Have nothing to do with the [evil] things that people do, things that belong to the darkness. Instead, bring them out to the light... [For] when all things are brought out into the light, then their true nature is clearly revealed...

-Ephesians 5:11-13

Tag Archives: Private Sector

Post Office Privatization Moves Closer

English: United States Postal Service, Ford Wi...

United States Postal Service, Ford Windstar Minivan. In Olympia (Photo credit: Wikipedia)

With the announcement that the U.S. Postal Service will be unable to make a $5.6 billion payment to its employees’ health benefit plan due on September 30th, calls for privatization of the archaic service are mounting.

The service already failed to make last year’s payment of $5.5 billion which Congress had allowed to be delayed until August 1st. And it’s no wonder that the service can’t make those payments: it lost $5.2 billion in the third quarter this year, up from a loss of $2.1 billion a year ago. Estimates are that the service will lose at least $10 billion this year without counting the default of $11 billion in payments to its benefit plan.

USPS spokesman David Partenheimer thinks the service can still be salvaged through “comprehensive reform” of the laws that govern the service. He said:

They are urgently needed in order for the Postal Service to fully implement its five-year business plan and return to long-term financial stability.

Missing from his statement was any mention of profitability, just

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Medicare: The Latest Political Football

paul ryan medicare

paul ryan medicare (Photo credit: Brendan Loy)

With political ads defending and bashing various proposals about how to “fix” Medicare reaching a crescendo, fact-checkers are having a field day in sorting through who’s right and who’s wrong. The claim by Democrats that Paul Ryan’s reform bill would “end Medicare as we know it” was awarded the “lie of the year” by Politifact, while Factcheck.org named it one of the “Whoppers of 2011.” Even the liberal Washington Post gave the canard its highest—or lowest—rating of “four Pinnochios.”

Claims by Republicans that President Obama “raided” Medicare by cutting benefits and using bookkeeping entries as ways to fund ObamaCare without increasing the deficit are adding to the noise. They also claim that cuts to suppliers of medical services will ultimately result in reduced services for Medicare beneficiaries, reductions exacerbated by the unelected panel—the Independent Payment Advisory Board (IPAB)—charged with keeping costs in line through essentially dictatorial powers granted by ObamaCare.

What’s clear is that Medicare is in trouble, and has been almost from the beginning. In 1965, when Medicare was signed into law by President Lyndon Johnson, costs were estimated to approach $9 billion annually by the year 1990. It exceeded $65 billion that year. Last year Medicare spending touched $560 billion, and is headed toward $1 trillion in less than eight years.

Trustees are frightened about its future. Their 2012 annual report states: 

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New High-Tech Body Scanners Courtesy of the CIA

English: Millimeter wave technology. Gen 2 sca...

Millimeter wave technology. Gen 2 scanner manufactured by Brijot of Lake Mary, Fla. (Photo credit: Wikipedia)

The latest piece of terrifying technology, the Picosecond Programmable Laser scanner from Genia Photonics, will be able to identify gunpowder residue on an individual’s shoes, and what he had for breakfast along with his adrenaline levels, according to the anonymous author of Gizmodo.com.

The portable unit, about the size of a breadbox, is described as “robust” and “mobile,” meaning it could not only be used in airports to supplement  the invasions of privacy already being performed by the TSA but also in mobile units, such as police cruisers, roaming the streets, looking for suspicious “wavelength patterns and sequences.” According to anonymous:

The machine is ten million times faster—and one million times more sensitive—than any currently available system. That means that it can be used systematically on everyone passing through airport security, not just suspect or randomly sampled people…

The small, inconspicuous machine is attached to a computer running a program that will show the information in real time, from trace amounts of cocaine on your dollar bills to gunpowder residue on your shoes. Forget trying to sneak a bottle of water past security—they will be able to tell what you had for breakfast in an instant while you’re walking down the hallway.

All of this is being provided through a grant system set up in 1999 by the Central Intelligence Agency (CIA) when it was discovered that the agency was falling behind the technology curve and decided to do something about it. According to the CIA:

By the 1990s, however, especially with the advent of the World Wide Web, it is the commercial market that is setting the pace in IT [information technology] innovation. And, as is the nature of a market-based economy, the flow of capital and talent has irresistibly moved to the commercial sector, where the prospect of huge profits from initial public offerings and equity-based compensation has become the norm.

In contrast to the remarkable transformations taking place in Silicon Valley and elsewhere, the Agency, like many large Cold War era private sector corporations, felt itself being left behind. It was not connected to the creative forces that underpin the digital economy and, of equal importance, many in Silicon Valley knew little about the Agency’s IT needs. The opportunities and challenges posed by the information revolution to the Agency’s core mission areas of clandestine collection and all-source analysis were growing daily. Moreover, the challenges are not merely from foreign countries but also transnational threats [such as drug cartels].

And so, in coordination with Congress which provided some start-up funds, a quasi-private venture capital company was set up, called In-Q-Tel, with major intellectual input provided by

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Will Senator Chris Lauzen’s Pension Reform Work?

Illinois State Capitol in Springfield {| cells...

Illinois State Senator Chris Lauzen made three simple suggestions to solving Illinois’ $83 billion unfunded pension liabilities: end abuses of the present system, raise the retirement age to 62, and limit cost-of-living-adjustments (COLAs) to 2 percent a year. What he failed to mention is how to get these changes implemented.

Lauzen has served in the Illinois state legislature beginning in 1992 when he ran on a promise to “work hard, stay honest, and use common sense.” Now that he is retiring he decided to spell out what was needed to bring order out of chaos in Illinois. He said that, if successful, his plan, “The Lauzen Plan,” could be applied to other states facing similar daunting challenges. And if it works there, it might even, he says, apply to Europe’s problems. First, Lauzen recognized the size of the problem. According to the American Enterprise Institute (AEI) the total unfunded liabilities of all the states is at least $3 trillionpossibly more.

Many states, according to AEI, are in denial about that number, relying on old and outdated methods and assumptions used to calculate those liabilities. The interest rate assumptions and proper valuing of the assets held to provide the future benefits may be off, perhaps way off. As noted in an article in The New American, liabilities could be as much as

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Wisconsin Governor Walker to Win in a Walk, Polls Show

"On the Issues with Mike Gousha at Marque...

On Wednesday the Marquette Law School poll showed Wisconsin Governor Scott Walker with a comfortable lead over his rival, former Milwaukee mayor Tom Barrett, in next week’s recall election, 52 percent to 45 percent. This was an improvement from their poll taken two weeks earlier when Walker held a six-point lead over Barrett. It was also confirmed by a poll taken on May 23 by We Ask America that showed Governor Walker leading Barrett 54 percent to 42 percent. More telling perhaps was the Intrade site which measures voter sentiment and showed Walker on Thursday with a 94.5 percent chance of winning the recall election.

The recall election process began in November last year when United Wisconsin, a coalition of unions and the state’s Democratic Party, decided to go after Walker because of his success in passing Act 10. That law limited unions’ collective bargaining powers and required that union members pay a little more for their health insurance and retirement benefits. Specifically, Act 10 required members to contribute 12.6 percent of their health care premiums (with the taxpayers picking up the balance of 87.4 percent) and 5.8 percent of their pension costs (with taxpayers picking up the remaining 94.2 percent).

Even after these increases, a study by the American Enterprise Institute showed that state government employees in Wisconsin are still enjoying a significant

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Senate Votes to Pump More Money into the Post Office

A United States Postal Service contractor-driv...

When the Senate voted overwhelmingly, 62-37, to continue funding the virtually insolvent U.S. Postal Service in April, it made clear its determination not to let reality enter into its deliberations.

Senator Joe Lieberman (I-Conn.) put it perfectly:

The Postal Service is an iconic American institution that still delivers 500 million pieces of mail a day and sustains 8 million jobs. This legislation will change the USPS so it can stay alive throughout the 21st century.

There are so many errors of fact in that statement reflecting such a lack of understanding of the reality in today’s Postal Service that Lieberman should be ashamed of himself. The Postal Service used to deliver vastly more mail than it does today and is expected to deliver much less in the future. The Internet and email and social networking has decimated and largely eliminated vast swaths of what once was the service’s function: delivering the mail. Lieberman failed to mention that by “sustaining” (the liberal’s favorite term du jour) 8 million jobs it is reducing the private workforce by at least that many as funds are extracted from the private sector to keep the postal service alive. As for changing the USPS so it can stay alive “throughout the 21st century,” the insertion of some $11 billion allowed by the Senate might keep it going for three years before it runs out of money again.

By refusing to allow the Postmaster General, Patrick Donahoe, to make the cuts necessary to keep the service afloat, the Senate is making sure that

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Experts Disagree on U.S. Economic Outlook

The Six Million Dollar Man

As soon as Automatic Data Processing, Inc. (ADPannounced that hiring slowed in April compared to March, with 199,000 new jobs being the lowest since last September, the experts began scratching their heads. Joel Parkken, chairman of Macroeconomic Advisors which produces the monthly reports for ADP said that “this deceleration seems consistent with other incoming data” and that it also means that Friday’s employment report from the Bureau of Labor Statistics (BLS) will show that the unemployment rate will stay at 8.2 percent, the same as last month.

ADP also revised downward last month’s jobs numbers from 209,000 to 201,000, and indicated that 123,000 service jobs were added in April while manufacturing lost 4,000 jobs. Paul Ashworth, chief U.S. economist at Capital Economics who estimated that job growth would be 175,000 for the month, is now backtracking:

Obviously, the weak ADP reading means that there are now clear downside risks to our estimate…Indeed, it is possible we could see a repeat of March, when payrolls [reported by the BLS] increased by only 120,000.

Looking back over the last five months of ADP data, however, gives a better picture of the economy and jobs. Since November total payrolls have increased by 1 million, or about 200,000 jobs per month. Two-thirds of those jobs were created in the service industry while one-third was in the goods producing sector, with only about 15,000 jobs being created in the heavy manufacturing sector every month.

But this report from the payroll giant, which tracks job growth closely, differs from the survey of

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CISPA Assumes Too Much Trust in Government

iPad tablet

In a surprise move the White House issued a statement on Wednesday threatening to veto CISPA (Cyber Intelligence Sharing and Protection Actbecause of privacy concerns. Parts of the statement sounded as if they had been drafted by Republican presidential candidate Ron Paul:

The sharing of information [between private agencies and the federal government] must be conducted in a manner that preserves American’s privacy, data confidentiality, and civil liberties and recognizes the civilian nature of cyberspace. Cybersecurity and privacy are not mutually exclusive…

[CISPA]…repeal[s] important provisions of electronic surveillance law without instituting corresponding privacy, confidentiality, and civil liberties safeguards…

The bill also lacks sufficient limitation on the sharing of personally identifiable information…and does not contain adequate oversight or accountability measures…to ensure that the data is used only for appropriate purposes…

The bill effectively treats domestic cybersecurity as an intelligence activity and thus, significantly departs from longstanding efforts to treat the Internet and cyberspace as civilian spheres.

This is the first time in recent memory that the White House has expressed any such concerns. When signing into law the controversial National Defense Authorization Act [NDAA] the White House blithely ignored its trampling of those same civil liberties through its “indefinite detention” provisions. Nor did the White House raise any similar concerns when it issued its executive order commandeering all resources from American citizens in the event of an emergency to be declared by the president.

So the following from the White House’s statement on CISPA makes perfect sense: the White House favors government regulation of the internet and invasion of privacy without following the Fourth Amendment. It just doesn’t want

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The Fed Is Buying 61 Percent of U.S. Government Debt

Interest Rates

In his attempt to explode the myth that there is unlimited demand for U.S. government debt, former Treasury official Lawrence Goodman explained that there is high perceived demand because the Federal Reserve is doing most of the buying.

Wrote Goodman,

Last year the Fed purchased a stunning 61% of the total net Treasury issuance, up from negligible amounts prior to the 2008 financial crisis.

This not only creates the false impression of limitless demand for U.S. debt but also blunts any sense of urgency to reduce supersized budget deficits.

What about Japan and China? Aren’t they the major purchasers of U.S. debt? Not any more, notes Goodman. Foreign purchases of U.S. debt dropped to less than 2 percent  of GDP (Gross Domestic Product) from almost 6 percent just three years ago. And private sector investors—banks, money market and bond mutual funds, individuals and corporations—have cut their buying way back as well, to less than 1 percent of GDP, down from 6 percent. This serves to hide the fact that the government can’t find outside buyers willing to accept rates of return that are

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New Book, White House Burning, Reprises Old Keynesian Canards

U.S. Total Deficits vs. National Debt Increase...

On April 3 the book White House Burning, authored by two hard-core Keynesian economists and internationalists, will be released, and the noisy propaganda surrounding its publication has already begun in earnest.

According to the book store Barnes and Noble, which is discounting the $26.95 hardcover book to $17.96, though the national debt amounts to $30,000 for every individual in the country, the solution is easy: Stop treating debt as a moral issue and raise taxes. Says B and N, the authors “account for the debasement of our political system in the 1980’s and 1990’s (read: Reaganomics and the Laffer Curve), which produced today’s dysfunctional and impotent Congress.” But if something isn’t done soon,

The national debt will harm ordinary Americans by reducing the number of jobs, lowering living standards, increasing inequality, and forcing a sudden and drastic reduction in the government services we now take for granted….

They debunk the myth that such crucial programs as Social Security and Medicare must be slashed to the bone. White House Burning looks squarely at the burgeoning national debt and proposes to defuse the threat to our well-being without forcing struggling middle-class families and the elderly into poverty.

The authors, Simon Johnson (formerly the chief economist for the International Monetary Fund and now a professor at MIT) and James Kwak (associate law professor at the University of Connecticut and a fellow at Harvard Law), have based their book on a set of statist foundational principles about the role of government in a free society: More is better.

They explained in their introduction that when Alexander Hamilton, as Treasury Secretary, urged Congress to declare war on Great Britain in 1812, he put the responsibility for paying for it onto a reluctant Congress. Congress refused to raise taxes and the Treasury had to go begging to a private individual, Philadelphia banker Stephen Girard, to loan the money to pay for the war. This set the stage for the end of Hamilton’s Federalists (according to the authors) and the rise of Jefferson and Madison’s Democratic-Republican party. The authors then drew the parallels to today’s “dysfunctional” government, which is engaged in the same discussion: how to pay for

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White House Jobs Growth Celebration is Premature

South façade of the White House, the executive...

White House announcements celebrating the jobs report from the Bureau of Labor Statistics (BLS) were optimistic: “Private sector employers added 233,000 jobs to their payrolls in February [which] means the economy has added jobs for 24 consecutive months…” This illustrates “the progress of the last two years and the importance of doing everything we can to continue strengthening our economy and creating jobs for the months and years ahead,” wrote Megan Slack on the White House blog. Alan Krueger, chairman of the Council of Economic Advisors, was equally enthusiastic:

Today’s employment report provides further evidence that the economy is continuing to heal…. It is critical that we continue the economic policies that are helping us dig our way out of the deep hole that was caused by the recession…

MarketWatch.com joined with the White House in its analysis of the numbers: “By almost every measure the employment picture has brightened considerably…”

Unfortunately both sources were reading from the top line of the BLS report. A closer look would likely have dampened their enthusiasm. From that report, 

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Plans Revealed for Greek Default on March 23

March 25 - Greece Independence Day

Writer Bruno Waterfield’s claim that Germany has drawn up plans to deal with the inevitable Greek default was published in the British newspaper The Telegraph a little after 8 p.m. Saturday night. Within hours his claim was confirmed separately by blogger John Ward with times, dates, and consequences all spelled out by those drawing up the plans.

German Finance Minister Wolfgang Schauble has increasingly voiced his opinion that the economic implosion taking place in Greece would result in its bankruptcy despite official protestations to the contrary from German Chancellor Angela Merkel. One official close to Schauble said, “He just thinks the Greeks cannot do what needs to be done. And even if by some miracle they did what has been promised, he…[is] convinced it will not pull Greece out of the hole.”

Schauble’s opinion gained increasing credence by a report issued last week by the European Commission, the European Central Bank, and the International Monetary Fund (EC, ECB, and IMF—the “troika”). According to their report, even if Greece were successful in accomplishing all that it has promised in order to secure the next round of financing, it will still fall far short of bringing down its debt load to manageable levels. Waterfield went on to say that Schauble, behind the scenes, is pushing Greece to declare itself bankrupt and demand a 70 percent “haircut” from the banks holding the bulk of its debt.

The timetable is pushing events inexorably forward: Greece must receive the next round of financing in order to pay debt service of $20 billion on March 20. Without it the debt will default and government checks will start bouncing. But it will take at least four weeks to get a formal agreement on

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Regime Uncertainty, Regulatory Surge, and Unemployment Numbers

USA Today

Last Friday’s unemployment numbers, on the surface at least, appeared to reflect a growing, albeit slowly, economy. The number of new unemployment claims for the week ending January 14th dropped to 352,000, down from 402,000 the previous week, and down from 415,000 a year ago. The four-week moving average also dropped, from 382,500 to 379,000.

The December numbers were less than November’s which prompted USA Today to note that this was “an even stronger finish to the year than economists had forecast.” The monthly gain of 212,000 private-sector jobs also reported “means American businesses have replaced more than 3 million of the 4.2 million private-sector jobs lost in the past 13 months,” according to the paper. This “is the strongest recovery since the rebound after the 1990-1992 recession, when U.S. businesses added 4.2 million jobs in the same period of time by late 1993.”

The ebullience of USA Today failed to take note of the Department of Labor’s announcement that, along with the reduction in initial claims there was in increase in the number of people making claims in all unemployment insurance programs, rising by nearly 500,000, an increase from December of 7 percent in a single month.

Economics Professor Robert Higgs was singularly unimpressed. From his analysis of the Department of Labor’s (DOL) numbers dating back to the year 2000 he found that the number employed in the country’s private sector at the end of 2011 was

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Another U.S. Debt Rating Downgrade On the Way!

Junk

A year ago Dagong Global Credit Rating reduced its rating on the sovereign debt of the United States from AA to A+. In August it dropped it another notch to A. In an interview on Saturday the agency’s chairman, Guan Jianzhong, said it is nearly inevitable that the agency will further reduce its rating of U.S. sovereign debt: “We are continuing to monitor this closely. First of all we need to look at this year’s economic growth [in the US] and then predict next year’s trends. If in the year 2012 the overall projections are not very good, meaning that the sources of payment—and liabilities—are bad and cannot be changed, or change for the worse, then we will lower the rating once again.”

This would bring the Chinese agency’s rating on U.S. sovereign debt to BBB, “medium high rating” or just one notch above “junk.”

When Standard and Poor’s downgraded its rating on the U.S. sovereign debt from AAA to AA+ back in August, it expressed a dim view of

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Solyndra Just the Tip of the Alternative Energy Iceberg

Solar Panels

In late October White House Chief of Staff William Daley ordered a complete review of all loan guarantees the Department of Energy has made to various energy projects. The review “is a tacit acknowledgement that the loan program [that supported the now-bankrupt energy company Solyndra]…has raised enough internal concern that an outside assessment is necessary…”, according the Washington Post.

While the review is supposed to take 60 days and will no doubt be an attempt to whitewash failed efforts by the government to jumpstart the economy through its support of the green industry, a look at past efforts is more than sufficient to conclude that such “investments” are more properly labeled “boondoggles” and an enormous waste of taxpayer money.

The spin on the review is already in. When Daley named Herbert Allison, a former assistant Treasury secretary, to head it up, he said:

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Four Ways to Reinvigorate Private Sector Job Growth

"Big Pete" Ramagos, rigger at work o...

There was precious little good news in the latest employment report from the Bureau of Labor Statistics (BLS) for October. Employment rose by 80,000, less than economists expected, and much less than the 250,000 needed to begin to bring down the unemployment rate significantly.

But inside the numbers there was a little good news: The unemployment rate dropped slightly to 9.0 percent, the number of long-term unemployed declined by 365,000 and private-sector employment increased by 104,000. At the same time government payrolls have been decreasing, reducing slightly but inevitably the drag on the private sector that ultimately pays for that government overhead. In fact, according to the BLS,

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Think Teachers are Underpaid? Think Again.

Teacher at Chalkboard

Despite the public perception that public school teachers in general are underpaid, Jason Richwine, senior policy analyst at the Heritage Foundation and co-author of “Assessing the Compensation of Public-School Teachers,” says “the reality is that it’s just not true. There’s no way to look at the data and conclude that they are underpaid. They are certainly paid more than they can get if they work in the private sector…” In fact, Richwine found that “public-school teachers receive

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The US Post Office: Price it to Sell!

Image taken by User:Minesweeper on December 14...

Image via Wikipedia

Now that Congress has extended the due date for the Postal Service’s $5.5 billion pension plan payment to November 18th, various proposals to modernize and “rightsize” the service have appeared. The most comprehensive is the Issa-Ross Postal Reform Act, which endeavors to allow the service the freedom to do what needs to be done to keep it operating as a quasi-government agency.

If approved by Congress, the Act would:

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Obama’s Never-Ending Flow of Red Ink and Economic Fallacies

Warren Buffet

Image by secretagent007 via Flickr

Last week the President introduced his deficit reduction plan by saying that it would start to pay down “the big pile of IOUs” the government has issued in order to pay its bills, through a combination of spending cuts and tax increases. He asserted, “We have to cut out what we can’t afford [in order] to pay for what really matters. We can’t just cut our way out of this hole. It is going to take a balanced approach.” And to make his point clear, he declared,

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Greek Austerity to Be Enforced German-Style

Steel workers protest in Berlin in front of th...

Image via Wikipedia

Eurogroup President Jean-Claude Juncker said in an interview over the weekend that the austerity measures being imposed on Greece in exchange for additional bail-out funding from the IMF will result in “the sovereignty of Greece [being] massively limited.” He added, “One cannot be allowed to insult the Greeks. But one has to help them. They have said they are ready to

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Many of the articles on Light from the Right first appeared on either The New American or the McAlvany Intelligence Advisor.