Sunday, July 17, 2011

Learning From The Great Depression

"I have seen the future, and it works," journalist Lincoln Steffens famously said of his 1919 visit to Bolshevik Russia. Guided by his economic faith, Steffens saw the future as he wanted it to be, not as it would be.

What excuse do we have when we follow people who, guided by a different economic faith, see the past as they want it to have been, not as it was? Today, under the influence of leaders blinded to facts by certain faith, we are careening toward a repetition of mistakes that led to catastrophe.

Friday, July 15, 2011

The Taxpayer's Dilemma - Public Safety

You want it and you want it for a very low price.  Why don't you go to Walmart and buy it?  You can't?  Why not?  Just go the checkout stand and ask to purchase police and fire protection.  Do you ever wonder why police and fire protection are not sold just like a new automobile?  Why is there no Acme Police and Fire, Inc.?  How would they sell their product and collect their revenue?  Forget about your city hiring them.  That is still a governmental function financed by taxes.

The single answer to all of these questions is that police and fire services cannot be procured through the market place.  We are left with just one vehicle to deliver these services - the most inefficient organization known to man - government.  There is no other choice.  Turn off talk radio and work on making police and fire operations more effective and efficient.

Many pundits claim police officers and firefighters are overpaid.  How do they know that?  Their gut feelings.

Oh, I Misunderstood You

You want to cut pensions, insurance and paid time off without raising pay?  Got it. If we totally eliminate employer contributions for pensions and insurance, along with the elimination of paid time off, this would effectively lower total compensation about 30%.  Hey, I hear you.  We need some sacrifice from our employees.  Sacrifice only makes a person stronger.  But, why stop with our employees?  Let's apply this sacrifice to everyone in town.  We could implement a flat, personal income tax of 30% on everyone not employed by the city.  This revenue windfall could be used as follows:

1  - Eliminate all outstanding debt of the city and prohibit any new debt
2 - Rebuild all of the public school buildings and streets
3 - Modernize the water and sewer systems
4 - When everything possible has been done, start an investment trust and accumulate a gazillion dollars

Fiscal Responsibility Will Reign For Ever

Shut up you sniveling cry babies.  You make me want to puke.  Sacrifice conquers all.

Who said there was no easy solution?

Solution To Excessive Sick Leave and Paid Time Off

Raise the pay and give no paid leave.

Solution To Health Insurance Premiums

Raise the pay and let the employees pay 100% of the premium.

Solution To "Obscene" Police Officer Compensation

Adopt A Market Economy Similar to MLB, NFL, and NBA

1 - Retirement and health insurance plans are nationwide and transferable
2 - All recruits are hired on a public exchange, using an ask and bid process
3 - Employment contacts can be any length
4 - Options, waivers, and releases are allowed
5 - All activities and documents are public and on the internet, including resumes
6 - Employers must publish on the internet turnover rates and crime statistics

What do you think Mr. Capitalist?  Are you ready for some "Free Market" football?  Hey, while we are at it, why don't we do the same with CEOs.

I wonder who's pay would go up and who's pay would go down?

Choking on your "Tea"?  Call Glenn Beck or Rush Limbaugh.

Solution To Public Pension Debate

Raise the pay and let the employees pay 100% of the contribution.

Pensions - Much Ado About Nothing

College Professor - Annual Pay of $108,000 

Pay Check Options:

1 - 12 payments of $9,000
2 - 9 payments of $12,000

Police Officer - 30 Year Career Pay $4,500,000

Pay Check Options

1 - 30 annual payments of $150,000
2 - 50 annual payments of $90,0000
3 - 30 annual payments of $100,000 and 20 annual payments of  $75,000

Footnote For Fanatics:  The numbers can be adjusted and restated for inflation and present value.  If you think that matters, send me an email giving your proposed inflation and discount rates and I will create a model that includes them.  It is just a concept.