for lenders who are already receiving massive subsidies thanks to the TARP bailouts.

And even after making payments affordable, homeowners who participate are paid $1,000 per year to make their mortgage payments on time, something they should do anyway and something that 90% of American borrowers are doing without any financial payment. The generosity of the plan will encourage as many homeowners a possible to try to qualify.

The Obama plan would also give homeowners the option to file for bankruptcy and have a judge modify the mortgage (so-called “cramdown”). That option is deeply problematic. It would let judges modify mortgages that, even under Obama’s plan, no servicer or lender was willing to modify. If the Administration believes in its plan, there’s no need for overworked bankruptcy judges to interfere. Given the poor track record of Chapter 13 bankruptcy plans—two-thirds fail—“cramdown” could just delay the foreclosure crisis for years. As well, the option of a bankruptcy cramdown may encourage consumers to forgo working hard with lenders under this plan and take their chances with the bankruptcy system where they can get permanent reductions in their mortgage balances. We know from previous downturns that reducing principal is usually unnecessary to encourage borrowers to keep paying their mortgage; what is needed is to make payments on the home affordable, which is what this plan does.

We applaud President Obama’s plan, but encourage the Administration to treat it as a first step toward an effective solution. If the plan took a more realistic approach toward servicer incentives, it would be more effective and make it unnecessary to waste taxpayer money on lender payments and bankruptcy cramdown. We need a policy that doesn’t ask taxpayers to overpay.

Warwick Taxpayers on Alert

Marc Comtois

Following up on Justin's post "Avedesian Locks in...Savings?", only a government official would consider "savings" to be a reduction in the "normal" INCREASE that the public sector has come to expect as essentially a birthright.

Despite what Mayor Avedesian says, this isn't a "savings" of $10 million, it is a reduction in what the "normal" spending increases would be if business-as-usual is followed. The Mayor is touting the willingness of the Warwick municipal, fire and police unions to work together with the city. OK, fair enough...but it's up to "management" to keep the best interest of the taxpayers in mind. In these tough financial times, that means holding the line at the very least. And the unions have a strategic interest in making these limited concessions now, before things get worse. (A similar thing occurred last October when the Warwick teacher's contract was renegotiated and extended).

Reducing "normal" increases ain't reduction! Real cuts mean spending less...or at least not spending more!

But while the pay increases in these troubled times are enough to tick taxpayers off, there are some other--some might think bigger--issues. No layoffs, guaranteed? That's another management right surrendered. Pay increases if funding resumes at "normal" levels? Following that logic, shouldn't these actually be pay cuts since funding has been reduced?

And then there are the health care provisions.

Former Warwick City Council member Robert Cushman has analyzed the contract with respect to the potential passage in the General Assembly of a 25% co-pay of health care insurance. If Warwick waits for the GA :

The total three year saving with all police, fire and municipal employees paying a 25% health care co-pay over the current $11 per week co-pay is $6,270,552
The total three year saving with all police, fire and municipal employees paying a $14 per week for individuals and $28 per week for family is $1,644,304

If this contract is signed and the General Assembly passes the 25% health care co-pay it will cost Warwick Taxpayer $4,626,248
Yes, how often does "waiting for the GA" actually work out? But the thing is that it's still better than rushing this deal through.

Cushman's complete analysis after the "jump".

If the General assembly passes the 25% co-pay of health care insurance here is the amount of money that will be lost if Warwick passes these contracts based on individual health care costing $7,500 and family plan costing $15,000 compared with the $14 per week co-pay for individual and $28 per week for family negotiated by the mayor. Assuming 25% passes by March 1 2009.

$7,500/52 = $36 per week - current $11 per week co-pay being paid = $25 more saving per week.
$15,000/52 = $72 per week - current $11 per week co-pay being paid = $61 more saving per week.
Assume no change in health care cost for 2011 & 2012.
Additional savings = number of employees * additional weekly co-pay dols* num weeks
Police Department

Police FY 2009 individual = 33*$25*16 = $13,200
Family = 140*$61*16 = $136,640
Total FY2009 savings = $149,840

Police FY 2010 ind 30*$25*52 = $39,000
Family = 133*$61*52 = $421,876
Total FY2010 = $460,876
Total FY2011 = $460,876
Total FY2012 = $460,876
Total three year difference in savings with 25% co-pay over mayor's fix rate co-pay for the three years is $1,532,468

Fire Department
FY2009 individual = 22*$25*16 = $8,800
Family = 184*$61*16 = $179,584
Total FY2009 savings = $188,384

FY2010 savings = 22*$25*52 = $28,600
Family = 184*$61*52 = $583,648
Total FY2010 savings = $612,248
Total FY2011 savings = $612,248
Total FY2012 savings = $612,248
Total three year difference in savings with 25% co-pay over mayor's fix rate co-pay for the three years is $2,025,128

Municipal savings
FY2009 individual = 99*$25*16 = $39,600
Family = 218*61*16 = $212,768
Total FY2009 savings = $252,368

FY2010 Individual = 99*$25*52 = $128,700
Family = 218*$61*52 = $691,496
Total FY2010 savings = $820,196
Total FY2011 savings = $820,196
Total FY2012 savings = $820,196
Total three year difference in savings with 25% co-pay over mayor's fix rate co-pay for the three years is $2,712,956

The total three year saving with all police, fire and municipal employees paying a 25% health care co-pay over the current $11 per week co-pay is $6,270,552
The total three year saving with all police, fire and municipal employees paying a $14 per week for individuals and $28 per week for family is $1,644,304

If this contract is signed and the General Assembly passes the 25% health care co-pay it will cost Warwick Taxpayer $4,626,248

Polls and Principles on Marriage

Justin Katz

I have to say that I'm not sure what to make of Joe Trillo's planned strategy for dealing with same-sex marriage if he becomes governor and the issue comes up:

Were a bill allowing same-sex marriage to make it to his desk as governor, Trillo said he would let a public poll determine whether he vetoed it. "If over 60 percent of the people supported gay marriage ... I would not veto it." Conversely, he says he would "absolutely" sign into law Republican Sen. Leo Blais' bill to prohibit same-sex marriage.

But Trillo said he supports "civil unions" or "life partnerships" because "I basically believe in their cause" and "I think it needs a term or a word used to describe it that would make it totally understandable for what it is."

Now there's a guy hedging his bets. It's as if politicians have such an aversion to this topic that they don't wish to investigate why supporters of traditional marriage believe that the difference is more profound than just a word.

It would also be nice if the quoted political personages — or even the Providence Journal reporter who quotes them, Katherine Gregg — gave some indication of awareness that Senator Leo Blais has also placed on the table a proposal to create "reciprocal beneficiary agreements." Members of the public could justifiably argue that there's a difference from "civil unions," but at least the ruling class and the media would be furthering debate, rather than a cause.

Travis Rowley: No Country for Black Individualism

Engaged Citizen

The Coen Brothers' 2007 film No Country For Old Men revolves around the tale of several young men engaged in a violent race for a satchel of cash. Tommy Lee Jones plays an aging sheriff investigating the depressing trail of bloodshed, markings that inform the old man that the customs and morals that guided his generation have decayed even faster than he has. Jones ends up as a depiction of the anguish experienced by people left without a country they can call home.

Democrats remain on their quest to offer similar anguish to African Americans, as liberals now embark on their fifth decade aimed at stripping these reliable party constituents of American nationalism.

Liberal mouthpieces have long emphasized a shameful American history, one marked by slavery and segregation. And they insist that, even today, a majority of Americans hold contempt for dark-skinned people. "Something is clearly wrong when the government's most effective affirmative-action program is the preference people of color receive when entering not college, but the criminal-justice system," proclaims one prominent progressive text titled A Covenant With Black America — which goes on to say that there is "a multi-headed, multi-tentacled monster out there devouring blacks who live in certain neighborhoods."

Such rhetoric has caused many African Americans to experience feelings of anti-Americanism and national detachment. Blacks now see mirages of racism everywhere, albeit disguised by "code words" and "institutional racism." The outrage last year over Barack Obama being referred to as "articulate" provided a powerful example of this paranoia.

Anger and hatred typically accompany blacks' racial anxiety. Before the start of a game last year the NBA's Josh Howard said to a live camera, "The Star-Spangled Banner is going on. I don't celebrate this [expletive]. I'm black." Denver Nuggets guard Mahmoud Abdul-Rauf refused to even stand for the National Anthem, stating that the American flag was a "symbol of oppression" and that the United States has a long "history of tyranny."

In Democratic circles, this is known as "patriotism."

These are not so much black sentiments, as much as they are liberal. But many blacks now subscribe to the anti-American wing of contemporary liberalism.

Last year Michelle Obama said that America was "just downright mean" and admitted, "For the first time in my adult lifetime, I am really proud of my country." And any Google search of Jeremiah Wright provides a score of videos showing Barack Obama's longtime pastor condemning America for practicing "state terrorism" and for "inventing the HIV virus as a means of genocide against people of color." We find Wright referring to the United States as the "US of KKK A" and thundering, "Not God bless America. Goddam America!"

His all-black congregation cheers.

To be without a home is to live with pain. But this has been the Democratic scheme for decades — to promote government intrusion by convincing minorities that most Americans, especially Republicans, reject them. Republicans are racist, and against affirmative action. Democrats care, and will give you stuff.

The misinformation campaign has succeeded. Many black Americans now view racial solidarity as more important than black individualism. Each year a handful of notorious black leaders convene an event called the State of the Black Union, calling all "brothers" to recognize the uniformed plight that all African Americans endure.

Liberals stripped blacks of their country, so they concocted a new one — the Black Union.

Because racial camaraderie has resulted in more than 90% of blacks predictably voting for Democrats, the advice to be more "inclusive" is often delivered to the GOP: Replicate the way in which Democrats pander to minorities in order to attract blacks to the Republican Party.

But safeguarding the feelings of minorities by adhering to liberals' politically correct pap is precisely the cause of blacks' adoption of big-government, anti-American liberalism. Do Republicans really want to be associated with such a philosophy?

The advice is backwards. Blacks are the ones to make concessions. They must abandon their liberalism before the party of conservatism can consider their membership. A simple matter of principle.

Yet, in order to convince Republicans to alter their strategy, Los Angeles-based writer Chaise Nunnally recently referenced in the Projo the Don Imus controversy, in which Imus referred to the Rutgers women's basketball team as "nappy-headed hoes." Even though Nunnally found the opinions expressed by conservatives involved in the debate "legitimate and defensible," he thought "they also struck the wrong note in communicating with the black community on a racially sensitive topic."

Nunnally's counsel was to be more racially symbolic, recommending Republicans find "a more race-sensitive tack to woo black voters." Join the left in their truth-stifling political correctness in order to trick blacks into voting for you.

That's how much liberals respect minorities.

Republicans would be better off listening to black conservative columnist Thomas Sowell, who recently reminded his readers, "Most Americans' principles are closer to those of the Republicans than to those of the Democrats ... [Republicans] won big when they stood for something and told the people what that something was ... Ronald Reagan was the classic example. But another example would be the stunning Republican victories in the 1994 Congressional elections ... Articulating the message of Newt Gingrich's 'contract for America' was a key to that historic victory."

Republicans win when they underline conservatism, not when they dilute their principles by pandering to special interests. They should leave such prostitution to the Democrats.

For black Americans addicted to Democrats' coddling sense of self-pity and collectivism, they will find no such slavery within the Republican Party. Only when blacks finally recognize the big-government whip held in Democratic hands, can the Party of Lincoln help them regain their independence, sustain their dignity, strengthen their families, and recapture their country.

Travis Rowley is the Chairman of the RI Young Republicans, and author of Out of Ivy: How a Liberal Ivy Created a Committed Conservative.

The Political Stylings of Barack Obama

Justin Katz

With his latest maneuver, Barack Obama has really clarified his approach to politics:

President Obama wants to cut the federal deficit in half by the end of his first term, mostly by scaling back Iraq war spending, raising taxes on the wealthiest and streamlining government, an administration official said Saturday as the president worked to finalize his first budget request.

Obama's proposal for the 2010 fiscal year that begins Oct. 1 projects that the estimated $1.3 trillion deficit he has inherited from President Bush will be halved to $533 billion by 2013. That's a difference of 9.2% of the overall economy now vs. 3% in four years.

Hey, why not? Our national harbinger of hopey-change — he of the impossible-to-gauge promise to "create or save" jobs (Can't you just hear the brainstorm team laughing at the gullible electorate while contriving that one?) — learned from his election that Americans will believe whatever he says. Rather, we'll believe whatever we want about what he says, so one month into his presidency, Obama's day-to-day operations already resemble the most elaborately woven of Bill Clinton's state of the union speeches.

What better way to deflect political heat over the rush to move a massive spending bill through the legislative process than to insist that his goal is to decrease the deficit? "I'm a fiscal conservative," he's appearing to claim, "so you may go back to sleep and trust my steerage." Of course, for one thing, spending in Iraq was already likely to decrease, thanks to the success of the Bush Administrations reworked strategies. For another, the notion of "inheriting" his first budget year is a conspicuously convenient way to hide the impact of his own policies. But nevermind.

Make the claim; claim the ground; ground the flights of observation from the opposition. The administration will float excuses for failure, take the credit for others' successes, and find some way to straddle ever-broadening fences. After all: "He's gonna change it. And rearrange it. He's gonna change the world."

February 22, 2009

Academy Awards: Mark Steyn Takes a Look at the Man, the Myth

Monique Chartier

... Oscar himself.

He's short. He's muscular. He has no private parts. No, not Tom Cruise. We're talking about one of that select handful of silver screen legends recognised instantly by their first name alone: Brad, Barbra, Arnie... and Oscar. He's Hollywood's most indestructible star, unless your chauffeur accidentally reverses over him in the limo. He has Tinseltown's most consistent year-round tan - a rich golden glow that you can see your face in, and sometimes your name on. ...

Just a Stimulus Bill

Justin Katz

Most Anchor Rising readers are old enough to recall the School House Rocks cartoons that offered young TV viewers a bit of civic education back in the late '70s and early '80s. The one that I remember most clearly was the "I'm Just a Bill" song about how a bill becomes federal law.

Well, Jim Treacher provides an opportunity to reminisce and, separately, updates the song in light of the stimulus bill's precedent:

On Reports of Conservatism's Death

Justin Katz

Don't count Jay Nordlinger among those who believe American conservatism is in crisis. He unnecessarily elides conservatism and Republicanism, but his point is well taken:

Consider the 2008 presidential election. It was almost a perfect storm for Republicans. John McCain was a very, very poor candidate. He could barely make a case for himself. Now, I voted for him with gusto, and wish he had been elected. I’d like to go back to that same polling place and vote for him again. I wish he were in the Oval Office right now. But he had a very hard time making a case for himself, particularly in the three presidential debates.

His running mate, Sarah Palin, was perfectly and disgustingly vilified. The Left, broadly defined, has a lot to answer for in this regard.

McCain-Palin had 100 percent negative media coverage (or 99.9—depends on how precise you wish to be). Barack Obama had 100 percent positive coverage. The rooting was open and appalling.

And he was a very, very good candidate—a good campaigner, a good speaker, a good debater, a good pol.

Plus, the incumbent Republican president had historically low approval ratings. And the nation was weary of a fairly long and difficult war. And, in September, the financial system collapsed.

AND AND AND: McCain-Palin got 46 percent of the vote. Think of that.

As I've said before, I believe that, culturally, conservatism has been on a gradual incline over the past couple of decades, but that President Bush, in the aftermath of September 11, cashed in too rapidly on its political gains. And now, as Nordlinger puts it: "The patient may not be at death’s door; he may be simply resting."

The movement must take stock of itself. It must shuffle out some old baggage and usher in some new faces. The country, the party, the movement — they've all taken some major hits this decade. Various cultural illnesses have graduated to more critical organs. Some philosophical principles have been dirtied by their poor exercise (as with the free market). Others are asserting their essential truth behind the ostensible successes of the other side (consider the demeanor and structure of the first family). In any process of growth, however, there are periods of apparent, but superficial, stagnation.

Western Conservatism must refortify, though, and quickly, because in the very near future, it's going to have to dispel the hopelessness that creeping socialism will engender and arrest Islamic militantism in its tracks.

Creative Destruction in U.S. Manufacturing

Marc Comtois

Both Justin and I have recently posted about the RI employment market, with a particular focus on manufacturing jobs. In the February 23 edition of National Review, Jim Manzi has an interesting piece on the decline of manufacturing in the U.S.

Except, as Manzi explains, it hasn't. Manufacturing jobs have declined, but output is the same as it ever was.

At the end of World War II, manufacturing accounted for about one-third of the U.S. workforce. Today it is about one-tenth. In terms of employment, we are no longer transitioning to a services economy; we are there. Over that same period, manufacturing has consistently represented about 15 percent of rapidly growing U.S. economic output. Manufacturing has become ever more productive; as any industry matures, this becomes increasingly necessary for survival. While continuous improvement is essential for any relatively mature business, the process of improvement itself is fairly routinized, and almost inexorably eliminates labor. Productivity gains are beneficial to consumers, but not so much to employees who have trouble moving or learning new skills.
He provides this graph to illustrate.


That was news to me too. Manzi spent the 1980's "as one small part of a self-conscious movement to rescue American manufacturing from its projected obsolescence." He compares the decline in 20th Century manufacturing jobs to the earlier decline in agricultural jobs. In both cases, we have fewer workers making more. Manzi has several other interesting insights.

First, we have to be careful about letting sentiment guide economic policy.

The days of getting out of high school, working in a factory, and having a middle-class life are pretty much gone, because the economic world of 1955 is gone. The jobs that provided this opportunity have been automated out of existence, and our international position no longer allows us to protect them at feasible cost. I take no joy in the need for restructuring the auto industry. I wish that old world still existed, but it does not.

I realize now that my attempts to resist this change were like William Jennings Bryan’s attempts to resist the coming of the economic order that I was trying to preserve. I slowly came to understand through experience that my original vision of saving manufacturing would have destroyed it. Theories for how to revive American manufacturing abounded in the 1980s, and it’s hard to exaggerate how difficult it is to understand which alternatives are feasible and which are not in the face of an economic transformation. It is almost impossible not to be guided by our sentiments in such a situation, and this happened to me. I fought the direction in which market price signals were pushing manufacturing, but in the end, they were the only reliable guide to what might work....Almost all industrial policy ends up protecting existing institutions: This is a function of human nature and is not fixable with clever program design....Ironically, these attempts to protect ourselves end up creating a sclerotic economy that in the long run puts everyone at greater risk. The painful reality of economic growth is creative destruction, and in a globalized economy, to lose out in this race is ultimately to put ourselves at the mercy of those who may or may not share our interests....So while I remain emotionally a factory guy, I recognize that it is counterproductive to use the political process to prevent factories from becoming something almost unrecognizable to me.

He also observes:
There is, however, one thing that seems to be predictable about these changes. Historically, each new growth sector, from agriculture to manufacturing to services, has tended to be more abstract than its predecessor. This often leads them to be labeled as “not real work,” and they seem to be a flimsy basis for an economy — just as, I assume, the first farmers who started to scratch out little garden plots were mocked by the hunters on one side and the gatherers on the other, those who did the “real work” in their clan.

Another RI Newcomer Speaks Truth to Insanity

Justin Katz

Gary Smith, of Newport, has come to a conclusion that will be familiar to Anchor Rising readers:

So I asked myself: What is keeping companies away, especially those for whom shipping is not an issue? The answer is and has long been obvious — taxes. CEOs won't relocate to places where their high incomes get hit hard. Companies won't relocate to a state where corporate taxes exceed those of neighboring states. So it would appear that the recommendations of the governor's panel are right on target — and the key part of the panel's findings is that the changes, if enacted, will be revenue-neutral.

It's time for our legislature to wake up and move forward expeditiously and get this state on the move again; it has much to offer. Maybe it takes an outsider to see it. With competitive taxes I think Rhode Island is an easy sell.

Welcome to the battle, Gary. I regret to inform you, however, that the project is much more daunting than you realize.

February 21, 2009

Avedisian Locks in... Savings?

Justin Katz

Out of Warwick comes a "tentative agreement" with the municipal unions in which Mayor Scott Avedisian purports to have secured $10 million in savings between March 2009 and June 2012. The dollar amount is measured against the current contracts, expiring at the end of June, and an assumption that a subsequent contract covering the next three years would otherwise have been substantially the same.

The specifics of the "concessions," however, give the impression that the objective is to lock in some very modest changes to help the unions weather the escalating economic storm. Furthering the impression that the taxpayers of Warwick may not be getting the best of deals, here, is the fact that the city council has called for a special meeting on Tuesday night to ratify the contracts, which (according to my sources) will require "unanimous consent" among the councilors, because the required procedure will have been circumvented.

According to a cover letter to the above-linked packet by Personnel Director Oscar Shelton:

... the bulk of the savings comes from increasing health insurance copayments, temporary wage reductions, deferring holiday pay and clothing allowances and from the FOP and Municipal Unions' willingness to reduce their ranks through attrition. The police union is amenable to allowing the City to reduce their force from 180 employees to 163 without filing for arbitration or any other types of litigation. The Municipal Union's workforce will be reduced by at least 12 employees and the Management/Non-union employee Group will be reduced by at least 16 employees (28 total).

The salient points are as follows:

  • The health insurance savings come from an increase in the weekly pay-check reduction from $11 for all employees to a whopping $14 for an individual plan and $28 for a family plan, which is minimal to say the least, by current standards.
  • The wage reductions vary in significance from one contract to the next:
    • The police will see a 3.25% salary reduction for the remainder of this year (which began, last July, with a 3.75% increase). Unfortunately, my documentation is missing the page that lays out the raise schedule for '09 to '12.
    • The firefighters will see a 5% salary reduction for the remainder of this year (which again began, last July, with an approximate 3.75% increase, although I didn't check the increase for each position). Come July, they'll get that money back as their raise for the first year of the new contract, and then they'll receive a 1.5% increase every six months until June 2012 (equivalent to 2.25% annual increases).
    • Municipal employees will see a 3% decrease for the remainder of this contract year (which began with a roughly 3% raise, although again, I didn't calculate every grade). As with the fire department, a return of that money will be their raise for the '09-'10 year, followed by 1.5% increases every six months.
  • In all cases, the deferred holiday pay and clothing allowances are redeemable as paid days off (with clothing allowances converted thereto) — timed, at least, so as not to trigger overtime costs — or as cash payments upon retirement.
  • The ability to secure attrition of workforce comes at the cost of no-layoff clauses in the police and fire contracts. (The police contract specifies the current contract period, but as I said, I'm missing an important page.) Moreover, none of the attrition or staff reduction language that Shelton cites is actually in writing within the document that I have.

The most insidious part of the agreement, however, is that it is absolutely contingent upon the city's revenue shortfall. As the police section of the agreement puts it:

In following, the parties hereby agree that should the City become able to partialy or wholly fund the above-referenced Budget Shortfalls for the (current) Fiscal Year ending June 30, 2009 and/or the Fiscal Year ending June 30, 2010 through the receipt or generation of additional revenue through:

(a) its receipt of any reinstatement of or new source of State of Rhode Island State Aid/revenue sharing,

(b) its receipt of any applicable funding from the Federal Government, or

(c) its reduction of applicable costs and expenses from the implementation of any legislatively and unilaterally reduced wages and benefits levels affecting those wages and benefits levels set forth in the parties' current 206-2009 CBA or the successor 2009-1012 CBA (i.e. such as those changes proposed in Article 33, Article 45, etc. of the Governor's proposed Supplemental Budget);

the parties will re-open negotiations concerning the 2009-2012 CBA in order to reinstate levels of benefits reduced in said CBA (i.e. the Holiday Pay and/or Clothing Allowance deferred in the 2009-2012 CBA) in amounts that are commensurate with the level of additional revenue received or generated.

In other words, should budgetary matters turn around in a way helpful to the city, the unions will be first in line for renewal of their money flow. Part C goes so far as to require renegotiation should, for example, the governor and General Assembly implement a statewide minimum healthcare copay; Warwick's savings from that measure would be cycled back to the unions. If only Rhode Island's cities and towns could draft their contracts contingent upon the continuation of short-term market booms and annual windfalls!

As I suggested above, the agreement has an air of union protection in a disastrous and unpredictable time, and the people of Warwick should insist that their elected representatives protect them instead.

A Warning-Response Disconnect in North Providence (for One)

Justin Katz

North Providence Mayor Charles Lombardi has issued twenty layoff notices to public works and municipal employees that will go into effect unless their unions accept a five percent cut in salary and a fifteen percent health insurance contribution. The mayor's had mixed results, thus far, with the police union coming up with $200,000 and the firefighters' union going to court. It's the argument of the latter — put forward elsewhere, recently — that strikes a discordant tone:

On Thursday night, the entire membership of the firefighters' union voted against the cuts, according to the union's president, John Silva.

The firefighters, who number about 100, voted for a package of concessions that would save the town about $85,000 between now and June 30, and about $390,000 over the next 15 months, Silva said.

But Lombardi said the town needs about $240,000 in concessions from the firefighters in the current budget year, which ends June 30.

The firefighters union secured a restraining order that would provide some level of layoff protection until Judge Mark A. Pfeiffer takes up the issue Tuesday morning.

Silva said the order would prevent the layoffs. Lombardi said the restraining order allows him to lay off as many as 22 firefighters.

Following the lead of Woonsocket firefighters, the union is arguing that the threatened layoffs would jeopardize their safety and that of the public.

"It's a third of our force," Silva said.

We should heed the advice of professional firefighters when it comes to the necessary provisions for our safety, of course, but there's something that justifiably restrains public judgment. If firefighter and civilian safety is so terribly threatened by layoffs, then how can it not be worth a small cut in pay and reasonable healthcare contributions to prevent them?

Unionists would say that public safety workers would be in a disadvantageous negotiating position if underfunding were always leveraged against their conscience, and that's a valid argument to be worked out through the give and take of politics and negotiations. But in the current circumstances, the disadvantage is too dramatically skewed the other way; the North Providence union can refuse the concession and turn to the court to stop detrimental cuts in staffing and services.

When Negotiating Season and Flat-Tire Season Coincide

Justin Katz

In a comment to my post about Tiverton school officials' ambiguous admission of intimidation by the National Education Association, Cranstoner Donald Botts relates the following anecdote:

My take on their comments was that the union was attempting to use intimidation tactics against them, but they either were not intimidated or didn't want to admit they were intimidated.

I spoke at a school committee meeting in Cranston recently. Magically, roofing nails appeared at the end of my driveway. I was not performing any home improvement projects at the time.


Each of my family's vehicles has had a flat tire, recently. With my work van, it was a roofing nail; with my wife's car (which I use when not working), it was two punctures, sans implement.

Of course, being a carpenter, I'm very slow to look elsewhere to explain such things. Moreover, amidst the daily inconveniences that arise from working full-time in a construction trade, having three children, owning a fifty-year-old home, living in Rhode Island, being politically active, and writing for this here blog, flat tires are things to be taken in stride. Heck, it's been so long since I was above grade, what's another shovelful out of the hole I'm digging?

It strikes me as a particularly foolish mechanism of intimidation, though, if there's another explanation for flat tires than the terrible condition of our state's roads: If they appear to be coincidental, the action will have no effect on behavior. On the other side of the spectrum, strongly suspecting a human agent behind a mere inconvenience will surely tend to increase one's resolve.


Mr. Botts sends along a picture of the nails — of assorted sizes — collected from the driveway, sidewalk, and grass in front of his home, as if tossed from a car:

Sports and the Community

Marc Comtois

Growing up in northern Maine, no week was bigger than Tournament Week--what we call February vacation here in Rhode Island. It is still a big deal. Basketball teams and their supporters congregate at the Bangor Auditorium from all over the northern 3/4s of the state, all for the purpose of representing "Eastern Maine" in the various Class and Division State Finals.

It seems like it's always been so.

To an outsider, it may seem strange that basketball is such a big deal in Maine...until you realize that there isn't much else to do in the winter, now, is there? So the High School Basketball season--and the tournament that crowns it--are major social and cultural events in the Pine Tree State.

Bangor Daily News, which I delivered growing up way back when, editorializes about "Tourney Time" and offers some perspective on the importance of sports to our youth and how the support of the community to the old town teams is so important:

And then there are the folks who are fixtures at the hometown high school gym each Friday or Saturday night. No one is really sure — are they related to one of the ballplayers? Long ago, did a son or daughter trot up and down these hardwood floors and the habit of attending stuck? Or is it that they just enjoy witnessing the amateur ballet and epic battle that is a high school basketball game.

They, too, play a critical role. They are the cross-stitches of community. It is they who know that a student athlete has a better chance of succeeding in the classroom if he or she takes on the discipline, cooperation and sacrifice of team sport. When the young athlete passes the anonymous fan’s familiar face at the grocery store or on the sidewalk outside the movie theater, the teen is simultaneously being supported and held accountable — which is what a healthy community is all about.

February 20, 2009

William's Sisters Refuse to Take a Stand

Marc Comtois

Sometimes its the sports pages that hold the important cultural news of the day. Today's win-at-all costs sports culture provides plenty of fodder for those of us interested in supplying our youth with teaching moments. The recent admission by Alex Rodriguez that he took steroids is but one example of just one high profile and ongoing saga.

Jim Donaldson calls attention to another, today.

Shame on Venus Williams. And on her sister, Serena, too.

The two of them will meet in the semifinals of the $2 million Dubai Tennis Championships.

They never should have played in the tournament at all.

Not after Shahar Peer, ranked No. 48 in the world, was unable to participate, banned from entering the country because she is an Israeli.

Can you imagine the outrage, the outcry if the Williams sisters were prevented from playing in a sanctioned, World Tennis Association tournament because they’re black?

Yet the barring of Peer, because she’s Jewish, didn’t seem to upset the sisters Williams all that much.

"We can’t let our sponsors down," said Venus, a member of the WTA Players Council. "Our sponsors are extremely important to us."

Which is tantamount to saying: "Money is extremely important to us."

The Williams sisters should have boycotted the tournament. Every American player should have boycotted the tournament. Every member of the WTA should have boycotted the tournament....

The Williams sisters could have been rallying points in Dubai. Instead, the only rallying they have done has been on the court, in pursuit of prize money.

The excuse given by the tournament organizers for banning Peer was that they were concerned about "security" in the wake of Israel’s recent military action in Gaza. Saying Peer’s presence "would have antagonized our fans," the tournament organizers wrote in a statement that they "did not wish to politicize sports, but we have to be sensitive to recent events in the region and not alienate or put at risk the players and the many tennis fans of different nationalities that we have here."

Donaldson also offers an instructive story about Arthur Ashe, who wrote about stands on principle made by John McEnroe and Bjorn Borg. No matter the excuse made by the tournament organizers, it's racism, pure and simple.

UPDATE: The World Tennis Association (WTA) has fined the Dubai tournament's organizers. A step in the right direction...

ADDENDUM: A quick personal anecdote: Prior to past business visits to Dubai and other Persian Gulf States, I've had to have my passport "scrubbed" of any existing Israeli Custom's stamps so I wouldn't encounter any "problems" entering the country. The reverse was not true.

Obama's First Round of Foreign Policy Tests

Justin Katz

Charles Krauthammer is not optimistic that initial indications of foreign-policy acumen in the Obama White House are not plentiful:

The Biden prophecy has come to pass. Our wacky veep, momentarily inspired, predicted in October that "it will not be six months before the world tests Barack Obama." Biden probably had in mind an eve-of-the-apocalypse drama like the Cuban missile crisis. Instead, Obama's challenges have come in smaller bites. Some are deliberate threats to U.S. interests, others mere probes to ascertain whether the new president has any spine.

Preliminary X-rays are not very encouraging. ...

With a grinning Goliath staggering about sporting a "kick me" sign on his back, even reputed allies joined the fun. Pakistan freed from house arrest A.Q. Khan, the notorious proliferator who sold nuclear technology to North Korea, Libya and Iran. Ten days later, Islamabad capitulated to the Taliban, turning over to its tender mercies the Swat Valley, 100 miles from the capital. Not only will sharia law now reign there, but members of the democratically elected secular party will be hunted as the Pakistani army stands down.

I must say that I share Krauthammer's sense that the mistakes are indicative of beliefs, rather than inexperience.

The Town Governments Need the Taxpayers' Help

Justin Katz

The bottom line for Tiverton — indeed, for all of Rhode Island — came into stark relief at last night's Budget Committee meeting. The town's infrastructure is crumbling. Taxes have been skyrocketing. The schools are laying off teachers and talking about cutting into services. And town officials are insisting that there is simply no way in which they can avoid raising taxes in the double digits — during the worst economic downturn in three-quarters of a century.

As a prelude, the Department of Public Works Director Stephen Berlucchi detailed how much ground his staff must cover and how dramatic is the disrepair of the town's infrastructure. By all accounts, the DPW employees work very hard, but the fact remains that, with overtime, longevity, and sick-time buy-backs, their average income allotted in the currently proposed budget is $47,877.60. That doesn't count benefits or pensions. Mr. Berlucchi noted that their work time is all too precious, but they get two weeks of vacation to start, which climbs to three weeks after five years, and (possibly) four weeks after ten years. Factoring in their twelve sick days per year, that's potentially more than a full man-year in paid time off.

The matter of real interest, though, came from the school department's turn at the microphones. The conversation was quite revealing when the elephant in the room stepped from the shadows: stream, download.

Superintendent William Rearick: It's one thing to have discussions and say what the objectives may or may not be, but until you've done it and faced the full fury of an organization that has over 2.1 million members nationally, has unlimited resources, and will go after elected officials on the school committee and family members and say or do whatever --- it's not an easy process. And I'm saying it from experience, and I'm speaking for my former chairman, and my vice chairman, and my current members that went through that horrible process. It's not easy.

And when we were going through it, quite frankly, there weren't a whole heck of a lot of people standing shoulder to shoulder with us when we were taking on the battle, when we were the tip of the spear. And I think people need to know that. It's one thing to to pontificate about this that or the other thing. It's another thing to actually do it, to sit there and then have to withstand the assault that you will come under during negotiations.

The teachers unions, whether you like them or not, they're very powerful, well organized, and the way it's structured now, in my opinion, until we get a statewide contract, local school committees will always be under that gun.

It's just simply not that simple. I just ask people to take that in mind, having lived through it, having seen people's families negatively affected by it to the point where they're still affected by it --- needs to be taken under consideration. In simple terms: easier said than done, and folks need to consider that when the rubber hits the road.

Budget Committee Member Thomas Parker: So you're actually intimidated by contractual negotiations?

Rearick: Sir, I went eighteen months toe-to-toe with the toughest teachers union in this country. I'm not intimidated by them or anyone.

Parker: Well you just implied that you were.

Rearick: I'm telling you that they went after school committee members personally.

Former School Committee President Denise DeMedeiros: I was not intimidated.

Parker: What kind of organization is this you're dealing with that intimidates you and threatens your family?

DeMedeiros: That's what I asked every day the last year, and we were not intimidated. We did the very best we could. And my family...

Parker: Mr. Rearick just said that they were intimidating.

DeMedeiros: Of course they're intimidating. Wouldn't they intimidate you if they went after your job and your children? Wouldn't that be intimidating to you?

Parker: I've been in combat, lady...

[Crowd noise.]

Demedeiros: I'm very glad you just did that, because you just did that in front of the camera, and people in this town know who I am and know what I have done and what I went through the last year.

Parker: My point is this: You're dealing with an organization which has intimidated you, which has threatened your families.

DeMedeiros: Yes.

Parker: And you admit it here, and as a result... what kind of an organization are you dealing with? That's the only question I'm asking.

DeMedeiros: That's what we asked every day for the last year. It's called a labor union. NEA, actually.

Rearick: And we weren't intimidated, because we didn't concede the field.

Parker: So you're saying the NEA are the ones who intimidated you?

Rearick: They're the labor union that we had to deal with. They didn't intimidate us.

The bottom line is that those who populate municipal governments are placed before an orchestrated assault. It's little wonder that labor costs are scraping the services from the budget. And it's easy to empathize with the frustration that elected officials — essentially volunteers — have expressed as the local citizen group, Tiverton Citizens for Change, has stepped into the mix to push back against the union tide. In their view, they've stood up for their town and done as well as they believed possible in the face of extremely powerful interest groups that aren't afraid to throw stones and sling mud.

The boards and committees aren't empowered to fight against such dominating strength. In addition to behaving beyond officials' moral boundaries, the unions act and organize beyond their scope, controlling the fundamentals of the debate. Each town union's victorious negotiation gives every other town's union leverage to compare salaries. The dynamic infects even discussions about student performance. When Budget Committee Member Cynthia Nebergall raised the issue of unacceptable test scores, the superintendent's argument entailed comparisons across the state and across the nation (stream, download. But none of those comparisons rise above the core problem.

We who see must organize at the state level and remove some of shackles that bind our towns and cities, but even more importantly, taxpayers must begin to stand as a group and let the unions know that their game is over by cutting budgets and thereby forcing deep concessions. The school committee stands on its record of resisting last year's onslaught, but the reality is that the union simply wouldn't come down to a number that the district could concede. The teachers took the town's appropriation, tacked some more demands on top of it, and then began their campaign of intimidation.

It has to stop.

February 19, 2009

Station Nightclub Fire: How Attorney General Patrick Lynch Shielded the Guiltiest Party

Monique Chartier

[February 20, 2009 is the sixth anniversary of the fire at the Station nightclub.]

Attorney General Patrick Lynch has given two principal excuses for his refusal to prosecute Denis LaRocque, the man who repeatedly inspected the Station nightclub in his capacity as a West Warwick Fire Inspector. Let us examine them.

1.) "Without malice or bad faith, criminal capability cannot attach to fire marshals"

With these words, the Attorney General cites the two exceptions to sovereign immunity specified by Rhode Island law and the reason that he purports to believe that West Warwick Fire Inspector Denis LaRocque was not criminally responsible in the matter of the fire. To assess this conclusion, we need to review LaRocque's actions. In carrying out his official duties with regard to the Station nightclub, did West Warwick Fire Inspector Denis LaRocque act in good faith and without malice?

During repeated inspections, he

> Failed to enforce fire safety laws for existing conditions in the club

LaRocque failed to order the abatement of the foam covering the doors, walls and ceilings - foam whose flammable qualities have been described as akin to gasoline.

> Actually violated fire safety laws himself in repeatedly increasing the occupancy level of the club

Have you noticed that public establishments post a sign announcing their legal capacity? The fire authority is required to furnish such a sign after inspecting. LaRocque did not put up such a sign at the Station nightclub; the number he had reached was so high and far-fetched, he knew he wouldn't have been able to explain or defend his calculation.

The result of these actions and failures was devastating. The foam supplied a fast-acting fuel to Great White's pyrotechnics. And because the Derderians, aided by Denis LaRocque, had packed far too many people in the club, once the fire had started, it was physically impossible for hundreds of people to leave in time.

Returning to the Attorney General and the two exceptions to sovereign immunity, there is no evidence that Denis LaRocque undertook his official actions out of malice. That leaves the second exception: the requirement to act in good faith. Do his deliberate and repeated failures to enforce critical fire prevention laws and his ... creativity in calculating capacity constitute a lack of good faith?

That's what a Grand Jury tried to determine.

Responding to the Grand Jury's request for a definition of "bad faith," after waffling, both Assistant Attorney General William Ferland and prosecutor Michael Stone provide one that incorrectly incorporates "malice," mix in some innuendo that LaRocque might have been a volunteer firefighter, and then conclude that, in any case, "bad faith" does not apply to Denis LaRocque. (Wasn't it the Grand Jury's job to determine that?)

The Grand Jury also asked Denis LaRocque himself questions about the two critical matters of the foam and his calculation of capacity. Patrick Lynch's prosecutors took it upon themselves to deflect their questions: at various points, changing the subject, calling for a break and even answering for LaRocque.

After persisting in some damn good questions, the Grand Jury finally gave up. (What else could they do in the face of such shuffling and misinformation?) Patrick Lynch's prosecutors had successfully blocked the Grand Jury from examining Denis LaRocque as a potential guilt party.

Now to the second excuse of Attorney General Lynch.

2.) It is up to the Grand Jury to indict. My office lacks the power to indict.

And on another occasion, when asked why Fire Inspector LaRocque was not indicted, Attorney General Lynch stated, "That's what the grand jury returned. I can only do what they say."

These statements are completely false.

Firstly, the Attorney General refused to even submit Denis LaRocque as a defendant to the Grand Jury, saying "no reasonable person could find that LaRocque had acted in bad faith or with malice." If it was up to the Grand Jury, why not, in fact, submit Mr. LaRocque and let the Grand Jury do their job?

Secondly, short of a capital crime, the Attorney General assuredly does have the power to indict. See page nine of this information sheet from the Web site of Rhode Island Superior Court. Patrick Lynch did not lack such a power, he deliberately chose not to exercise it.

In sum:

If Denis LaRocque did not act in "bad faith," why didn't Patrick Lynch's prosecutors supply a definition of the term?

If there was an innocent explanation for Mr. LaRocque's handling of the foam and the occupancy level, why didn't Patrick Lynch's prosecutors let him supply it?

If Patrick Lynch disagreed with his prosecutors' handling of the case and their "successful" steering of the Grand Jury, why didn't he simply indict Denis LaRocque himself?

Most observers strongly suspect that Denis LaRocque is the party most responsible by far for the terrible fire of February 20, 2003. Count Rhode Island's chief law enforcement officer decidedly among their ranks. Why else would he use all of the considerable power of his office to abstain Fire Inspector Denis LaRocque from the process of justice?

A Different Sort of Meeting

Justin Katz

Tonight is my first Tiverton Budget Committee meeting (public-access television excepted), which means I'm not in the utter minority of the room. Town Hall is actually pretty well populated — moreso than for many Town Council meetings.

Of course, it helps that the entire School Committee is here to argue (or not) for their proposed budget, which along with the proposed municipal budget, will raise property taxes in the town by an estimated 13%.

7:10 p.m.:

An updated tax increase is now 12.1%

7:21 p.m.

First in the hotseat is the Department of Public Works — Director Stephen Berlucchi.

7:29 p.m.

Berlucchi reviewed the tight circumstances of the Tiverton DPW, and with a workforce of ten, there doesn't appear to be much fat there. Now he's talking about the huge increase in the cost of sand and salt for snowstorms. He predicts that supplies will run out in the middle of next year.

7:37 p.m.

It sounds like Tiverton can treat the roads for two more storms this year. After that, who knows. Clearly our budget dollars flow somewhere else.

7:41 p.m.

Apparently, street-sign theft is a real problem. The consequences of things I didn't realize as a teenager...

7:44 p.m.

The paving budget (now equal to last year's $70,000, down from a proposed $85,000) serves also as a reserve fund for sand and salt, overtime, and so on. As the director admits (and everybody knows) the roads in town are just horrible.

Again: where's all the tax money going? These are basic government services.

7:52 p.m.

And drainage is a problem, wasting manpower and sand/salt for ice that forms unnecessarily in the street. For this reason, Berlucchi applies his paving budget to alleviate this problem (you know, the paving budget that serves as a reserve budget for other things).

I'd say that, in addition to cutting the budget to a 0% tax increase, the town ought to redirect resources to these basic necessities that keep residents and visitors safe.

8:30 p.m.

Budget Committee Chairman Jeff Caron asked Mr. Berlucchi what he would do to come up with a 15% reduction. Being very helpful, Berlucchi suggested that he couldn't come up with that off the top of his head, but he'd put something together and move it through Town Administrator Jim Goncalo, who (I believe — I looked away) waved him off of doing so. The conclusion is that such a document will not be forthcoming.

8:43 p.m.

Currently on the table is the police pension, and former Budget Committee Chairman Chris Cotta is giving a history lesson on the poor investments in the past. According to Cotta, the problems originated in the '90s, when the money was pretty much placed in a simple 5% interest account.

8:48 p.m.

The question has been raised whether Budget Committee member Rob Coulter can vote on the budget of the School Committee (now up), considering that his wife, Danielle serves on it. The answer is that Rob must recuse himself only if Danielle stands to gain financially (as with a committee member stipend).

8:52 p.m.

Supt. Bill Rearick just stated that the School Committee's goal is to bring its budget to an increase of 2.75%. He also noted that Blue Cross/Blue Shield expenses are likely to go down 4% (around $100,000).

9:00 p.m.

The school department estimates that unfunded mandates amount to $347,000 (as an arbitrary amount for which the state would pay, but of which the town has received nothing).

9:05 p.m.

The school department has been told to expect $623,000 from the federal stimulus package, but there is no information about how many years that covers. The School Committee's lawyer also clarified that existing laws require that money to supplement, not supplant, funds already dedicated, although some rumors suggest that requirement might be relaxed.

9:15 p.m.

Two teachers are expected to retire and be replaced with lower-step employees — conversation planned for next Tuesday night.

9:18 p.m.

One Budget Committee member asked why budgets keep going up although enrollment goes down. Supt. Rearick is explaining that costs keep going up — and he listed everything except the cost for classroom instruction.

9:20 p.m.

Rearick's message: The school department doesn't control anything that's driving up the cost of education. Unmentioned: labor contracts.

9:24 p.m.

Sally Black is expressing hope that the three government bodies (town council, budget committee, and school committee) will work together, unlike historical ire prior to the last few years.

9:27 p.m.

Jeff Caron handed out a package of documents illustrating the school department's budget increases well beyond CPI. Here's where tension may ratchet up in the room.

Growth of expenditures has been more than twice CPI.

9:34 p.m.

Rearick is complaining that Budget Committee worksheets show "total appropriations" and might confuse "the average citizen who reads it" into thinking that's the total tax levy. Doesn't make much sense to me... state aid and such is reduced down the line.

9:42 p.m.

Jeff Caron is going through his sheet showing that school funding must drop somewhere around 5% and everything else that's changeable by 16.5% in order to stop a tax increase. I'd like to think that the school committee is picturing families that will watch their spending money shrink.

9:46 p.m.

Some bickering between Supt. Rearick and Jeff Caron has seen some real heat the room. One member of the committee left the table.

9:49 p.m.

School Committee Solicitor Robinson is urging the Budget Committee to "tread carefully" in taking state statute to permit a decrease in school aid.

9:56 p.m.

The arrogant gaggle at the back of the room — consisting of the old powers of the town — are gabbing like highschoolers at a performance put on by the unpopular kids.

9:59 p.m.

School Committee President Jan Bergandy is discussing the contractual complications that they face. Nothing new. All of the arguments for higher pay and such (keeping quality teachers) lose force in a non-merit, collective bargaining scenario.

10:12 p.m.

Michael Burk is shouting out from the back of the room.

10:37 p.m.

Very, very heated discussion, centering around Supt. Rearick's contextualization that going up against the NEA in negotiations can be very intimidating.

I'd submit that the way in which the Budget Committee can stand "should-to-shoulder" with the school committee is by forcing the issue by constraining budgets for the sake of the taxpayers.

Arizona Asserting Sovereignty

Justin Katz

Of all the notions that spread from state to state, wouldn't this be a breath of fresh air?

Whereas, the Tenth Amendment to the Constitution of the United States reads as follows: "The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people"; and

Whereas, the Tenth Amendment defines the total scope of federal power as being that specifically granted by the Constitution of the United States and no more; and

Whereas, the scope of power defined by the Tenth Amendment means that the federal government was created by the states specifically to be an agent of the states; and

Whereas, today, in 2009, the states are demonstrably treated as agents of the federal government; and

Whereas, many federal laws are directly in violation of the Tenth Amendment to the Constitution of the United States; and

WHEREAS, the Tenth Amendment assures that we, the people of the United States of America and each sovereign state in the Union of States, now have, and have always had, rights the federal government may not usurp; and

Whereas, Article IV, section 4, United States Constitution, says in part, "The United States shall guarantee to every State in this Union a Republican Form of Government", and the Ninth Amendment states that "The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people"; and

Whereas, the United States Supreme Court has ruled in New York v. United States, 112 S. Ct. 2408 (1992), that Congress may not simply commandeer the legislative and regulatory processes of the states; and

Whereas, a number of proposals from previous administrations and some now pending from the present administration and from Congress may further violate the Constitution of the United States.


Be it resolved by the House of Representatives of the State of Arizona, the Senate concurring, that:

1. That the State of Arizona hereby claims sovereignty under the Tenth Amendment to the Constitution of the United States over all powers not otherwise enumerated and granted to the federal government by the Constitution of the United States.

2. That this Resolution serves as notice and demand to the federal government, as our agent, to cease and desist, effective immediately, mandates that are beyond the scope of these constitutionally delegated powers.

3. That all compulsory federal legislation that directs states to comply under threat of civil or criminal penalties or sanctions or requires states to pass legislation or lose federal funding be prohibited or repealed.

4. That the Secretary of State of the State of Arizona transmit copies of this resolution to the President of the United States, the President of the United States Senate, the Speaker of the United States House of Representatives, the Speaker of the House and the President of the Senate of each state's legislature and each Member of Congress from the State of Arizona.

I know nothing about Arizona politics, so this may or may not have a life beyond its introduction, but it's nice to know that there are folks out there with this sort of goal in mind.


Marc Comtois

Nothing, in my opinion, is more deserving of our attention than the intellectual and moral associations of America...they are as necessary to the American people as [political and industrial associations], and perhaps more so. In democratic countries the science of association is the mother of science; the progress of all the rest depends upon the progress it has made.
~ Alexis de Tocqueville, Democracy in America

It's time for more Rhode Islanders to step up:

It turns out that Rhode Islanders don’t volunteer as much as its neighbors in Connecticut and Massachusetts or even the rest of the country.

In a Jan. 14 news conference given by the Volunteer Center of Rhode Island and the Serve Rhode Island group, it was announced that a Serve Rhode Island Volunteer Corps was being instituted. The above two groups would be merging in the hopes that together they could increase the amount of volunteerism that takes place in Rhode Island.

The Corporation for National and Community Service’s “Volunteering in the United States” provides a detailed yearly assessment of volunteering at all levels: state, country and city.

In the 2008 assessment, Rhode Island ranked 41st in the country as far as its overall rate of volunteerism.

“The average number of volunteer hours served per resident of 28.2 hours per year ranks even lower, at 46th among the 50 states in the U.S.,” the report states.

Despite its low ranking nationally, there were some bright spots for Rhode Island in the report. Volunteer rates for specific demographics in our state ranked higher in some areas.

“College students [volunteering] in Rhode Island rank fourth nationally. Young adults in Rhode Island ages 16-24 rank 24th, black Rhode Islanders rank 27th [and] Latino Rhode Islanders rank 30th,” reads the 2008 report.

Volunteerism by Rhode Island Seniors ages 67-74, however, trails behind most of the nation. Rhode Island ranks 47th out of the 50 states in that area.

In comparison, “Rhode Island’s overall volunteer rate of 24.9 percent trails well behind Connecticut (30.3 percent) and slightly behind Massachusetts (27 percent),” the report goes on to say.

The good news is good. Ocean State "youngsters" seem to have more of a volunteer spirit than our elders. Make of that what you will.

All solutions don't come from government programs, agencies or funding. If you're interested in volunteering--in putting your time, if not your money, where your ideals are--take some initiative and head on over to www.vcri.org.

Another (Potentially) Huge Development

Justin Katz

Here comes another historic, philosophical battle, this time in Providence:

Education Commissioner Peter McWalters has ordered the city schools to begin filling teacher vacancies based on qualifications rather than seniority, an order that could fly in the face of the teachers' contract.

McWalters, in a no-nonsense letter yesterday to Supt. Tom Brady, said the district hasn't been moving fast enough to improve student achievement and that it was time to intervene in a much more aggressive fashion.

Dare we hope that we're seeing the beginning of a revolution of sanity? (And dare we hope that it'll arrive before we reach the utter bottom?)

Calling All Economics Experts…

Carroll Andrew Morse

Would anyone with an understanding of markets and finance -- I know we have a few people qualified on this subject in our reading audience -- like to take a stab at filling in the details about the relationship between deficits, monetary policy and interest rates that former White House (under Reagan) and Treasury Department (under Bush II) official Bruce Bartlett briefly explained in a recent posting to National Review Online

I do not believe that budget deficits are inherently stimulative. However, when we are in a liquidity trap, as we were in the 1930s and I believe we are today, deficits are essential to make monetary policy effective. Monetary policy provides the real stimulus. But it doesn't work when interest rates are close to zero.
A longer version of Mr. Bartlett's economic prescriptions are available in his Forbes Magazine column, here.

Letting the Public Watch the Table

Justin Katz

The conversation between Andrew and Matt, on last night's Matt Allen show, had to do with open public-sector negotiations. Stream by clicking here, or download it.

February 18, 2009

Cuts or Layoffs, City by City, Town by Town

Justin Katz

It's going to become impossible to catalog all such stories, but a couple came with today's paper. In Woonsocket:

Woonsocket officials warned the city's two public safety unions yesterday that if they don't agree to substantive concessions on pay or benefits, they will lay off about 40 of the community's 101 police officers and 55 to 60 of its 135 firefighters, possibly by the end of the week.

They did so after a Superior Court judge, ruling on a request by both unions, scuttled the 5 percent pay cuts and 15 percent health coverage contributions that the city unilaterally imposed on both unions two weeks ago in an effort to cut current-year spending by more than $1.2 million.

In North Providence:

In a series of open and closed sessions in the library of North Providence High School, the mayor gave leaders of the police, firefighters, public works and municipal workers unions until 10 p.m. Sunday to accept his demand that they accede to 5 percent wage cuts and start contributing 15 percent of the cost of their health care.

Also, he put the School Committee on notice that the Town Council would unilaterally cut its budget unless the board secures similar concessions from the School Department's unions.

Those developments, against the backdrop of a current-year deficit that threatens to hit $13 million, came out of a meeting at which state Auditor General Ernest A. Almonte warned officials and union leaders that failure to achieve a balanced budget could lead to a state takeover that he said would be painful.

And as the editors of the Sakonnet Times describe:

It happened in New Bedford where the all-but-broke city asked police and firefighters to accept a 10 percent pay cut or else dozens of their own would be let go. Ten percent is a significant loss but with many of the rank and file earning $100,000 or more with overtime and enjoying world-class benefits, the loss seems bearable given what’s going on all around.

When, as promised, the city followed through with layoffs, those same workers who had refused to compromise voiced outrage that the city would put its citizens at risk by cutting police and firefighters.

Faced with similar options, teachers' unions have been just as rigid. Teachers in East Providence have taken the city to court rather than concede the pay and benefit changes asked of them. Since the city simply doesn't have the money to pay what the contract dictates, the price of victory for teachers will surely be the loss of many of their own. They need only look to West Warwick or Central Falls if they think otherwise.

And in Tiverton, teachers celebrated retroactive raises finally won after a long fight with their town. Almost going unnoticed was the school committee’s next act — the elimination of a half-dozen teacher assistants.

One-time fixes will not last forever. Public-sector unionists would do well to do some reading:

God forbade it indeede, but Faustus hath done it:
for vaine pleasure of 24. yeares, hath Faustus lost eternall
ioy and felicitie, I writ them a bill with mine owne bloud,
the date is expired, the time wil come, and he wil fetch mee.

Open Negotiations and the Common Good

Carroll Andrew Morse

Contrary to the Rhode Island Labor Relations Board's implication that contract negotiations opened to the public constitute "mere surface bargaining", there are other states that mandate some form of open negotiations -- sometimes all the way through the process. The Washington-state based Evergreen Freedom Foundation has compiled a list of different state laws regarding openness as of about a year and-a-half ago. The laws on the books fall into three basic categories…

  1. Straightforward requirements that contract negotiations be open to the public (for example Florida, Kansas, Minnesota, Tennessee)
  2. Requirements that records or recordings be kept, and made available to the public (for example, Idaho)
  3. Requirements that proposals offered at different stages of negotiation from both sides be made available to the public (for example, Alaska, Iowa, Ohio)
A major source of dissonance between municipal councils, unions and the public can be traced to union resistance to negotiating in the open. Here's what I mean by that: it is often implicit in union positioning during collective bargaining that contract provisions can be...
  • Appropriate vehicles for regulatory action (for example, regarding minimum staffing), and
  • Full-blown appropriations decisions (for example, as is being debated in East Providence, where the underlying question is whether union contracts need to be brought into compliance with the government’s budgeting process, or the results of the budgeting process need to be brought into compliance with union contracts.)
But there are non-trivial problems with assigning full force of law to contracts, the primary being the difficulty in reconciling the principles of democratic self-governance with the idea of organizations not directly accountable to the public (and this refers to any kind of organization, not just unions) having a way to override the established budget process -- the process that some would claim is the fundamental basis of self-government. (Personally, I'm not quite so stark in my view of government, but I do agree that going outside of the budget process should not be easy, if it is allowed at all).

Even without settling this concern, however, union leaders and members who are serious about contracts being agreements that serve the broader public good and not just narrow organizational interests need to be willing to embrace the same level openness in contract creation that is required when making other public decisions and laws intended to advance the common good.

West Warwick Teacher Layoffs

Marc Comtois

In the ProJo story about West Warwick handing out 188 layoff notices (wow!), there was this little nugget:

State law requires that teachers be notified by March 1 that they will no longer have jobs the following September, and many school districts routinely send out pink slips by the deadline while acknowledging that most, if not all, of them will not actually be exercised.

But West Warwick has not sent out such notices in 17 years, and officials said that at least 30 of the 188 teachers targeted for the notices this year are likely to be let go.

A no-layoffs clause in the district’s contract with the West Warwick Teachers Alliance was modified last September to allow layoffs under circumstances that include “uncertainty or lack of funding in programs and /or positions that are totally supported by federal or state funds.” {Emphasis added}.

Is it any wonder we find ourselves where we are now, with School Committees bargaining away management rights to the extent that they even gave up their ability to lay-off employees?

Memories Over Housing in Rocky Point

Justin Katz

Even with the market sag, housing is still relatively expensive in Rhode Island, and part of what led to our being hit so hard in the subprime collapse was residents' inability to find suitable housing within their means, and the lack of in-state competition for property owners probably raises the threshold of taxation "price" tolerance in any given community. What to do? How about we devote ever-more-limited public funds to taking land off the RI market in the name of nostalgia and open-space aesthetic:

The state Department of Environmental Management wants to acquire a portion of the former Rocky Point amusement park that had been set aside for private development and preserve it as open space.

DEM Director W. Michael Sullivan yesterday successfully asked the State Properties Committee for permission to begin surveying and appraising the roughly 82 acres that developers have been eyeing for luxury housing. Sullivan said he hopes to create an expansive coastal state park by coupling the land with the 41-acre shoreline portion of the old amusement park that was acquired by the city and state last year. ...

"Even though I grew up in Massachusetts, I did have the opportunity to go there," he said. "And like most people, when I stand there, I still can hear the laughter and have an overwhelming sense of times gone by.

"This is a legacy and an opportunity that we should not forgo without giving a final effort," Sullivan said.

Save Our Schools (or SOS: The Name of the Game Should Be Take a Chance on School Choice)

Carroll Andrew Morse

If President Obama is going to foist a “Swedish model” for bank reform on the American public, he should also toss in some Swedish-style public education reform while he’s at it…

It may sound out of place in Sweden, that paragon of taxpayer-funded cradle-to-grave welfare. But a sweeping reform of the school system has survived the critics and 16 years later is spreading and attracting interest abroad....Since the change was introduced in 1992 by a center-right government that briefly replaced the long-governing Social Democrats, the numbers have shot up. In 1992, 1.7 percent of high schoolers and 1 percent of elementary schoolchildren were privately educated. Now the figures are 17 percent and 9 percent....

Before the reform, most families depended on state-run schools following a uniform national curriculum. Now they can turn to the "friskolor," or "independent schools," which choose their own teaching methods and staff, and manage their own buildings.

They remain completely government-financed and are not allowed to charge tuition fees. The difference is that their government funding goes to private companies which then try to run the schools more cost-effectively and keep whatever taxpayer money they save.

Democrats (and Reporters) Too Quick to Assess Poll's Blame

Justin Katz

Rhode Island Democratic Party Executive Director Tim Grilo barely waited for the starting gun to charge through the gate and publicize new Taubman Center polling data concerning Governor Carcieri's approval ratings:

"These numbers reflect a resounding rejection of Governor Carcieri's failed policies and empty promises. We are in the midst of the greatest economic crisis in a generation - this is a time for ideas, not extremist ideology and the governor grows further out of touch with each passing day," said Grilo.

Earlier today, the Taubman Center at Brown University released a poll that found only 34 percent of Rhode Islanders approve of Governor Carcieri's job performance and 80 percent thought the state was headed in the wrong direction. By way of comparison, 74 percent of Rhode Islanders indicated a level of support for President Obama's stimulus package and said they believed it will help improve the American economy. Carcieri has joined the small partisan chorus of GOP leaders in speaking out against the Obama plan.

"If the governor doesn't get the message today, he never will. This poll should serve as a message to Mr. Carcieri that it's time to focus less on union and immigrant bashing, and more on solving the problems of Rhode Island's hard-working families. Until he does, his relevancy will diminish at a rate only surpassed by his falling approval numbers," Grilo said.

If his partisan blinders had slipped, however, Mr. Grilo might have accidentally read the following, as well:

Fourteen percent believe House Speaker William Murphy is doing an excellent or good job, and 15 percent feel Senate President Teresa Paiva-Weed is doing an excellent or good job.

Surely this poll should serve as even more of a message to members of the General Assembly that it's time to focus less on unions and other special interests, and more on solving the problems of Rhode Island's hard-working families!

Although I wouldn't go so far as to call it a redeeming factor, I will acknowledge that the numbers are made a little deceptive by the fact that 41.4% and 47.2% of respondents said that they "don't know" how good of a job Murphy and Paiva-Weed are doing, respectively, compared with only a 3.8% "don't know" for the governor. But even if we tease out "don't knows" and "no answers," those who have an opinion graded these key state-level leaders as Excellent or Good in the following proportions:

  • Carcieri: 37%
  • Murphy: 26%
  • Paiva-Weed: 33%

Katherine Gregg's top-of-the-front-page story on the poll takes the same approach as the Democrats, although she does mention the legislators' even lower numbers way down deep in the story. Curiously, the Providence Journal splashed the headlline "Poll finds Rhode Islanders oppose steep local aid cuts," even though readers who bother to follow the report onto page A4 will learn that:

... an even larger number (72.5 percent) are opposed to raising the income tax to avert steep cutbacks such as these, for anyone except the highest earners.

Of course, in a display of her own (and her paper's) credibility, Gregg goes on to highlight the redistributive inclination by contacting her prize go-to source, Patrick Crowley. Perhaps the next Taubman poll should have some questions about Rhode Islanders' opinion of news reporters and their affection for union talking points.

February 17, 2009

Censorship, a.k.a. the "Fairness" Doctrine, is Nothing to Laugh at but ...

Monique Chartier

... did anyone else get the giggles when they heard who is now promoting it?

"Essentially, because there's always been a lot of big money to support the right wing talk shows and, let's face it, Rush Limbaugh is fairly entertaining even when he's saying things I think are ridiculous," Clinton said. "I think the American people know now that we're in a very serious time. We all need to be questioned. The president, I'm sure, would be the first to admit none of us are right all the time and everything should be debated."

"With the future of the country hanging in the balance, we shouldn't be playing petty politics or just going for entertainment," he said. "What I think we need to do is have more balance in the programs, or have some opportunity for people to offer countervailing opinions," he said.

"When the Fairness Doctrine was done away with I was not in favor of doing away with it," Clinton said. "I never minded having somebody be heard who disagreed with me."

Setting aside the large vat of whitewashing contained in that last sentence, the former President couldn't see this as a way of getting back at some of his more "vocal" critics, could he ...?

Some Cheering Perspective

Justin Katz

I'm not saying that we're imagining outsourcing, automation, and other economic factors, but it's nice to read such things as this from time to time:

It may seem like the country that used to make everything is on the brink of making nothing. In January, 207,000 U.S. manufacturing jobs vanished in the largest one-month drop since October 1982. Factory activity is hovering at a 28-year low. Even before the recession, plants were hemorrhaging work to foreign competitors with cheap labor. And some companies were moving production overseas. But manufacturing in the United States isn't dead or even dying. It's moving upscale, following the biggest profits, and becoming more efficient, just like Henry Ford did when he created the assembly line to make the Model T.

The U.S. by far remains the world's leading manufacturer by value of goods produced. It hit a record $1.6 trillion in 2007 -- nearly double the $811 billion in 1987. For every $1 of value produced in China's factories, America generates $2.50.

We must continue to strive to better educate ourselves and find innovative ways in which to advance our economy (neither of which is a goal facilitated by an interventionist, nanny-state government). Rhode Island, being worse-off than the nation overall, would be a wonderful testing ground for a new paradigm of freedom and self-reliance.

(I know, I know. My boss is on vacation, and it's possible I'm letting the increased liberty go to my head.)

Two Explanations for Mark Patinkin

Justin Katz

Mark Patinkin's bullet-list-style column, today, makes two quips that, helpful soul that I am, I'll try to answer:

Someone will have to explain to me why Palestinian militants feel it's productive to keep firing rockets into Israel.

Because, receiving no substantial international backlash against the practice, the terrorists wish to provoke Israel into military action, with invariably causes international backlash. Thus do the random rockets ultimately isolate Israel from the spinless West even as they wear down the confidence and comfort of the Israeli people.

Obama may fail yet, but it's impressive how readily conservative radio hosts who for eight years championed policies that led to a big mess abroad and at home have piled on the new administration for attempting to change course.

Conservatives fall into several categories on this. Some don't believe that the policies that they supported were ultimately the cause of our current predicament. Others believe that the necessary change to prior policies is being made in the wrong direction. Of course, it's unfair to lump conservatives together as Patinkin does (specificity, Mark!), although the world certainly doesn't lack for partisans who will offer support to the convenient cause.

Municipal Fines: Their Purpose Clarified

Monique Chartier

... by the administration of Mayor David Cicilline.

Some city officials think Caprio and the three other Municipal Court judges might be a little too forgiving to those who come before them, and it is costing the city money.

Mayor David N. Cicilline’s director of administration, Richard I. Kerbel, says the court — which deals with traffic and moving violations and some misdemeanor offenses — is not on pace to meet the city’s revenue estimates.

So, in not so many words, he is asking the courts to step it up.


The city has not been able to increase its parking-officer staff as fast as it would have liked because of delays in passage of this year’s budget. As a result, the additional revenue has not materialized, and now the city is expecting about $9.5 million from the courts by the end of the fiscal year. It’s a relatively small piece of the city’s $641-million budget, but with all the other financial difficulties facing the city, every dollar counts.

Just so we're clear, then, traffic and parking regulations pertain to something other than public safety and free-flowing traffic.

My objection to any judicial leniency is from the other angle completely. There is no provision in the law for being four minutes late back to a parking meter. Two hours is two hours. As for extenuating circumstances or personal economic hardships, not only do most of us have them but most of them aren't contemplated by the law, either. Why should some people get off while others have to pay?

Alas, the mayor's administration did not cite the slightly loftier basis of a desire for equitable enforcement of laws and regulations but the more questionable goal of a steady revenue stream. As a caller last evening to the Matt Allen Show pointed out, the city is literally banking on the failings of their citizens and visitors.

Labor Relations in the Dark

Justin Katz

According to a press release from the Ocean State Policy Research Institute (printed in full in the extended entry), without public discussion, the Rhode Island Labor Relations Board has declined to consider the East Providence School Committee's complaint against the union:

"The State Labor Relations Board reported it has dismissed unfair labor practice charges filed by the East Providence School Committee against the teacher's union alleging failure to bargain in good faith (ULP-5933)," said William Felkner, president of OSPRI, "but we learned this after hearing the news that they did issue a complaint based on the same circumstances filed as charges by the union against the school committee (ULP-5946)."

As background, complaints by the Board reflect that the charges have jurisdictional substance and may give rise to a finding of unfair labor practice. They are not meant to reflect on the merits of the case but lead to a formal hearing to weigh those merits.

The extensive submission of the School Committee details compromises offered by management and intransigence by the Union in attempting to set conditions for negotiation in over 3 pages of documentation for the basis of the charges. These are only allegations that have not (and apparently will not) have a hearing, but it is remarkable that the Board should have thought such serious charges if true, did not amount to a refusal to bargain.

Yet, the board did find evidentiary circumstance that may constitute bad faith on the part of the school committee based on a complaint consisting of 2 sentences that quote the school committee as saying that "no substantive discussion had occurred []." This is not to say that a charge cannot be brief and to the point, but the mere fact that no discussion has occurred offers no evidence whatsoever as to what party is responsible for the breakdown in negotiations and who is really refusing to come to the table. Both sides essentially alleged that the other wouldn't come to the table, yet one set of charges was sustained and the other dismissed.

"How the SLRB made this decision is puzzling and will remain so because the decisions are made behind closed doors," said Felkner. "Why these decisions are made outside of public view is one more mystery."

In the executive-session-discussed view of the Labor Relations Board, all of the discord in East Providence is apparently the fault of either unfair practices on the school committee side or, well, the fickleness of nature, I suppose. The other party to negotiations may play by no-holds-barred rules.

OSPRI is kind to suggest only the "appearance" of bias.

President of the Ocean State Policy Research Institute today cautioned that the lack of transparency in State Labor Relations Board operations is leading fair-minded citizens to question whether the board is biased.

"The State Labor Relations Board reported it has dismissed unfair labor practice charges filed by the East Providence School Committee against the teacher's union alleging failure to bargain in good faith (ULP-5933)," said William Felkner, president of OSPRI, "but we learned this after hearing the news that they did issue a complaint based on the same circumstances filed as charges by the union against the school committee (ULP-5946)."

As background, complaints by the Board reflect that the charges have jurisdictional substance and may give rise to a finding of unfair labor practice. They are not meant to reflect on the merits of the case but lead to a formal hearing to weigh those merits.

The extensive submission of the School Committee details compromises offered by management and intransigence by the Union in attempting to set conditions for negotiation in over 3 pages of documentation for the basis of the charges. These are only allegations that have not (and apparently will not) have a hearing, but it is remarkable that the Board should have thought such serious charges if true, did not amount to a refusal to bargain.

Yet, the board did find evidentiary circumstance that may constitute bad faith on the part of the school committee based on a complaint consisting of 2 sentences that quote the school committee as saying that "no substantive discussion had occurred []." This is not to say that a charge cannot be brief and to the point, but the mere fact that no discussion has occurred offers no evidence whatsoever as to what party is responsible for the breakdown in negotiations and who is really refusing to come to the table. Both sides essentially alleged that the other wouldn't come to the table, yet one set of charges was sustained and the other dismissed.

"How the SLRB made this decision is puzzling and will remain so because the decisions are made behind closed doors," said Felkner. "Why these decisions are made outside of public view is one more mystery."

In the vast majority of cases, these SLRB "executive sessions" do not contemplate confidential personal information or engage in "investigative" function. Rather, they generally constitute the board debating law and policy analysis applied to alleged facts and pleadings that are themselves public records.

The apparent use of the 'civil investigations' exemption to the open meetings law (RIGL 42-46-4 et seq) seems potentially a violation of the letter of the law and is certainly a violation of its spirit.

Furthermore, charges and pleadings, which are by rule and statute public documents, are not posted on the board's web site. While not illegal, this omission is more evidence of an opacity that frustrates the public's ability to track and understand the basis for "administrative dismissals" of charges such as those filed by the East Providence School Committee.

"Without any real explanation of why the Board dismissed the School Committee's charges, OSPRI cannot charge that the Board is biased," Felkner continued. "But, if the State Labor Relations Board wishes to allay growing suspicions that it is biased towards labor, records and process should be made accessible, the rational for administrative dismissals should be explained in each case, and any claim of exemption from open meetings law should be justified on both legal and prudential grounds on a case by case basis before erecting the shield of executive session."

February 16, 2009

President Obama and Article Two: Do We Really Want to Know?

Monique Chartier

Unless an objection was filed, Occidental College had until 10:00 am Pacific time today to respond to a subpoena filed on behalf of "Keyes et al" requesting

Academic and housing records of Barack Hussein Obama, including but not limited to approximately two years from September 1979 to June 1981

Why do Plaintiffs wish to review such documentation?

The gravamen of the Petition is the question as to whether United States Senator Barack Hussein Obama, of Illinois, is eligible to serve as president of the United States pursuant to the requirements for that office in the United States Constitution. The records sought may provide documentary evidence, and/or admissions by said Defendant, as to said eligibility or lack thereof.

My initial reaction to this avenue of investigation, one of three as of a month ago, was, huh, that's pretty clever. My second reaction was, you know, they might be on to something, especially as there are reports that the Obama administration would attempt to block the effort.

My ultimate reaction was of dread.

If Barack Obama does not qualify to be President of the United States under Article Two, Section One of the Constitution, I don't want his presidency challenged and I don't want him removed from office.

It's not because the worst has already happened and a truly egregious bill will become law as a result of his efforts. (Though the administration certainly is sending mixed signals about the urgency of its passage.) And it's not because the Republican candidate, John McCain, would not be his replacement.

It's because, rightly or wrongly, so many people believe that a milestone was reached and the ultimate glass ceiling was broken for African Americans. (Me, I've thought all along that America has known for a long time that Martin Luther King Jr. was on to something.) It's because of the false yet ugly accusations that would be made. (The fact that one of the Plaintiffs of this subpoena is himself African American would be deliberately overlooked.) It's because, rightly or wrongly, so many people of all colors would be so bitterly disappointed if Barack Obama were disqualified "now that he has come so far", "now that we have come so far".

Yes, if the worst happened, ultimately, it would be Barack Obama himself who would let everyone down because he failed to ... well, properly vet himself before running. But many people believe that this is larger than one man. And if that one man were removed from the White House, too many people would never understand the real reason, or would refuse to understand the real reason. I'm not sure I can face their reaction, even if it is based upon flawed information or reasoning.

Exporting the Culture of Death

Justin Katz

For his latest column, Bishop Tobin imagined the interview he would conduct with President Obama:

TOBIN: But the use of tax dollars to pay for abortions is very controversial. It's a divisive policy. It violates the conscience of millions of Americans who respect life and oppose abortion. Isn't that completely contrary to your goal of fostering unity in the nation?

OBAMA: Bishop Tobin, let's be clear. I said in my inauguration speech that with all the problems our nation is facing we have to overcome narrow ideological positions and move beyond childish behaviors.

TOBIN: But, Mr. President, providing tax money to support abortion — isn't that in itself an ideological position?

OBAMA: No, not in my view.

TOBIN: But do you consider the heartfelt convictions of pro-lifers to be "childish behaviors?"

OBAMA: Well, not exactly, but let's move on . . .

TOBIN: Is it safe to assume that you consider the use of tax dollars to pay for abortions overseas to be good foreign policy?

OBAMA: I believe that people overseas should have the same rights we Americans have — the right to kill their children and use abortion as a form of birth control.

TOBIN: But shouldn't we be using foreign aid for more positive reasons — for example, to provide food, clothing, shelter and medicine to impoverished children?

OBAMA: Bishop, obviously you're missing the point. If you control the population and eliminate the children, you don't have to worry about giving them food, clothing, shelter and medicine now do you?

Nicholas Eberstadt the question of whether such a response would be accurate:

Population alarmists and their allies in the U.N. are deluding themselves when they claim government intervention can reduce fertility rates and "stabilize" population. Their mantra is that education, high literacy and cheap birth control lead to lower birth rates.

Health, literacy and voluntary contraception are meritorious objectives in their own right, irrespective of any influence on population growth. But it is misleading to assert that they predictably reduce birth rates.

Take literacy. The adult-literacy rate in 2006 was about a third higher in Malawi than Morocco (54 percent vs. 40 percent), yet fertility levels in Malawi were double. Family-planning campaigns are similarly unpredictable. For instance, in 1974 Mexico started a vigorous campaign to cut population growth and got fertility levels down by 56 percent but Brazil's fertility level fell by 54 percent with no campaign at all, in the same quarter century. These are not cherry-picked examples. There is simply no way of knowing in advance the impact of family-planning programs on birth rates.

It turns out that the single best international predictor of fertility levels is the number of children that women say they would like. ...

Yes, culture is the determinant of such behavior, and it has been the argument of we on the Right that the normalization of abortion and extensive promotion of contraceptives tilts the culture the wrong way. To Leftists, however, there is no culture but their culture, and whether they arrive at their policies based on their beliefs or hope to promote their beliefs through their policies is moot — indeed, irrelevant.

A Thought on Minimum Manning

Justin Katz

I know and trust Lieutenant Michael Morse of the Providence Fire Department, and he certainly makes some persuasive points on minimum manning:

From my seat I witness Providence's manpower used beyond the breaking point daily. Day after day, we are forced to tap resources from surrounding communities to answer 911 calls. Crews from Cranston, East Providence, Johnston, Pawtucket and anywhere else Providence can find fill the void when we need emergency responders. The people in those communities are under-protected while their first responders are busy bailing out their neighbors in the capital. It is a recipe for disaster. ...

One thing that is imperative in the fire/EMS service is consistency. From our end, we need to know where our resources lie, how long before they arrive, and how many will show up when called. While I am doing CPR with my partner, I'm also formulating a plan based on my expectations. I know Engine Company 11 has been dispatched from the Reservoir Avenue Fire Station and will arrive within a few minutes with three firefighters on board. I'll need two trained people to continue CPR, one to drive the rescue, my partner to monitor the heart, administer oxygen and start IVs. That leaves me to administer medications, defibrillate, document and contact medical control. Nobody is idle during an emergency. Often we have nobody left to drive the fire engine. We do the best we can and make due with what we have.

What if the mayor closed Engine 11 for the night rather than pay overtime? What if two firefighters showed up five minutes later than planned? What chance, if any, the patient had for survival would be tossed aside because of irresponsible budgeting? Is this the best our society can do?

The basic distrust is that the people setting manning levels stand to gain financially from overtime. (Whether that is really a factor is a debate into which we needn't slip.) The basic challenge is that schedules will always hover somewhere between full-time equivalent positions.

To square this circle, although I hate to create any additional departments at the state level, what if Rhode Island were to establish (or adjust rules and regulations in whatever way necessary to enable municipalities to establish) a statewide or regional fire authority that would take care of some of the organizational and back-office work entailed in sharing full-time firefighers/rescuers from town to town? The fire authority could bring an outside perspective to disputes about the number of team members necessary at any given time, and more importantly, it could organize a mixed volunteer and professional force that would split time with different departments.

I'm not suggesting a union-hall type setting to which such employees would show up to grab their daily assignments. Rather, their schedules would typically be nearly as regular as firefighters' currently are.

That way, each town or city could remain fully staffed without requiring a significant number of work hours to be paid at time-and-a-half. There would also be a new route toward securing full-time jobs or volunteering. (Details about pay, benefits, and pensions would have to be worked out of course.)

Just a thought.

“Can you imagine Socrates not answering Plato’s questions because it isn’t in the contract?”

Marc Comtois

So says Robert Flanders,chairman of the state Board of Regents for Elementary and Secondary Education. Prison guard (and union member) James Petrella essentially agrees:

James Petrella, a prison guard, has a few things in common with his son’s teachers.

He is in a union, and he knows what it’s like to work without a contract because he did it once for six years.

But the 45-year-old correctional officer said local teachers are using schoolchildren, including his own, as tools in their battle to get a new labor contract....Petrella said he first realized work to rule was in play last fall when his son’s teachers stayed away from the Winsor Hill School open house for parents.

When his son’s report card arrived with all A’s and B’s, except in music for which he got the equivalent of a C, Petrella called the school to ask about the low mark. The teacher said his son had been disruptive in class, shouting out answers.

Petrella asked why someone hadn’t called to tell him about the problem as another teacher had done in the previous school year. He said the teacher said he was under no contractual obligation to phone a parent.

Petrella persisted, asking why the teacher didn’t at least write a comment on the child’s report card to explain the C. The teacher, he said, responded that the contract doesn’t require him to do that.

On another occasion, he said, his wife asked a different teacher for some homework exercises that would help her son address a slight slip in the boy’s math scores. He said the teacher advised his wife to go to a store in Cranston and pay for a tutorial system called “Up With Learning.”

Kathleen P. Kandzierski, president of the teachers’ union, an affiliate of the Rhode Island Federation of Teachers and Health Professionals, says the union has not ordered any work-to-rule or contract-compliance tactics.

Ah yes, they have not formally"ordered" it so it's all just one big ko-ink-ee-dink.

Milestones on the Road to Serfdom

Justin Katz

Linking to an illustrated Road to Serfdom, Instapundit Glenn Reynolds conveys a reader's question about what page we're currently on. Of course, one must take into consideration, as Michael Ledeen does, that American fascism is likely to have some significant differences in character from that described by Hayek, but I'd suggest that we're somewhere around pages eight and nine. (Sadly, that assessment includes both Republicans and Democrats in the category of "planners.")

This paragraph, from Ledeen, struck an uncomfortable chord for me, having recently observed many state and local "leaders" casting their eyes to Washington for salvation:

The metaphor of a parent maintaining perpetual control over his child is the language of contemporary American politics. All manner of new governmental powers are justified in the name of "the children," from enhanced regulation of communications to special punishments for "hate speech;" from the empowerment of social service institutions to crack down on parents who try to discipline their children, to the mammoth expansion of sexual quotas from university athletic programs to private businesses. Tocqueville particularly abhors such new governmental powers because they are Federal, emanating from Washington, not from local governments. He reminds us that when the central government asserts its authority over states and communities, a tyrannical shadow lurks just behind. So long as local governments are strong, he says, even tyrannical laws can be mitigated by moderate enforcement at the local level, but once the central government takes control of the entire structure, our liberties are at grave risk.

Any Rhode Island school committee member will complain of unfunded mandates from the feds. What they may not have considered is that, when the funding encompasses the entire enterprise, increasingly invasive mandates will follow. The same is true on the town side, as well.

David Anderson: Do the NECAP Test Results Mislead?

Engaged Citizen

Secretary of Education Arne Duncan recently lamented, "I think we are lying to children and families when we tell children that they are meeting standards and, in fact, they are woefully unprepared to be successful in high school and have almost no chance of going to a good university and being successful." Do his remarks pertain to Rhode Island's 8th grade public school children? Is it the Rhode Island Department of Education (RIDE) that is misrepresenting their skills through their use of the New England Common Assessment Program (NECAP) tests?

Recently released public school achievement results from the NECAP test seem to confirm these worries. The proficiencies reported not only exaggerate the performance of Rhode Island students in mathematics and reading but also claim improving 8th grade reading scores when, in fact, they are declining. This seems inconsistent with the transparency that was promised.

Stakeholders, including Governor Carcieri, have been pushing Rhode Island educators to improve student performance. In response the NECAP 8th grade reading scores are giving them only the illusion of improvement. Illusion is a poor substitute for truth. These advocates of better education have been blindsided by RIDE and the NECAP testing regime.

To see the problem, please consider the 8th grade NECAP results in recent years. They are significantly inconsistent with those of the well-respected Nation's Report Card- also known as the National Assessment of Educational Progress (NAEP).

The NECAP measure of skills should roughly reflect that of the NAEP. It fails to do so in two regards:

Firstly, the NECAP exaggerates. It reports that roughly twice as many Rhode Island 8th grade children are proficient (at or above grade level) as are reported by the NAEP. We are told that last year 53% of Rhode Island pupils were proficient in math and reading when, in fact, the NAEP trend says it's only 26%.

Perhaps worse, and what is new to us, is the fact that NECAP reading proficiencies have been increasing over time while the NAEP shows declines. We call this the up-down problem.

You can see this in the graph, which shows the 8th grade reading proficiencies reported by the NECAP and those interpolated or reported for the NAEP. The vertical separation of the plots shows the exaggeration effect while the up-slope versus down-slope represents the up-down problem.

We also reviewed the performance of 8th grade pupils in the best school district, of Barrington, and in one of the worst districts, of Providence. Additionally, using a mapping technique we developed, we have estimated NAEP proficiencies for them.• By considering these cases parents and other stakeholders can get some sense of what's wrong with our public schools.

All must seem fine to Barrington 8th grade parents when the NECAP is claiming student proficiency percentages exceeding 90%. But not when they see our NAEP estimates showing one-third of their children below grade level.

Parents in Providence, while not pleased by the NECAP results showing only 28% of their 8th grade children proficient in both subjects, would be justifiably outraged if they knew that the more trustworthy NAEP estimates suggest that less than 10% are at or above grade level. If these numbers are correct, Providence schools are extremely dysfunctional.

How could these inconsistent results arise? It's fairly clear that the exaggeration problem is due to the policies of the NECAP authorities and, indirectly, of the participating states' departments of education.

As to the up-down problem of erroneously rising NECAP reading proficiencies, that uptrend could be due to a number of causes. Other states have seen officials gaming the tests to produce artificial gains- as happened in California some years ago. While we can't entirely rule out this possibility, we think the explanation lies more in the realm of good intentions gone awry.

Maybe the NECAP curriculum content is narrower than that of the NAEP and is thus more easily taught? It's like learning a booklet instead of a book. The one is mastered and the other not so well. Then scores go up for the one and down for the other.

But that is just a hypothesis. Further study of this is needed- probably by outside independent experts. Consideration should also be given to conducting the assessment function through an independent agency to remove concerns about conflicts of interest. That is the practice of Massachusetts's MCAS test.

Do the authorities of the Rhode Island Department of Education (RIDE) take these inconsistencies seriously?

As to the exaggeration problem, consider that at least one RIDE official apparently thinks that the NAEP standard is too high and should be lowered. She says, "NAEP 'proficient' is a very high aspirational standard."

It suggests that these officials would prefer to lower the NAEP standards rather than elevating those of the NECAP. Lowering expectations of students is no way to build tomorrow's work force. We should be maintaining or raising standards. Senator Kennedy has introduced legislation to encourage aligning state standards with the NAEP. Instead the gap between the NAEP and NECAP seems to be widening- at least with respect to 8th grade reading proficiencies.

When asked about the up-down problem a RIDE official said that the 8th grade reading test "has been administered ONLY ONCE" in recent years. But how could that be when the RIDE website reports 8th grade NECAP proficiencies for four consecutive years?

It seems that obfuscation is the primary response from RIDE officials while nary a word is said about studying these discrepancies.

We believe that when parents and other stakeholders have a more transparent picture of our public schools, then the needed political pressure can be developed to begin serious reforms. Our preliminary analysis of test results suggests that social promotion is a fundamental problem that exists in every public school in the state. But most interested parties don't yet see it that way- certainly not with the wool NECAP pulled over their eyes.

David V. Anderson, Ph.D., is CEO of Asora Education Enterprises, and his NAEP estimates were generated under a contract with the Ocean State Policy Research Institute.

Targeting Caruolo from All Angles

Justin Katz

Back on the fourth, I mentioned Sen. Leonidas Raptakis's legislation to suspend the Caruolo Act, which empowers school districts to sue their towns for more money. Saturday's Providence Journal brought news that Governor Carcieri's got a plan of his own:

A proposal to suspend the law that empowers school districts to sue cities and towns for more money is one of the measures Governor Carcieri has proposed to help plug the state's multimillion-dollar budget gap. And, this week, it picked up the support of the presiding judge of Superior Court.

A three-member panel should settle financial disputes between cities and school districts in tough budget years — not the courts, the governor said.

My initial reaction was to question why a small unelected panel ought to have that sort of sway, but I'm not sure reporter Katie Mulvaney's paraphrasing captures the plan, which she describes thus further down:

The governor's proposal would bar districts from suing cities or towns over budget issues in any fiscal year in which state aid has been cut. Instead, a town or school committee could petition the governor for relief.

That concern would be heard by a three-member panel convened by the governor and consisting of the education commissioner, director of revenue and auditor general, or their designees. The panel would develop a "corrective action plan" within 60 days that could include the suspension of contracts, including collective-bargaining agreements.

The suggestion, in other words, is for a mechanism whereby state-level financial experts would help school districts reconcile state funding cuts with their budgets, perhaps restoring some money, but with the possibility of loosening logjams that school committees lack the power and/or political will to address (such as teachers' contracts). The governor's plan does not supplant Raptakis's legislation; if the state level-funds or increases assistance, the school committee could still turn its legal guns on the town.

The state most definitely requires practices and mechanisms that take responsibility for the effects that its policies have on municipalities, but it also should take its thumb off the scale balancing the interests of each town and city.

February 15, 2009

The Governor Joins the Transparency Movement

Justin Katz

Right on the heels of Treasurer Frank Caprio's efforts (suspiciously so, some might say), Governor Carcieri has directed the Department of Administration to make its data available online:

Governor Carcieri's administration is poised to announce the launch Monday of a mechanism for the public to search state spending records through a new "Transparency Portal."

According to the governor's office, the new Web site — www.ri.gov/opengovernment/DOA — will enable "taxpayers to see how public funds are spent" by the Department of Administration "in a detailed, user-friendly format in the context of expenditure classifications with a few easy clicks."

Initially, the access will be limited to Department of Administration records. But as the hub of state government, DOA has oversight over state personnel, purchasing, accounting, budgeting, information technology, state leasing and capital-property management, statewide planning and legal services, so the potential range of newly searchable material is wide.

Now we just need a fleet of bloggers with nothing better to do than sift through government numbers...

Savage on Education, the Romantic Versus the Paradigmatist

Justin Katz

East Providence Representative John Savage (R-East Providence) describes a philosophy of public education that is fundamentally self-contradictory. On one hand, there was the system back in the day — which cultivated those Americans who reached for the moon, invented the computer-driven society, and built history's most dynamic economy:

WHEN I BEGAN teaching in the late '60s, we had pens, pencils, crayons and rulers to give to the children. The school would supply the paper for their assignments. Our textbooks would be reasonably current, and some might even be new. Maps and globes would be in our classrooms for referencing.

Sitting at their desks would be some 30 to 35 sixth-grade students, three or four of whom spoke no English. I, unfortunately, spoke no Portuguese. I did take a six-week course to learn some basic phrases (now forgotten), but to communicate with these children was very difficult. There would also always be a student or two in the class who had a severe learning disability. Together in that classroom for six, seven or eight lessons a day, the 36 of us would all work very hard.

My salary was a modest one (all my friends who graduated with me from college were earning more, and they didn't even have to return to college for night courses). My benefits were good. At times I did consider changing careers, but I loved what I did so I stayed. I knew I would always be lower-middle-class, and that was okay.

On the other hand, there is the current system — in which specialized services for individual students, smaller class sizes, and an emphasis on "attracting and retaining talented, motivated, and highly skilled professionals" are crowding out other expenses. Savage suggests that it is "the educational process itself" that is "driving up the cost of education," but that skirts the value judgment between the before and the after. Would Savage characterize his early years in the field as an era of endemic failure? I suspect not. Somewhere, he leaves off the lessons of his technicolor past for the demands of a digital present.

I'd propose that the current system of generating and remunerating teachers is nowhere near adequate for ensuring talent, motivation, and skill. Indeed, unionization is crushing those spirits from the profession. Talent is hardly a consideration against seniority. A one-size-fits-all career path is clearly stultifying of motivation.

Savage ends with the despairing question of whether we can afford the "free public education [that] is necessary for the maintenance of a functioning democracy." In a full and honest review of his experience as a teacher, perhaps he'd be able to identify the assumptions that make the answer "no" and the opportunities that would make it "yes." Not a lot of folks in the business can resist the natural inclination to turn away from the conclusions toward which that project would lead.

Welcome to the Era of Dependency

Justin Katz

I have a question. Once the dust settles on the big grandchildren's money drop heading the states' way, how is our failed public finance system going to maintain all of this on top of the infrastructure and assets that it currently struggles to keep in one piece?

To Providence Mayor David N. Cicilline, new federal investment in his city means streetcars.

Not the RIPTA buses with the fine wood trim that resemble trolleys. But real trolleys running on rails along city streets. He sees crater-pocked Bridgham Street in the city's Elmwood section and dozens of other neglected city streets and sidewalks finally repaved and refinished.

In Warwick, Mayor Scott Avedisian sees a new bridge over Mill Creek on Tidewater Drive, and maybe a boardwalk and a handicap-accessible pier at Gorton Pond, a freshwater pond that is a popular spot for bass fishermen and beachgoers.

In Pawtucket, Mayor James E. Doyle sees something that young city residents have been dreaming about for well over a decade: a skateboard park in the heart of the city, right across from McCoy Stadium, at Joseph Jenks Junior High School.

It's the dawn of a new era of big government, and big government spending. Millions of federal dollars are expected to come to Rhode Island as part of an economic stimulus plan.

The certainty of the windfall has inspired local cities and towns to dust off development plans, some long-held and many that may have just never had the money to begin with, in the hopes that maybe, finally, they’ll see the light of day.

Perhaps the most important whisper to heed comes from our Congressional delegation, which doesn't think the current borrow-and-spend plan is big enough. It's a sort of trap we're in:

  • If the stimulus money doesn't boost the economy, the powers who be will insist that the windfall wasn't big enough, and nobody down the money-grubbing line will be inclined to disagree.
  • If the stimulus money has a mild effect on the economy, the powers will say the same thing, and states will have all sort of new items and programs for which they have no real prospects of continued funding.
  • And if by some miracle throwing borrowed money at the country really does revive the economy, it will be seen as having validated the principle, and the practice will be continued in good times and amplified even more in bad.

Some would argue that this monster will be something worse than ineffective.

Through it all, the spectacle of hearing officials of every layer of government, right down to small-town school committees, place their hopes and dreams in a federal check writer is evidence of that malignant addiction to receiving. Yes, it's the dawn of the Era of Dependency, and not a few paths that lead from here into the future begin the end of the United States of America.

February 14, 2009

But Whose Truth Must We Tell?

Justin Katz

Now here's an interesting, disturbing idea:

Undoubtedly you've heard the calls for a return of the Fairness Doctrine. Listen, I am so sick and tired of "fair and balanced" as the next person yet I believe in separation of press and state.

Hmmm. What to do...what to do?

I got it!

How about reversing the court decision that actually states the media is not legally required to tell the viewer the truth!

As Northeastern conservatives are particularly well trained to understand, based on experience walking deep in the heart of bizarro country and often (for those of us who've gone through a political conversion of some degree) a memorable period of discovering that everything you thought you knew about the world was wrong, the concept of "telling the truth" is not immune to spin and relativity. For effectiveness and accuracy, no legal policy will ever match habits of discerning credibility and applying common sense. Indeed, a government stamp can numb the drive to exercise those two knacks.

The Change Some Didn't Believe In

Justin Katz

There are a number of right-of-center Obama supporters from whom I haven't heard any follow-up regarding their expectation that he would bring fresh air to government and would, actually, be a consummate centrist. Mark Steyn, for one, finds the possibility increasingly dubious:

The "buy American" provisions in the "stimulus" will invite certain retaliation around the world, wrote Jagdish Bhagwati, the Columbia economics prof, in the New York Times. This is presumably the same Jagdish Bhagwati who reassured a Toronto audience last year that he was endorsing Obama despite the senator's anti-NAFTA, anti-free-trade rhetoric because he didn't think Obama really believed it. Today it's even less clear what, if anything, Obama believes — and, even more critically, whether he has the wit or authority to impose those beliefs on a Congress whose operating procedure for the new era seems to be business as usual with three extra zeroes on the end.

Rick Karlgaard turns to his Obamacon Silicon Valley peers for some description of their current feeling:

In the eyes of Silicon Valley, Obama was like the Apple Macintosh. John McCain was like Windows.

Now comes the reckoning. Obama may be the coolest guy ever to hold the office of U.S. president. He may be the personification of an Apple Mac, iPod and iPhone. But this week Obama proved he is a big-state liberal, through and through.

My Silicon Valley friends who supported Obama are weirdly silent about this. I suspect they are in denial, still hoping for the closet libertarian Obama to emerge. Throughout the 2008 campaign, Silicon Valley Obama voters would tell me that Obama was really an economic centrist. Forget his liberal Senate record and Saul Alinsky-conditioned career as a community organizer. Forget the Chicago-style thug politics. That was in the past. Obama did what he had to do to rise. Once in the Oval Office, Obama will really govern more like John F. Kennedy, Bill Clinton or Tony Blair.

Say it enough times, and you can almost believe it. Well, sorry about that, you Obamacons. You just got thrown under the bus.

Me, I've captured the audio from the "Obama's gonna spread happiness" song and loaded it onto my non-iPod MP3 player — for use whenever the sour mood about our ever-more-difficult lives settles on the construction site.

A Cut Above, in Multiple Senses

Justin Katz

In Portsmouth, they're debating whether a 5% reduction in town spending should be a "goal" or a "mandate":

After a freeze in discretionary spending for what remains of this fiscal year, Portsmouth will try to cut spending by 5 percent in the next fiscal year.

The Portsmouth Town Council voted 6-0 Monday evening to make next year's 5 percent reduction a "goal" rather than the mandate sought by Republican Councilor Jeffrey Plumb who had called for the budget action.

"Welcome to an emergency," Mr. Plumb said, adding that strapped taxpayers cannot afford business as usual from their town government — "We should have cut our spending three years ago."

Town Administrator Robert Driscoll agreed that spending must be tightened but asked the council to make the 5 percent reduction a townwide goal. He said that while managers will do their best to "embrace" the challenge of identifying savings, departments in Portsmouth have less leeway than other places since they are already more lightly staffed than most towns.

In Tiverton, meanwhile, the Budget Committee has concluded that the only way (PDF) not to raise taxes on a struggling citizenry will be to institute the maximum reduction in school funding (enabled by declining enrollment) and to cut every expenditure that can legally be cut by 16.5%. As it is, the budgets currently submitted by the school committee and town council will result in a 13% tax increase (PDF).

A request from the Budget Committee, which is currently dominated by members of Tiverton Citizens for Change, for department heads to give the town a sense of what it might look like to cut 15% from their budgets has stirred up all kinds of resistance. Town Administrator Jim Goncalo has intervened to insist on a process of moving that request through him and the Town Council (with some ambiguity about whether he'll actually follow through). In a very interesting exchange, Fire Chief Robert Lloyd insisted that he simply cannot cut the budget 15%, called the committee a "kangaroo court," and stormed out of the meeting (audio: stream, download).

The line from town officials appears to be that expense accounts are already bare-bones, and everything else is mandated by law or by contract. Oddly, our elected and appointed negotiators (as it were) appear reluctant to acknowledge that every labor contract that is relevant to next year's budget is currently open. Perhaps they intend to accede to the unwritten law that union deals can only advance or, during real calamities, level off.

Further along in the meeting, Budget Committee member Rob Coulter noted that committee documents show the school department's budget growing from $16,504,785 to $25,156,129 (52.4%) from FY01 to FY09, even as enrollment fell from 2,201 to 1,965 (-10.7%); per-student expenditures therefore grew from $7,799 to $12,802 (64.1%). For some perspective, I calculated what the per-student expenditures would have been if they had only increased along with inflation and found that, rather than $12,032 in FY08, the number would have been $9,120, which works out to a total appropriation of $18,642,027. In other words, from 2001 to 2008, the school department's budget increased 31.9% more quickly than inflation — or $5,952,360.

One gets the impression that the primary goal of municipal government is to transfer money from residents to union members.

Pulling People from the Union Machine

Justin Katz

The extremity of Mike Cappelli's comment about unions offers a starting point from which more tempered opinions can be considered:

Do these pigs ever acknowledge that the taxpayers are people, too? Do they ever acknowledge that their "clients" are children, too?

Dealing with these pigs is like dealing with Hamas, Justin. You just can't do it. You continue to delude yourself into thinking someway, somehow, there is a silver bullet out there to fix this problem, and you just need to find that one way to deal with these pigs.

I don't waste my time on such useless pursuits.

Mike pulls back from the direct comparison to terrorists, comparing instead the act of dealing with the group in question, but there's still an underlying difference that destroys the conclusion: Union members are not an isolated culture isolated from their fellow citizens. They are our neighbors, and the side that forgets the humanity of its opposition will ultimately fail.

Look, probably more than half of the emphasis in unions' propaganda is directed at their members, for whom questioning union tactics may lead to questioning union value. Local taxpayer groups can't be acknowledge as consisting of residents who are seeing their tax bills drive up their monthly mortgage payments, even as their employers scale back salaries; they aren't aging retirees watching their income flake away; they're "astroturf" groups, mouthing a bought-and-sold line of rhetoric funded by powerful interests from whom union members must seek protection. (In Tiverton Citizens for Change, we've taken to calling ourselves "crabgrass.") The numbers showing the disparity between union members and the people who pay their bills must be seen as spun, not factual illustrations of inequity. And so on.

The reasons that union members are susceptible to the chatter of their labor organizations are readily empathizable. Nobody ever feels as if they are compensated at their full value. Nobody fails to notice that they face sometimes uncomfortable restrictions on their spending. And yet, union members sense that they've got it good compared with their private-sector counterparts, and it's surely reasonable to fear that somebody will wash that advantage away, perhaps even with some justice.

Mike is correct to say that there is no silver bullet; no argument will prove powerful enough to shatter the illusions forged in self-interest and well-financed intellectual trickery. But inasmuch as union members can see through their glass boxes, they may be drawn out of them, into their full communities. Giving them violent images against which to react will only add layers to the walls.

February 13, 2009

Exercise your Constituent "Franking" Right

Monique Chartier

Can't find any web reports but I heard a news report that the House has just passed the non-economic stimulus bill and the Senate was expected to act on it later today.

Do you support or oppose this bill? Let your voice be heard. Senatorial contact information below.

Senator Jack Reed: (202)224-4642. Website.

Senator Sheldon Whitehouse: (202)224-2921. Website.

The Public/Private Disconnect

Marc Comtois

What takes up 10% of my weekly paycheck? Family health care, that's what. And that's just my share. My employer kicks in some, too.

Like so many other employees of small businesses, my company had to health-plan shop again this year to find a way of keeping costs down. In our case, the health care costs went up, just not as much as they would have if we hadn't switched plans. So now, like so many others, I take home a little less than I used to. That's just the way it is.

I'm not alone. You see, in the private sector, yearly reassessment of benefits is the norm. There's no locking in with contracts, no long term "promises." Be flexible or be out of business. Right now, tens of thousands of Rhode Islanders who work in the private sector are taking the hits, sucking it up and living with a little less. In many cases, it is necessary that employees recognize that they can either make a little sacrifice or say goodbye to their job or that of some of their co-workers and friends. I know of a few cases where people have taken pay cuts to stay employed. Or companies that have instituted mandatory furloughs to keep their doors open and avoid further layoffs. Imagine that? That's the simple reality in today's economy.

This is why the compassion meter is just about pegged at "0" when we hear public employees complaining about deals "made in good faith" being broken because they may have to endure reductions in their generous benefit packages or increases in their relatively minuscule co-pays and co-shares. There is no money. And politicians, wisely, are reticent to go to taxpayers asking for more. Everyone else is making sacrifices, now it's their turn.

Small-business owners and their employees are used to cinching their belts and spreading the hardship amongst themselves. That way, hopefully, we can help keep more people employed. Making a little less is better than none at all. The question we keep asking is, how come the public sector isn't willing to do the same for their "brothers and sisters" or the communities they serve?

While We're on the Nexus Between Religion and Politics...

Justin Katz

Here's some Biblical inspiration specifically for Rhode Islanders (Proverbs 28:28)

When the wicked gain pre-eminence, other men hide;
but at their fall the just flourish.

I'd append the suggestion that the second clause goes the other way, as well: the flourishing of the just leads the wicked to fall.

So let's start flourishing!

Divine Right and the Modern State

Carroll Andrew Morse

Channeling John Locke and Edmund Burke via Newt Gingrich on last night's Matt Allen Show on WPRO radio (630 AM), Zack the Speculator provided a brief tour of the evolution of the philosophy of government in Western Civilization...

The great Newt Gingrich said this many years ago; he said the difference between us and England and the royalties and the monarchies is that they all believed that God gave the power to the king and the queen and the king and the queen gave a little bit of that to the people. What [John Locke] and [Edmund Burke] and the others that the founders read and believed in said was God gives the power to the people, and the people loan it to the government…that is something we should never forget.
It is interesting to note that if you begin from Zack's description of the authority of government being rooted in divine right…

…then replace God with some secular concept like "the forces of history" or "progress"…

…then replace the monarchy with a group of technocrats, or maybe even with a "vanguard of the proletariat", but in either case with a group of people who supposedly understand the needs of "progress" better than the common citizenry does…

…what you end up with is the Progressive ideal of government, with the leaders of the modern state demanding nearly unlimited power over the individual, to meet the needs of a higher-power of "progress" -- needs that the leadership tells you that only they can fully comprehend!

Alas, the idea of power rightfully belonging to a special class of citizens who are supposedly "closest" to the ultimate authority is still alive and well here in the 21st century.

Gregg Rejects Obama Census Grab

Marc Comtois

New Hampshire Senator Jud Gregg removed himself from consideration as Commerce secretary. While his disagreement over the "stimulus" package may be the main reason--his stand on principle--the shenanigans that the Obama Administration is engaged in with the 2010 Census may have been the final straw. John Fund recently explained the danger with having the White House control the census and discussed the issue with Bruce Chapman, who directed the Census in the 1980s.

"The real issue is who directs the Census, the pros or the pols," says Mr. Chapman. "You would think an administration that's thumping its chest about respecting science would show a little respect for scientists in the statistical field." He worries that a Census director reporting to a hyperpartisan such as White House Chief of Staff Rahm Emanuel increases the chances of a presidential order that would override the consensus of statisticians.

The Obama administration is downplaying how closely the White House will oversee the Census Bureau. But Press Secretary Robert Gibbs insists there is "historical precedent" for the Census director to be "working closely with the White House."

For my Democratic friends, the words of Mississippi Republican Rep. Gregg Harper may provide some perspective:
How would you feel if this was [President Bush's senior political adviser] Karl Rove and the Bush White House that was handling this census? It's the same thing.
Michael Barone thinks the Gregg un-nomination may have shined a brighter spotlight on the Obama Census grab. Let's hope so.

ADDENDUM: On a lighter note, we should keep in mind the rights of Imaginary-Americans.

State on the Radio

Justin Katz

Matt and Marc talked about the state of the state, on the Matt Allen show, Wednesday night, and the peculiarity of having a lieutenant governor from the governor's opposition party (sports analogy employed). Stream by clicking here, or download it.

What Does Rhode Island Get Out of This?

Monique Chartier

[This post should in no way be interpreted as an acceptance or approval of the "stimulus" bill furiously being worked out in Congress. The premise that massive government spending can lift or save an economy is a non-starter; most of the line-item spending in the bill qua economic stimulus is an absurdity. In short, this and all "stimulus" bills should be killed.]

Budgeters on the state and local level have been holding their breath and postponing important decisions, pinning their hopes on the state aid expected to flow out of the "stimulus" package pending in Congress.

CBS News Political Hotsheet provides the AP's listing of how the $789b will be doled out. Setting aside targeted monies - $87b for Medicaid, $46b for transportation projects, etc - below are the line items that might remotely fulfil wishful budgeters dreams.

$8 billion in aid to states to defray budget cuts

* * *

$47 billion in state fiscal relief to prevent cuts in state aid to school districts, with great flexibility to use the funds for school modernization and repair

* * *

$26 billion to school districts to fund special education and the No Child Left Behind law for students in K-12

Items two and three would flow directly to the local level. But in actuality, they are targeted funds as well and must be spent on specific education spending items.

Really, only the first item of $8b is discretionary. And remember that states may choose to keep the entire amount at the state capitol and not share with cities and towns.

Rhode Island and the United States have populations of around a million and 304,000,000 correspondingly. If the $8b is divided among the states on a per capita basis, it looks like $26,315,000 in "discretionary" funds is headed to Rhode Island. [Feel free to check my math.]

So. If this bill passes, would $26m have been worth the wait? Would it cover all postponed budgetary decisions? Last but not least, how will the Rhode Island General Assembly divy this $26m?


In today's ProJo, Steve Peoples and John Mulligan peg the total coming to Rhode Island at $825 million and make a good point about the targeted funds.

Roughly $425 million will go to Rhode Island Medicaid programs over the 27-month life of the emergency bill, which will free up hundreds of millions of dollars for other causes. And the state could get another $400 million over two years for local school districts, with few restrictions on how it is spent.

Differences are emerging as to how will these one-time funds should be spent.

Even though the package hasn’t yet cleared Congress or been signed by President Obama, whispers have already begun to fill State House hallways about who will control Rhode Island’s share and where it will go.

Governor Carcieri has suggested using the stimulus to cut taxes. Assembly leaders have yet to outline a plan, but acknowledged yesterday tremendous pressure to restore proposed cuts to municipalities, hospitals and nursing homes.

February 12, 2009

OPEN FORUM: So Whaddya gonna do with your $13?

Marc Comtois

Hey, looks like the average Joes and Jills are going to get a whole $13 extra a week thanks to the "stimulus" bill. So, what are YOU gonna do with all that extra coin?

No More Political Cover

Justin Katz

This is an instructive episode:

A House vote to raise the state's cigarette tax by $1 a pack — to what would be the highest level in the nation — was aborted at the last minute yesterday after Republican Governor Carcieri yanked his support from his own tax-raising proposal.

Carcieri's eleventh-hour move was announced by a visibly annoyed House Finance Committee Chairman Steven Costantino on the House floor, the unexpected development punctuated by this uncharacteristic utterance by House Speaker William J. Murphy: "Get it out of here!"

Earlier in the day, Murphy had said raising the cigarette tax "doesn't bother me" because people choose to smoke.

It appears that the General Assembly Democrats would very much like to raise taxes as a way out of their personal-special-interest-debt conundrum... but not without cover. I say that the governor should finally learn this lesson: Go for the conservative gold and declare that anything less is the full property of the legislature. Make them wear it. Make them fight for every ounce of political cover that he's willing to give as part of negotiations.

Meanwhile, remind them that the clock is ticking and that the bomb is on their desk.

Congressman Says Let's Have Public Sector Pension Funds Bail Out the Banks!

Carroll Andrew Morse

One of the most unenlightening debates that has resulted from the financial crisis has been the one where advocates of defined benefit pension plans argue that the market crash proves that 401(k)-style plans can't work and therefore we need to increase the number of people in defined benefit plans, while advocates of 401(k)s argue that the market crash proves that defined benefit plans don't work, and therefore we need to increase the number of people in 401(k)-style plans.

This argument is inane. Without robust market growth, nobody's plan for a multi-year retirement is going to work.

What has remained true, however, both before and after the crash, is that public sector defined-benefit plans require putting a huge single pool of money under the control of politicians and that the odds of a big pool of money, under the control of politicians for multiple decades, not getting raided for something stupid, are virtually negligible.

Case and point, from the New York Times via Instapundit, is Congressman Gary Ackerman's plan to a) bail out banks using pension fund money and, even better, b) his attitude that this is not a problem, because the government can magically "guarantee" an 8.5% return on investment...

Financial institutions in the United States probably need hundreds of billions of dollars in additional assistance, and one congressman wants to harness state and local pension funds to help them.

Rather than rely more heavily on the Treasury, which has already put $350 billion in the nation’s banks, Representative Gary L. Ackerman sees an opportunity in the trillions of dollars in public pension funds, The New York Times’s Mary Williams Walsh reported....

Mr. Ackerman, Democrat of New York, is sponsoring legislation that would allow public pension funds to pool some of their money and use it to create a sole-purpose entity that would buy $50 billion to $250 billion worth of preferred stock in America’s banks. That would strengthen the banks’ balance sheets and, Mr. Ackerman hopes, get them lending again.

And, saving the truly best for last, here is Congressman Ackerman's explanation of why he favors this plan, because...
Some of us are getting tired of writing checks with public money.

Open Meetings and Public Comments

Carroll Andrew Morse

Given opinions expressed from multiple quarters at Tuesday night's East Providence School Committee meeting on whether members of public bodies can respond directly to questions offered during the public comments, I want to point out that Rhode Island law is explicit on the subject, and the answer is yes...

42-46-6(d) Nothing within this chapter shall prohibit any public body, or the members thereof, from responding to comments initiated by a member of the public during a properly noticed open forum even if the subject matter of a citizen's comments or discussions were not previously posted, provided such matters shall be for informational purposes only and may not be voted on except where necessary to address an unexpected occurrence that requires immediate action to protect the public or to refer the matter to an appropriate committee or to another body or official. Nothing contained in this chapter requires any public body to hold an open forum session, to entertain or respond to any topic nor does it prohibit any public body from limiting comment on any topic at such an open forum session. No public body, or the members thereof, may use this section to circumvent the spirit or requirements of this chapter.
A public body can choose to limit the topics that are discussed, not even a requirement that what happened during the "official" part of the meeting be an "allowed" topic, and never any requirement that committee members not respond.

This change in the law was added in 2006, presumably in response to some less-than-clear guidance that had been offered on the subject by the Attorney General (making this a perfect example, by the way, of the democratic process working well. Executive branch says "this is how I'm going to enforce the law". Legislative branch says "we don't like how the enforcement is proceding, so let's change the law".)

Union Cause and Effect

Justin Katz

I just heard a report on 630 WPRO in which the public sector unions in New Bedford explicitly rejected a pay cut in full knowledge that the city would have no other option than layoffs. Said one firefighter (approximately):

We're going to have to work harder, and response times are going to be slower. People are just going to have to expect that.

In other words, the unions' vote didn't preference just layoffs over paycuts, but degraded emergency service over paycuts.

February 11, 2009

Making Candidates Work for It

Justin Katz

I've been hearing that the stars are aligning behind a bill in the RI House (PDF) — introduced by Representatives Brian Newberry (R-North Smithfield, Burrillville) and Michael Marcello (D-Scituate, Cranston) — that would eliminate the straight-party, master-lever option on RI ballots.

The House Judiciary Committee is to hear testimony today, and from the news from my email box is that Operation Clean Government, Rhode Island Statewide Coalition, Common Cause, the Republican Party, and the Moderate Party, as well as former legislators June Gibbs and Sue Story will all be speaking in favor of the bill. The Moderate Party's Ken Block has put up a quick and easy email form to submit a letter of support to the General Assembly.

More Official and Public Comment from the East Providence School Committee Meeting

Carroll Andrew Morse

Here is one financial measure of exactly how dire a situation in the city is in.

Suprintendent Mario Cirillo praises the level of professionalism and effort exhibited by East Providence school system personnel...

...and outlines a plan for administrative restructuring that he believes will eventually save the city $400,000 per year, while helping to create a culture of achievement within the schools.

East Providence Education Association President Valerie Lawson argues that the school committee holding the meeting at City Hall, instead of at the high school, is an attempt to limit public participation, and that it was "the reaction of the school committee" that brought about the early retirement proposal made by the union.

Two East Providence teachers discuss their pride in their profession.

Teacher Richard Martin calls for a search for middle ground (warning: North Providence residents may want to skip this one).

Bill Murphy (aka "the good Bill Murphy", from the East Providence Taxpayers Association) discusses the negotiations process, open or otherwise.

East Providence resident Jack Fahey challenges the idea that there is something inherently wrong with open negotiations, and brings some discussion of how things are done in other states to the table.

Another East Providence resident lays out the the dilemma that many parents, in East Providence and across Rhode Island, are facing.

In the most contentious moment of the evening, when former school committee member Mildred Morris takes it upon herself to berate the current school committee, an audience member challenges the idea that past school committee members bear no responsibility for the current problems.

East Providence teacher Mary Texeira once again stakes out a tough, direct, but willing to compromise position.

Rhode Island Employment Trends

Marc Comtois

Inspired by the chart unveiled by the Governor during last night's State of the State speech, I went over to the RI Department of Labor and Training's website last night and downloaded employment figures from 1990 to 2008 (all that was available--I used the "not seasonally adjusted" figures). I was interested in looking at the employment trends of other sectors in addition to manufacturing. So here come the pretty charts! (For all of these, the job numbers are on the "Y" axis and represent thousands of jobs).

First, here is a chart of the overall jobs broken down by "Goods Producing" and "Service" sector jobs. I included the "Manufacturing" sub-category of "Goods Producing" to show how closely linked the trends are. You can see this even more with the second chart of just the "Goods Producing" sector. It's also quite obvious that, as we already know, Rhode Island's is a "Service" economy (just like the rest of the U.S.).


Next, let's take a closer look at the Service sector. Here's the big-picture snapshot.


Here we see that the trend is generally upward. The "Information" sector is relatively flat, but the main driver, in terms of overall jobs and rate of growth, is the "Educational and Health Services" sector. The "Leisure and Hospitality" sector is also quite strong and, until recently, so were the "Financial" (driven by Real Estate, I expect) and "Business and Professional Services" categories.

Here is a closer look at the "Educational and Health Services" sector, which makes it obvious that Health Care is a major growth component of our economy.


Government is included in the "Service" sector of the economy. The overall chart showed that, after an uptick in 1999, it has remained fairly consistent. However, a closer look supports the Governor's contention that while Federal and State government employment has been reduced, local government has grown.


Finally, here is an indication of which component of local government has driven that growth (there was no separate data for educational and non-educational local government employment prior to 1993 and data for 1995 and 1996 was not provided).


East Providence's Half-Million Dollar Compromise

Carroll Andrew Morse

Gina Macris' story in today's Projo on a cost-saving early retirement plan for teachers in East Providence...

During the meeting, the committee approved the retirement of 15 veteran teachers who chose a midyear buyout, saving what school officials estimated will be nearly $1 million in salaries and benefits by the end of the fiscal year, Oct. 31....

With the retiring teachers’ last day expected on Friday, the School Department plans to replace them with retired teachers at substitute pay for the remainder of the school year. It expects to hire replacements in the fall at significantly less than the retiring teachers have been paid.

...doesn't get the details quite correct.

Actually, most of the teachers who are officially retiring have volunteered to stay on as long-term substitutes, but because of state law have to be away from their jobs for 30 days before they can be re-hired. In return for retiring mid-year, the retirees will be allowed to participate in the healthcare plan specified in the expired 2005-2008 contract.

Already-retired former teachers will be used to fill the 30 day gap.

East Providence expects to realize an immediate $400,000 to $500,000 savings with this plan. Add to this the fact that this proposal was brought to the school system by the union (although union President Valerie Lawson didn't seem too happy about the school committee accepting the offer), and it seems like we may have an honest-to-God compromise benefiting all sides on our hands here.

Click here for the audio of East Providence School Department Director of Human Resources Lonnie Barham's official description of the plan.

CBO analysis of House-passed porkulus bill

Donald B. Hawthorne


Sometimes pictures do tell more than words can say.

Correcting Myths About The Great Depression

Donald B. Hawthorne

Burton Folsom, Jr. on the Great Depression.

Read his book.

A Mandate for Change and a Change of Mandates?

Justin Katz

There's a hearing at the State House today on an excellent bill (PDF) from newcomer Representative Roberto DaSilva (D, East Providence, Pawtucket):

(a) No educational mandate shall be enacted or promulgated after the effective date of this chapter, unless the body enacting or promulgating the same shall first, after public hearing, determine the cost of the proposed mandate to each of the school districts of the state. No rule, regulation or policy adopted by state departments, agencies or quasi-state departments or agencies which requires any new expenditure of money or increased expenditure of money by a city or town shall take effect unless full and adequate funding, as determined by public hearing, is included as a portion of the language of the mandate document.

(b) The lack of full and adequate funding as a provision of an educational mandate shall be an absolute defense against any legal action filed by any party for the purpose of enforcing the provisions of the mandate.

February 10, 2009

The Governor's Speech

Justin Katz

The governor's office has sent along the text of his state of the state speech, and I've included it in the extended entry, below. They've also sent along his eye-opening chart from the speech:

It would be interesting to see other industries and a total plotted, as well, but it certainly makes a statement as it stands.

2009 State of the State Address
The Honorable Donald L. Carcieri
Governor, State of Rhode Island
Tuesday, February 10, 2009
Mr. Speaker, Madam President, members of the General Assembly, my fellow General Officers, members of the Judiciary, First Lady, Sue Carcieri, my family, distinguished guests, and my fellow Rhode Islanders.
In the midst of all the economic turmoil, tonight I'd like to start out with some uplifting stories. These stories will give us encouragement about what's good in our state, and what's possible when we make up our minds to do something positive.
We have some very special people in these chambers tonight. Let me begin with the first, a 15 year old swimmer from North Kingstown, who through her dedication, focus and determination earned a spot on the US Olympic Swim Team and competed in the Beijing Olympics last summer.
Her accomplishments are many, but perhaps her greatest achievement is the pride she has inspired in her family, her school, and all Rhode Islanders. Ladies and gentlemen, please welcome Rhode Island's own Olympian Liz Biesel, and her parents Ted and Joan.
I ask you now to please hold your applause until I introduce both of our next special guests.
There are many men and women in uniform who keep us safe throughout the world, and who call Rhode Island home.
Tonight, we are honored to have two Rhode Island National Guard non-commissioned officers along with their families and employers. Supportive employers are critical to maintaining the strength and readiness of the nation's National Guard and Reserve Units in support of our nation's defense.
The first is Army Sergeant First Class Richard Gaudet. SFC Gaudet deployed with our Embedded Training Team for his second deployment, from Nov 07 - Nov 08. He served as a Senior NCO Mentor to both the Afghan Border Police and Afghan National Police. SFC Gaudet is also a Vietnam War veteran and former commissioned officer.
He resides in Coventry, RI and is employed by Verizon in downtown Providence. Donna Cupelo, Regional President of Verizon New England, has accompanied Sergeant Gaudet tonight along with his daughter Angie and son Richard, Jr. who also served two tours of duty in Iraq.

Our Air-Guard NCO is Staff Sergeant Gerald Hutchinson. Staff Sergeant Hutchinson is with the Air National Guard Maintenance Group and has been deployed on multiple occasions since 9-11.
He has just returned from Afghanistan, which was his fourth deployment and third location.
Staff Sergeant Hutchinson was instrumental in maintaining the Air Force's newest air transportation aircraft, the C-130J Hercules from the 143rd Airlift Wing, which is based at Quonset Point.
Staff Sergeant Hutchinson hails from Cranston, and he is employed by Butler Hospital, here in Providence. Tonight accompanying Staff Sergeant Hutchinson is wife, Michele, and Mr. Chris Paiva, Nursing Manager at Butler Hospital.
Let's thank these two Rhode Island heroes, their families, and two very patriotic Rhode Island employers who recognize their sacrifices and support them in the workplace.
It is stories like theirs that sustain us through tough times. And, there is no question these are tough times.
Last year at this time, I warned that Rhode Island was at a tipping point. Now, our condition is more fragile and perilous, and we need to act boldly.
Tonight, I want to review with you three major actions we have underway that will have a profound impact on the state of the state.
First, what we need to do to get through this economic downturn.
Second, how we better position our state for the future.
And third, what we have already done to put in place the building blocks to create a stronger and more competitive state. That's important, because despite our economic stresses, we are pushing ahead on many fronts.
One month ago, I spoke directly to the people of Rhode Island about the serious financial situation we are facing, and shared many of the details contained in my deficit reduction plan.
Our nation's economic distress continues, and Washington is in heated debate about how best to stem the slide, stop the unemployment spiral, and revitalize the credit market.
And, we are being greatly affected by the economic downturn!
Last month when I spoke to our citizens, I emphasized three themes to guide us through this storm.

First, we must strengthen our safety net for our most vulnerable citizens by careful and thoughtful implementation of the new Global Medicaid Waiver.
Second, we must reform our public employee pension and benefit plans so that they are fair and equitable, affordable and sustainable.
And third, we must slow the rise of local spending by giving our mayors and town councils the ways and means to control spending and balance their budgets without raising property taxes.
These are all detailed in the Economic Recovery Plan I submitted to the General Assembly last month. We need to get that plan enacted as soon as possible.
Too many R.I. families are painfully experiencing the loss of jobs, healthcare, and their homes. But now, more than ever, we mustn't lose our nerve or our resolve.
I know that our proposed changes are difficult ones, and I know there are many critics.
But, the only alternative we hear from the special interests and lobbyists is "raise taxes," because, they can't get by on less. Well, that's what most of our families and businesses are having to do.
Rhode Island has been increasing spending and taxes for decades. That's why we are so distressed now. People have been voting with their feet – they're leaving. In fact, we have almost 4,500 - 17 percent - of our state employees whose retirement checks are mailed out of state, over 2,000 to Florida alone. I don't blame them – but it's indicative of the problem.
We need every department of every city and town to sharpen their pencils, tighten their belts, and be smarter about how they spend the taxpayers' money!
We need the unions to realize that our cities and towns cannot afford business as usual---they cannot afford the wages, the pensions, the health care, and the work rules that were bargained for.
The world has changed dramatically. The cost of defined benefit pension plans and healthcare have spiraled out of control. These costs are crushing our taxpayers – most of whom don't have such pensions and health benefits.
This is not about picking on anyone---rather this is about picking up the burden together, for the sake of our children, our seniors on fixed incomes, and those truly dependent upon us. This is about pulling together to get us through this severe downturn.
We're not alone in this! Connecticut and Massachusetts are facing multi-billion dollar deficits.

California has an unemployment rate of 9+%, and a $45 billion deficit. Governor Schwarzenegger has declared a fiscal state of emergency. They are out of money!
They're postponing tax refunds, college tuition payments and requiring state employees to take 2 unpaid days off each month.
We can't let this happen in Rhode Island.
Folks, we are in very extraordinary times, which call for extraordinary measures. State employee unions worked with us last year, recognizing the difficult economic environment. They made major concessions, including no pay raises, paying more for health care, and picking up the slack in light of the wave of retirements. I want to express my appreciation to all our state employees for their continued hard work and dedication to public service.
I encourage every public employee union to sit down with the mayors, town managers, the city and town councils, and the school committees to become a part of the solution. Help your communities get through this! Some have already stepped forward and I thank them.
Our immediate challenge in the next few months will be to use the anticipated federal stimulus money wisely and sensibly. We must use the additional funding to bridge the deficit, support tax relief and structural reforms, grow jobs, and grow our economy.
Today, I signed an Executive Order creating the Office of Economic Recovery and Reinvestment to establish a transparent process to administer these federal funds.
As Washington gets closer to passing the stimulus package, it is critical that we have the right structure in place to quickly move forward with projects and ensure the appropriate use of taxpayer dollars.
The late president, J.F.K. once remarked that, "when written in Chinese, the word crisis is composed of two characters. One represents danger and the other opportunity."
To squander this stimulus by avoiding the hard decisions would be an enormous shame, and a great opportunity lost. I don't want our children and grandchildren to pay the price for our lack of courage.
Think again of the courage, the determination, and the perseverance of our guests here tonight. I ask us all to summon these same virtues and make this a state we can all be proud of.
Today, the pressing issue is growing jobs in those sectors of the economy that will bring money and investment to our state.

To illustrate why our state continues to be so vulnerable to economic downturns, I want to share a chart with you! In 1978, Rhode Island had 137,000 jobs in manufacturing which represented 34% of the entire workforce---today we have 46,000 representing under ten percent of the workforce.
In the past 30 years, we have lost almost 100,000 jobs in businesses that added to the economic wealth of our state. What do I mean by that? These manufacturing businesses made products, sold them elsewhere, and brought the money back to R.I. in the form of more jobs and investment.
That's the type of business activity necessary to build our economy and expand our tax base. At the turn of the last century, Little Rhody was one of the most prosperous states in the country. In fact, that's when this magnificent State House was built. Look at the mills and factories in Woonsocket, Central Falls, Pawtucket, Providence, West Warwick---all across our state.
These factories employed thousands of Rhode Islanders, who were able to build a future for their families. Many of our parents and grandparents worked in them, my grandfather included.
There's another disturbing trend on this chart. The brown line is state employment and the green one is employment by our cities and towns. As you can see, over the last twenty years state government employment has declined from 21,300 to 15,800 a reduction of 5,500 or 25%. Today, the number of state employees is below 14,000.
But look at what's been happening to employment by our cities and towns! During the same period, it has increased from 27,500 to 38,000---10,500 jobs, an increase of 38%.
I want to repeat that. The state has reduced employment by 25 percent, while the cities and towns have increased employment by 38 percent.
Ladies and gentlemen, that's why your property taxes are so high and keep rising. That's also why it is so imperative that we find ways to consolidate services, and reduce the burden on our economy and our taxpayers. Government services consume our economy's resources --- they don't create them!
The competition, among states and countries for companies and jobs is intense. There are many factors that go into a company's decision about site selection---available workforce, energy costs, site readiness, over-all business climate, and, yes, taxes. We have been working hard on the first four - but now we need to make significant changes in our tax competitiveness.
I'm tired of people writing stories about R.I. being "tax hell," or ranked near the bottom in business tax competitiveness. We need to reverse the trend on that chart with bold, business friendly tax reforms.

I am firmly convinced that if we dramatically change our tax structure, our economy will produce jobs!
What Rhode Island needs now is more taxpayers; not more taxes.
This will only come from a tax policy that says to our business community, "stay here and grow your business, and by the way, tell all of your out-of-state business friends that R.I. is a great place to do business."
I want to send a loud signal that – R.I. is open for Business!!!!
I want to see billboards at our state line proclaiming R.I.; the Ocean State, a great place to build your business."
Despite the many challenges, we have not let ourselves be distracted from our long term goals. We have made numerous investments over the past year - investments in our people, our environment, and our infrastructure. These are the building blocks for our future.
First, although we may face a worsening economy and increased hardships for our citizens, we have taken steps to strengthen our safety net with the Global Medicaid Waiver, reforms in our welfare to work program, additional funding for low income heating assistance, and, working with Rhode Island Housing, we have increased the number of affordable housing units by over 700.
As for education, steady progress has been made with our Primary and Secondary schools. In the four years of NECAP testing, in grades 3 – 8, and two years of measurement in grade 11, our student scores are improving in every subject, in every grade. We are closing the gap not only between our urban and suburban schools, but also with our partner states Vermont and New Hampshire.
Last year we undertook four major education initiatives.
1. We formed the Urban Education Taskforce
2. We launched several projects to improve math and science scores
3. We instituted new graduation standards for high school seniors, and
4. We have been leading the nation with our K-16 council.

Last week, I had the honor of cutting the ribbon at a new state-of-the-art facility at Rhode Island College where students and teachers will focus on math, science, engineering and technology. It will provide our students with the knowledge and skills they need for the jobs of the future.
Two weeks ago, we cut the ribbon on URI's new Center for Biotechnology and Life Sciences – a world-class facility.
And this spring we will open the new Inner Space Center at the Graduate School of Oceanography – making us a leader in global ocean exploration.
These are exciting investments in our colleges and universities which will produce the future scientists, inventors and job creators that we need.
Protecting the Environment and Producing Renewable Energy are more than dreams in Rhode Island. They have become realities.
2008 was a record-breaking year for land protection in our state. In fact, 3,148 acres were protected last year, more than any previous year on record.
The $350 million Combined Sewer Overflow project was completed, on time and on budget. Soon, we will be able to improve Narragansett Bay water quality in a dramatic way.
In the area of renewable energy production, we have moved aggressively to make Rhode Island home to the first offshore wind project in the nation. Deep Water Wind, the company that will develop the project, will help us reach our goal of 20% of our state's energy being derived from renewable resources.
In doing so, they will be adding 800 green collar jobs at Quonset – jobs that will help both the economy and the environment – as opposed to jobs that might put our bay at risk.
Recently, there has been a lot written about the Quonset Business Park. A great deal is going on there. Let me give you some facts! The latest figures show that 8,842 people are employed in 164 companies inside the Park. 2,400 of these jobs were added in the last four years with private investment of $170 million, and another $125 million in the pipeline.
Electric Boat, one of Quonset's cornerstone companies, is expected to add 1,000 new jobs over the next few years as its submarine production ramps up.
And there is a renewed commitment from the US Navy to expand in Newport, adding 600 jobs and new investment in that community.
We have been investing heavily in our Infrastructure. By now, you've all probably driven over the new I-Way bridge. The entire I-Way project is scheduled for completion by the end of next year. Not only will traffic flow be greatly improved, but 30 acres of prime real estate in downtown Providence will become available for development.
Many other exciting infrastructure projects were either completed or initiated last year. We opened the new Rte. 403 connector between Rte. 4 and the Quonset Industrial Park. We've broken ground on the Intermodal project that will connect the airport with a new commuter rail station and car rental facility off Jefferson Boulevard. And, the New Sakonnet River Bridge contract has been awarded with construction beginning this spring.
All these projects support a stronger and more efficient infrastructure that will facilitate economic growth and help Rhode Islanders with their daily commutes to work, shop or just to enjoy our state.
Last week, my Tax Policy Group met and is completing its final report to make our state more business-friendly and welcoming, and able to compete with our neighbors. I have encouraged them to be bold, because we need to radically change both the perception and the reality of our tax structure.
My goal is to submit to the General Assembly, as part of my 2010 Budget, a new tax plan. A plan that brings income tax relief to Rhode Islanders, phases out the corporate income tax, and eventually eliminates our estate tax.
This bold new tax policy will stimulate our economy, grow jobs, and keep productive people of all ages from leaving Rhode Island.
In summary tonight, everything we have done for the last six years is part of an ongoing plan to set the stage for a reinvigorated Rhode Island. We are at a critical time right now. Much has been done to lay the ground work.
What we must not do is choose to ignore the fundamental problems and maintain the status quo. And, we must not rely on all the Federal Stimulus money as a crutch to avoid the hard decisions.
What we must do is enact the pension reforms that are critical to our financial stability going forward, and provide relief to our cities and towns by giving them the tools to manage their costs more effectively.
We must reform our tax structure to become not only competitive, but rather the most attractive in our region. That will grow businesses, grow jobs, and grow revenues.
Having a new, compelling story to tell will enable us to energize our economic development efforts to sell this great state.
Ladies and gentlemen, if we make the right choices, we will be positioned to exit this downturn stronger than ever.

Mr. Speaker and Madam President, last year, we worked well together to pass a difficult budget that we had hoped would stabilize our finances. The General Assembly passed many major reforms, especially retiree health care.
Little did we know, that three months later, the national and global economy would go into a tailspin. Working together again this year, we will not only weather this storm, but we will propel our state forward.
Sue and I are native Rhode Islanders. We were born here, our parents were born here! Our grandparents all immigrated here! We've raised our four children in Rhode Island, and now have 11 of our 14 grandchildren living here. Some of them are up in the balcony tonight!
I ran for governor, and Sue encouraged and supported me, because we love this state and just want to see it do well. I have no other agenda!
In my business career, we traveled extensively with my company, and lived and worked overseas.
Having seen all that, I know what a great jewel this state is. People come to the Ocean State from all over the world, and marvel at our natural beauty, our rich history, our extraordinary colleges and universities, our beautiful architecture, and the spirit of our citizens.
It has been my honor to serve as your Governor these past six years. It has not been an easy time, because we have been trying to right a ship that has been badly off course.
Please know that every action I've taken, every decision I've made, has been on the basis of what I believe is best for our citizens.
I want what's best for your children and mine. Not only for the moment, but for the long term.
Tonight, I've shared with you not only the great challenges we face, but also the strides we have made. I've explained what has happened to our economy over the years, and how we can change it. I've encouraged us all to find common ground, and to sacrifice for the sake of a better future. I've described a plan that will get us there.
I hope we will all look back on these times with the satisfaction of having created new opportunities. And, it is my hope that future generations will thank us for having had the wisdom and foresight to make the right choices.
Thank you and God Bless America

Reducing the Schools

Justin Katz

With other contributors covering the state of the state and the hoopla in East Providence, I'm at the Tiverton School Committee meeting, to which I arrived in the midst of Superintendent Bill Rearick's description of the various cuts to come for the next budget — you know, the one that increased by about $150,000 when the committee approved the latest teachers' contract.

7:15 p.m.

Personnel reductions to come:

  • 0.5 middle school special ed
  • One elementary special ed
  • One speech pathologist
  • One kindergarten teacher
  • One grade one teacher
  • Four grade seven teachers reduced by 20% each
  • Three part-time elementary teacher assistants
  • 6.5 elemntary special ed teacher assistants

As I understand, these are on top of some nine positions already slated for nixing.

7:22 p.m.

The committee just voted to approve the new proposed budget, with only Danielle Coulter opposed. Supt. Rearick reminded everybody that further cuts — that is, below a 2.7% spending increase year-over-year — are going to begin cutting into programs.

Of course, The teachers got their raise, including retroactive pay for more than a year of negotiations. That much is off the table...

7:27 p.m.

The committee is discussing the 24 tentative pink slips that the superintendent will give out in case they have to be let go. Most or all of these teachers won't lose their jobs, but Rearick made an interesting comment:

"Many of these are the best and brightest."

Presumably, he's referring to bumping and the discusson he said he had with the union leaders over whose jobs to threaten. Letting the good one's go; that's the way to succeed!

7:36 p.m.

Extended discussion of the appropriate detail to be included in meeting minutes. Danielle Coulter suggests that key points of discussion ought to be included. Carol Herrmann thinks that's the press's job. Rearick said the schools' lawyer suggested the short form.

7:41 p.m.

Looking at the new budget proposal, the breakdown of increases/decreases is noteworthy:

  • Salaries: 0.54%
  • Benefits: 2.18%
  • Purchased services: 19.87%
  • Supplies/materials: -5.12%
  • Other costs: -3.15%
  • Capital (operations): 1.19%
  • Capital: 0%

Those salary and benefit numbers, by the way, take into account the 14 or so layoffs — and they're still increases.

7:47 p.m.

The committee is discussing the financial ramifications should the financial town meeting be moved to July. Financial Director Doug Fiore explained that any resolution to postpone the vote would require a component that ensures the continuation of cash flow until the budget is resolved.


7:58 p.m.

After the meeting Town Council Member Joanne Arruda approached me rather agitated that I'd suggested that town council meetings tend to start early, and she requested that I tell my "people" that my assertion was "not a good thing."

So, people, let it be noted — and I've appended a footnote to the relevant post — that my casual commentary did not accurately reflect the thorough devotion to punctuality of the Tiverton town council. I should have taken a moment to elaborate on my thought, rather than publish an inaccurate short-hand quip.

Liveblogging the STATE OF THE STATE

Marc Comtois

Good evening fellow Rhode Islanders and visitors from near and far. The Governor of Rhode Island, Donald Carcieri, will be giving the State of the State Address at 7 PM. This post is being provided as an "open forum" for people to comment upon the speech and its contents. So, if your of a mind to do so, please join me and head on into the "Comments" section and have at it!

The Healthcare Trojan Horse in the Porkulus Bill

Donald B. Hawthorne

Betsy McCaughey writes:

...Tragically, no one from either party is objecting to the health provisions slipped in without discussion. These provisions reflect the handiwork of Tom Daschle, until recently the nominee to head the Health and Human Services Department.

Senators should read these provisions and vote against them because they are dangerous to your health. (Page numbers refer to H.R. 1 EH, pdf version).

The bill’s health rules will affect “every individual in the United States” (445, 454, 479). Your medical treatments will be tracked electronically by a federal system. Having electronic medical records at your fingertips, easily transferred to a hospital, is beneficial. It will help avoid duplicate tests and errors.

But the bill goes further. One new bureaucracy, the National Coordinator of Health Information Technology, will monitor treatments to make sure your doctor is doing what the federal government deems appropriate and cost effective. The goal is to reduce costs and “guide” your doctor’s decisions (442, 446). These provisions in the stimulus bill are virtually identical to what Daschle prescribed in his 2008 book, “Critical: What We Can Do About the Health-Care Crisis.” According to Daschle, doctors have to give up autonomy and “learn to operate less like solo practitioners.”

Keeping doctors informed of the newest medical findings is important, but enforcing uniformity goes too far.

New Penalties

Hospitals and doctors that are not “meaningful users” of the new system will face penalties. “Meaningful user” isn’t defined in the bill. That will be left to the HHS secretary, who will be empowered to impose “more stringent measures of meaningful use over time” (511, 518, 540-541)

What penalties will deter your doctor from going beyond the electronically delivered protocols when your condition is atypical or you need an experimental treatment? The vagueness is intentional. In his book, Daschle proposed an appointed body with vast powers to make the “tough” decisions elected politicians won’t make.

The stimulus bill does that, and calls it the Federal Coordinating Council for Comparative Effectiveness Research (190-192). The goal, Daschle’s book explained, is to slow the development and use of new medications and technologies because they are driving up costs. He praises Europeans for being more willing to accept “hopeless diagnoses” and “forgo experimental treatments,” and he chastises Americans for expecting too much from the health-care system.

Elderly Hardest Hit

Daschle says health-care reform “will not be pain free.” Seniors should be more accepting of the conditions that come with age instead of treating them. That means the elderly will bear the brunt.

Medicare now pays for treatments deemed safe and effective. The stimulus bill would change that and apply a cost- effectiveness standard set by the Federal Council (464).

The Federal Council is modeled after a U.K. board discussed in Daschle’s book. This board approves or rejects treatments using a formula that divides the cost of the treatment by the number of years the patient is likely to benefit. Treatments for younger patients are more often approved than treatments for diseases that affect the elderly, such as osteoporosis.

In 2006, a U.K. health board decreed that elderly patients with macular degeneration had to wait until they went blind in one eye before they could get a costly new drug to save the other eye. It took almost three years of public protests before the board reversed its decision.

Hidden Provisions

If the Obama administration’s economic stimulus bill passes the Senate in its current form, seniors in the U.S. will face similar rationing. Defenders of the system say that individuals benefit in younger years and sacrifice later.

The stimulus bill will affect every part of health care, from medical and nursing education, to how patients are treated and how much hospitals get paid. The bill allocates more funding for this bureaucracy than for the Army, Navy, Marines, and Air Force combined (90-92, 174-177, 181).

Hiding health legislation in a stimulus bill is intentional. Daschle supported the Clinton administration’s health-care overhaul in 1994, and attributed its failure to debate and delay. A year ago, Daschle wrote that the next president should act quickly before critics mount an opposition. “If that means attaching a health-care plan to the federal budget, so be it,” he said. “The issue is too important to be stalled by Senate protocol.”

More Scrutiny Needed

On Friday, President Obama called it “inexcusable and irresponsible” for senators to delay passing the stimulus bill. In truth, this bill needs more scrutiny.

The health-care industry is the largest employer in the U.S. It produces almost 17 percent of the nation’s gross domestic product. Yet the bill treats health care the way European governments do: as a cost problem instead of a growth industry. Imagine limiting growth and innovation in the electronics or auto industry during this downturn. This stimulus is dangerous to your health and the economy.

The actual article has all the links.

Welcome to the beginnings of socialistic medicine in the United States. Brought to you by your favorite community organizer. It's not like he didn't tell us his intentions in advance.

Think about it: If you oppose the porkulus, Obama says you are a partisan. And if you don't cave to these terms asap, Obama says it will turn into a catastrophe.

Isn't hope and change simply wonderful?

Not the Sideshow

Justin Katz

This is being treated as a secondary matter, but in the long range it might be the more significant thread coming loose in East Providence:

The state Labor Relations Board has decided to hold a formal hearing on a complaint by the city teachers union that the School Committee violated Rhode Island labor law by insisting on public negotiations as a prior condition for collective bargaining.

The charge was filed in early December by the East Providence Education Association. Yesterday, the board confirmed that it has issued its own complaint, which says that the school board's insistence on public talks resulted in "mere surface bargaining," a violation of the duty to bargain in good faith.

The board's complaint is not a finding but its own statement of the issue, which will go to a formal hearing Aug. 25.

I'm not sure where the distinction lies between the board's having an official "complaint" and having come to a "finding," but the idea that the only fair negotiations are those that happen outside of the view of the people who ultimately pay for the results is another bit of insanity to add to Rhode Island's madness. If this complaint is found to have merit, the lesson will be that "fairness" is a measurement of the unions' leverage, rather than a two-sided balance.

Mark Zaccaria: You Can’t Finance Growth with Deficit Spending

Engaged Citizen

We all should be vitally interested in the goings-on in Washington, DC, regarding the Stimulus Package that’s making its way through Congress. The news reports may make it seem complicated and far away, but it won’t be long before the effects of what our lawmakers do to us on this matter come right home to roost.

America became what it is today by productivity. In days gone by that word meant manufacturing, virtually the only process by which wealth is created. The productive capacity of the United States of America was the deciding factor in both World Wars of the Twentieth Century, and our ability to build the things that businesses and consumers around the world wanted created the highest living standard in history. I would also argue that the inability of our adversaries to keep up with our productivity was the very thing that won the Cold War.

Today we are seeing what happens when our ability to keep creating wealth slips away from us. Make no mistake. We still manufacture plenty here in America, just not as much as we once did. But we have been consuming more than we’ve been creating for some time and the result is plain for everyone to see. So it falls to government to act as agent for American society and do something to fix our ailing financial system.

That means now is the time that every politician who has ever uttered the phrase “Doing the People’s Business” gets to prove that he or she knows what that means. To government, Doing Something means spending money. To politicians, spending money carries with it the implicit chance to curry favor with voters in the process. Without that there might be no re-election.

So what will curry favor with the voters while also having a positive impact on our economic woes?

The Congress of the United States seems to think that would be a spending frenzy on public works and special interest projects. Collectively, our Senators and Representatives appear to have decided this will please voting constituencies in the short term, even if it takes years for the economic impact to trickle down to you and me. What we are seeing in the Gazillion Dollar Spending Bills making their way through Congress is a litany of measures that fail to address the housing crisis, contain wasteful spending at a time when tax revenues are bound to be down, and create only temporary or purely public sector jobs.

How about creating an Industry instead of just a spending program? What if private capital instead of public tax dollars created the infrastructure that millions of us could work within to once again make the things that businesses and consumers around the world really want? For that to happen, government action has to attract that private investment, not repel it. Harder still, our political leaders have to have the courage of their convictions to give the voters credit for understanding that it is only economic activity that will create growth, not pork and not special interest pandering.

Giving taxpayers’ hard earned dollars to inefficient corporations won’t help us. Spending in deficit to pump up the balance sheets of banks won’t help us either, if those banks just sit on the cash instead of putting it to work in the economy. What these approaches will do, at least according to one study, is give every American Taxpayer a brand new $10,000 invoice on top of all our existing indebtedness.

There are real product opportunities in green technologies and alternative fuels, just to name two industries that will be built on innovation. Electronics and nanotechnology are two more. Recent gains in efficiency for high voltage electrical transmission promise to let us use much more of the juice we generate, if we will only put them in place. There are plenty of market segments where a real stimulus might trigger a new growth industry.

What’s lacking is political courage inside the Washington Beltway.

But you and I can help with that. We can let our elected representatives know we understand that stimulating the economy is different than helping insiders feed at the public trough. We can let them know that we hired them to go down there and do the right thing for Us, even if we don’t have lobbyists reminding them of it all the time. Drop a Dime. Send an E-Mail. Write a letter. It could save you Ten Grand! The more we tell them that they have more to loose by doing Business as Usual than they do by innovating for new times, the more likely they are to get it.

Here in Rhode Island, our own Congressional Delegation is composed of professional legislators. None of our team in Congress has any practical experience in the private sector. So they can’t be expected to understand intuitively what the right thing to do actually is. We need to tell them. We need to let them know that when they hold back on spending for government managed projects they are doing what we want. We need to tell them that incentives for economic development will cost much less and go much farther towards helping everyone than entitlements put in the hands of consumers will.

Let them know you’re watching. Let them know that you approve of doing the right thing in this crisis. Hopefully it will give them the political courage to actually do it.

Mark Zaccaria is a small businessman in North Kingstown. He is a former member of the North Kingstown Town Council and was the Republican Candidate for the state’s District 2 seat in Congress in 2008.

Transparency in the Treasury

Justin Katz

Treasurer Frank Caprio's online transparency site is up and running, providing a browsable collection of all expenditures for his department. Anchor Rising readers first heard of the project when we sat down with the treasurer last month.

The site is set up such that any other department in state government could quickly and easily follow the treasury's lead, and hopefully the entire executive branch is already making preparations to do so.

Bi-partisan Effort to Stop Straight-Party Ticket Option

Marc Comtois

A couple freshman RI legislators--one a Democrat and the other a Republican--have introduced a bill (PDF) to discontinue straight-party ticket voting in RI. From the Projo Politics blog:

Freshmen Representatives Brian C. Newberry, a North Smithfield Republican and Democrat Michael J. Marcello, of Scituate, have teamed up to submit legislation that would prohibit straight-party voting: the law allowing voters to cast their entire ballots for one party's candidates by checking a single box at the top of the ballot.

Rhode Island is one of just 16 states that still allow straight-ticket ballots, a holdover from 19th century party machine politics. For years, Rhode Island Republicans have fought to eliminate the option, saying it makes it harder for GOP candidates to break the Democratic party's hold.

But rarely have Democrats and Republicans come together to push for the change.

"While the straight ticket voting option does make the voting process quicker for some, the controversy surrounding its use has unfairly called into question the legitimacy and fairness of elections," Marcello said in a statement, ironically issued by the Republican caucus.

"I believe that people who want to vote for all candidates from a particular party will continue to do so, and the elimination of straight-party lever will finally end the speculation that somehow election outcomes would be different."

"By eliminating this option, it would force candidates to reach out to communities and make their positions known, as opposed to relying on their party hold," Newberry said in the same statement."

The bill has been referred to the House Judiciary Committee for a hearing, but none has yet been scheduled.

I'm not holding my breath for a hearing. But we'll see.

Semantic Games with Children

Justin Katz

How much of life is phrasing? When it comes to the political battle with unions, the spats are like Abbot and Costello skits, which (for the young'ns) often hinged on a semantic misunderstanding. One must read to paragraph six to reach the punchline under the headline "Teachers deny killing science initiative" (emphasis added):

The union has never taken a formal position on the matter, according to the news release that Kandzierski sent out late yesterday afternoon.

"To blame this on the teachers is nothing more than a political cheap shot and a weak attempt to cover up their own inadequacies in communicating this program to teachers," she said in the statement.

Nobody had suggested that union members sat down and took a formal vote concerning whether science teachers ought to participate in an externally funded program to improve science proficiency in the town. But school officials did notify the relevant teachers and sent them requisite information. So, in effect, the union is pointing its finger at the individual teachers for declining to participate, and of course, the union would defend with its claws any attempt to impart consequences for that decision. (Not to mention "unofficial" suggestions that the union might have made.)

Whatever the case, the situation provides a clear example of the insidious effect that unions have on a professional environment, especially one involving the nexus of children's education and taxpayer funding.

February 9, 2009

Trying to Keep Up with a Fluid Government

Justin Katz

A very tight 'round-the-state schedule today made attending the Tiverton Town Council meeting difficult, but there was an item on the agenda that I very much wanted to follow:

Discussion with Honorable Representatives Jay Edwards and John Loughlin III and Honorable Senators Walter Felag, Jr. and Louis DiPalma Regarding the Governor's Proposed Cut in Aid to Cities and Towns and Relief from Mandates.

Granted, I was about 25 minutes late, but the item was well into the second page of the agenda. Even so, the state representative discussion was well under way by the time I got through the door. Sounds like the council blew through the early parts of the agenda.


7:41 p.m.

Councilor Jay Lambert is asking the legislators some big-picture questions about the supplemental budget and his impression that the General Assembly is "tiptoeing" around the reasons Rhode Island is in its current position. His suggestions are regionalization
and full state funding of schools, both of which are certainly not as straightforward as he appears to believe.

7:45 p.m.

Councilor Ed Roderick observed the difficulty of budgeting without knowledge of the likely cuts in state aid.

Councilor Louise Durfee asked whether the town will have a number for next year's aid by the time of our financial town meeting. Senator Felag is explaining that no numbers will be available at that point.

7:48 p.m.

Louise Durfee just stated that many people are thinking about entering the financial town meeting and immediately moving to recess until July so as to deliberate with accurate numbers.

Councilor Joanne Arruda is seconding the underlying notion.

7:50 p.m.

Rep. Loughlin, with concurrence of his peers, just put the time frame for passing a supplemental budget in March or April — as the state bleeds millions of dollars per week!

7:59 p.m.

Jay Lambert just asked about a Curuolo-related provision in the budget, and the two Democrat legislators at the table looked to John Loughlin. Said Rep. Jay Edwards, "He's your governor."

Oddly, I'd been under the impression that he was the governor of the entire state.

8:02 p.m.

Jay Edwards has remained behind for the next item on the agenda, which is his House bill (H-5200), naming the Sakonnet River Bridge after local son Christopher Potts, who died in Iraq a few years ago.

8:12 p.m.

The town council passed a resolution to support Rep. Edwards's bill. Voting against was Louise Durfee and Hannibal Costa.

Confusing Economic Realities with Imperiousness

Monique Chartier

A caller to WPRO's John Depetro today reproached the East Providence School Committee for failing to engage the teachers union in substantive negotiations and, instead, simply "dictating" terms of a contract. Anthony Carcieri, Chair of the EP School Committee and John's guest by telephone, explained that, faced with a $3m shortfall, the School Committee had given the teachers union free rein to work out that reduction any way it saw fit, presumably meaning: keep the same number of employee and reduce their pay, reduce the number of employees or a combination of both.

When a company in the Dreaded Private Sector (as Howie Carr calls it) hits bad times and has to reduce labor costs, it doesn't generally "negotiate". If it has the luxury of keeping all employees, it goes to them and says, "Sorry, we have to reduce your pay." At that point, the employee can choose to stay or quit.

This is the situation that East Providence and many communities now find themselves in. As with private sector employers, cities and towns do not seek, on some arbitrary basis, to place themselves and their employees in this difficult position so as to showboat or "dictate". The position, rather, is imposed by stark fiscal realities. The sooner this critical distinction is recognized (and some public labor unions around the state have done so, to their credit), the sooner steps can be taken to avoid even more stringent measures - measures, again, that would be dictated not by an arbitrary government body but by certain fiscal realities.

Advertising the Dole

Justin Katz

The front page of today's Providence Journal questions why welfare payments would decrease even as the economy worsens, and it looks to me like Cynthia Needham and her "experts" missed one explanation:

Experts attribute the decline to several factors including tighter eligibility, a potential lag time between when the economy falters and when people seek state benefits, and the fact that some newcomers might not know how to find help.

Perhaps it falls under factor #1, but I wouldn't discount the possibility that those who would seek welfare — as opposed to unemployment payments — have become outgoers from the state. Such an explanation is consistent with recent policy history:

Here in the Ocean State, for example, children were exempt from a cap restricting the amount of time they could receive cash assistance, essentially assuring that their families received some money until they were 18. That could explain in part why in 2007 Rhode Island had the third-highest number of recipients on welfare as a percentage of population in the nation, according to a report in Congressional Quarterly's State Fact Finder.

That rule changed last year when Rhode Island lawmakers, desperate for savings, voted to limit children to a total of five years of assistance.

The new legislation took effect this past october, cutting upwards of 2,400 children from the rolls that month alone.

At the time, more than half of the enrolled families had been receiving FIP money for more than five years, according to data from the Department of Human Services. One quarter had been on the rolls for more than a decade.

Newly desperate families will still have an aversion to falling into the welfare pool. They'll rightly take assistance targeted at those who are out of work and looking, but it couldn't possibly have a positive effect on our society to lure them toward the government dole.

Forbes: America's Two Nations

Marc Comtois

Forbes magazine examines the difference between America's private and public sector (H/T):

In public-sector America things just get better and better. The common presumption is that public servants forgo high wages in exchange for safe jobs and benefits. The reality is they get all three. State and local government workers get paid an average of $25.30 an hour, which is 33% higher than the private sector's $19, according to Bureau of Labor Statistics data. Throw in pensions and other benefits and the gap widens to 42%.


Cops and firemen initially were granted early retirement because their work was physically demanding and they tended to die young. These days they live as long as everyone else, but early retirement lives on for an ever expanding pool of public workers. So do liberal disability rules. Nevada law 617.457 decrees that heart disease among uniformed safety workers is job-related. The medical reality, says the American Heart Association, is that a fireman gets heart disease from diet, lack of exercise or genes, not from dashing into burning buildings. Still, veteran Las Vegas firemen hobbled by heart disease can collect an inflation-protected $40,000 a year for life on top of their pension. That applies even if they're healthy enough to work in another occupation.


All this would be infuriating enough if public employees were merely retiring with pensions that paid out a reasonable percentage of their working wages. Instead, they have found legions of ways to boost payments well beyond those levels. In New York, Philadelphia and several other cities police officers rack up huge amounts of overtime in their last two or three years on the job to goose the base pay used to calculate lifetime pension benefits.

But there's another side:

When misguided policies lead to extreme underfunding, public employees are often left feeling as victimized as taxpayers. Chicago police Sergeant Michael Murphy, 41, is a third-generation cop whose grandfather was killed in the line of duty. Murphy works on an antiterrorism task force and narrowly missed being shot himself 16 years ago. He plans to retire at 55 and draw 75% of his salary. If he makes lieutenant it would top $70,000 a year.

The fly in this ointment is that the Policemen's Annuity & Benefit Fund of Chicago is only 35% funded. This despite the fact that Murphy and other Chicago cops contribute 9% of salaries and the city matches that nearly two-to-one. The city is pressuring police union boss Mark Donahue to swallow pension cuts. Murphy is outraged.

"I made a pact with the city when I was 23," he says. "I put my life on the line. You keep your promise to me when I retire."

Understandable, but then it gets undercut by stories like this:
Don't shed too many tears for public employees, says Gary Clift, a 52-year-old Californian who speaks with an insider's authority. Clift spent 26 years working for the state's Department of Corrections & Rehabilitation, retiring in 2006. He's now collecting 78% of the $112,000 salary he earned before stepping down and full health care coverage for life. Clift is thinking about using some of the public's largesse to write a book about the outrageous ways public employees milk California.

Clift holds special vitriol for a state program that lets employees retire and return to work part-time as "consultants." Some of the "retired annuitants," known as retired irritants to full-timers, deliberately get themselves laid off to collect unemployment pay without having to even show up, Clift says.

Near the end of his career Clift spent two years in the Department of Corrections' Sacramento headquarters analyzing legislation. The office's mandate was to provide the governor with insights into how proposed laws would affect the giant prison system. Not surprisingly, Clift says his colleagues took another agenda more to heart: doing their union's bidding and heading off anything that hinted at job cuts or lower salaries. Clift says he was the only manager at his former prison that he is aware of who didn't put in for disability on retiring.

The prevailing attitude, according to Clift: "It's just taxpayers' money, so nobody cares."

A Cause of This Effect

Justin Katz

Things don't look good in West Warwick:

There are no solutions to their immediate fiscal problem. In fact, their current deficit is projected to balloon into a $10-million deficit in the years ahead if nothing is done.

So school officials have worked "seven days a week" to come up with a three-year plan that would gradually wipe out the growing deficit.

It requires a supplemental tax hike in the current year to raise an additional $2-million. In future years, a hodge-podge of reductions, from health-insurance savings to staff cuts and eliminating sports, would gradually wipe out the deficit. It would only work with substantial union givebacks, they say.

Conspicuously absent from the story is a recollection of the work-to-rule action back in late 2007. The school committee, if you'll recall, had followed the appropriate procedure to opt out of the last year of the contract, which would have left it up for negotiation after this school year. Witnessing the damage that the teachers were doing, however, the committee backed down and extended the contract through next year:

The next day [after the school committee's vote not to extend the contract], the union announced it would take a "work to contract" stance that discouraged teachers from performing any duties not explicitly required by the contract. Union members began sporting pins that proclaimed "We Keep Our Promises," and let their actions speak for themselves.

As the school year got under way, the resignations rolled in, affecting classrooms at all grade levels. Field trips and teacher participation in the school-improvement and teacher-support teams halted districtwide. At the elementary level, there were no yearbook advisers, book fairs, learning walks or teacher involvement in fundraising. Teachers shunned a Saturday-school program. The National Junior Honor Society adviser at Deering Middle School resigned as well.

Advisers for the French, Italian and Spanish clubs at West Warwick High School resigned, as did the summer school director, Academic Decathlon adviser and the credit-retrieval program coordinator. The band and choral calendars were scant. Community members and school administrators stepped in to fill vacancies, chaperoning school dances and volunteering to lead summer school programs.

And now the union has the upper hand as the town struggles and tears itself apart trying to balance its budget. The well-paid grownups got theirs, and now the question is how much they'll deign to help the givers.

February 8, 2009

Overreaching Representation

Monique Chartier

We can discuss the weighty obligations that fall to those who choose to serve in elected office and thereby come to possess the tax gun. Emphatically absent from that list of obligations is to cast an ever widening net - in this case, beyond the borders of our country - in search of wrongs to right or consequences of individual free will choices with the intention of ameliorating them.

Bills recently introduced in the General Assembly would, if passed, grant official state drivers licenses and in-state college tuition rates to undocumented immigrants. These proposals would be implemented at the expense of both the entity (the state of Rhode Island) that our elected officials have been elected to represent as well as the sovereignty of the country whose constitution they have taken an oath to uphold.

Contrary to Rep Diaz' assertion at her press conference Thursday, offering in-state tuition rates to undocumented immigrants would, in fact, cost the taxpayers. The state would be forced to pick up that shortfall in tuition. And if, as has been asserted, officials on the state level have no obligation to enforce federal laws, it would be reasonable, by the same logic, that officials on the state level take no action to encourage people to break federal law. In fact, both of these proposals would have the effect of enticing people to break federal immigration laws to get to Rhode Island - because look, when we get there, we can pass as documented with our Rhode Island drivers licenses and - major bonus - we will be able to attend state universities at in-state tuition rates!

At Rep Diaz' press conference Thursday, Attorney Robert Gonzalez called upon the General Assembly "to do what's right". Indeed, yes, honorable members of the Rhode Island General Assembly. Do the right thing. Demonstrate restraint when employing the tax gun with which we have entrusted you.

Is There Anyone in New England with a Dimmer Understanding of the Principles of Regulation than Christopher Dodd?

Carroll Andrew Morse

Keven Rennie's column in today's Hartford Courant forces the reader to wonder if Connecticut Senator Christopher Dodd is incredibly dim-witted, or incredibly dishonest (h/t Instapundit). I don't think there's any other choice. Or maybe there's no need to choose…

Sen. Christopher J. Dodd went one contrivance too far last week at his carefully choreographed press event to explain his mortgage deals with Countrywide Financial. Dodd has engaged in so many contradictions in trying to manage the gathering storm that he probably did not recognize his stunning blunder.

At his Monday event, Dodd wouldn't let reporters have copies of the selected documents he let them glimpse. Instead, Dodd released a report from a Chicago firm hired with campaign funds to review his mortgage transactions.

If this episode reflects Senator Dodd's idea of meaningful oversight and transparency, he needs to be relieved of his Banking Committee responsibilities immediately. But hey, it's not every New Englander who can brag he would win a "who is less trustworthy" contest if pitted against Sam Goliath of Goliath Insurance, the ethically-challenged main character from the Providence Auto Body spots heard on local radio.

And did you know that Senator Dodd voted last week against giving low-interest mortgages to American citizens as part of the stimulus package. Apparently, the Senator believes that low rates are a privilege reserved for Senators with influence on banking issues, not something to be shared with the hoi-polloi.

A Necessary Correction, Some Might Say

Justin Katz

Until I reached the end, I wasn't going to bother commenting on Bob Kerr's column, today. It's all emoting, no solutions. Or rather, in the typical fashion of typical liberals, Kerr's solution is an implied government gimme. But the daughter of the woman who receives most of Kerr's attention makes a complaint — a set of complaints — worth noting:

"I don't have a day off," she says. "I'm in class or working. It's seven days a week."

She says students are more worried all the time and few see a future for themselves in Rhode Island.

"We're not really having the experience of college," she says. "It's like no one's having fun anymore."

To be blunt, too much cultural effort has been invested, over the past few decades, in creating this notion of "the experience of college." Too many movies have romanticized it. Too many parents have told their children that it is the time of their lives (in part because the parents never figured out how to make the remainder of their own lives meaningful, I guess). And too many students have stridden from the campus, degrees in hand, with a backwards concept of the world of which they'd been promised conquest.

All of the saving and borrowing and scholarship funds and government grants invested in higher education ought to be incompatible with the premise that the college experience is primarily about fun. It is primarily about learning, about enhancing one's opportunities for the future.

Let's not pretend, furthermore, that the necessity of seeking opportunities in another state after graduation from a Rhode Island institution is anything new. It is one of the shameful characterizing qualities of the state, and not a problem apt to be fixed with complaints that the state government apparatus isn't helping enough.

At Least Our Goof Isn't Our Goof

Justin Katz

Can we pause for a moment and be thankful for one thing — that this guy is a Democrat?

Sen. Sheldon Whitehouse said earlier, as the moderates struggled to complete their deal, "I couldn't care less about bipartisanship." Whitehouse said getting an economic pump-priming bill passed quickly was more important than drawing Republican support. The question of whether the bill gets support from few Republicans or many Republicans "is a sideshow," Whitehouse said.

Whitehouse also said he believes the Senate bill is too small to accomplish the amount of economic stimulus needed.

In another indication of the fraying tempers in this week's debate, Whitehouse angrily denounced Republican Sen. Tom Coburn of Oklahoma for his efforts to block certain projects, including one at the Roger Williams Park Zoo.

"He mocked a zoo that belongs to the City of Providence," Whitehouse said of Coburn during a Senate speech. Coburn, who has made a specialty of attacking spending programs he considers wasteful, had earlier won a large bipartisan majority for an amendment that forbade spending on any gambling casino, aquarium, zoo, golf course, swimming pool, stadium, community park, museum, theater, art center or highway beautification project. ...

"Is the senator who offered this so infallible? Does he know so much about other states that he's never even visited that he can impose his views?" Whitehouse asked about Coburn after the Senate adopted his amendment on a 73-to-24 vote. Reed and the rest of the New England Democrats present joined Whitehouse in opposition to the amendment.

I'd suggest that Republicans pondering a run for national office keep an eye on Sen. Whitehouse's spot. I've a feeling that, when the political caravan begins to turn, Whitehouse is going to run straight into a ditch.

February 7, 2009

Eliminate All Overtime in the Public Sector

Monique Chartier

We've probably all heard of the coordinated sick/overtime scam. I call in sick one day this week so Joe gets to come in on overtime. Next week, Joe calls in sick and I come in on overtime. Now multiply by X.

Add to that the nonsense that Justin brings to our attention of elected officials in Tiverton who irresponsibly signed a contract which fails to specify that employees stagger their vacations so as to keep manning requirements at reasonable levels.

Readers are encouraged to append their own examples of systematic or contractual overtime abuse.

How much of the overtime paid out, say, over the last ten years, was really necessary? And what has been the cost?

Enough. End overtime in the public sector. As we listen to the gasps of horror from certain quarters at the mere suggestion, keep in mind that workers would not be "paid in apples", as Justin phrased it, for anything beyond forty hours but his or her regular hourly rate.

Challenging the socialistic onslaught

Donald B. Hawthorne

As Obama, Pelosi and Reid accelerate the implementation of socialistic practices in America - building on what Bush started - it is helpful and necessary to reacquaint ourselves with fundamental economic principles and some specific significant issues animating today's public debate.


The 17-blog post series below was originally put together in 2006 and contains excerpts from the writings of Thomas Sowell, Reason magazine, Bruce Caldwell, Friederich Hayek, Milton Friedman, Arthur Seldon, Gordon Tullock, Jane Shaw, Lawrence Reed, The Freeman magazine, Leonard Read, Donald Boudreaux, John Gray, Bertrand de Jouvenel, and Michael Novak, with links to others like Walter Williams, David Boaz, and David Schmidtz:

No matter how emphatically these politicians rant and rave in their effort to re-write history, they cannot re-write the basic laws of economics. As a Reverend once said, those chickens will come home to roost at some point. The only question is when and how big a price we will pay when it happens.


As some of the above posts note and as further ammunition for the public debate, these books are excellent primers on important economic topics:

An excellent site for articles, blogging, and podcasts on a broad range of economic issues is Library of Economics and Liberty.

Furthermore, the budding public debate in America touches on 5 significant issues, highlighted below and drawing on the 17 blog posts:


Since numerous politicians and the media are already trying to re-write the history of the Great Depression so as to justify a significantly larger role for the federal government in our society, we need to arm ourselves for that debate. Here are some good starting points:

Not for the casual reader, here is the book which famously explained how monetary policy was a fundamental cause of the Great Depression:


As part of their argument for a more intrusive government, one of the core arguments of the Left is that interventions by government in the marketplace are somehow more high-minded and of purer intent than private sector actions in the same marketplace.

Part VIII in the above blog series describes public choice theory, which explains the fallacy of that world view. While false, it is nonetheless a pervasive view that holds sway in many minds - even if not articulated explicitly - and has to be tackled directly.

Here are some excerpts from Part VIII about government failure:

...Many economics writers and teachers still present economic systems of exchange between private individuals or firms as "imperfect" and requiring "correction" by government. Most teachers of politics, politicians, and political journalists still present government as well-meaning and able to remove such "imperfections."...

In the past many economists have argued that the way to rein in "market failures"...is to introduce government action. But public choice economists point out that there also is such a thing as "government failure."...

...that government is imperfect carries with it two consequences. The first is that imperfections in the market process do not necessarily call for government intervention; the second is a desire to see if we cannot do something about government processes that might conceivably improve their efficiency...

Although public choice economists have focused mostly on analyzing government failure, they also have suggested ways to correct problems. For example, they argue that if government action is required, it should take place at the local level whenever possible. Because there are many local governments, and because people "vote with their feet," there is competition among local governments, as well as some experimentation...

What causes governmental failure?

...One of the chief underpinnings of public choice theory is the lack of incentives for voters to monitor government effectively...the voter is largely ignorant of political issues and that this ignorance is rational. Even though the result of an election may be very important, an individual's vote rarely decides an election.

Public choice economists point out that this incentive to be ignorant is rare in the private sector...he or she pays only for the [purchased item] chosen. If the choice is wise, the buyer will benefit; if it is unwise, the buyer will suffer directly. Voting lacks that kind of direct result...

Public choice economists also examine the actions of legislators. Although legislators are expected to pursue the "public interest," they make decisions on how to use other people's resources, not their own. Furthermore, these resources must be provided by taxpayers and by those hurt by regulations whether they want to provide them or not...Efficient decisions, however, will neither save their own money nor give them any proportion of the wealth they save for citizens. There is no direct reward for fighting powerful interest groups in order to confer benefits on a public that is not even aware of the benefits or of who conferred them. Thus, the incentives for good management in the public interest are weak. In contrast, interest groups are organized by people with very strong gains to be made from governmental action. They provide politicians with campaign funds and campaign workers. In return they receive at least the "ear" of the politician and often gain support for their goals.

In other words, because legislators have the power to tax and to extract resources in other coercive ways, and because voters monitor their behavior poorly, legislators behave in ways that are costly to citizens.

...bureaucrats in government...incentives explain why many regulatory agencies appear to be "captured" by special interests...Capture occurs because bureaucrats do not have a profit goal to guide their behavior. Instead, they usually are in government because they have a goal or mission. They rely on Congress for their budgets, and often the people who will benefit from their mission can influence Congress to provide more funds. Thus interest groups...become important to them. Such interrelationships can lead to bureaucrats being captured by interest groups...

Or, as is stated in Part III about any government action:

...One of the recurring themes in our consideration of various policies and institutions...has been the distinction between the goals of these policies and institutions versus the incentives they create...

What must be asked about any goal is: What specific things are going to be done in the name of that goal? What does the particular legislation or policy reward and what does it punish? What constraints does it impose? Looking to the future, what are the likely consequences of such incentives and constraints? Looking back at the past, what have been the consequences of similar incentives and constraints in other times and places?...

Now, does any sane person believe that the railroading of a nearly $1 trillion spending spree in about two weeks by Obama, Pelosi and Reid passes the smell test here?

Similarly, the financial crisis of the last year has provided numerous examples of governmental actions and inactions which created incentives for tawdry behaviors in the marketplace. Meanwhile, governmental agencies or individual players have not only suffered no adverse consequences but they are now using these recent events as justification for further governmental involvement in economic activities.


As Bastiat noted in the 1800's, Paris got fed every day without anyone intentionally planning that outcome. Similarly, Part XII above describes how a pencil is made without one person knowing or doing all the work. Why do those outcomes occur?

Appreciating how these outcomes occur via prices which comunicate the knowledge that enables individuals to coordinate their actions and create economic value is a critical issue usually ignored by public sector players. For example, when they aggressively insert disruptive government actions into the marketplace via a TARP bailout and pork-intensive spending legislation. Contrast that blunt hammer approach with potential legislation which seeks to alter incentives in a way which encourages certain constructive economic behaviors to happen naturally.

Parts III and IV above elaborate further on the role of dispersed knowledge:

...In addition to the role of incentives and constraints, one...other central theme has been the role of knowledge...

...the role of prices...[is to coordinate]...social action where knowledge is dispersed...

Hayek...zeroed in on the critical assumption of full or perfect information. He said that in the real world, we have millions of individuals who have little bits of knowledge. No one has full knowledge, and yet we see a great deal of social coordination...How does that happen? Hayek's answer is that a market system ends up coordinating individual activity. Millions of people are out there pursuing their own interests, but the net result is a coordination of economic activities. And prices are the things that contain people's knowledge.

Mainstream economists have picked up on this and talk about prices as containing information. Modern information theory certainly nods to Hayek as a precursor. He argued that pricing contains knowledge of specific time and place and the man on the spot. Prices contain knowledge that is tacit, that can't really be expressed by individuals. Individuals make actions in markets, and that's what causes prices to be what they are. People are acting in markets. They are not always explicitly saying why they are acting, but they are acting on their knowledge of local situation, the past, and more...

...Given the decisive advantages of knowledge and insight in a market economy...we can see why market economies have outperformed other economies that depend on ideas originating within a narrow elite of birth or ideology. While market economies are often thought of as money economies, they are still more so knowledge economies, for money can always be found to back new insights, technologies and organizational methods that work...Capital is always available under capitalism, but knowledge and insight are rare and precious under any system.

Knowledge can be bought and sold in a free market, like anything else...

...In all these cases, it was the knowledge that was built up over the years - the human capital - which ultimately attracted the financial capital to make ideas become reality...

Success is only part of the story of a free market economy. Failure is at least as important a part, though few want to talk about it and none want to experience it...Economics is not about "win-win" options, but about often painful choices in the allocation of scarce resources which have alternative uses. Success and failure are not isolated good fortunes and misfortunes, but inseparable parts of the same process.

All economies...are essentially ways of cooperating in the production and distribution of goods and services, whether this is done efficiently or inefficiently, voluntarily or involuntarily...

By portraying cooperative activities as if they were zero-sum contests...those with the power to impose their misconceptions on others through words or laws can create a negative-sum contest, in which all are worse off...

More on prices/knowledge is in Parts X and XI above.

Friedrich Hayek addressed the subject of knowledge in a seminal 1945 article and his 1974 Nobel Prize speech:


In a simplistic layman's nutshell, one could say that the failure of socialism rests on its assuming away the real government incentives problem described in Issue #2 while blocking the flow of knowledge required to enable a free marketplace as depicted in Issue #3.

If you want to better understand and counter the world view which drives the socialistic mentality, here are some classics which rigorously address the fatal flaws of various shades of socialism:

Parts XVI and XVII above discuss the ethics of redistributive policies and the meaning of social justice, two themes which run through socialistic thought and require the coercive force of government. Part IX above elaborates further on the coercive nature of government. Part XV above discusses the consequences of price controls.


The impact of the confusion regarding Issue #2 has caused the core American principle of liberty to be missing in action in the current public debate.

This lack of focus on liberty can translate into policies which have a repressive definition of equality measured by outcomes instead of the liberating equality of opportunity; see Part XIV above for further thoughts.

More specifically, this lack of focus on liberty has further highlighted the lack of commonly shared beliefs about the proper role of government if America is to remain a free society - a topic discussed in Part VII above, including these excerpts about the role of government:

...The widespread use of the market reduces the strain on the social fabric by rendering conformity unnecessary with respect to any activities it encompasses. The wider the range of activities covered by the market, the fewer are the issues on which explicitly political decisions are required and hence on which it is necessary to achieve agreement. In turn, the fewer the issues on which agreement is necessary, the greater is the likelihood of getting agreement while maintaining a free society.

...a good society requires that its members agree on the general conditions that will govern relations among them, on some means of arbitrating different interpretations of these conditions, and on some device for enforcing compliance with the generally accepted rules...most of the general conditions are the unintended outcome of custom, accepted unthinkingly...no set of rules can prevail unless most participants most of the time conform to them without external sanctions...But we cannot rely on custom or on this consensus alone to interpret and to enforce the rules; we need an umpire. These then are the basic roles of government in a free society: to provide a means whereby we can modify rules, to mediate differences among us on the meaning of the rules, and to enforce compliance with the rules on the part of those few who would otherwise not play in the game.

...the organization of economic activity through voluntary exchange presumes that we have provided, through government, for the maintenance of law and order to prevent coercion of one individual by another, the enforcement of contracts voluntarily entered into, the definition of the meaning of property rights, the interpretation and enforcement of such rights, and the provision of a monetary system.

The role of government just considered is to do something that the market cannot do for itself, namely, to determine, arbitrate, and enforce the rules of the game...

Parts V and VI discuss what combination of economic freedom and limited government enables liberty for us:

...How can we benefit from the promise of government while avoiding the threat to freedom? Two broad principles embodied in our Constitution give an answer...

First, the scope of government must be limited. Its major function must be to protect our freedom both from the enemies outside our gates and from our fellow-citizens: to preserve law and order, to enforce private contracts, to foster competitive markets...By relying primarily on voluntary co-operation and private enterprise, in both economic and other activities, we can insure that the private sector is a check on the powers of the governmental sector...

The second broad principle is that government power must be dispersed...If government is to exercise power, better in the county than in the state, better in the state than in Washington. If I do not like what my local community does...I can move to another local community, and though few may take this step, the mere possibility acts as a check...If I do not like what Washington imposes, I have few alternatives in this world of jealous nations...

...The power to do good is also the power to do harm; those who control the power today may not tomorrow; and, more important, what one man regards as good, another may regard as harm...

The preservation of freedom is the protective reason for limiting and decentralizing governmental power. But there is also a constructive reason. The great advances of civilization...have never come from centralized government...

Government can never duplicate the variety and diversity of individual action...[see Part XIII above for more on how the individual is the unit of economic action]

It is widely believed that politics and economics are separate and largely unconnected; that individual freedom is a political problem and material welfare an economic problem...such a view is a delusion...

Economic arrangements play a dual role in the promotion of a free society. On the one hand, freedom in economic arrangements is itself a component of freedom broadly understood, so economic freedom is an end in itself. In the second place, economic freedom is also an indispensible means toward the achievement of political freedom...

Viewed as a means to the end of political freedom, economic arrangements are important because of their effect on the concentration or dispersion of power...competitive capitalism also promotes political freedom because it separates economic power from political power and in this way enables the one to offset the other...

Because we live in a largely free society, we tend to forget how limited is the span of time and the part of the globe for which there has ever been anything like political freedom: the typical state of mankind is tyranny, servitude, and misery. The nineteenth century and early twentieth century in the Western world stand out as striking exceptions to the general trend of historical development. Political freedom in this instance clearly came along with the free market and the development of capitalist institutions...

History suggests only that capitalism is a necessary condition for political freedom. Clearly it is not a sufficient condition...

The relation between political and economic freedom is complex and by no means unilateral...

As [nineteenth-century, not twentieth-century] liberals, we take freedom of the individual, or perhaps the family, as our ultimate goal in judging social arrangements. Freedom as a value in this sense has to do with the interrelationship between people...in a society freedom has nothing to say about what an individual does with his freedom; it is not an all-embracing ethic...a major aim of the liberal is to leave the ethical problem for the individual to wrestle with. The "really" important ethical problems are those that face an individual in a free society - what he should do with his freedom. There are thus two sets of values that a liberal will emphasize - the values that are relevant to relations among people, which is the context in which he assigns first priority to freedom; and the values that are relevant to the individual in the exercise of his freedom, which is the realm of individual ethics and philosophy.

The liberal conceives of men as imperfect human beings. He regards the problem of social organizations to be as much a negative problem of preventing "bad" people from doing harm as of enabling "good" people to do good...

Fundamentally, there are only two ways of co-ordinating the economic activities of millions. One is central direction involving the use of coercion - the technique of the army and of the modern totalitarian state. The other is voluntary co-operation of individuals - the technique of the market place.

The possibility of co-ordination through voluntary co-operation rests on the elementary - yet frequently denied - proposition that both parties to an economic transaction benefit from it, provided the transaction is bi-laterally voluntary and informed.

Exchange can therefore bring about co-ordination without coercion...

...Political freedom means the absence of coercion of a man by his fellow men. The fundamental threat to freedom is power to coerce...The preservation of freedom requires the elimination of such concentration of power to the fullest extent and the dispersal and distribution of whatever power cannot be eliminated - a system of checks and balances. By removing the organization of economic activity from the control of political authority, the market eliminates this source of coercive power. It enables economic strength to be a check to political power rather than a reinforcement.

Economic power can be widely dispersed...Political power, on the other hand, is more difficult to decentralize...if economic power is joined to political power, concentration seems almost inevitable. On the other hand, if economic power is kept in separate hands from political power, it can serve as a check and a counter to political power...


With the framework provided by the points raised in this post, we can assess and join in the public debate about the policy proposals we will see over the next few years. Along the way as we defend the marketplace, we will have to be careful to distinguish between crony capitalism/corporate welfare and the innovation arising from the more competitive entrepreneurial capitalism as well as ask ourselves if our private sector leaders, public sector leaders and citizens are holding themselves to a high enough set of ethical standards and transparency in their public behaviors. I predict that finding a way to do the latter in a way that promotes liberty and personal accountability without increasing the number of laws and regulations will be critical to neutralizing the self-righteousness and influence of those who promote various forms of coercive socialism today. In that sense, winning the debate will require a modified strategy from what worked in the 20th century.

Finally, as another part of the discussion, we should also not forget to draw strength from the unique principles underlying our American Founding, including equality before God, as we engage in this ideological struggle to retain our liberty.

Tiverton Fire and Money Issues

Justin Katz

Of the three hours of Tiverton town council budget workshop discussion, the only mildly animated discussion came toward the beginning, regarding the fire department's budget. Here are two snippets:

  • Discussing the union's refusal to lower minimum manning, space their vacations, or forgo their recent pay raise: stream, download. The first voice is Fire Chief Robert Lloyd, and the second is Town Administrator James Goncalo. Councilor Louise Durfee speaks up, followed by Councilor Jay Lambert confirming that the union would offer "no concessions at all."
  • Discussing a new ladder truck (which is not actually in the budget): stream, download. The initial inquiry is made by Councilor Hannibal Costa, with the chief answering and Council President Don Bollin disagreeing on a particular example and noting that negotiations occur within a long-term relationship (to paraphrase). Louise Durfee's voice is in there, as well.

Community Beyond Outreach?

Justin Katz

An East Providence school committee member in attendance at the Ed Achorn talk gave me a copy of a flier that's going to homes across the town:

Inside are a few union talking points presented in a "true or false" format, my favorite of which is the following (emphasis in original):

It's the teachers' fault that the district is running a deficit.

FALSE. The district has been mismanaged for years, with annual budget deficits for the last 10 years in a row. The City Council and School Committee have made decisions that have worsened the situation rather than resolved it.

What makes this noteworthy is that the single greatest example of mismanagement has been in giving away too much to the union. In some of their more stumbling rhetoric of recent months, even union officials have tacitly acknowledged this point.

But there's reason for optimism: The back of the pamphlet provides contact information for all of the school committee and town council members, and at least according to the one who gave me the flier, every single response that it has generated was supportive of the school committee, not the union.

One must wonder whether the teachers' union in East Providence, and perhaps elsewhere, has squandered its support among the community at large.

And Saturday Afternoon...

Justin Katz

And now to the Ed Achorn talk in Barrington. I missed the beginning, owing to the need in this state to circumnavigate rivers.

A few notables in the crowd, including a unionist who's disrupting the question period by trying to turn the session into a discussion of Mr. Achorn and the Projo. The crowd actually piped up and told him to let the event proceed.

As it happens, it's the guy who called me a loser at the East Providence school committee meeting and who complained of having to drive down from Boston to a Tiverton school committee meeting.

Peculiarly, he made a point of shaking my hand as he left the room. Wonder what the crowd thinks I'm typing, here.

2:38 p.m.:

Ed called the special interest groups of RI DaVincis in their masterpiece of controlling RI's legislature.

2:49 p.m.

There's a wide-ranging conversationi going on, from town to national topics, almost making the group of 50 (or so) people a community event for reform-minded people. (That's now that the union plant has left, of course.)

2:55 p.m.:

One member of the audience asked about the CEO bonuses in the midst of bailoutpalooza, leading to a sense of collusion, and Ed noted that part of the problem is the size of the government and the market manipulation that it enables. That speaks to the point that I often make that these millions of dollars in waste and bonuses would represent a significant cost disadvantage in a more competitive environment.

3:02 p.m.

June Gibbs just noted that there is a group forming in conjunction with Operation Clean Government that's attempting to create an opposition movement. I think I know what she means, but there are actually several things going on behind the scenes that bear on the question.

To be honest, sometimes I worry whether the whole thing can come together, for various reasons, but there is some movement out of view.

Saturday with the Budget

Justin Katz

Oddly, the Saturday morning budget workshop of the Tiverton Town Council has plenty of open seats, despite the box of donuts provided by Councilor Jay Lambert. I note, also, that the meeting did not begin early.

10:11 a.m.

The upshot of the hot-off-the-presses new "administrator recommended" budget is an increase of the municipal budget from $16,397,109 to $16,922,951.33. The previous budget for 09-10 requested $17,800,966.96.

According to the town administrator, the major differences between the previous request and this one were a decrease in the projected cost of fuel and a reduction in payments to the unfunded police pension liability of $9,894 from last year and $211,225 from the recent recommended budget.

10:18 a.m.

The fire chief just explained the reasons for his overtime projection, notably minimum manning and the ability for multiple firefighters to take vacation at the same time, as well as a firefighter death and a departure of another.

The town administrator just explained that he and the firechief had asked the union to waive the contractual requirement of seven-person minimum manning to six, waiving the ability of multiple firefighters to take vacations at the same time, and giving back a recent raise of (I think) 1.4%. In total, these concessions would have saved the town $75,000 by June 30.

Councilor Lambert asked whether it is the case that the town received "no concessions at all from the union." Administrator Goncalo: "Pretty much."

Citizens should take note that the contract is up for renewal at the end of June.

10:30 a.m.

The chief is defending his request for a ladder truck ($800,000), and he made the point that the town currently relies on equipment from neighboring towns and gave the example of a saw shop business that is no longer in the town because a fire took the building down, in part because the firefighters couldn't open up the roof as part of the firefighting strategy. He offered a recent counterexample of music store fire in which opening up the roof enabled other businesses in the same building to open the next day: "saved businesses, saved jobs, kept a business in Tiverton."

Council President Don Bollin mentioned that the there's more cost to such equipment than just the initial cost. He also noted that the union won't help out in hard times, and that will be remembered in better times.

10:38 a.m.

I should note that the fire department budget is now proposed to increase from $2,291,151 last year to $2,419,310.64.

The head of the department of public works is discussing the department's current over-budget status due to snow and ice costs for this year.

10:43 a.m.

The DPW budget is now slated to go from $2,062,851 to $2,064,305, which is down from $2,125,292 in the previous proposal.

10:57 a.m.

The DPW head says he's convinced people from surrounding towns are putting out trash in Tiverton. (One house put out a box spring for collection every week.

Louise Durfee is now talking about the problem of people not recycling, with the conclusion being possibly a refusal to pick up from houses that don't recycle.

At issue is that our landfill will have to close down in a few years, with a cost of $4 million. In 2025, the DPW head says, there will be nowhere in Rhode Island to dump rubbish.

11:01 a.m.:

Councilor Cecil Leonard just asked if anybody talks about burning waste to create energy, as in Europe. DPW head Stephen Berlucchi responded that doing so is against state law. Louise Durfee stated that it was a matter of some controversy in the early '90s.

Leonard is saying that you can't even tell where the incinerators are in Europe. Durfee stated that there is no "emission free" technology.

11:06 a.m.:

In response to a question from Ms. Durfee, Mr. Berlucchi just suggested that people in nearby towns that would have to pay for rubbish removal may be bringing their garbage to the homes of friends and family in Tiverton. I can't help but wonder what the difference is between that and bringing trash to a dump.

I don't know how my fellow Tivertonians, or even the reformers among them, would feel about it, but I wouldn't mind having to bring my trash to the dump, provided some improvements were made. Right now, one must literally drive up onto the mound, sometimes getting stuck in the mud, and throw trash directly into the pile. If there were a way to make that less daunting of a proposition, I'd be for saving the town the requested $573,601 for trash collection.

11:16 a.m.

To the confirmation of the council, Berlucchi just praised his workers, pointing out that there are just a few guys covering 100 miles of roads, and the town's had none of that "teamster baloney" of grievances and such.

11:23 a.m.

The department of Senior Citizen Services is up. Their budget last year was $111,600, the recent proposal was $144,707, and the request is now $114,311.

One thing the director noted was that the roofs are high, and the building burns a lot of oil. Why not lower the ceiling? Installing a suspended ceiling is quick and easy work.

I'm not sure why the town can't find volunteers for that sort of thing... or to help out around the senior center, even young people doing community service work. I wonder if this starts to get into the essentials of political philosophy, wherein high taxes and a "government will step in" view of social challenges decrease a general inclination toward community involvement and charitable work.

11:35 a.m.

The tax assessor is up and just mentioned that the value of the residental end of the town is about to drop 15-20%. That means that the tax rate for each property will go up, but the actual amount that a household pays will remain the same.

11:42 a.m.:

The assessor's office, by the way, is now to receive $140,363, which is down from $142,169 last year and $146,363 in the previous request for the coming year. (Incidentally, when I say "last year" in this post, I mean the current budget year of 08-09.)

11:53 a.m.

The building and zoning inspector's office is now proposed to go to $103,140, from $101,472 last year and $108,390 in the previous proposal.

12:12 p.m.

A brief break, and now the treasurer is up, discussing his now-$140,363 budget, down from $142,169 in the last budget and $146,363 in the previous draft of this one.

12:15 p.m.:

The number of councilors actually in the room has now dropped from six to four, with only Jay Lambert, Ed Roderick, Louise Durfee, and Don Bollin remaining.

12:29 p.m.:

Police department is up. The previous budget was $2,568,038, the previous proposal for this budget was $2,608,851.43, and the current proposal is $2,581,647.33.

12:39 p.m.:

I had expected the police discussion to be much like the fire one, but nobody asked whether labor had been approached for concessions. The council merely confirmed that most items in the police budget were required by law or by contract.

1:01 p.m.

Several departments have come and gone without event. The head of the library (whose budget is slated to increase by about $2,000) is explaining that usage of the library and its Web services have exploded, with the hard times that families face.

Teachers Aren't Embattled Saints

Justin Katz

Two comments on Anchor Rising from apparent teachers within the past twelve hours raise some common points that are worth addressing. The first, appended to a September post by Monique, is a recitation of some typical union talking points — which, as I've been saying, are most directly targeted at the union members themselves, to keep them believing that they need a union and deserve ever more remuneration:

As usual, let's continue to demonize ALL teachers, belittle the work that they do, forget the professional degrees that they paid for and earned, and generally disrespect anyone who devotes their life to educating our children despite the lack of support from the public, government and so many parents. And EVERYONE should have health care benefits. Pushing to remove decent health care from the last few people still adequately covered will finally make it possible for the health care industry to drive in that final nail. Use your zealous energy to get something for everyone instead of blaming people who are trying to hang on to something you haven't got.

The comment opens with a display of the thin-skinned sense of victimization, whereby complaints about performance and union tactics are statements of disrespect for teachers qua teachers. They're all alone, these educators, with everyone — "the public, government and so many parents" — gunning for them and their meager, cobbled-together remuneration packages. Who's to protect them from a society that would manacle them to their desks and pay them in apples? Why, the union, of course — organizers who assure the members that, as much as they might find work-to-rule and strikes disagreeable, they are mild actions compared to what school committees would do to our harried professionals without collective strongarming, and as much as they might be embarrassed of and uncomfortable with the union performances at public meetings, well, that's just how these things are done.

Two considerations are offered to buttress this sense, the first being the dedication evidenced by the pursuit of professional degrees. Factoring in the broad range of careers that begin with bachelors and layer in masters over the years, it takes a bit of myopia to present education degrees as some sort of rigorous crucible. Would-be teachers are not sequestered in an isolated training camp in their preteen years and run through drills in preparation for their work. They borrow, work for, or receive money to invest in an education suitable to their professional choice and then study sufficiently to achieve degrees. That is increasingly the expected path for all young Americans, many of whom pursue continued education (whether matriculating or autodidactic) as a matter of intellectual curiosity disconnected from direct increases in remuneration that's worked into many teacher contracts.

The second consideration put forth is the notion that, in guarding their benefits, union members stand as a last bastion for the way in which employment packages ought to work. In striving against those benefits, taxpayers are bringing victory to those faceless corporations in the evil health care industry. Nevermind that the storyline is functional nonsense: Public-sector healthcare benefits are filtered through those very same corporations, none of which are apt to complain about the taxpayer-guaranteed revenue stream. Nevermind, as well, that the motivation for taxpayer opposition is not an idle jealousy, but an actual aversion to financing benefits better than their own as they struggle to move forward in life: Even if it were true that ending enviable benefits somehow served the ends of healthcare kingpins, their preservation is an unjust burden to place on suffering private-sector families.

Another commenter, this time to a recent post of mine, takes that extra logical step to conclude that perhaps there's a reason that teachers have it so good compared with their neighbors:

Wow ... its amazing that people aren't just lining up for teaching jobs ... you losers wouldn't last a week in a real classroom ...

I'd suggest that, to the extent that the assertion of an inadequate workforce is true, it has more to do with the steps, processes, and regulations built up as obstacles around the classroom than with the incompetence of the public at large. Myself, I lasted a year as a grade-school computer teacher and several months teaching seventh grade with less than a month of preparation. Done well, teaching isn't an easy job, and it comes with a fair bit of responsibility, but it ain't landing an airplane on the Hudson. One could just as accurately state that any given group "wouldn't last a week" as the lead carpenter on a construction crew, as legal council to a wrongly indicted citizen, or as the kitchen manager in a midrange restaurant.

We choose our professions based on our interests, our aptitudes, and the likely rewards. It doesn't belittle the profession of teaching to suggest that, while the calling is certainly high, it's hardly a qualification for sainthood of itself.

February 6, 2009

The Physics of Government: The Heaviest Element Known to Science

Donald B. Hawthorne

From a friend of a friend in honor of the Obama/Pelosi/Reid porkulus spending bill:

Lawrence Livermore Laboratories has discovered the heaviest element yet known to science.

The new element, Governmentium (Gv), has one neutron, 25 assistant
neutrons, 88 deputy neutrons, and 198 assistant deputy neutrons, giving
it an atomic mass of 312.

These 312 particles are held together by forces called morons, which are
surrounded by vast quantities of lepton-like particles called peons.

Since Governmentium has no electrons, it is inert; however, it can be
detected, because it impedes every reaction with which it comes into
contact. A tiny amount of Governmentium can cause a reaction that would
normally take less than a second, to take from 4 days to 4 years to

Governmentium has a normal half-life of 2- 6 years. It does not decay,
but instead undergoes a reorganization in which a portion of the
assistant neutrons and deputy neutrons exchange places.

In fact, Governmentium's mass will actually increase over time, since
each reorganization will cause more morons to become neutrons, forming

This characteristic of morons promotion leads some scientists to believe
that Governmentium is formed whenever morons reach a critical
concentration. This hypothetical quantity is referred to as critical

Increasing the Cigarette Tax: Will the GA Put Our Money Where Their Mouth is?

Monique Chartier

The extra financial burden of smoking to the health care system and, more specifically, the state has been put forward as one of the justifications for the proposed one dollar increase to the state cigarette tax being contemplated by the General Assembly even as we speak.

It was interesting and a little nauseating to read in today's ProJo that tobacco is a significant driver of customer traffic for certain stores and that making cigarettes sold in Rhode Island the highest taxed in the country might impact the overall business of those stores.

It also failed to take into account the impact on lawmakers of a hearing-room packed with convenience store owners begging them not to choke off a rich vein of business for them. Their warning: Fewer people will be able to afford cigarettes and those who can will look to the Internet and low-cost states such as New Hampshire for cheaper deals.

The feared result: Rhode Island’s sales will plummet and they’ll lose much-needed business. Manish Modi, who owns a small convenience store in West Warwick, told lawmakers at a recent hearing that he’s barely surviving as it is. “I cannot afford to lose any more business,” he said. “This tax increase is going to drive more and more people to close their stores and drive me almost to bankruptcy.”

Setting that concern aside for a moment and projecting that revenue to the state does increase, in view of one of the asserted reasons for this tax increase, will revenue derived by the state from this tax increase be segregated and directed not into the General Fund but towards the state's tobacco related health care expenses?

Let Them Take the Blame for the Bad

Justin Katz

The misguided revenue boosters were the weak spot of the governor's supplemental budget. Of course, they'll probably be the one proposal that the General Assembly passes swiftly:

Smith Hill lawmakers are poised for a vote today on the revenue-raising pieces of Governor Carcieri's $357-million deficit-reduction plan — including a proposed $1 cigarette tax hike.

But they are likely to do so without support from Carcieri's Republican allies in the House, who say they tried unsuccessfully to dissuade the governor from including the increases in his deficit-closing plan, and are now doubly unhappy that House Democrats are trying to move $23.8 million in tax and fee hikes along without any of accompanying budget cuts the governor proposed.

As I've said before, if the legislature makes more than just cursory changes, Governor Carcieri ought to loudly and frequently wash his hands of the budget, saying that it's not his doing.

What's the Big Deal?

Justin Katz

I hate to be plain spoken on an issue regarding which Americans prefer obscurity, but folks, this is abortion:

Eighteen and pregnant, Sycloria Williams went to an abortion clinic outside Miami and paid $1,200 for Dr. Pierre Jean-Jacque Renelique to terminate her 23-week pregnancy.

Three days later, she sat in a reclining chair, medicated to dilate her cervix and otherwise get her ready for the procedure.

Only Renelique didn't arrive in time. According to Williams and the Florida Department of Health, she went into labor and delivered a live baby girl.

What Williams and the Health Department say happened next has shocked people on both sides of the abortion debate: One of the clinic's owners, who has no medical license, cut the infant's umbilical cord. Williams says the woman placed the baby in a plastic biohazard bag and threw it out.

Police recovered the decomposing remains in a cardboard box a week later after getting anonymous tips.

Parsing the moral difference between this incident and a parallel one in which the clinic visit had gone according to plan is like trying to distinguish between a matricidal son who bumps off his wealthy mum in her sleep and one who accidentally allows her to wake up first.

(via the Corner)

A Tenuous Deal with the Devil

Justin Katz

Generally speaking, the government ought to get out of the charity business, but if it's going to appropriate funds, there's no reason that it shouldn't be able to work together with religious groups toward shared ends. For one thing, their spiritual motivation often enables lower administrative costs. The danger — the deal with the devil — is that government tends to appropriate in the other direction, as well, making the receipt of its funds an increasingly dominant consideration. And when it begins making demands, the religious organizations ought to cordially turn away from the relationship.

One might justifiably be suspicious that, at bottom, the word "expand" has a double meaning for the current administration, indicating both an increase in the size of the program and in its demands of participants:

President Obama signed an executive order Thursday to create a revamped White House office for religion-based and neighborhood programs, expanding an initiative started by the Bush administration that provides government support — and financing — to religious and charitable organizations that deliver social services. ...

In announcing the expansion of the religion office, Mr. Obama did not settle the biggest question: Can religious groups that receive federal money for social service programs hire only those who share their faith?

The Bush administration said yes. But many religious groups and others that are concerned about employment discrimination and protecting the separation of church and state had pushed hard for Mr. Obama to repeal the Bush policies.

Meanwhile, other religious groups were lobbying to preserve their right to use religion as a criterion in hiring. Some religious social service providers warned they might stop working with the government if they were forced to change policies.

Invidious discrimination should not mix with charity, but the practice of interfering with an organization that's interwoven with religious principles will tend to expand, with groups opposed to various religious tenets using the government's reach to constrict them. The impression that religious citizens should be wary of government expansion is fortified by other recent news:

Senator DeMint's [failed stimulus-package] amendment would have eliminated a provision that bans any university or college receiving funds to renovate buildings, from allowing "sectarian instruction" or "religious worship" within the facility. This would in effect bar use of campus buildings for groups like the Fellowship of Christian Athletes, Campus Crusade for Christ, Catholic Student Ministries, Hillel, and other religious organizations.

February 5, 2009

Different Paths to the Same Ratio

Justin Katz

I'm not entirely sure why the notion of more state money must be tied with the development of a school funding formula in this state, but this paragraph caught my eye:

Currently, 60 percent of Rhode Island's school costs are paid for by local property taxes, compared to the national average of 43 percent. Some groups have advocated for a state-local share of 50-50, phased in over several years.

According to most notions of a funding formula that I've heard, some districts would see this ratio go up, while others would see it go down. Be that as it may, it seems to me that the easiest way to match the national education funding ratio would be to begin cutting local spending. A 28% reduction in property-tax-based education spending, and we're right in line with the national average with no state-level action necessary.

Massaging the Numbers on Teacher Compensation

Justin Katz

Yesterday, I pointed to a report showing that Rhode Island teachers lead the nation in pay compared with neighbors in similar fields within the state. With a methodology that selects specific occupations that require a comparable amount of education to teaching, the study's authors found that RI teachers exceed their peers by 12%. Not surprisingly, the NEA's Pat Crowley prefers a different study, from the Economic Policy Institute, which is funded in part by labor unions:

... in order to be a teacher, a person needs, as a base level, a bachelors degree. So if we are to do a fair comparison, we should compare teacher pay to other college educated professionals. According to the Economic Policy Institute, teachers in Rhode Island earn 90.9% of their educated peers. This includes the so called "summers off" idea. Even though a bachelor's degree will get you hired, in order to keep working or to advance, a teacher needs to earn a Master's degree (not by law, mind you, yet, but by the nature of the job). In Rhode Island teachers with a Master's degree fair somewhat better, earning 96.3% of what their peers earn. Said another way, teachers in Rhode Island face a 5-10% wage penalty for working in the profession.

Right off the bat, it should be observed that the class of "college educated" residents includes a very broad range, with significant outliers on the high end. A college-educated entrepreneur who builds a business and nets himself billions of dollars will draw the pool well north of the more standard career path. Moreover, a teacher who reaches such heights through some innovation would have to cease to be a teacher to pursue it.

Secondly, wherever one places the parity line, the report (PDF) still places Rhode Island at an extreme: with the third highest teacher-to-private-sector ratio. Even if public school teachers have a raw deal, Rhode Island doesn't have the economic health to be unique in combating the inequity.

At bottom, though, Crowley's statement fundamentally misleading, if not flatly incorrect. The EPI's measure adjusts for "the so called 'summers off' idea" by comparing weekly earnings. At least for some portion of teachers, however, the paychecks are spaced out across the year, not limited to the weeks of actual work. In Tiverton, the contract calls for biweekly paychecks year round, with the option for teachers to take a lump sum for the summer pay. And beyond it all, even the EPI acknowledges the importance of total compensation:

Improvements in the non-wage benefits of K-12 teachers partially offsets these wage differences, such that the weekly compensation disadvantage facing teachers [nationwide] in 2006 is about 12%, about 3 percentage points less than the 15% weekly wage disadvantage.

Unfortunately, the EPI (and therefore Crowley) does not offer a state-level comparison of compensation. Perhaps the results were not helpful to the cause.

A Hidden Tax in the Middle of the Road

Justin Katz

Rhode Islanders are beginning to catch on, I think, to the game whereby the state government spends our tax dollars on labor costs, entitlements, and other non-essential or excessive line items and then returns to the taxpayers requesting the passage of bonds for infrastructural basics, like roads. As has come up on Anchor Rising, before, the scheme contains a hidden tax, as well:

Gaping potholes have opened up in town and are snagging cars left and right.

All on Feb. 2, police received reports of eight incidents where drivers struck a pot hole and seriously damaged their vehicles — and many more strikes went unreported. All of these incidents occurred on state roads, and those with damage to a vehicle resulting may be able to recoup up to $300 from the state. ...

A Portsmouth man said he was at the Cumberland Farms on East Main Road, between Pine Tree Road and Schoolhouse Lane, when he noticed four drivers in the parking lot with "blown out tires." Twenty minutes later, he got a call from his daughter who needed help changing a tire that was popped by the pothole near Pine Tree Road.

When he arrived to help his daughter, he said "another six cars were changing their tires at that time."

"This is outrageous," the man wrote in the report he filed with police. "Because it is a state road, police cannot do anything. Shame on the R.I.D.O.T."

Police checked out the pothole on East Main Road near Pine Tree Road and measured it at one foot wide.

Department of Transportation Public Affairs Officer Dana Nolfe said on Tuesday that DOT's dispatch received six calls that day about potholes on state roads in Portsmouth. Now that DOT is aware of them, she said, workers will go out and patch the holes as soon as the weather permits.

Yes, in the extreme, direct circumstances, the motorist can recoup some or all of the repair expense, but note the declining number: One eyewitness observed a total of thirteen cars, while police received reports of eight, and the DOT heard from four people (who weren't necessarily among those experiencing damage).

One also must remember that the $300 doesn't cover the lost time, productivity, and peace of mind on the day of the incident or of the repair. More broadly, it doesn't cover the gradual accelerated wear on the vehicles of everybody who drives over the miles of rough roads every day nor the time and aggravation of those who face the roads' effects on traffic. The right-hand southbound lane of West Main in Portsmouth is a painful ride — just about undrivable in a work van — so drivers tend to stay in the left, congesting flow.

To avoid such outcomes is why we pay taxes in the first place.

A Topical Puzzle

Justin Katz

On the Matt Allen show, last night, Matt and I discussed the madness of the modern world — from CEOs who are practically daring the government to begin finding ways to limit their pay to teachers' unions that are risking PR devastation to keep their contracts growing. Stream by clicking here, or download it.

February 4, 2009

Go, Raptakis, Go!

Justin Katz

Every Senator and Representative in Rhode Island should back this bill introduced by Senator Leonidas Raptakis (D, Coventry, East Greenwich, Warwick, West Warwick):

Saying that the use of a "Caruolo action" by school committees "is simply giving them an out from living within their budget," Sen. Leonidas P. Raptakis has introduced legislation to suspend such legal actions for the next five years.

Named for the former House Majority Leader who proposed the legislation, George Caruolo, the law allows a school district to sue a municipality for more cash if it contends the amount budgeted by the community is insufficient to properly run the schools.

Caruolo actions have come into play in Cranston and West Warwick in school district efforts to force the municipalities to increase school spending.

"State and local government are in the midst of the worst fiscal crisis in memory," said Senator Raptakis (D-Dist. 33, Coventry, East Greenwich, Warwick, West Warwick). "There is not a school district in this state that isn't feeling its belt being tightened. To allow Caruolo actions to continue while the state works through its budget problems and attempts to bring real reform to education funding would only lead to more and more chaos."

Senator Raptakis said that a Caruolo action is contrary to "3050," the number of the Senate bill passed two years ago that attempts to bring tax relief to communities by setting restrictions on spending growth. "Technically, the two should not be able to exist together. The continued existence of the Caruolo action is simply giving school districts a hammer to beat over the head of municipalities that have no more money to give."

The Raptakis bill, 2009-S 0113, has been referred to the Senate Committee on Finance. It is co-sponsored by Sen. Leo R. Blais (R-Dist. 21, Coventry, Foster, Scituate), Sen. Marc A. Cote (D-Dist. 24, Woonsocket, North Smithfield), Sen. William A. Walaska (D-Dist. 30, Warwick) and Sen. Edward J. O'Neill (I-Dist. 17, Lincoln, North Providence, Pawtucket).

The bill would officially suspend the provisions of that portion of state law referred to as the Caruolo Act effective this year through January 1, 2014.

This is the first bill on which I've noticed Sen. O'Neill's name, by the way, and I look forward to seeing it more often on worthy — necessary — legislation.

The Union Death Grip

Justin Katz

What we're seeing across Rhode Island, from Tiverton to East Providence, to West Warwick, and now to Johnston is the essential nature of the teachers' unions:

Resistance from the teachers' union has forced the Johnston school system to abandon its leading role in a $12.5-million project to dramatically upgrade science and math education across Rhode Island, school officials said yesterday.

The town's top educators withdrew from the effort after learning that the district's science teachers would not participate in the program, which Governor Carcieri last September heralded as essential for the development of a work force in an increasingly challenging global economy. ...

In Johnston, only 16 percent of its 11th-graders were proficient in science.

"We could have gotten things that we normally could not afford, especially in this economy that we're in," Schools Supt. Margaret Iacovelli said yesterday when asked about the district's withdrawal from the program. "I'm really disappointed."

School committees and superintendents have been unwilling, in the past, to tie the unions' hardball tactics to significant detriments to students, so year by year, they have incrementally introduced those detriments a little at a time. Now the money has run out, the minimally controversial excisions have all been made, and the unions' teeth are coming out.


The governor has released the following statement:

The decision by the Johnston School Department to leave the five year science and mathematics pilot project to upgrade science and math education in the state was met by surprise and great disappointment by Governor Carcieri today.

"This was a tremendous opportunity for Johnston to forge a new path in math and science education in Rhode Island," said Governor Carcieri. "It represented a chance for the Johnston School District to use new tools and resources for their teachers and students to improve students' proficiency in the critical areas of science and math. This decision by the Johnston teacher's union to pull the plug on their own members is spiteful, and in the end only hurts the students."

The decision by Johnston School Department will not derail or delay the project. The Rhode Island Department of Education has already identified a list of schools to participate in year two of the five year pilot program and will choose to accelerate one of those schools to now participate in year one. RIDE is expected to make a decision within the next week.

"We have received overwhelming response from school districts eager to participate. However, it is disappointing that Johnston has stepped away from the project, and it is a shame that the students will be deprived of the chance to participate," concluded Carcieri.

'50s Policies in the Modern Economy

Justin Katz

As I recall, it was during America's discovery of FoxNews, just after 9/11, that I saw Robert Reich on Hannity and Colmes, and Hannity made a comment to the effect that Reich's ability to talent for promoting detrimental economic policies was frightening. That memory came to mind while reading Reich's recent essay promoting the "Employee Free Choice Act" as a form of economic stimulus:

WHY IS THIS recession so deep, and what can be done to reverse it?

Hint: Go back about 50 years, when America’s middle class was expanding and the economy was soaring. Paychecks were big enough to let us buy all the goods and services we produced. It was a virtuous circle. Good pay meant more purchases, and more purchases meant more jobs.

At the center of this virtuous circle were unions. In 1955, more than a third of working Americans belonged to one. Unions gave them the bargaining leverage they needed to get the paychecks that kept the economy going. So many Americans were unionized that wage agreements spilled over to non-unionized workplaces as well. Employers knew they had to match union wages to compete for workers and to recruit the best ones.

Cast your mind back, dear reader, to the time of fuzzy bunnies and economic prosperity — all the way before technology booms and Reagan, back to a time that relatively few of you remember with an adult's clarity. What was responsible for that technicolor past of prosperity? Unions! Ignore that those were days of pre-globalization innocence; ask not what happens when labor becomes more expensive in the United States in an environment already characterized by companies' looking for less-expensive nations in which to operate.

Democrats "Staunchly Opposed" to a Stimulus for Regular Folks

Carroll Andrew Morse

According to the New York Times, "senior Democratic lawmakers" are opposed to the Republican proposal to create a long-term stimulus by lowering mortgage rates...

[Senator Mitch McConnell] has proposed that the federal government subsidize mortgages with a fixed interest rate of 4 percent to 4.5 percent. Fannie Mae and Freddie Mac, the two government-controlled mortgage-finance companies, would use their buying power in the mortgage market to drive the rates down....

The low rates would be open to any “creditworthy” borrowers, which would probably exclude many if not most homeowners who are now facing foreclosure. But supporters of the plan argue that it would help lift housing prices, which would make it easier for troubled homeowners to either refinance or sell their houses.

But senior Democratic lawmakers are staunchly opposed to the plan, warning that the costs could climb as high as $1 trillion.

Translation: Responsible, middle-class folks who have been scraping by, but are feeling strained because of the condition of the broader economy have no place in the Democratic agenda.

Isn't this the best reason you've heard so far for supporting the McConnell plan?

The Story of Rhode Island Education in Two Rankings

Justin Katz

Taking a soft tack in defining "fairness" when it comes to teacher compensation, Julia Steiny references a series of reports put out by Education Week:

The researchers averaged the earnings of all 16 occupations and used that number to draw a "parity line" across the center of the chart. Against that line they graphed each states' average teacher compensation — salary and benefits — to indicate, on an admittedly gross average, how well teachers were paid as compared with their private sector counterparts. ...

Seven states pay above the parity line. Rhode Island is at the extreme end of the chart, paying 112 percent of parity, or 12 cents per dollar more than the private sector average.

So Rhode Island teachers are doing relatively well, while lots of private-sector people are losing their jobs, or having hours and benefits cut back. It's only natural that teachers would freak when their salaries and benefits are threatened. A loss of income, however minor or manageable, feels neither good nor fair.

But private sector people who have lost their jobs must now somehow get health care, since we are the only industrialized country that still ties health care to jobs. And they must also pay the taxes, quite high in Rhode Island, that maintain their luckier, unionized, protected brethren. This feels royally unfair. As such, the resentment growing in Rhode Island’s private sector is now mushrooming.

Unfortunately, the report does not say whether the parity line takes into account benefits and work schedules (hours in the workday, days in the workyear), although judging from the language (e.g., "pay-parity"), I suspect not. Whatever the case, the Rhode Island report (PDF) shows on page 11 that our state is #1 in the country for paying teachers above this definition of parity.

There's another component to the story, though. The previous page of the report informs the reader that Rhode Island ranks 47th in "efforts to improve teaching," which includes accountability for quality, incentives and allocation, and building and supporting capacity. In other words, Rhode Island already overpays teachers compared with the society in which they live (and the community that funds their compensation), but if we were to adjust for the quality demands that we place upon them they'd be off the chart.

Town Manager v. School Committee in West Warwick

Carroll Andrew Morse

Paul Mueller of WLNE-TV (ABC 6) is reporting that the West Warwick Town Council has voted to have the Town Manager "take over" reconciliation of the school committee's budget deficit...

ABC 6 Reporter Paul Mueller: A town council meeting, packed with hundreds of West Warwick residents and teachers, searching for answers to help fix their financial woes…

West Warwick Town Manager James Thomas: In my 25 years, I have never seen a school district so dysfunctional from the financial side.

PM: Town Manager James Thomas, moments after the West Warwick Town Council gives him the nod to take over the entire school district's finances and take the steps he deems as necessary – only if approved by the council. The reason, he says: school superintendent Kenneth Sheehan is breaking state law.

JT: After the financial town meeting, if your budget is out of balance, within 30 days, you have to submit a revised budget. He has not done that.

However, the Projo's Lisa Vernon-Sparks writes in today's paper that the action by the West Warwick Town Council was something significantly less than a "takeover"…
After protracted and sometimes heated debate, the Town Council last night rejected Town Manager James H. Thomas’ request that he be authorized to take full control of the School Department’s finances.

Instead, the council — meeting before more than 300 residents in the West Warwick High School auditorium — passed a resolution encouraging him to pursue in-depth discussions with the school board and top administrators in an effort to produce meaningful budget savings.

An earlier item by Ms. Vernon-Sparks makes reference to Section 508 of the West Warwick Town Charter as the basis of the Town Manager's and/or Council's rationale for their action, whether that action is a "takeover", "discussions" or something in-between…
The budget of the Town of West Warwick shall be balanced for each fiscal year so that total expenditures shall not be greater than total receipts. If any time during the fiscal year the town manager shall determine that actual revenue receipts will not equal the original estimates upon which the budget was based, the town manager, for purpose of maintaining a balanced budget, shall recommend to the town council such reductions or suspension in the appropriations for any or all departments, offices or other agencies of the town government as will, in the town manager's opinion, prevent the occurrence of a deficit. However, there shall be no reductions or appropriations for the town debt payments or the retirement fund or lease purchasing contractual obligations to balance the town budget. The town council shall by ordinance either approve the same in whole or part or make such other reductions or suspensions in total equal to that proposed by the town manager as will prevent the occurrence of a deficit.
It does seem to be something of a stretch to allow a Town Manager to take over school committee labor negotiations, whatever the budgetary situation, based on an official listing of duties that stops at "shall recommend".

February 3, 2009

The Court's Presumption

Justin Katz

I would hope that we could all agree that the events that Bob Kerr describes are a travesty in their own right, although certainly accentuated by the fact that their victim is a veteran:

Barone is a neighbor and friend and has testified in court on [Paul] Kelly's behalf. He remembers when Pocahontas Cooley, Kelly's former girlfriend, showed up shortly before Kelly left for pre-deployment training in September 2007. She's still there, claiming to be Kelly's common-law wife. She got a restraining order against him, saying he was bothering her when he visited his cabin.

"I think I would know if I was married or not," says Kelly.

That seems reasonable, since common-law marriage requires the man and woman to intend to be married and hold themselves out to the public as married. Kelly says the only relationship he had with Cooley was boyfriend-girlfriend, and that relationship ended in 2004.

Kelly admits he made a mistake when Cooley came to his door just before his deployment and he allowed her to stay in his cabin temporarily because she said she had nowhere else to go.

"I was trying to help her out," he says.

This is nuts. A man is kept out of his home for seven months after returning from nine months of serving his country. There is no way to justify it and no way to justify the length of time it is taking to resolve it.

Not knowing all of the specifics, I can't say for sure, but this certainly sounds related to the many complaints that I've heard of the bias in court on behalf of the female in a relationship. Whatever the case, it shouldn't be this difficult to resolve.

As Kerr says, Kelly's still paying the taxes on the property.

Gotta Fight for Your Right to Party

Justin Katz

Ken Block, founder of the Moderate Party of Rhode Island, is taking his cause to court:

The Rhode Island ACLU has today filed a federal lawsuit against Rhode Island elections officials on behalf of the Moderate Party of Rhode Island (MPRI), challenging the State's restrictive ballot access laws. The lawsuit, filed by RI ACLU volunteer attorney Mark W. Freel, argues that the laws unconstitutionally impede the ability of fledgling groups like MPRI from gaining formal recognition as a political party.

At issue in the lawsuit is a state statute that bars any new political party from collecting in an off-election year the signatures necessary to gain state recognition as a party. Instead, the party must wait until the beginning of the election year to do so. This provision prevents MPRI from raising money and organizing in 2009, while allowing the two major political parties to organize and raise funds at will.  In addition, the statute requires a new political party to collect signatures representing 5% of the voter turnout for the 2008 elections (roughly 23,500 certified signatures of registered voters) in order to gain recognition as a party. Many states have far lower signature thresholds for party recognition.
The lawsuit argues that "having to collect the required number of signatures in the limited time window permitted by law, and not being able to commence that process until January 1, 2010, creates an arbitrary, unjustifiable and ultimately impermissible burden that makes the task far more difficult to accomplish." The suit notes that MPRI officials "are ready, willing, and able to commence collecting the necessary signatures for recognition now, but are currently forced to wait" until 2010.  As a result, they are "unjustly forced to compete in the political arena at a distinct political and financial disadvantage, when compared to previously recognized political parties." The suit argues that these burdensome restrictions violate MPRI's First Amendment rights.

The suit is seeking a court order declaring the contested provisions unconstitutional and enjoining their enforcement.        
"Existing state law sets up any new political party for a perpetual cycle of failure," said Ken Block, Chairman of MPRI.  "The new party cannot raise money until state recognition is granted, which doesn't occur until 23,500 valid signatures have been collected and then confirmed by the local boards of canvassers. This process cannot commence until January 2010 and is unlikely to be finished until May or June 2010, best case.  Imagine trying to run successful campaigns for the General Assembly and State officer positions starting with a bank balance of zero in June of the year of the election!"
RI ACLU volunteer attorney Freel said today: "Preventing a new and fledgling third political party like the Moderate Party from being able to move forward with the collection of thousands of statewide signatures until January 1 of an election year makes no sense and places them at a tremendous disadvantage.  The Moderate Party is ready to start its work now, and should have the ability to do so, consistent with their constitutional rights of free speech, association and due process, and in order to provide fair and unfettered access to the ballot for all."
RI ACLU executive director Steven Brown, noting the ACLU's non-partisan status, added: "Whatever one's views of the Moderate Party, it should be entitled to compete in the electoral arena on a fair basis. The state laws we are challenging serve no purpose other than to impose unnecessary barriers against the formation of third parties. This is harmful not only to groups like the Moderate Party, but to voters themselves whose choices are arbitrarily limited."
Block described the MPRI as being "dedicated to centrist governance, focusing on four major issues affecting all Rhode Islanders: the Economy, Ethics, Education and the Environment.  MPRI's focus is the General Assembly, where the Party believes that the current massive imbalance of power leads to poor legislating.  We believe that good governance is the result of compromise and moderation, activities that do not occur when a single party has a 90% majority. That is why we have started this new party." During the 2008 elections, MPRI, through a PAC, endorsed a slate of candidates for the General Assembly and published a platform describing its position on numerous issues of public concern.

Any further dent that citizens can put in the incumbency-protection edifice is worth pursuing.

Stimulus is no Cure-All for Rhode Island

Marc Comtois
As I mentioned last week, the WSJ wrote an editorial about the ever-growing "economic stimulus" package. As they put it then:
This is a political wonder that manages to spend money on just about every pent-up Democratic proposal of the last 40 years....this bill was written based on the wish list of every living -- or dead -- Democratic interest group.
Here in Rhode Island, Governor Carcieri is trying to explain (in a radio ad) that the Ocean State's portion of the package will do nothing to solve the long-term problems that got us into these straits.
With a federal bailout on its way, some may think Rhode Island’s budget crisis will soon be over. But don’t be fooled by those who would ignore the real issues, and simply patch the budget with this newfound money. Such sudden windfalls may solve our immediate budget problem, but in the long run they will only make things worse.
North Providence Mayor Charles Lombardi welcomes the relief--a "shot in the arm"--but agrees with the Governor and recognizes that it's not a cure-all. For their part, the ProJo sought out the always-present NEA official for his (original?) comments:
This was the response from Patrick Crowley, assistant executive director of National Education Association Rhode Island, after hearing the Carcieri radio spot: “The governor’s so-called recovery plan was nothing more than a conservative wish list of proposals having very little to do with the economic plight of working Rhode Islanders. What the people of Rhode Island need today is leadership, not finger pointing or campaign attack ads. “But more importantly, the people of Rhode Island need good-paying jobs and the stimulus package from the federal government is just the shot in the arm our state economy needs,” he said.
Must be running close to the end of the playbook and running out of "original" material. Meanwhile, I found this graphic, well, illustrative!

A Stimulus Proposal that Even Responsible, Non-Politically Connected Americans Can Love?

Carroll Andrew Morse

If there is going to be a major binge of stimulus spending in one form or another, and since Fannie Mae and Freddie Mac have already been taken over by the government anyway, doesn't this stimulus proposal being put forth by Senate Republicans make a lot of sense, because it brings regular folks who have been spending responsibly and living within their means into the program...

Senate Minority Leader Mitch McConnell, R-Ky., told reporters Monday that Republicans would offer a plan to have the government step in to reduce mortgage rates to around 4 percent, which could shore up home prices and lower housing payments for millions of Americans.

"A stimulus bill must fix the main problem first, and that's housing," McConnell said. "That's how all of this began. We think you ought to go right at housing first."

Republicans want to have banks lower the interest rates to 4 percent or 4.5 percent on 30-year fixed rate loans, up to a certain cap. Rates could drop if Fannie Mae and Freddie Mac agreed to buy the mortgages.

The two companies were seized by the government in September, and have bought the majority of the new home loans issued over the past year because Wall Street's appetite for mortgage securities has vanished. The new rates would be available through 2010 for both new purchases and refinanced loans.

Yeas or nays, anyone?

Drowning Goose, Frozen Gander

Justin Katz

There's some risk of "gotcha" opposition to the current president and his hordes of true believers, including in the media. Considering that the Katrina catastrophe still holds an important place in the self-persuasive arsenals of the anti-Bush crowd, Steve Gill is right to note a conspicuous difference in treatment:

Last week a massive ice storm struck the heartland of America, leaving at least 42 dead and millions without power or water. Days later there are still over a million people in Kentucky who have no power, no water, and no communications. They could have to survive this way for weeks! The conditions are dire and getting worse, with some storm survivors carrying pails of water from creeks. Thousands more are living in shelters with no timetable for returning home. FEMA is nowhere to be found.

Amid this catastrophe, where is President Barack Obama? While millions were struggling with the dangerous and deadly icy conditions President Obama had the thermostat in the Oval Office cranked up like a "hothouse" growing orchids. On Thursday — while millions in Tennessee and Kentucky did not have access to shelter or food — Obama hosted a cocktail party at the White House and served up fancy martinis and an appetizer menu that featured mouthwatering wagyu steak costing $100 a pound.

Stumbling Down the Logical Aisle

Justin Katz

Ray Hodges' ruminations on the morality of same-sex marriage are reasonable and presented with an even temper. Just so must be the tone of any dialogue on controversial matters. Unfortunately, his argument is a wholly erroneous construct, collapsing under the weight of misapprehensions, categorical non sequiturs, and an a priori conclusion.

The flaws emerge right at the beginning, when Hodges notes that his "question about gay marriage is not why [he, as a Catholic,] should be concerned about legalizing an immoral activity." Of course, the sexual acts to which he refers are already legal. The dispute, in the civic sphere, is whether those sexual acts are sufficiently indistinguishable from those associated with traditional marriage to negate all legal methods of treating the latter as unique. By the end of his letter, having determined to his own satisfaction that homosexual behavior is not immoral, Hodges admits no additional considerations prior to the leap to marital equivalence.

To take up that further argument, however, would rush past the fact that Hodges errs in hinging his reasoning on the false synonymity of "natural" and "moral." Indeed, immorality — sinfulness — comes so naturally to humankind that, we Christians believe, God offered a law to His chosen people (who had a terrible record of obeying it, thereafter) and ultimately went to the length of sacrificing His own Son to free us from the inevitability of sin and death. Natural law, in the Catholic Catechism, is not related to the popular notion of appearing in nature, but to "the original moral sense which enables man to discern by reason the good and the evil, the truth and the lie."

Even in secular terms, one need only trace the effects of humanity's foibles on civilization to see that morality seems most often to be a denial of "natural" tendencies. Marriage, itself, is meant to regulate the natural urge, especially among men, to stray from the families whom heterosexual activities tend to create. It is a foundational institution in our civilization's progress away from raw nature.

Mr. Hodges is free to brush aside core teachings of his Church, such as the critical importance of tradition, but the rejection of a theological worldview does not constitute a case for the innovation of same-sex marriage. We all want to be compassionate, and most of us wish to increase the world's sum of happiness, but radically altering the meaning of marriage is not a path toward either end.

February 2, 2009

Tools in the Governor's Supplemental Budget for Cities and Towns

Monique Chartier

In Saturday's Pawtucket Times, Jim Baron, who, despite his opinion of another Rhode Island blog, is an excellent reporter that we need to clone, lists those ground-breaking (for Rhode Island) recommendations in the Governor's supplemental budget.

The changes have been touted by mayors and administration officials as “tools” that would allow cities and towns to bring their budgets under control and ease the pain of state aid cuts that are also part of the governor’s supplemental budget.

These include

> creating a statewide health, vision and dental plan for school employees and taking those issues out of the realm of collective bargaining;

> setting a minimum 25 percent co-share of health insurance premiums;

> forbidding “minimum manning” provisions in future police and firefighter contracts;

> reducing the pay for police and firefighters disabled in the line of duty from 100 percent to 80 percent of salary;

> modifying arbitration rules to restrict arbitrators to choose between the two sides’ “last best offer:”

> making it illegal for teachers to strike or “work to rule” during contract disputes;

> taking away the right for a hearing and other protections when teachers are laid off to reduce a school district’s budget;

> requiring that proposed language of teacher contracts be posted on the Internet 30 days before the contract is ratified, and asserting management rights for issues that are currently subjects of collective bargaining.

Postponement and Corruption

Justin Katz

Word on the street is that the RI Senate Judiciary Committee has indefinitely postponed its hearing on marriage issues.

On a related note, a source in a position to know informs me that the reason even informed citizens can be surprised by such events is that the General Assembly exempts itself from open meeting laws. Apparently, it's an annual tradition: The Republicans move to adhere to the laws, and the Democrats continue the exemption.

Nothing to see there, I guess.

A Home Overseas?

Justin Katz

Conservatives sometimes lament that, unlike liberals, they lack for countries to which to move — or at least to threaten to move — when they lose elections. Judging purely from its president's attitude, it looks like the Czech Republic might be headed in the right direction:

When it comes to the climate, "there are competing theories. I'm very sorry that some people, like Al Gore, are not ready to listen to the competing theories. I do listen to them."

Klaus has published a book called "Blue Planet in Green Shackles: What Is Endangered: Climate or Freedom?" Klaus told us that the answer is freedom — freedom is endangered — adding, "I imagine National Review would understand what I mean." I replied, "Actually, there are differing views about global warming at National Review."

Another journalist present said, "What freedom do you mean? What freedom is endangered?" Klaus pointed to her and said, "Yours, mine, [turning to the World Economic Forum representative] the moderator's. The freedom of publications like National Review."

A different journalist, with high-pitched indignation, said, "Are you saying that Al Gore is threatening freedom?" Klaus answered, "More or less. Environmentalism and the global-warming alarmism are challenging our freedom; Al Gore is an important person in this movement."

Money Makes the World Go Mad

Justin Katz

Disappointingly, URI economics professor Len Lardaro sums up the zeitgeist of the times:

"These may not be stimulus funds in the strict sense," Lardaro said, but they convey the sense that government is attacking the crisis head on.

Bryant's Edinaldo Tebaldi displays another symptom of the intellectual virus currently infecting economics academia:

To Tebaldi, the separate streams of money expanding unemployment insurance, food stamps and home heating aid for the poor are necessary parts of the stimulus blend. "You cannot let people suffer if it can be avoided," he said.

For his part, Representative Pat Kennedy runs onto the thin ice that cooler heads have avoided:

Democrats disagree, of course, and some, including Rep. Patrick J. Kennedy fear that the stimulus bill — far from being too expansive — is too timid.

"We need a bolder vision," said Kennedy.

Personally, I think these speakers — especially the academics — provide a fine expansion to economist William Poole's observation in the article:

A new program to extend Medicaid to the unemployed at all income levels might have the perverse incentive of prompting people to pass up job opportunities that do not carry health insurance, Poole said.

Thus grows the gravity of an expanding government. Little wonder that professors — whether employed by public universities or merely benefiting from huge government subsidies and lending for higher education tuition — move toward the principle that government must be seen to be doing something — that pouring money drawn from some unmentioned corner of the financial universe onto "suffering" is a moral imperative.

The reality ignored is that none of these steps can "jump start" the economy; at best, they have some chance of forestalling utter collapse, in the hopes that the next bubble will begin to inflate before the temporary bridge crumbles. At this magnitude, however, the effort may be draining gallons rather than sprinkles of precisely those resources and incentives that ultimately generate the booms. The money and initiative is being taken out of the striving and entrepreneurial segments of the economy in order to support bureaucrats, workers, non-workers, and the already rich. The larger the expenditure, the less likely it is that the next lurch forward will ever come.

Kennedy, no doubt, exists in the blissfully ignorant state of a kid gathering snowflakes on his tongue. One can only hope that the economists feel some small twinge from the deep-down knowledge that they're merely rationalizing a calamitous economic blunder.

Repair the System to Repair the Budget

Justin Katz

It's curious — at a time when lefties and unions are more than happy to accept far reaching justifications for weaving their wish lists into an ostensible stimulus package at the federal level — to hear them arguing for a close delineation of "budget repair" in the state:

Union leaders are accusing the Carcieri administration of executing a targeted assault on labor unions and of trying to "destroy the labor movement in Rhode Island" by seeking to limit the scope of collective bargaining in this state.

Such fragile things are these unions, apparently, that the imposition of limits could be fatal to them. Of course, they're merely throwing any argument that they think might stick at the governor's proposal:

But union leaders say there's another key flaw in the proposed prohibition [against teacher strikes and work-to-rule]: It doesn't belong in the state budget-repair bill because it won't save local school districts any money, they say.

Sure it will: By removing a cudgel that the unions use to threaten, and to harm, the communities from which they wish to extract more money, the change would empower school committees to negotiate more responsible contract terms. RI unions have constructed a series of pretty little traps around all of their talking points to create the illusion that the only restrictions and cuts that are legally, morally, or safely feasible are those that they propose, but the icy sheen of recession reveals just how shallow their arguments really are.

Patrick Laverty: Rewriting the Teachers' Contract

Engaged Citizen

First, let me say, as a Cumberland resident and taxpayer, that I greatly respect teachers and the job that they do shaping the minds of our children. I like the profession; I do not hate teachers, nor do I have anything personally against them. This is not intended as an attack.

Having taken the time to review the entire current Cumberland teachers' contract, and understanding that it expires this coming August, I want to give my suggestions for changes and improvements to the existing contract to the Cumberland School Committee to bring to the negotiating table. What follows is an abridged version. The background and full version are available here.

  1. Make all negotiations public. The taxpayers are paying the bill, so let the taxpayers see the full negotiations. What's to hide?
  2. Eliminate salary, steps, and insurance from the contract. Let the teachers' union be their employer. Simply give the money to the union and let them decide on salaries, raises, and negotiate the insurance coverage. Treat the union like a subcontractor. If this is not possible for some reason in negotiations:
  3. Remove the specification of health and dental insurance providers from the contract. Remove the names "Blue Cross" and "Delta Dental" in case something better comes along.
  4. Increase the teachers' contributions to their health insurance from 11% to 25% to make it more in line with the private sector.
  5. Drastically reduce the amount given for health insurance buyouts. The health insurance buyout is currently approximately $5,000. Reduce that to $500.
  6. Eliminate double raises. Currently, teachers get a raise each year for moving up to the next step and because there is a raise for that new step from the previous year. The average raise in the present contract is 11.7%. Make that closer to the cost of living or inflation.
  7. Eliminate degrees for raises. Give merit-based raises.
  8. Monthly payroll, and no paychecks in the summer months. This may be just shaving a few bucks from the overall problem, but even a few dollars will buy a few new books.
  9. No pay for seminars. Teachers going to professional development seminars on their own time are given $30 for attending. Eliminate this.
  10. Change the next contract's expiration date. Change the expiration date to June 30 so there's no more last-minute, or even beyond that, negotiating and wondering if the schools will open with teachers.
  11. Eliminate allotted sick days. Let teachers take what they need. When you give people a number of days, they tend to use them. Professionals will simply take what they need.
  12. Don't allow substitute teachers to become full-time teachers in the same year. Substitutes are substitutes and full time is full time. Remove the clause whereby a substitute teacher can get retroactive pay for substituting for a certain number of days.
  13. Eliminate "preparation time." Lengthen the day by 45 minutes, to 7.5 hours, and have the teachers prep during that time.
  14. Shorten the length of the contract. No one knows the state of the economy in three years, so don't guarantee what you'll be able to pay in three years.

Patrick Laverty is Treasurer of the Cumberland Republican Town Committee

Change Can't Be Done

Justin Katz

On Friday evening, Portsmouth Fire Chief Jeff Lynch sent an email to a baker's dozen (or so) of state legislators explaining why not a single one of the governor's budgetary suggestions related to public-sector labor ought to be accepted. The entire letter is printed in the extended entry, below.

It would be folly to state that the chief doesn't make some worthwhile points, but no group whose cash flow is apt to be restricted as Rhode Island adjusts to financial reality will come unarmed with arguments. There's a reason they've collectively pushed our state to the precipice in the first place.

I won't attempt a point-by-point response to Lynch's statement, here, but a few of his comments related to benefits point to a skewed perspective that legislators ought to take into account as they gut the governor's supplemental budget and pass one of their own making:

I know, the rest of the world already co-pay some or all of their insurance. However, when I started I qualified for food stamps. We take the low pay because we have these benefits.

I can't speak to the wheres and whens of Chief Lynch's first days as a firefighter, but career paths that begin within 100% of the poverty line are not uncommon. Be that as it may, a look at Portsmouth's '07/'08 payroll (PDF, from The Money Trail) reveals that no full-time firefighters currently face that prospect. Their compensation packages (PDF, from The Transparency Train) emphasize the point. The town's budget for that year (PDF, from The Transparency Train) puts the healthcare costs for the department at $452,881. Lynch subsequently notes "a friend" in the defense-industry private sector who supposedly has a better deal, but individual acquaintances and long-ago pay complaints are hardly relevant to questions of parity.

Similarly with pensions:

It remains unclear whether the COLA proposed by the Governor applies to vested employees. Regardless, our contributions were based on actuarial studies that accounted for our present COLA's. Additionally, having to wait 5 years for a COLA will essentially put the average public servant at poverty level. Assuming the cost of living increases 3% per year, which is compounding, a person retiring form a job that pays $50,000 with a 50% pension will start with a $25,000 per year pension. After 5 years that pension will be worth less than $21,250 in today's dollars. This coupled with a healthcare co-payment of $3,800 makes the value of the pension worth around $17,450.

Put aside that public employees who retire after twenty years of service are not likely to begin their forty-year retirements without finding other jobs that put them not only above the poverty level, but well above the median household income for the state. Lynch's hypothetical simply doesn't apply to the men under his command.

According to their latest contract (PDF), a 1st class firefighter (who reaches retirement without becoming an officer) earns $47,587.10, and longevity is included in pension calculations, which brings the retirement-age average to $51,552.69. Retiring after 20 years, his pension payment would be $30,931.61, and after 27 years, it would be $38,148.99. With no cost-of-living adjustment, the retiree would face the undaunting necessity of saving or investing that annual cushion until actually reaching a suitable retirement age.

Again, we in the private sector are generally not in a position to snicker at that benefit. Still, the chief goes on:

Second to the love for the job, the reason we all take these jobs are for the benefits because they don't pay nearly as well as private sector jobs for the risks we take. We make a deal when we sign up and plan our lives in accordance with that deal. To change it, and change it this drastically, is unfair to say the least. I can tell you as much as I love my job, and as much as it is going to kill me to leave it, I have advised my son that he should seriously consider another career.

Strictly speaking, union employees remake their arrangement with every contract. If Mr. Lynch is referring to a more abstract "deal" of contract-by-contract increases and perpetual insulation from the economic realities that the rest of us face, then I'd ask why it is that he believes his reality ought to be more "fair" than his neighbors' — neighbors who have at an accelerating rate been advising their children not just to consider alternative careers, but to flee the state in which they've grown up altogether.

The bottom line is that nobody's deal will survive the collapse of the state, and that is exactly what the future holds if dramatic changes are not made to Rhode Island's method of operation.

On Jan 30, 2009, at 6:21 PM, Jeffery P. Lynch wrote:

Good Afternoon again, At the request of Representative Rice I am sending a position paper of sorts. Below is a list of articles as I understand them related to the fire service and how we feel it will affect the fire service locally. I hope this will be helpful for our meeting next Friday.

Article 41: Regionalization or the State Realignment Commission

This would create a (7) member regionalization/realignment committee to make recommendations on consolidation and regionalization of services, IT, public safety service delivery, etc. The Governor is appointing (2) labor reps (unions), (1) current or former Police Chief, (1) current or former Fire Chief, (4) legislatures and (3) state workers. The commission has to be done with this by 3/2010 with a 11/2010 election day vote.

It is my understanding that Aquidneck Island will be the test bed for regionalization. Without a plan, I wonder how this will be accomplished without county government in place. A question I ask is how the current equipment will be distributed? For example, Portsmouth taxpayers spent $700,000 for a tower ladder truck. If we regionalize do you think this truck will stay in Portsmouth? It would make more sense to put it in Middletown and replace their 20 year old ladder and have it closer to Newport that has a bigger fire load. Also, every fire chief in Newport County is saying he needs more manpower because we can not handle the calls we have now with the manpower we have. Regionalizing will not increase manpower and will not make the amount of emergencies go down. Additionally, I suspect the master plan is to do away with chief officers. None of the chiefs have any spare time on their hands so I wonder how all the work will get done? Standardizing fire alarm equipment would require business owners to spend another 5 to 6 thousand dollars to update their fire alarm systems many just installed. Creating a dispatch center to receive these additional alarms as well. Radio systems would require massive infrastructure upgrades to be able to talk throughout the county? Telephone systems, computer aided dispatch software, etc. would also need to be upgraded and built. Facilities as they are presently located would not allow for adequate response times. The Governor says there are somewhere in the order of 82 fire departments in the state. Mostly all of these departments are volunteer within the same town. In the East Bay area for example Bristol has 4 charted volunteer fire companies. While there are 4 separate charters, they all fall under the direction of the Bristol Fire Chief and there is no waste. In Portsmouth, there are essentially 3 departments, the Portsmouth Fire Department, the Portsmouth Volunteer Fire Department, and the Prudence Island Volunteer Fire Department. In reality, they all fall under the budget and control of the Portsmouth Fire Chief. In fact, the Portsmouth Volunteer Fire Department is responsible for purchasing the ambulances in town. They often receive donations that help pay for these trucks. It is actually saving the taxpayers in the town money. While perhaps it is possible that some consolidation of these smaller departments in other areas of the state will save on equipment costs, the savings would be minimal. I also question what affect this would have on the volunteers that are in these smaller departments, if they would all stay? The fire service has been regionalized for years. Through the existing Mutual Aid agreement, we routinely send apparatus across jurisdictional boundaries to assist neighboring communities. This aid covers both the need for specialized training, tools but mostly in the event the community requesting assistance has already deployed all of its resources. Combining departments would have virtually no effect on saving dollars. How would the ambulance billing monies be distributed? Last fiscal year my department alone made $425,000 for the town. Also, it is my understanding the bill earmarks $150,000 to do the study. Is this the most prudent expenditure during these economic times?

Article 43: Minimum Staffing

This would eliminate minimum staffing for Fire Departments. The article actually includes staffing for fire departments, deployment or amount of personnel a department has, stations, equipment and that we cannot bargain what type of equipment we have, etc.

People will die if we eliminate minimum manning. If this passes you can expect a fire truck with one or two guys on it that will take a hose off the truck and wet your neighbor's house down so it doesn't catch fire while yours burns to the ground. Firefighters have given up benefits and pay to get the minimum staffing requirements. The Providence Journal will tell you the reason is so firefighters can make more overtime. Trust me, we have difficulty getting guys to work these overtime shifts, it isn't the overtime. NFPA, a non governmental association with no ties to labor, has minimum requirements of 4 to 6 people on a truck and 11 to 13 people to respond to a structure fire on the initial alarm (NFPA 1710 if you're interested in looking it up.) They do because they have studied fires extensively. Additionally, if you call for a rescue and it is already on a call you will have a delayed response for one IF the neighboring community has one available. Also, Chief Byer from Jamestown has expressed concern that if minimum manning were eliminated it would put a burden on his department if neighboring communities fell below current staffing level. He fears he will be called for mutual aid to cover calls for service these departments are currently handling but could no longer handle due to lack of staffing. He also fears this would drive down the membership of his department due to the required commitment for the volunteers. Advocating for one's own worker safety is unique to the fire service. Industrial worker safety is ensured by laws enacted by the government. What we are presently seeing in H-5019 is the government attempting to eliminate any safety rules the fire service has negotiated into labor agreements. Why is Rhode Island not an OSHA state? Why does OSHA not include the fire service. If we were protected by laws and not standards, we would not be having this conversation. Response time would also suffer. If a town does not have adequate staffing to cover multiple calls they would rely on mutual aid from their neighbors as previously stated. Those mutual aid departments would have upwards to a 20 minute response time.

Article 44: Healthcare

This act reads that no contract signed after 7/1/09 by law can include anything else but a minimum of a 25% healthcare co-payment for active personnel. This does allow for existing contracts to maintain their existing co-pay structure until they expire.

I know, the rest of the world already co-pay some or all of their insurance. However, when I started I qualified for food stamps. We take the low pay because we have these benefits. This also forces us to pay 20% in retirement this year, I'm sure that will increase too. It is believed in yesterday's testimony given before the House Finance Committee that this co-pay will affect already retired firefighters. I believe this will affect recruitment efforts. A young person that is contemplating public service would think twice about a job that has relatively low pay with minimal benefits. I spoke with a friend who works for a local defense contractor who advised me he had a pension from his work in addition to a matching 401K product that is somewhere in the order of 6%. He co-pays 10% of his medical and gets paid a lot more money than those of us in the fire service.

Article 45: Pensions

The act makes a variety of changes to State and Private pensions by Law. Effective 7/1/09. Changes include reduction in disability pension for those not totally disabled, years of service and age limitation eligibility requirements and mandatory co-share of healthcare costs during retirement. Disability pensions will be reduced to 50% of base salary state-wide for partially disabled personnel, a law requiring co-pay of 20% of your healthcare costs during retirement and changes to age requirements making you have to stay until your either 55 or 59 years of age. This also changes how and when you receive a COLA for unvested employees and it also allows the state the ability to file suit against any municipality (private pension fund) that does not comply with this article.

Essentially there are presently just over 2,000 paid firefighters in the state. Of that number, nearly 40% can retire. If this bill passes it is likely a very large number of them will retire. In my department there are 8 members ( 1 entire shift) that can retire. It is likely at least 7 will. In addition to that I have 5 members who are nearing retirement but are still young. They are contemplating leaving now, collecting their partial pension in a couple of years, and testing for other departments and putting in another full career there. They would likely stay an additional 8 to 10 years if they didn't have to go now. If they elect to stay most will have to work an additional 20 to 25 years. Immediate effects of this legislation will include the retirement of a large percentage of senior staff in the fire service. The fire service will no doubt continue and recover over the long term. The talents and experience of the retired senior firefighters will be replaced with a dramatically lower quality work force due to the new unattractiveness of the profession. Towns like mine who are in a private pension system, have thriving pension systems that are fully funded. The problem with the State pension system is the State, and other municipalities in it, failed to fund it for years while the workers continued to put their 6-10% of their income in to it. Also keep in mind this affects all municipal workers too, police, public works, teachers, town clerk offices, building inspection departments etc... It is our understanding that this proposal does not have a positive affect on the budget this year. In Wednesday's hearings the Governor office did not have an actuarial report and have no idea what, if any, savings there will be with this proposal. I wonder if all the public employees this affects decide to leave where cities and towns are going to come up with the severance pay coming to everyone? For my department alone the implication is somewhere in the order of $250,000. It remains unclear whether the COLA proposed by the Governor applies to vested employees. Regardless, our contributions were based on actuarial studies that accounted for our present COLA's. Additionally, having to wait 5 years for a COLA will essentially put the average public servant at poverty level. Assuming the cost of living increases 3% per year, which is compounding, a person retiring form a job that pays $50,000 with a 50% pension will start with a $25,000 per year pension. After 5 years that pension will be worth less than $21,250 in today's dollars. This coupled with a healthcare co-payment of $3,800 makes the value of the pension worth around $17,450. The age requirement of 59 is just too old for police and fire. The physical demands of the job are just too great. A majority of heart related deaths in the fire service are firefighters over the age of 50. There are many members presently in pension systems that still contribute but derive no additional benefit from their contributions because they have worked beyond the maximum benefit. These workers, along with the many others who would leave pre-maturely will draw the system down very quickly and will no longer be contributing in to the system. While we will all leave eventually I believe the system was not designed for such a mass exodus.

Second to the love for the job, the reason we all take these jobs are for the benefits because they don't pay nearly as well as private sector jobs for the risks we take. We make a deal when we sign up and plan our lives in accordance with that deal. To change it, and change it this drastically, is unfair to say the least. I can tell you as much as I love my job, and as much as it is going to kill me to leave it, I have advised my son that he should seriously consider another career. I believe that such a drastic reduction in benefits will result in substandard applicants in the future. I have always prided myself on the professional service me and my department provide. I fear that service will be substantially reduced in the future. Firefighters are aware of the state of the economy, and I dare say we would be willing to negotiate some concession to help ease the pain. I do not know the particulars of the Governor's statement that we pay the highest per capita for fire protection. What he fails to mention is throughout the US, 87% of fire departments are either all or mostly volunteer departments. The Town of Portsmouth didn't give me a job because they like me, there are no more people volunteering around here. Additionally, 42% of fire departments nationwide do not provide ambulance service. If that cost alone were factored in to the rest of the country I can bet RI would be substantially lower. Also, I wonder if the amount fire departments bring in through ambulance billing, plan reviews etc. is deducted from the costs? If the predicted mass exodus does take place many departments will not longer be compliant with the National Incident Management System (NIMS). This will likely make them ineligible for many federal grants many towns rely on to supplement their budgets. A point to ponder is what if 9/11 happens April 2nd and most of the command staff and half the firefighters in the State have retired to save what benefits they have?

Thank you all for your consideration in this matter and we look forward to meeting with you next Friday.

Chief Jeff Lynch
Portsmouth Fire Department
East Bay Fire Chiefs Association

February 1, 2009

To the Victor Go...

Justin Katz

As he often does, Jonah Goldberg captures something almost intangible, but true, with this:

Ramesh asked yesterday: "I'm not quite sure why so many liberals are spluttering with rage over the Republicans' failure to go along with their stimulus ideas." He then went on to provide perfectly rational explanations for why liberals should still be happy.

But I think there's an answer for liberal rage: They won. They've been yearning for victory for a very, very long time. They've been full of passionate, netrooted, intensity. Like a starving man dreaming of his next big meal, they had all sorts of ideas about how great their repast would be. Moreover, they believed their own hype. They actually believed that the in-the-tank press was accurately describing reality when they described Obama's FDR-like and Lincolnesque abilities — and opportunities. They bought the idea that because Obama wanted a post-partisan era, he would get it. And they won, they won, they won! And like any kid on their birthday, they think everything should go their way.

That's why this stimulus bill isn't a stimulus bill. It's a bill to catch-up on liberalism's yearnings for social democracy and a more generous welfare state. God gave them this financial crisis as the perfect excuse and Barack Obama as the perfect leader to bring it home.

And yet, it didn't happen the way they hoped. Republicans didn't rollover. Conservatives haven't dropped their convictions. In fact, they seem to have found them.

Goldberg may go a bit far, here. Be individual commentaries what they will, the broad mood of the American public is of breath-holding. There's a come-ye-spring longing, and one can hope that even dyed-in-the-wool liberals are a little apprehensive of the broad strokes of the fiscal brush swooping across the canvas.

Conservatives are fighting under a common-knowledge pall of hopelessness, and liberals aren't sure how much to grab — or how much they trust those doing the grabbing. Perhaps what's spurring some to anger isn't so much the petulant demands of the birthday girl, but a nagging feeling that Republicans resolve against the inevitable is evidence of moral — and political — justification.

A Choice Consolidation

Justin Katz

I'm not a fan of top-down consolidation — at least not in Rhode Island. It's not as if our system consists of a competent, efficient state-level government attempting to stay afloat on a roiling mass of expensive, unruly municipalities. The whole beast's cancerous throughout, and the more diseased flesh we graft onto the heart, the more risk we run of that fatal metastasis.

Thus, consolidating all healthcare benefits into a statewide contract, as in Julia Steiny's example last week, sounds like a wonderful idea, but it could prove akin to scheduling a root canal procedure to be performed while one's under anesthesia for brain surgery. With a psychotic doctor. Who isn't a dentist.

By the end of her column, though, Steiny is right on track:

The 36 school districts will consolidate when they have good reason to. When they want to. Allowing parents the right to shop and choose their child's school will give districts good reasons to deploy more resources in service of the kids and families, or go out of business. And choice-driven consolidations will occur in more useful, creative and less bloody ways than any mandate to join up ever would.

Magical consolidation schemes and funding formulas aren't going to resolve Rhode Island's problems until there's a mechanism in place for true accountability. Giving parents a choice with at least some not-insignificant portion of the tax dollars allocated for their children's education would act as a holistic medicine. For best, most rapid effect, it should include private schools, but such details needn't be resolved until the diagnosis has been agreed upon.

Government and Marriage

Justin Katz

I've been getting notices of an RI Senate Judiciary Committee hearing concerning three marriage-related bills on Tuesday afternoon, but there's currently no information online. The Judiciary Committee isn't on the legislative calendar, and the schedule for the committee lists no meetings.

Acknowledging the short time-frame in which they've been forced to act, the National Organization for Marriage — Rhode Island is asking people to get involved by attending the meeting, writing to the relevant legislators, and (although it's not mentioned on that page) to testify on behalf of the two bills that support traditional marriage.

Both of those bills were introduced by Republican Leo Blais, with one reinforcing the opposite-sex definition of marriage and the other creating "reciprocal beneficiary agreements" that would enable couples not eligible for marriage to gain some explicitly enumerated rights. As long-time readers will know, this is precisely the solution that I support: The government has an interest in supporting committed mutual care, but it also has an interest in affirming the unique relationship between one man and one woman. Inasmuch as it has no interest in, and no right to interfere with, a couple's non-procreative sexual activity (or lack thereof), there is no rational justification for making physical intimacy an implied requirement of an acknowledged relationship of reciprocal care.

Former Tax Collector Speaks out; Mayor Responds In Advance

Monique Chartier

Former Providence Tax Collector Robert Ceprano talks about his termination and events leading up to it in today's front page ProJo story by Mike Stanton. And below is the text of a press release issued yesterday by Mayor David Cicilline responding to the story ahead of time.

Two items stick out from Stanton's story. One is the contrast between the curriculum vitae of Robert Ceprano and David Cicilline, the former notably heavy in the areas of military and public service. The second is this item, about half way down:

But weeks and months passed, the taxes remained unpaid and Cicilline remained elusive. Ceprano, who learned from the city’s lawyer that Cicilline didn’t have sufficient money in his account, enlisted the mayor’s then-chief of staff, Chris Bizzacco, and another aide, Rita Murphy. Both tried without success to collect the money. A few times, Ceprano and the lawyer, Scott Hammer, wanted to cash the check, to force Cicilline’s hand, but Bizzacco passed the word through Murphy that they should hold the check.

[Press Release issued by Mayor David Cicilline at 8:37 pm last night]

Dear friends,

I wanted to let you know about a story that will be featured in tomorrow’s Providence Sunday Journal in which the City’s former Tax Collector Robert Ceprano and his attorney, Artin Coloian, seek to make a case in the press that his original termination last September was not based on performance.

It is not a pleasant thing to discuss someone's substandard job performance publicly, but public trust is critical to effective government and these allegations of inappropriate termination need to be addressed openly and immediately.

The Finance Director has forwarded the information below, which is a summary of the factors that led to his official request for the Tax Collector's resignation on September 15th, 2008:

Upon taking office in October 2007, Finance Director Bruce Miller determined that the Tax Collector's Office was lagging far behind national, and State of Rhode Island, best practices. Deficiencies included:

- inefficiencies due to poor use or non-use of technology
- internal control gaps that rendered the City vulnerable to error and fraud
- inefficient operational practices
- lack of effective policies and procedures

Finance Director Miller initiated a process to bring the Tax Collector’s office from a level of mediocrity to a level of excellence. This began with a discussion of the deficiencies that Mr. Miller had outlined and his request that a plan be developed to correct them. The Tax Collector repeatedly refused to create the plan or initiate the improvements.

After roughly nine months of working with the Tax Collector to make these improvements, Director Miller saw no improvement in the operations of that office. The Tax Collector's failure to act was clearly leading to disciplinary procedures against him, so Director Miller sought to pursue an outcome that might avoid termination. In July and August of 2008, several options were discussed:

Continue as Tax Collector while complying with all the stated expectations, understanding that if expectations were not met then termination would proceed.

Because the Tax Collector had difficulty meeting the expectations of the Finance Department, perhaps another City department would be more suitable. Reassignment to the Police Department was discussed.

The Tax Collector could choose to resign. He was interested in this option and a discussion of the conditions regarding this option ensued.

Finally, last September, the Tax Collector agreed to resign. On September 15th, 2008 Director Miller formally asked for his resignation by email.

This unfortunate episode reflects my view that the citizens of Providence have a right to expect something more than the mediocre performance they were getting from the Tax Collector during his tenure. While operating in a nearly complete absence of standards or procedures might have worked under previous administrations, my view is that it is an invitation to precisely the kind of corruption we were burdened with under previous administrations. The Tax Collector’s unwillingness to raise his performance to a level of professionalism that the taxpayers have a right to expect led, regrettably, to his inevitable resignation.

Our efforts to clean up Providence and set things right will continue.

As always, please feel free to contact me with any further questions or concerns.


David N. Cicilline


Paid for by The Cicilline Committee. Per Rhode Island State Law, individuals may contribute a maximum of $1,000 per year. Business and corporate checks are prohibited. Note: In keeping with Mayor Cicilline’s pledge to not accept campaign contributions from employees and vendors of the City of Providence, any contribution from an employee or vendor will be returned.

Tabula Rasa: The Attorney General's Position on E-Verify

Monique Chartier

Under "General Treasurer Frank Caprio on E-Verify and Immigration," commenter JoeB asks:

Has Lynch taken a stand on e-verify?

Good question. Where does Rhode Island's chief law enforcement officer stand on the question of a tool to aid compliance with certain laws?

My quest to answer this question actually began last July. After some research failed to uncover any public stance by Attorney General Patrick Lynch on the question, I left a message for Michael Healey, Director of Public Information for the Attorney General's office. He returned my call on July 21 and left me a voicemail saying, among other things:

I need to get a dialogue going with the General. I want to hash it out and refine it.

It appears that nothing ever came of the dialogue, if it even took place. On January 21 and then January 28, I left a second and third message for Mr. Healey with the same question: "What is the Attorney General's position on e-Verify?"

On Thursday, at last, came a voice mail reply. In it, Mr. Healey accepted with genuine regret all blame for both a "lack of timeliness" of response and for the continued lack of an answer to the question itself.

Mr. Healey can accept responsibility for the former. He cannot, even if he wants to, accept it for the latter. The merits of e-verify have been very publicly and sometimes vociferously debated for a year. In that time, the Attorney General never formulated an opinion. If he had, Mr. Healey would have simply called me back, whether six months ago or last week, and relayed it. Clearly, the Attorney General's spokesperson cannot be held responsible for the studious lack of a stance by his boss on an important law-enforcement issue.

If the Attorney General's position is eventually "hashed out," "refined," and communicated, either to me or through another medium, I will be pleased to share it here. In the meantime, it appears that Rhode Island's chief law enforcement officer has the time to lend a hand with, in his words to Dan Yorke, "court safety" — that's basketball, not judicial — but has not found the time over the last year to formulate an opinion as to whether potential employees of either the public or the private sector should be screened for compliance with U.S. immigration law.

The Leadership Dance

Justin Katz

Part 2 of Tim White's investigation into misuse of public resources and time in the Providence Sewer Department mainly concerned supervisor Algot Abrahamson's use of a city truck for a spin to a known gambling house. More intriguing, in my opinion, is the similarity in some of the supervisor's phrasing to that of Mayor David Cicilline on White's related Newsmakers show. Says Abrahamson:

What I'm saying is a picture doesn't convince me there is any wrongdoing here, you'd have to speak to the director. I know the men, they are two of the best workers I have. ... Yeah, well, I guess I'm responsible for a certain amount of it, yes. I have so many guys, I can't follow everybody everyday.

And says the mayor:

The city of Providence has about 6,000 employees. We have extraordinary leaders in each of the departments in city government, and I would say without question that what you just saw was an aberration. ...

[Talking about issues in the Providence tax office:] Ultimately, the responsibility for that office, and all of the city offices is mine, but in any organization you have a director of administration, or any government, you have a director of finance who ultimately direct supervises.

Compliment one's workers, accept nominal responsibility, pass the blame down.

Cicilline dodged Arlene Violet's persistent questioning of why it took Tim White to discover abuse, and how he (the mayor) could possibly assert that the workers caught were in no way representative of a larger problem. Referring back to the transcript of White's report, I see that arguably the most egregious of the abuses uncovered — the backhoe traveling across the city with a load of publicly owned sand for the foreman's house — occurred on the very first day of surveillance.

Quite a coincidence.