Tuesday, July 27, 2010

Only In California...

From the Nation's Capital of the Left, sunny California, comes another story that both boggles the mind and helps us understand a little more clearly why they are broke.  Just when you think the "Crazies on the West Coast" who run the state and its municipalities couldn't get any crazier in terms of fiscal irresponsibility, they hit another home run -- Bell, California's city manager made $800K a year!  Fortunately, the city manager and other overpaid officials have resigned and only now the California AG is outraged over the whole issue. 

Here's is an excellent post on the issue from Tim Daniel at Left Coast Rebel:

Ringing the bell at the top: Paging Chris Christie

Consider Bell. A diverse, poor offshoot of Los Angeles, Bell’s population in 2000 stood at 37,000 and its median per year household income clocked in at $29,000. But according to a blitz of media reports, city manager Robert Rizzo’s yearly salary clocks in close to $800,000.

Rizzo thinks he’s worth every penny recently claiming:

“If that’s a number people choke on, maybe I’m in the wrong business. I could go into private business and make that money. This council has compensated me for the job I’ve done.”

No kidding. But that’s not where the buck stops.

Investor’s Business Daily has the city manager’s yearly retirement pension at a cool $600,000, starting at age 50. Such sweetheart scenarios were written by lawmakers during the Davis administration, exemplifying the unison of politicians, powerful unions, and the corruptocrat state attorneys at home in Sacramento.

In addition to Rizzo’s sub $800,000 salary, Bell police chief netted over $456,000 and assistant city manager Angela Spaccia earned $376,000. The Los Angeles Times reported today that all three of these high-income earners got the boot today. We’ll see if they “go into private business and make that money” as the Bell city manager claimed.

The local issue of overpaid, zealous administrators in Bell, California, demonstrates a far more troubling macro picture for both the state and the nation a whole. California’s pension system alone now comes with a price tag that dwarfs the estimates of 10 years ago. This is due mostly to the 1999 California enacted pension ‘reform’ based on ludicrous investment gambles that assumed (among many other things) that the Dow Jones Industrial average would be trading at 25,000 by 2009. And with the ongoing recession and business/entrepreneur exodus – it will only get worse.

California may break records in fiscal insanity and union largess but the issue is not unique to this state alone. A story today out of Ann Arbor, Michigan highlights city officials who saw it fit to use taxpayer dollars to purchase an $800,000 piece of art despite the city’s current fiscal distress. The city also hired an art-coordinator and while doing so fired the city administrator that oversees trash collection efforts.

Talk about taking out the trash.

Going forward, the nation may not only face public outrage but civic unrest, when the taxpayers who foot the bill for perpetual government sector magnanimity come to full grips with the situation we are facing.

Perhaps we need hundreds of clones of a certain large, Italian, former prosecutor at every level of state and federal government to clean up this mess.

Paging Chris Christie.

Obama, Reagan, and the Economy

Great opinion piece by Frank Donatelli, GOPAC Chairman, in this morning's Politico...

It’s easy to understand why President Barack Obama’s friends don’t want to acknowledge that July represents 17 months since Congress passed the $787 billion economic stimulus bill — the president’s signature measure to jump-start the economy and fight unemployment.

Obama says the economy is headed in the right direction; jobs are being created, not lost, and he is doing everything possible to revive the “worst economy since the Great Depression.” Most of the national press has been remarkably accepting of this narrative — even if the president has been vague, at best, about when we might finally see an uptick in economic growth and job creation.

But in another economic time, President Ronald Reagan’s economic recovery program took 17 months to take hold. It took from the time Congress passed his tax cuts, in August 1981, until the recession he inherited finally ended in January 1983.

Unemployment hit a high of 10.8 percent in December 1982. But then economic growth spiked, and the unemployment rate began a long, steady decline throughout the 1980s. It was obvious the program was working when people stopped calling it “Reaganomics.”

Tax cuts were a part of Reagan’s effort to cut the size and scope of government to fight economic stagnation. “Government is not the solution,” Reagan said in his remarkably clear inaugural address. “It is the problem.”

In addition to tax cuts, Reagan reduced domestic discretionary spending and streamlined regulations to make them less of a burden on businesses seeking to create jobs. He believed that government should give individuals and businesses the proper incentives to grow and expand and not inhibit the private sector with high taxes and cumbersome regulations.

Reagan faced obstacles that Obama did not. The House he had to work with was always controlled by Democrats. More ominously, inflation was running at double-digit rates, and it took nearly a year for the Federal Reserve to squeeze those pressures out of the system.

Regardless, in the end, Reagan’s program worked. The turnaround began 17 months later.

Fast-forward to today. The Obama administration says that government-directed investment, via huge spending increases, can revive the economy. It’s now stimulus plus 17. Is there a turnaround in sight?

Apparently not. Obama’s own budget estimates, released just last week, project trillion-dollar deficits, anemic economic growth coming out of a recession and unemployment near 9 percent for 2011 and 8 percent for 2012.

You have to go back to the 1930s to find a period in which unemployment has been so high for so long. This economic record would make former President Jimmy Carter blush.

Yet Obama continues to get a pass on his version of recent economic events. He has said that he inherited the worst recession since the Great Depression. He didn’t. The economies inherited by both President Gerald Ford in 1974 and Reagan in 1981 were far worse.

Obama has said the stimulus has saved 3 million jobs. It hasn’t. We have nearly that many fewer jobs than before the stimulus was passed in February 2009, and the unemployment rate is 1½ percentage points higher than what he claimed would be the high point once his program was enacted.

Obama has said he is doing all he can to revive the economy. Actually, he’s doing too much. The economic uncertainty that his “historic” health care and budget bills have created is doing more to hold back economic growth than anything else. Companies are hoarding cash rather than invest in Obama’s uncertain economic climate.

As a result, the recovery is anemic by historic standards.

So we have two historic presidents. Both inherited bad economies. One cut spending and taxes, and then, 17 months later, the economy boomed. The other increased taxes and spending. It’s now 17 months later.

Mr. President, we’re waiting.

Frank Donatelli is chairman of GOPAC, which helps and advises young Republican leaders.
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