December 20, 2012

Government Failures Abounded in Southwestern Ohio in 2012

Filed under: Economy,Ohio Economy,Ohio Politics,Taxes & Government — Tom @ 11:00 pm

And they won’t learn from their mistakes.

This post went up in revised form at Watchdog.org earlier this evening.

The supposedly conservative and heavily Republican southwestern portion of Ohio had quite a run of big-government failures and failures in the making in 2012. While it would be easy to assign the blame for most of them to the once proudly conservative but now almost hopelessly liberal City of Cincinnati, the city’s suburbs and exurbs have also more than done their part.

To be sure, it’s was pretty bad inside Cincinnati’s city limits. In July, it reopened Washington Park, a now eight-acre land expanse north of downtown, after spending a mind–boggling $48 million for a 450-car underground parking garage, land acquisition, several new facilities and significant renovations. Admittedly, the park’s appearance and amenities represent an impressive improvement over its decrepit prior condition, and, to be fair, about 45% of the funding came from private sources. That said, it’s still hard to imagine how this so-called “investment” will ultimately be worth it. Supporters believe it “will serve as a catalyst for future development of at least 25 surrounding vacant properties.” Let’s see if they’re right in a few years. I doubt it.

Two decades ago, the city said that the heavily subsidized and now half-empty Tower Place shopping complex downtown would be a catalyst for a revival there. An Associated Press report covering the city’s late-November offer to buy the entire mess with $8.5 million it really doesn’t have described it as “a once-thriving downtown Cincinnati mall.” That’s sheer historical revisionism. My recollection is that the mall had high vacancy rates and disappointing shopper traffic virtually since its inception. Just two years after its 1991 opening with the help of $10 million in city “investment,” the now-defunct Cincinnati Post, normally a see-no-evil cheerleader for city commerce, wrote that it “hasn’t been able to meet expectations.” The mall’s situation never really improved, and it has been an economic millstone around the city’s neck for over two decades.

Of course, the city isn’t learning from its mistakes. It’s deciding to make new ones. In February, after two voter initiatives failed to stop it, it broke ground on a four-mile streetcar project with an estimated cost of $102 million before the predictable cost overruns occur.

The government of Hamilton County, where Cincinnati is located, is still paying dearly for its ill-advised decision to build two stadiums for the Reds and Bengals, the city’s professional baseball and football teams.

In 1996, the county’s commissioners convinced taxpayers to approve a sales-tax increase which would supposedly be enough to cover all costs involved while providing property tax relief for homeowners. Sales tax revenues, based on far too rosy projections, weren’t at all sufficient. Sixteen years later, the commissioners didn’t even attempt to force goodwill concessions from the heavily tax-favored teams. Instead, facing a $7 million deficit in the stadium fund, they reneged on half of the property tax rollback in early December by a 2-1 vote while claiming that the de facto tax increase will only be in place for two years. We’ve all heard that before about “temporary” tax increases, haven’t we? The lone vote against the tax increase came from a Democrat.

From Clermont County, Hamilton County’s eastern neighbor and supposedly a Republican and conservative stronghold, came news in November that for reported “financial reasons,” the Jungle Jim’s retail grocery store in the Eastgate area would be laying off 30-40 employees just two months after it opened.  An emailer who lives in the area informed me that this is yet another example of the government trying to pick winners and losers, and — as all too often happens — picking a loser:

Let’s recap: Union Township and Clermont County taxpayers paid $8.5 million for Jungle Jim’s to set up shop even though another merchant was reportedly going to come in on their own accord. … Then we “bailed them out” with $1 million more because they couldn’t make their first payment.

… The market is saturated with eight grocery stores in a two-mile radius. … But they called this “the greatest thing to ever happen to the county.”

… Self-described conservatives … think nothing of government starting businesses with our money, indicating their fundamentally flawed view of government’s proper and intended role.

Government was never designed to interject itself into — and thereby manipulate — the market in order to create jobs; rather it should stay out of the way so that the market can dictate which industries are sustainable.

Sadly, the idea that our local and county governments will learn from their 2012 mistakes and conduct themselves in accordance within a properly limited framework in 2013 is probably way too much to hope for.

Quick Action Is the Key in Mass School Shooting Incidents …

Filed under: 2nd Amendment,Education,Taxes & Government — Tom @ 12:06 pm

… which is why anonymously arming teachers is the best prevention (go to the link if the video below won’t play):

Interesting and valid points:

  • A previous school shooting was perpetrated by a milk delivery driver — someone who will always be able to get into a school.
  • Police can’t possibly respond quickly enough to mass murder attempts. The school prinicipal noted that recent mass killings have only involved three to nine minutes of time.

3Q12 GDP Growth: An Annualized 3.1%, Up From 2.7% in Previous Report

Filed under: Economy,Taxes & Government — Tom @ 9:16 am

From the Bureau of Economic Analysis:

Real gross domestic product — the output of goods and services produced by labor and property located in the United States — increased at an annual rate of 3.1 percent in the third quarter of 2012 (that is, from the second quarter to the third quarter), according to the “third” estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 1.3 percent.

The GDP estimate released today is based on more complete source data than were available for the “second” estimate issued last month. In the second estimate, the increase in real GDP was 2.7 percent (see “Revisions” on page 3). The third estimate has not greatly changed the general picture of the economy for the third quarter except that personal consumption expenditures (PCE) is now showing a modest pickup, and imports is now showing a downturn.

Zero Hedge’s sum-up (bolds and paragraph breaks added by me):

reading between the lines reveals more of the same disappointing components, with nearly half of the entire 3.1% annualized growth being derived from Government (0.75) and Inventories (0.73%), combined adding 1.48% (more than in the second revision) of the 3.1% print.

Annualized Personal Consumption as a portion of the final number rose modestly from 0.99% to 1.12%, but still is well below the 1.42% in the first Q3 GDP estimate. It is this number that will be closely watched once the preliminary Q4 GDP number is released in a one month.

Recall that Q4 GDP is currently tracking between 0.5% and 1.5% depending who you ask.

Finally, the most important real growth factor for the US economy – fixed investment – remained stubbornly flat, at a mere 0.12%, virtually unchanged from the first revision’s 0.10%. In other words, in Q3 companies stubbornly refused to invest in capital investment i.e. CapEx, and will continue to do so as long as the Fed makes “investing” in dividends and buybacks a more rewarding option.

The inventory component is worse if you look at its elements: -0.38 Farm and +1.11 nonfarm. The negative number is a huge impact for such a relatively small economic sector, which is enough to make one wonder what might be happening to the food supply. The nonfarm number represents a potentially dangerous buildup, given that the fourth quarter is by all accounts not going nearly as well.

The Hopeless Fiscal Cliff Negotiations

Filed under: Economy,Soc. Sec. & Retirement,Taxes & Government — Tom @ 9:10 am

Not even a band-aid.

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This column went up at FrontPage Magazine earlier this morning.

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The other-worldly nature of the current discussions and proposals in Washington over addressing the “fiscal cliff” can be seen in a brief look at where the country stands financially.

Through the first two months of the 2013 fiscal year which will end on September 30, 2013, the federal government has already run up a $292 billion deficit. Our overlords of Washington are clearly on track to run up a fifth consecutive full-year shortfall of over $1 trillion. Before fiscal 2008, the highest annual deficit ever recorded was $455 billion.

Federal outlays during October and November of $638 billion were 16 percent higher than during the same two months in 2011, and a breathtaking 52 percent greater than October and November of 2007. Collections in this lukewarm recovery, if you can even call it that, were up by less than 10 percent.

As of Monday, December 17, the national debt was $16.35 trillion, up by over $5.7 trillion in the 35 months since Barack Obama took office. The portion of the national debt known as “debt held by the public,” which is really debt held by any entity which is not part of the U.S. government but includes foreign countries and other foreign holders, made up $5.25 trillion of that amount.

A significant portion of that $5.25 billion is held by Ben Bernanke’s Federal Reserve, which many don’t realize really isn’t a part of the government. Instead, the Fed is a collection of 12 district banks, each of which is “a legally separate corporation that is owned by the commercial banks in its district.” Because they produce no goods or services, the district banks, and the Fed itself, have no inherent ability to repay the Treasury and other securities they have bought from our beyond-profligate government.

Within this dangerous framework, House Speaker John Boehner and President Obama are obsessing over whether taxes should be raised on those with annual incomes of over $1,000,000 — or $400,000, or $250,000, or whatever. Besides the obvious danger that any tax increase on our most productive citizens will slow down an already sluggish, low-growth, under-employing economy, the amounts raised will be a pittance, garnering less than 10 percent of the amount needed to close projected fiscal gaps (I would say “budget gaps,” but the government hasn’t passed a budget in nearly four years).

Where are the spending cuts? Or, more properly framed, where are the reductions in projected future spending? A Wednesday morning Associated Press dispatch on the President’s plans to veto Boehner’s so-called “Plan B” framework reported that the President would veto such a plan if it ever reached his desk — something that in the real world probably wouldn’t happen because Senate Majority Leader Harry Reid wouldn’t let any House bill Obama opposes get that far — because “the deficit reduction that would result from the `Plan B’ approach is minimal and offers no spending cuts.”

You read that right. The people who have brought us trillion-dollar deficits as far as the eye can see are positioning themselves to the right of the hopelessly timid Republican House.

Is Obama’s claim correct? Well, Erick Erickson at RedState writes: “The most significant thing John Boehner’s plan does is absolutely nothing on spending.” A Wednesday morning Wall Street Journal editorial identifies what can only be described as nibbling around the edges of the problem by changing how increases in entitlement spending and taxes are indexed, and tells us that it’s all about continuing with business as usual: “Tax and spending increases now, in return for the promise of spending cuts and tax and entitlement reform later.”

We’re long past the time where business as usual will work. The federal government’s financial condition today is the functional equivalent of a family taking home $27,000 per year, spending $38,000, and carrying over $160,000 in nonmortgage debt. The major difference between the family and our government is that while the family inolved would almost certainly be paying 10 percent or more interest on its outstanding debts, Uncle Sam is for now getting away with paying less than 2 percent. Oh, and Uncle Sam can keep on borrowing, while the family’s lenders would surely have ended any access to additional credit.

Even if the example family just described was paying only only 2% interest on its debts, its finances would still be considered almost beyond repair without major changes. Boehner’s Plan B is the equivalent of the family telling its lenders who wish to force them into bankruptcy that it will “solve” their problem by immediately having one of its members get a one day per month job paying $100 and by cancelling their premium cable channels and lawn service — starting a year from now. Maybe. If they feel like it.

Such a proposal would send lenders straight to bankruptcy court, as it would be obvious that this family isn’t at all serious about taking meaningful action. Boehner’s Plan B isn’t any better, and promises to send the credit rating agencies scrambling to see who can lower the federal government’s credit rating first.

Don’t get me wrong, what Obama and his party want — don’t touch Social Security, don’t touch Medicare, and don’t touch any other entitlements — isn’t serious either. But the fact that he can credibly claim that his “solutions” do more that Boehner’s Plan B shows how badly the Speaker has failed.

No wonder genuine conservatives are in open revolt. They should be.

Unemployment Claims (122012): 361K SA; NSA Claims 5% Below a Year Ago

Filed under: Economy,Taxes & Government — Tom @ 8:57 am

From the Department of Labor:

SEASONALLY ADJUSTED DATA

In the week ending December 15, the advance figure for seasonally adjusted initial claims was 361,000, an increase of 17,000 from the previous week’s revised figure of 344,000. The 4-week moving average was 367,750, a decrease of 13,750 from the previous week’s unrevised average of 381,500.

… UNADJUSTED DATA

The advance number of actual initial claims under state programs, unadjusted, totaled 400,422 in the week ending December 15, a decrease of 28,766 from the previous week. There were 421,103 initial claims in the comparable week in 2011.

This year’s seasonal adjustment factor was 110.9, compared to 113.7 for the same week a year ago. If last year’s factor had been used on this year’s raw claims number, seasonally adjusted claims would have come in 9,000 lower (400,422 divided by 1.137 is 352,000, rounded).

The previous week was, as usual, revised upward, this time by 1,000 seasonally adjusted claims from last week’s 343,000.

This is a modest improvement, and may be as good as it gets, given that the Christmas shopping numbers are coming in at disappointing levels (Associated Press Headline — “DISCOUNTS ABOUND AS STORES TRY TO SALVAGE SEASON”). However, AP this morning says that today’s number “is consistent with a job market that continues to grow modestly.” The last word should be “inadequately.”

The next three weeks are going to be hard to peg because of the Christmas and New Year holidays; last year’s comparable week in next week’s report will include Christmas Eve.

Thursday Off-Topic (Moderated) Open Thread (122012)

Filed under: Lucid Links — Tom @ 6:05 am

Rules are here. Possible comment fodder may follow later. Other topics are also fair game.

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Positivity: A Teenager’s Life-Saving Decision

Filed under: Health Care,Life-Based News,Positivity — Tom @ 6:00 am

from Corsica, South Dakota:

Published: December 14, 2012, 6:06 PM

A Corsica teenager will be honored on a Rose Parade float. Andrea Cleveland died after a car crash last fall but thanks to her organ donations, she helped save five people’s lives.

That action is now representing the Upper Midwest on the Donate Life Float in the Tournament of Roses Parade.

Andrea was a fun-loving, outgoing 16-year-old.

“When she walked in the room, she lit up the room,” Andrea’s father, Jeff Cleveland, said.

But on November 1, 2011, the Corsica teenager lost control of her car on a rural road. She later died at the hospital.

“It took days, maybe weeks for me to realize that she’s actually gone. Every day I’d wait for her to come running down the steps, hearing her footsteps running down to get ready for school,” Andrea’s mother, Marlene Cleveland, said.

One thing that has helped the family heal is the fact that Andrea was an organ donor. Because of that, she was able to save the lives of five people. She also helped others.

“Many people also received tissue grafts from the gifts Andrea gave. She also was able to donate corneas to two people to restore sight,” LifeSource CEO Susan Gunderson said.

The family has met two of the people Andrea helped save: 29-year-old Meleah and two-year-old Keegan.

“It really helped us at Christmas time to know, yah, we’re grieving. I don’t know how we’re going to get through Christmas but then we see the picture of Keegan. Andrea saved this little boy’s life,” Jeff said.

“When they came in the room, I just picked up little Keegan and started hugging and holding him. It’s like holding or hugging Andrea again. I could feel her presence,” Marlene said. …

Go here for the rest of the story.

Lefty Media Tweeters Go After Reporters at Obama Presser For Not Obsessing Over Gun Control

At his news conference on Wednesday, President Obama opened with a statement of over 1,100 words, all of it on gun violence, including his announcement that “I’ve asked the Vice President to lead an effort that includes members of my Cabinet and outside organizations to come up with a set of concrete proposals no later than January — proposals that I then intend to push without delay.”

That should reasonably have been expected to put the gun control issue to bed for the rest of the day. How many meaningful questions could reporters possibly pose after all of that (other than the one Jake Tapper of ABC asked, which will be seen later in the post)? But as Ben Sisario at the New York Times’s Media Decoder blog reported Wednesday afternoon, that didn’t satisfy many media critics, who — with Sisario seeming to agree — expected and wanted to see an all-gun-control, all-the-time exercise, and were angry that it didn’t unfold that way (bolds are mine throughout this post):

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