The Obama State of The Union Address is tonight, and presents what could be the beginning of the end of his problems depending on his course of action. President Barack Obama, normally politically brilliant, has made a critical intellectual error in the decision to place a freeze on discretionary spending for three years.
It's a proposal President Obama claims will save $250 billion. The problem with his proposal is its timing; there's no evidence that the freeze is needed now. While U.S. debt level is high at 11.4 trillion, the country's debt load capacity is by no means threatened. The need is to increase economic production, thus lowering the percentage of Gross Domestic Product that is the U.S. Debt.
That's the objective missing in the Congressional Budget Office's irresponsible debt statement today. Irresponsible because it failed to discuss the need to grow the economy to reduce the debt.
What President Obama and his economic team needs is a refresher course in basic economics. Aggregate Demand (AD) is Consumption plus Business Investment, plus Government Spending, minus Imports, plus Exports. Right now, Consumption, Business Investment, and Exports are all lower than they were even three years ago; so low the overall economy contracted where GDP was less than that three years before, thus the recession. The need is to rapidly increase AD and the only way to do that is via Government Spending.
The problem is that the Economic Stimulus Package was not large enough; it should have been $2 trillion in size. It is focused too much on maintaining the social safety net and helping local government infrastructure. But the vast majority of America's economy is based on small service businesses. We now have the cottage-industry economy futurists like Daniel Bell predicted decades ago in The Coming of Post-Industrial Society.
In a 21st Century America where technical jobs and services have been creamed by the credit-crunch, the Obama path ignores the post-industrial sector purely in favor of construction. Even as roads and bridges are built, the small business service sector goes without assistance. The idea was for service firms to be helped by spending in infrastructure, but that trickle-down concept does not have the same wide-spread impact as in saving an auto plant or General Motors.
The Economic Stimulus package is missing direct subsidies for firms that make products in the United States, and a basic "tax-payer bailout" of $5,000 for every American taxpayer below $100,000 in income. That amount, even if some use it to pay off credit card debt, will result in improved credit ratings.
The President could issue a controversial executive order establishing credit card rate controls. The end result would be a dramatic spending spur that would save jobs, create new ones, and fuel business development investment. The consumer is key but needs Government's help to be effective.
Somewhere in the course of the first year of his first term, President Obama got bad advise, probably from Larry Summers, who has no business being the head of Obama's Economic Team. Larry Summers and U.S. Treasury Secretary Tim Geitner should be fired and replaced by Princeton Economist Paul Krugman and TIAA-CREF CEO Roger Ferguson, respectively.
It's time for Obama to right his ship and get back on course. The President will not do it with the State of The Union Address, but he can do it before the year is over.
Stay tuned.
Tuesday, January 26, 2010
City of Oakland stupidity: parking meters cost more than revenue gain
In this dramatic example of City of Oakland fiscal stupidity: the proposed 250 parking meter locations for new meters will cost more to install than the $146,000 revenue gain expected.
The previous Oakland Parking blog post on this focused on this email sent out by Oakland Councilmember Nancy Nadel's (District 3 - downtown Oakland, West Oakland) Office:
At the same Oakland City Council meeting of October 6, Councilmember Desley Brooks asked for an estimate of the cost to install parking meters; she did not receive an answer to her question that night.
Here's the answer:
In 2007 the City of Oakland arranged $4.8 million in financing to purchase 500 parking meters. At $4.8 million, it costs $2.4 million to install 250 new parking meters. That means the City of Oakland will spend $2.4 million just to raise $146,000.
That's stupid. There's no other kinder word for this, and its time for tough, no-holds-barred talk here. If the City has $2.4 million to spend, that means it does need to raise $146,000, it just needs to reassign the $2.4 million in spending. What's going on in Oakland City Hall?
Stay tuned.
The previous Oakland Parking blog post on this focused on this email sent out by Oakland Councilmember Nancy Nadel's (District 3 - downtown Oakland, West Oakland) Office:
From: Todd, Amber On Behalf Of City Administrator's Office
Subject: RE: Locating additional parking meters per Council direction on
October 6, 2009
Dear Council Members:
To realize $146,000 in additional revenue in FY 2009-10, the Oakland
City Council directed staff at the October 6, 2009 meeting to identify
250 possible locations to install additional parking meters. Staff in
Parking Administration and Public Works worked together and produced the
attached list which suggests possible locations where additional meters
could be installed. To give flexibility in generating revenue, the
attached list contains 470 possible locations for additional meters.
Staff plans to return to the Finance and Management Committee in
February to obtain approval for installing additional meters. During
the month of January, Parking Administration and Public Works staff
would like to work with members of your staff to reach out to and seek
feedback from potentially impacted merchants and other stakeholders.
Parking staff will contact members of your staff this week to discuss
the development and implementation of outreach efforts related to
installing additional parking meters.
Should you have any questions, you may contact Tom DiSanto in Parking
Administration at 986-2687.
Sincerely,
City Administrator's Office
At the same Oakland City Council meeting of October 6, Councilmember Desley Brooks asked for an estimate of the cost to install parking meters; she did not receive an answer to her question that night.
Here's the answer:
In 2007 the City of Oakland arranged $4.8 million in financing to purchase 500 parking meters. At $4.8 million, it costs $2.4 million to install 250 new parking meters. That means the City of Oakland will spend $2.4 million just to raise $146,000.
That's stupid. There's no other kinder word for this, and its time for tough, no-holds-barred talk here. If the City has $2.4 million to spend, that means it does need to raise $146,000, it just needs to reassign the $2.4 million in spending. What's going on in Oakland City Hall?
Stay tuned.
City of Oakland Parking Issue: Oakland wants more parking meters
The City of Oakland's desire to earn more revenue on the backs of Oakland's poor continues. This email, sent out by Oakland Councilmember Nancy Nadel's Office, reveals the first hand insensitivity of the City of Oakland during what many are still calling an economic recession and in a city with 17 percent unemployment and even more not working or underemployed.
The email below calls for locating additional parking meters "as Per Council Direction" on October 6, 2009. This is in reverse of the desires of Oaklanders for fewer parking meters.
Parking meters call for the same kind of draconian ticketing and enforcement practices that have overloaded Oaklanders with parking tickets and resulted in the towing of cars after five tickets were accumulated. Here's the email that shows the City of Oakland's irresponsiblity toward Oaklanders, and why the Oakland City Council should reconsider its policies or risk losing office, one-by-one, when each councilmembers reelection time comes up.
From: Todd, Amber On Behalf Of City Administrator'
s Office
Subject: RE: Locating additional parking meters per Council direction on
October 6, 2009
Note the email does not consider Oaklanders, and impacted merchants don't want the meters either. As this blogger calmly told one Oakland Councilmember after that person yelled in my ear, there are other ways to raise $146,000, but on the other hand, the City Council will have to do what President Obama's doing, and ordering a spending freeze where possible. That should include a reduction in salaries.
It's about time the City of Oakland adjust to economic realities and stop trying to act like some thuggish gangster, throwing a fiscal choke-chain around Oaklanders, shaking them down and forcing them to cough up money they don't have.
Stay tuned.
Oakland City Council squeezes Oakland
The email below calls for locating additional parking meters "as Per Council Direction" on October 6, 2009. This is in reverse of the desires of Oaklanders for fewer parking meters.
Parking meters call for the same kind of draconian ticketing and enforcement practices that have overloaded Oaklanders with parking tickets and resulted in the towing of cars after five tickets were accumulated. Here's the email that shows the City of Oakland's irresponsiblity toward Oaklanders, and why the Oakland City Council should reconsider its policies or risk losing office, one-by-one, when each councilmembers reelection time comes up.
From: Todd, Amber On Behalf Of City Administrator'
s Office
Subject: RE: Locating additional parking meters per Council direction on
October 6, 2009
Dear Council Members:
To realize $146,000 in additional revenue in FY 2009-10, the Oakland
City Council directed staff at the October 6, 2009 meeting to identify
250 possible locations to install additional parking meters. Staff in
Parking Administration and Public Works worked together and produced the
attached list which suggests possible locations where additional meters
could be installed. To give flexibility in generating revenue, the
attached list contains 470 possible locations for additional meters.
Staff plans to return to the Finance and Management Committee in
February to obtain approval for installing additional meters. During
the month of January, Parking Administration and Public Works staff
would like to work with members of your staff to reach out to and seek
feedback from potentially impacted merchants and other stakeholders.
Parking staff will contact members of your staff this week to discuss
the development and implementation of outreach efforts related to
installing additional parking meters.
Should you have any questions, you may contact Tom DiSanto in Parking
Administration at 986-2687.
Sincerely,
City Administrator's Office
Note the email does not consider Oaklanders, and impacted merchants don't want the meters either. As this blogger calmly told one Oakland Councilmember after that person yelled in my ear, there are other ways to raise $146,000, but on the other hand, the City Council will have to do what President Obama's doing, and ordering a spending freeze where possible. That should include a reduction in salaries.
It's about time the City of Oakland adjust to economic realities and stop trying to act like some thuggish gangster, throwing a fiscal choke-chain around Oaklanders, shaking them down and forcing them to cough up money they don't have.
Stay tuned.
Haiti Earthquake update: the human trafficking problem
In this Haiti Earthquake update: the human trafficking problem. As Haiti works to recover from the 7.0 Earthquake an the estimated 50 aftershocks (many over 5 on the Richter Scale), another problem has surfaced: fears of human trafficking.
"Human Trafficking" is the inhumane process of kidnapping primarily women and children for the sex trade, "forced" marriages, or bonded labor markets like domestic servitude, sweat shops, and agricultural plantations. Since the Haiti Earthquake, UNICEF has reported incidents of child trafficking in the wake of the thousands of newly orphaned kids after the Haiti Earthquake.
Human trafficking was a problem even before the Haiti Earthquake. With an 80 percent poverty rate in Haiti, a poor family sending or "trafficking" its children to wealthier families was common. With the new family the child would live often in substandard, unsupervised or policed abusive conditions.
Now, with escaped Haitian prisoners (because of the quake), little security infrastructure relative to the population, and again a large number of unaccounted for, but living minors, the fear and reports of allegations of child trafficking are on the rise.
UNICEF is not the only organization or person complaining about the poor state of security for kids in Haiti. On CNN's Larry King Live, Anderson Cooper reported from Haiti, explaining that many kids are in what he calls "ad hoc" groups, with little or no established organizational oversight. That has led to the kind of reported activity that was the basis of UNICEF's to this writing unsubstantiated charges.
I called and emailed UNICEF Communications Representative Alissa Pinck in the hope that more light could be shed on this problem. The question is, does UNICEF know who was doing the alleged trafficking and were they brought to justice? It's reported that 15 children were unaccounted for as of this writing in Haiti hospitals. But if those children belonged to wayward parents who survived the Haiti Earthquake, is it possible their parents may have simply arrived to get them?
With all of the uncertainty and chaos, it's hard to tell which end is up with this terrible issue in Haiti. But given Haiti's past, human and child trafficking is likely to remain a problem unless international forces step in.
Stay tuned.
"Human Trafficking" is the inhumane process of kidnapping primarily women and children for the sex trade, "forced" marriages, or bonded labor markets like domestic servitude, sweat shops, and agricultural plantations. Since the Haiti Earthquake, UNICEF has reported incidents of child trafficking in the wake of the thousands of newly orphaned kids after the Haiti Earthquake.
Human trafficking was a problem even before the Haiti Earthquake. With an 80 percent poverty rate in Haiti, a poor family sending or "trafficking" its children to wealthier families was common. With the new family the child would live often in substandard, unsupervised or policed abusive conditions.
Now, with escaped Haitian prisoners (because of the quake), little security infrastructure relative to the population, and again a large number of unaccounted for, but living minors, the fear and reports of allegations of child trafficking are on the rise.
UNICEF is not the only organization or person complaining about the poor state of security for kids in Haiti. On CNN's Larry King Live, Anderson Cooper reported from Haiti, explaining that many kids are in what he calls "ad hoc" groups, with little or no established organizational oversight. That has led to the kind of reported activity that was the basis of UNICEF's to this writing unsubstantiated charges.
I called and emailed UNICEF Communications Representative Alissa Pinck in the hope that more light could be shed on this problem. The question is, does UNICEF know who was doing the alleged trafficking and were they brought to justice? It's reported that 15 children were unaccounted for as of this writing in Haiti hospitals. But if those children belonged to wayward parents who survived the Haiti Earthquake, is it possible their parents may have simply arrived to get them?
With all of the uncertainty and chaos, it's hard to tell which end is up with this terrible issue in Haiti. But given Haiti's past, human and child trafficking is likely to remain a problem unless international forces step in.
Stay tuned.
R.T. Rybak: How money warps politics, and campaigns.
In the wake of the Supreme Court decision freeing up corporations to spend freely on political advertising campaigns one can only imagine the slander, innuendo, and deliberate misinformation will be getting worse -- more diverse and numerous -- right through Election Day in November. In Minnesota, it's already begun as a shadowy smear campaign evidently intended to convince Minnesotans to stay home on caucus night, February 2, 2010 -- especially if they’re thinking of supporting Minneapolis Mayor Raymond "R.T." Rybak in his bid to secure the party endorsement to run for Governor of Minnesota in November.The facts are chasing the lies in Minnesota, and nobody's quite certain who paid to send the misinformation - yet.
In brief: For years Minneapolis taxpayers had been overcharged by two pension funds that have been closed to new members for almost 30 years. No police officer or firefighter hired since 1980 draws any benefit from these funds — but all Minneapolis taxpayers contribute to it.Follow the money
Mayor Rybak and other city leaders stepped up to put a stop to the overcharging by the pension funds after the State Auditor alerted them to the problem. They approached the fund managers and the MN Legislature, but ended up taking the pension funds to court — and they won.One can only infer that high-priced lawyers and lobbyists who represent those who've been overcharging Minneapolis taxpayers are smear-mongering to get revenge for the money they lost.
To read more, and get links to Star-Tribune investigative reports, visit: Rybak Targeted for Recovering Taxpayer Money!
And remember, it's all about following the money.
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