Obama's Golf Game

Hurricane Christie Hits New Jersey!

By Alan Caruba

When the news that Republican Chris Christie had been elected Governor of New Jersey first hit Washington, D.C. they began to hang black crepe over the windows in the White House.

This decidedly Democrat and politically liberal State had done something fairly extraordinary; a majority of the voters had concluded that something was seriously wrong with the way the State had long been run. (He was the first Republican Governor in twelve years.) Concurrently, Virginia also elected a Republican to be its Governor.

Gov. Christie had gained notice as a United States Attorney for the District of New Jersey as he sent one crooked politician after another to jail. In a State famous for its crooked politicians, the novelty of seeing them brought to justice morphed into the notion that he could do even greater things for the State.

During the campaign Gov. Christie was outspent two-to-one and among the organizations contributing millions to defeat him was the American Federation of State, County and Municipal Workers.

Since his inauguration in January it has definitely not been business-as-usual in the statehouse. The last Governor, Jon Corzine, was so deeply attached to the civil service unions that a former “companion”, Carla Katz, had been the head of the Communications Workers of America local until suspended from the office in 2008.

The headline in the March 11th edition of the State’s largest circulation newspaper, the Star-Ledger, read “N.J. Gov. Chris Christie plans privatization of as many as 2,000 state jobs.”

“As he grapples with an $11 billion deficit in the budget he will present on Tuesday, Christie is also considering invoking the Disaster Control Act to suspend Civil Service rules to make it easier for him to lay off higher paid workers, according to two administration officials.”

Hurricane Christie has arrived in New Jersey!

Much of the budget of the Garden State is directly traceable to the enormous expense of civil service salaries, pensions, and other perks that have been negotiated with the Communications Works of America, the teacher's union, and others that represent civil servants.

Expanding government at the state and federal level is classic Democrat politics dating back to the era of Franklin Delano Roosevelt. It’s being noticed now as the recession settles in and people ask why working for the government generates higher pay than working in the private sector.

Serendipitously, The Washington Times carried a March 11th article, “Government workers feel no economic pain”, noting that “The recession and the ongoing jobless recovery devastated much of the private-sector work force last year, sending unemployment soaring, but government workers emerged essentially unscathed, according to data released Wednesday by the Labor Department.”

“Meanwhile, the compensation for state and local government employees continued to easily outdistance the wages and benefits for workers in private business, a separate Labor Department report shows.”

In January, a Cato Institute Tax & Budget Bulletin devoted to employee compensation in state and local governments revealed that, “To reduce deficits, large savings can be found in the general compensation packages of the nation’s 20 million state and local workers. In 2008, wages and benefits of $1.1 trillion accounted for half of total state and local government spending.” (Emphasis added)

Chris Edwards, Director of the Institute’s Tax Policy Studies, noted that “Public sector pay averaged $39.66 per hour in 2009, which was 45 percent higher than the private sector average. The public sector advantage was 34 percent in wages and 70 percent in benefits.”

Among the advantages cited was early retirement, typically at age 55 after 30 years as in California’s CalPERs system. Pension formulas in virtually all public sector plans calculate benefits based on pay in the last one to three years of work. Then there’s the practice of double dipping, common to New Jersey, California, and other States when public workers are allowed to “retire” early and then either resume their existing job or take a new one, thus receiving a pension and a salary at the same time.

Add to this disability claims and excessive benefits and the nation now faces deficits in virtually every State and at the federal level as far as the eye can see. As unemployment increases, private sector workers are no longer paying taxes, thus reducing government revenue.

It is a crisis of vast dimensions and one brought about by voracious public sector unions that represent funding for politicians seeking election and workers for their campaigns.

As the economic crisis deepens, Governors will be following Christie’s lead, watching how successful he is in reducing bloated work forces and ending the drain on a state’s ability to address infrastructure and other essential tasks.

© Alan Caruba, 2010

Beware of Experts

By Alan Caruba

I don’t know about you, but I have reached a point where, if someone is introduced as an expert on anything, I am almost automatically skeptical. Our popular media is filled with experts on politics, investing, dieting, and every other topic.

The problem is in knowing which one of these people really knows what they’re talking about or are just promoting themselves? Odds are, they’ve got something to sell you.

For example, there’s the phenomenon of “group think” where everyone coalesces around the most popular “truth” and puts in their two cents worth of advice on the topic. Did anyone foresee the collapse of the sub-prime mortgage market? Yes, a few people did and they were ignored by Congress.

Even Alan Greenspan spoke cryptically of “irrational exuberance” a dozen years back, but no one ever claimed to know what he was saying with regard to the economy. The last thing I heard from him was an apology for getting things wrong.

I saw Henry Kissinger on PBS television with Charlie Rose the other night. For the life of me, I have no idea whether his views, always cryptic, are any more valid than mine. The man gets paid for representing the interests of clients like the People’s Republic of China these days. Should I be wary? Yes; especially since I don’t know who his other clients are.

I am a long time book reviewer and I could build a stack several stories high of books on how to get rich. They’re published by the dozens every year. Their authors, we’re told, got rich and are sharing their secrets with the reader, but how many of those readers ever get rich? Or even try? Not many I suspect. And why would the author want to share his secret unless it was to get you to invest in his company?

Today I received a news release from “the Internet’s fastest-growing career site” purporting to identify the “job sectors and key professions that are most likely to grow as the result of President-elect Barack Obama’s economic stimulus politics.”

For one thing, Obama says he wants to throw billions at our present crisis to create “green jobs” and rebuild America’s infrastructure. Where is he going to get those billions when the U.S. is already billions in hock? As of October 1st, the budget deficit for the previous fiscal year was a record $438 billion. That was $25 billion more that the previous high in 2004.

Meanwhile, the news release says the new hot jobs will be all kinds of engineers. Good news for engineers, but it is so costly to get those degrees (and any other kind) in the United States that companies here have to import engineers from other nations. That’s why so many of our government laboratories and university faculty are populated with foreigners.

The “experts” we all sent to Congress and the “experts” over at the Securities and Exchange Commission all managed to miss the signs of an imploding economy or the massive $50 billion Ponzi scheme run by some Wall Street mobster. And he snookered people like Sen. Frank Lautenberg (D-NJ), an octogenarian who will be in his 90s if he lives to see the end of his new term. And he gets to vote!

The point of this is to be skeptical of those introduced to you as an expert on anything. They may well be, but in areas of personal finance and investment, do your own research. Want to diet? Do your own research. Raising kids? If you think your parents did an okay job with you, ask them, or do your own research.

The classic example is the person who tries to do his or her own pest control when they discover they have ants, cockroaches, or a rodent problem. It can’t be done even if you can buy pesticides at the local Home Depot. That’s why pest control firms nationwide stay in business. It’s a profession that dates back to the Middle Ages!

We are all conditioned to listen to other people. Sometimes they’re called experts, but other people have their own agenda, so do your own research.

Lastly, if you believe you possess a reasonable amount of common sense then trust your own judgment. You can actually be in charge of your own life if you exercise some personal discipline and question the wisdom being handed you by some expert.