Driver’s license optional
POSTED January 1, 2009 | 12:05 AM
In a Dec. 14 oped published in the Washington Post, Herndon Mayor Steve DeBenedittis noted that his town’s police officers issued more than 700 citations to motorists who were driving without a valid license last year. He added that the total number of similar citations issued in Fairfax County during 2007 was 10,000!
Imagine 10,000 unlicensed drivers on the road the next time you find yourself standing in line at the DMV. (To be on the safe side, make sure they have the defibrillator handy first.)
But why should we expect residents of a self-proclaimed “sanctuary” like Fairfax County to make the distinction between licensing requirements and other restrictions they don’t particularly like, such as zoning and immigration laws? Apparently 10,000 of them don’t.
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Tax revolt, anybody?
POSTED December 31, 2008 | 12:05 AM
According to the S&P Case-Shiller index, home prices in the Washington D.C. area were part of the nation’s 27-month-long decline in housing values, down another 18.7 percent in October.
http://money.cnn.com/2008/12/30/real_estate/October_Case_Shiller/?postversion=2008123010
That’s a staggering $93,500 loss on a typical $500,000 suburban home. And analysts are warning that with consumer confidence at a record low and no more easy credit available, prices could fall even further before they bottom out.
Because one’s property taxes are directly tied to the market value of one’s property, lower taxes should be the one silver lining in an otherwise dark economic thunderstorm. But don’t get your hopes up. Public officials in Northern Virginia and suburban Maryland are already letting it be known that your property taxes will not be going down as fast as the value of your home.
In fact, it’s much more likely your taxes will be raised to bail out county board members who already spent all of the windfall they raised during the housing bubble:
http://dcist.com/2008/12/maryland_property_taxes_to_rise.php
Here at The Examiner, we’ve been beating the anti-tax drum for years because we know that once taxes are raised and government expanded, it’s a devil to reverse the process. No matter what promises they make at election time, government officials always take care of their own first – at our expense.
In fact, most politicians will continue to tax the populace until people either become impoverished and it’s impossible to wring out any more tribute from them, or until the public has had enough and threatens to throw the big spenders out of office. Obviously, the latter course of action is preferable to the former.
Even residents of Montgomery County, the Brigadoon of government wealth sharing, got the message this year when they finally approved Robin Ficker’s three-decades-long quest for property tax relief. And if MoCo, of all places, can mount a mini tax revolt, can other local jurisdictions be far behind?
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Is this the end of the U.S. as a superpower?
POSTED December 23, 2008 | 12:05 AM
Some economists think so. As our federal deficit climbs to an unprecedented $1 trillion, with a national debt exceeding $10 trillion, and unfunded liabilities in the Social Security, Medicare and Medicare programs now exceeding the net worth of every American, they might be right.
Paul Craig Roberts, assistant secretary of the Treasury under Ronald Reagan, believes that no amount of economic tinkering by the incoming Obama administration can solve the grave structural problems facing the U.S., which he says are now well beyond any traditional solutions.
“The work is gone,” Roberts says. “All that is left are credit card and mortgage debts.” His grim prediction for the future is “inflationary depression” – a deepening spiral of lost jobs and failed businesses even as the Federal Reserve continues to crank out greenbacks – making those dollars already in circulation worth less and less. The end result is a hellish circle of rising prices and falling incomes that makes an ordinary recession look good.
A few Cassandras like Pat Buchanan have been warning Americans for years about the loss of our mining and manufacturing base. Nobody paid much attention as one by one, our great steel and lumber mills, textile and shoe factories closed. But as Buchanan noted back in 2003: “In 1950, a third of our labor force was in manufacturing. Now, it is 12.5 percent. U.S. manufacturing is in a death spiral, and it is not a natural death. This is a homicide. Open-borders free trade is killing American manufacturing.”
Free trade is good, but it's hardly free trade when U.S. companies are forced to compete with the dumping of government-subsidized imports.
No nation can remain a superpower with an economy based almost exclusively on consumerism and service industries as our has unfortunately become – and that doesn’t even include our unsustainable welfare system. Without a robust manufacturing base – which will be almost impossible to revive under the environmental Puritans of the Obama administration – Americans are doomed to watch as helpless spectators while their nation's economic power and sovereignty slowly slip away.
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Don’t blame capitalism
POSTED December 12, 2008 | 12:05 AM
According to the Austrian School of Economics, government-controlled central banks (i.e. The Federal Reserve) trigger cycles of boom and bust by artificially increasing the money supply (inflation).
Here’s how it works: People with money left over after they’ve satisfied their basic needs and wants (investors) put it in a bank, which then lends it out to other individuals and/or businesses for a certain price (interest rate). The interest rate not only acts as an incentive to save, it also sets an upper limit on how much borrowers can afford to borrow.
But when the Federal Reserve decides to pump money into the economy, the interest rate automatically goes down (law of supply and demand), and two things happen: People stop saving as much, because their reward for deferred gratification is not as high as it used to be, and early borrowers ramp up production (of new homes, as just one example) because the risk for them has suddenly gone down.
The whole thing comes to a screeching halt when demand inevitably fails to keep up with what is essentially an artificially-induced supply of money. With too-high inventories and maxed-out buyers, companies start laying off workers. If it gets bad enough, the stock market falls and massive unemployment follows – dampening demand for goods and services even more and deepening the downward spiral.
At this point, if the government learned its lesson from the last Great Depression, it would resist doing further damage – which is exactly the opposite of what it will wind up doing.
As economist Mark Thornton noted in 2004:
“Austrians view market crashes and depressions as the correction mechanism for the investment and organizational errors of the previous boom. In the Austrian view, the ‘correction’ should be allowed to run its course and should not be hampered by easy money policies, fiscal policy stimulus, or regulations on trade or employment....”
“The government’s attempts to save banks, maintain employment, and keep prices high is the primary reason why the [1929] crash resulted in a depression that was so severe and long lasting.”
So government interference in the market not only causes recessions, it extends them into depressions by trying to preserve the status quo – essentially undermining the necessary market correction that eliminates the unproductive (i.e. Big Three automakers) and redirects now scarce capital to more efficient uses.
But government officials never learn this lesson. Neither do most Americans, who demand that government “fix” what it just broke. So expect the litany of bad economic news to continue, but please don’t blame capitalism for this debacle.
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Sharp Sticks: Not your grandpa’s WPA
POSTED December 4, 2008 | 12:05 AM
The $10 trillion national debt and a worldwide credit crisis limit Barack Obama’s options, but the most “progressive” president since Franklin D. Roosevelt will likely expand public/private partnerships (PPPs) as he launches his version of FDR’s largest New Deal program: the Work Projects Administration (aka “We Poke Along”) to create jobs and rebuild the nation’s infrastructure.
But don’t expect any new efforts to ease traffic congestion. The Obama administration will leverage private investment for mass transit, not to fund needed new highway capacity.
Meanwhile, billions of dollars are sitting in private equity funds because investors haven’t been able to find enough local or state governments willing to sell and/or lease major roads, airports, water treatment plants, or other big-ticket items, according to Steve Steckler, chairman of Bethesda-based Infrastructure Management Group.
Pundits predict the death of capitalism, but Steckler forsees even more PPPs - such as the HOT lanes now under construction on the Capital Beltway in Virginia- under Obama by cash-strapped states and local governments that might not have considered them before for political reasons. However, PPPs will remain a “very small percentage” overall, he cautions.
Private, profit-driven companies can still build things quicker, cheaper and better than government, Steckler added, because they have incentives to innovate and maximize their return on investment. Meanwhile, the spread between Treasury notes and municipal bonds has almost doubled to150 percent (munis have to yield 150 percent more than Treasury bills to attract investors) just when state and local governments are least able to afford the higher rates.
Obama’s team of economic advisors are comfortable with PPPs, and big cities like Chicago - which just announced it is too broke to clear snow off residential streets after regular business hours this winter – are enthusiastically embracing them. The Windy City
got a $9 billion check for leasing the Chicago Skyway to Cintra-Macquarie, an Australian consortium. The city also signed a $1.1 billion, 75-year lease with Morgan Stanley to take over its 36,000 parking meters and okayed another $2.5 billion PPP deal to run Midway Airport. Neighboring Indiana is one of the few states that doesn’t have a major budget problem, thanks to its lease of the Indiana Tollroad.
One thing the Obama administration will definitely not do, Steckler added, is farm out the operations of federally-assisted transit systems like Metro to private companies because of the president-elect’s close ties to the Transit Workers union. No matter how bad the recession gets, Metrobus drivers will still take home their six-figure paychecks.
PPPs are sort of a bailout for overextended governments, and definitely not your grandpa’s WPA.
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