Phot by Amanda M Hatfield

Congressional members high tailed it out of Washington after passing a debt limit agreement, but Democrats Steve Israel and Tim Bishop wasted no time in holding a press conference at MacArthur airport on Long Island to blame Republicans for a crisis they created.

“They’re now injecting ideology into our runways,” Rep. Steve Israel, D-Dix Hills, said of Republicans in the House. “They’ve allowed Congress to return home without reauthorizing critical FAA airport safety.”

Wow, that sounds pretty serious. Those Republicans are at it again working hard to make America unsafe.

“Ask yourself if there’s a single company in this country that would solve a $16 million problem at the expense to their corporation of $1.2 billion,” said Bishop, a member of the House Transportation and Infrastructure Committee. “No, the answer is absolutely not.”

Tim Bishop, a man who has spent his entire career in academia and government is now an expert on what private businesses would do in a given situation. But as we have all learned by now, that when Democrats lips are moving and they are calling people terrorists (which you know are never real terrorists), hostage takers, racists, etc., etc. that they are probably covering up the real issue.

The Two Real  Issues

As you have probably guessed by now the issues are not safety and they are not about foolish fiscal management. The issues are a Democrat union power grab and wasteful spending. First, the union issue.

The House passed an FAA funding bill that the Democrats in the Senate, led by Jay Rockefeller of West Virginia, stopped cold, and then, of course, blamed the Republicans. The labor issue was described by the New York Times as follows:

The House also passed a long-term F.A.A. bill that included a measure to repeal a rule of the National Mediation Board, which oversees union and labor issues in the airline and railroad industries. The new rule, which passed after President Obama appointed two of the board’s three members, reversed a 76-year-old rule and made it easier for unions to win a representation election. Under the old rule, workers who did not vote were counted as “no” votes; under the new rule, only those casting ballots were counted.

So we have a labor rule that had been in place since 1935, on how union representation elections would be conducted. President Obama appoints two far left members to the National Mediation Board and they reverse the rule. Unions represent only about 7% of workers in the private sector but they are bedrock supporters for the Democratic Party. While Obama tries to refashion America in his own image, the Democrats blocked this bill for that reason and somehow it is the Republicans who are the villains.  The Republicans keep doing what they were elected to do, they keep passing legislation in the House; the Democrats do not seem to pass anything and they block whatever legislation the Republicans pass. Who do you think is the problem?

Wasteful Spending

The other issue concerns funding for a program called Essential Air Service (EAS). EAS, by law, was supposed to expire twenty three years ago, but Congress keeps it alive. It was created after Jimmy Carter deregulated the airlines in 1978 as a way to ease the impact on rural airports by subsidizing them over the ten years after deregulation. The budget for EAS has grown from $50 to $200 million. This program should be eliminated. Those heartless Republicans wanted to cut $16.5 million from the program. The Republicans said that in the overall scheme of things it’s not a lot of money, but we have to start somewhere. Tim “I haven’t found a program I can cut” Bishop naturally jumped in to call the move foolhardy. Well, just what is the EAS?

Essential Air Service

This program subsidizes air service to 140 airports around the country. Here are some examples:

• An airport in Lewiston, Montana. In 2007 it reported that it averages 0.6 passengers per flight. In other words, for every ten flights, six of them had ONE passenger and four of them took off EMPTY! You, my fellow Americans are paying for this.
• Three airports in Kansas in Dodge City, Garden City, and Liberal (no pun) are all within 75 miles of each other and yet we subsidize all three
• Chuck Schumer’s favorites in Messina, Plattsburgh, Ogdenburg, and Saranac Lake are about as close to the large airports in Montreal and Ottawa as Stamford, Connecticut is to JFK airport in New York.

Sen. Charles E. Schumer, D-N.Y., issued a typical defense of EAS, which supports service to six airports in New York. “There is no question about it,” he said. “Access to air travel is good for businesses, good for jobs, and good for the financial health of the community.”

The politburo has spoken. The central committee of the Democrat party has decided which airports are important and which ones are not, the free market be damned.

Okay but what about places were there are no alternatives such as the 45 subsidized airports in Alaska? In Alaska there are no Interstate highways. The Alaska Railroad only runs from May to September, and air travel is the only transportation available to some remote areas. Surely these places deserve the subsidy. Do they?

In Alaska there is something called the Alaska Permanent Fund, which was created at about the time the North Slope opened up to oil exploration. It collects about 25% of the oil royalties and invests it for Alaska and Alaskans. As of 2008 there was about $28 billion in that fund. There is also the Permanent Fund Dividend which is an annual payment from that fund to Alaskans and in 2010 it paid out $1,281 to every Alaskan who was eligible. If 45 airports, that benefit Alaskans, are in need of a subsidy, why not use this fund to subsidize it instead of using the taxes of someone in New Jersey? The same should go for other states. It’s called the Tenth Amendment. If we eliminate this program, as Congress said it should be eliminated after 1988, we could save $200 million. If we can’t agree to save $200 million, how are we going to save $2 trillion?

Circling back to Mr. Bishop’s remarks, “Ask yourself if there’s a single company in this country that would solve a $16 million problem at the expense to their corporation of $1.2 billion,” it is chutzpah at its highest. The FAA is losing $1.2 billion in tax revenue during this shutdown because Tim Bishop, Steve Israel, Chuck Schumer can’t stand the idea that their union power grab or their automatic pork would be curtailed. As a result jobs are on hold, construction projects stopped, because they won’t even allow a $16.5 million cut, let alone my suggestion to eliminate the whole $200 million. To hold a press conference to blame anyone but themselves is absolutely shameless, but then where is the news in that?

That’s my opinion; I’d like to know yours. Please comment below.

Ah, the romance of rail travel.  From Murder on the Orient Express to From Russia with Love to White Christmas to Some Like It Hot there is something alluring about a train.  But for all those warm feelings it’s time to recognize that we are in the 21^st century and to leave trains to the movies. 

There have been calls for the great idea of high speed rail that is, in effect, a solution in search of a problem.  It may work well in Europe and Japan, but the United States is not Europe or Japan.  Two things needed to make high speed rail viable are population density and distances between such population densities that are not too close and not too far. We have a whole lot of neither.

Building a high speed rail system is capital intensive.  Between the track bed, carefully engineered to keep high speed trains on the tracks and the passengers comfortable, the rolling stock, and the signaling and safety equipment, it takes a lot of money to build it.  If that investment is to be recovered you need many passengers paying ticket prices high enough to make a profit and low enough to attract those passengers.  Those population centers have to be far enough apart so that the inconvenience of public transportation offsets driving by car and close enough so that the travel time is not too much longer than air travel.  How many of these routes are there in this country that satisfy those criteria?  Precious few.

Consider that part of the country where the population is densest, the Northeast Corridor, extending from Boston to Washington, D.C.  This happens to be one place in the country where rail service works.  Amtrak runs a fast train service along this corner that in 2008 actually made a profit of $41 per passenger on this service, called Acela. 

Let’s compare that to what is being planned for California.  The concept is a high speed rail link running from San Francisco in the north to San Diego in the south, a run of about 800 miles.  The initial segment of the project is estimated to cost $5.5 billion, take five years to build, and will connect Bakersfield to Madera mainly through agricultural regions.  From a construction perspective that should be an easy build with long stretches of open spaces.  Anyone care to wager what how much the estimate will grow?  The total cost is estimated at $40 billion.  If you could achieve the same profit as the Acela ($41 per passenger) and carry as many passengers as the Northeast Corridor in a year (10.8 million), it would take over 90 years just to recover the capital costs, not including any interest charges.  Is that remotely feasible?

Here’s where the problems mount, you could travel the 800 miles by air in about an hour and a forty minutes, whereas a high speed train would probably take around four hours.  One of the towns mentioned in a recent article in the New York Times as being along the route is Corcoran, population 26,000 including 12,000 “guests of the state” at nearby prisons.  Don’t count on them using the rails much.  The distance is too great and the population density is lacking.  But once again, the federal government is in the middle of something where it doesn’t belong providing funding.  Why should the overtaxed citizens of New York and New Jersey pay for a high speed rail system entirely within the state of California?  This about sums it up:

On Dec. 9, California’s rail authority received a windfall of additional federal stimulus money — some $600 million — when Republican governors in Ohio and Wisconsin passed on money intended for their states. California voters approved high-speed rail in 2008, and deadlines are already passing, including a Dec. 31 cutoff for the state to finalize a plan to spend federal money in the Central Valley. Initial spending will span a raft of projects, including designing stations, redirecting nearby roads and acquiring land.

So responsible governors in Ohio and Wisconsin passed on federal stimulus money; rather than return the money to the Treasury, damn it, it was going to be spent by someone!  Send it to California.  In case you hadn’t noticed lately, California is broke.  So tell me again, why hasn’t this project been cancelled?

If the people of California want to build this themselves, fine.  If a private company sees the opportunity to make a profit and wants to build this, go ahead.  But to take tax dollars from one state and give it to another to build another white elephant, is insane.  It is time to get our heads screwed on straight and live within our means.  Between cars and air travel, there are few places you cannot reach in this country.  There is no value in spending billions of dollars to hit a very small niche between the two.

That’s my opinion; I’d like to know yours.  Please comment below.

As we approach the mid-point of his term we, once again, hear President Obama with another scheme to create jobs.  This time he really, really means it.  For a mere $50 billion we can build roads, rails and runways and we can create an “infrastructure bank” to boot.  I guess the government wants to get into the banking business now that they have swallowed up two thirds of the domestic auto companies and passed a law to take over health care.  But, hey, who are you calling a socialist?

The infrastructure bank has supporters: Arnold Schwarzenegger, Ed Rendell the Democratic governor of Pennsylvania and Michal Bloomberg the Democratic, Republican, Independent mayor of New York, but they want it to support more projects such as water and clean energy projects.  But here’s the really good news, according to the New York Times “They say such a bank would spur innovation by allowing a panel of experts to approve projects on merit, rather than having lawmakers simply steer transportation money back home.” We get a brand new panel of experts to tell us morons what is good for us! 

How about this idea, get the Federal government out of the roads, rails and runways business.  Unless the road is part of the Interstate highway system, and that means interstate, the feds should stay away from it.  If a road within a city needs maintenance, that city and its citizens should pay for it, not taxpayers elsewhere in the country.  That’s how the whole process got screwed up.  You build my road, I’ll build your road and nobody will know who pays for what, until we find out we are $13 trillion in debt.

One of the good ideas Jimmy Carter had was to deregulate the airlines.  Airlines became competitive and prices came down.  The problem is that air travel consists of three components: the airlines, the airports and air traffic control.  Complete the process, deregulate the airports and air traffic control.  If you do that, airports can charge different prices for takeoff and landing slots.  No more will we see thirty-two flights all scheduled to take off at 7:30 AM from one airport.  Private investors would also have an incentive to build a state of the art air traffic control system. 

By the way, what happened to all those “shovel ready” projects from the first stimulus plan?  Did we actually finish building all the turtle crossings that this country needs?

On another front, Obama continues to tinker with the mortgage market rather than getting out of the way, letting housing prices find their bottom and then going from there.  George Mason economist Anthony B. Sanders said in the New York Times, ““Housing needs to go back to reasonable levels.  If we keep trying to stimulate the market, that’s the definition of insanity.”  Even Democrats are piling on:

“The administration made a bet that a rising economy would solve the housing problem and now they are out of chips,” said Howard Glaser, a former Clinton administration housing official with close ties to policy makers in the administration. “They are deeply worried and don’t really know what to do.”

Who would have thought that a president and vice president with no executive experience prior to taking office would not know what to do once they got there?  After all everyone knew that Obama was a really nice guy with an even temperament, what went wrong?  Now we hear that Fannie Mae wants to back mortgages with nothing down.  But not to worry, this time they are actually going to require the lenders to check to make sure the borrower has income. I feel better already.

Since this administration seems to like experts how about listening to these experts:

“We have had enough artificial support and need to let the free market do its thing,” said the housing analyst Ivy Zelman.

Michael L. Moskowitz, president of Equity Now, a direct mortgage lender that operates in New York and seven other states, also advocates letting the market fall. “Prices are still artificially high,” he said. “The government is discriminating against the renters who are able to buy at $200,000 but can’t at $250,000.”

It’s time for President Obama and his administration to get his boot off of the neck of the economy.  Ours is the strongest most resilient economy in the world, if you set it free.  All of the tinkering and the anti-business threats have pushed employers to the sidelines.  The uncertainty over the economy has led businesses to take a wait and see attitude.

The rhetoric the Democrats have been trying to muster to save their skins is that “eight years of failed policies,” yada, yada, yada.  The reality is that this recession started one year after Nancy Pelosi and Harry Reid took over Congress.  This recession started in the last year of the Bush administration, not the first seven.  This recession has lasted nearly twice as long and counting under Obama than it did under Bush, and it shows no sign of changing anytime soon.  A recent poll in Ohio by Public Policy Polling asked respondents who they would prefer to see in the White House right now and the results were George W. Bush 50%, Barack Obama 42%; what does that tell you?

So, Mr. Obama, keeps your hands were we can see them and slowly step away from the economy.

Something We Can All Look Forward To

President Obama announces His Budget Plan and the Stock Market Craters

President Obama got his $800 billion stimulus package off the launching pad and now we eagerly await the massive stimulus to come when people start seeing their taxes reduced in April by $8-$16 per week.  Stand back, the crowds could be euphoric and out of control.

With the ink barely dry on that package, President Obama rolls out the next attack on future generations of Americans.  His plan calls for the addition of debt so staggering that it may destroy the U.S. economy.  How long before the additional interest on the national debt starts growing so fast that we cannot pay it, let alone the principal?  In his budget he plans to add half a trillion to the national debt every year, and all of this is with some very rosy forecasts of 5% and 6% GDP growth.  Will someone please tell the rookie, that when you slam the most productive earners with more taxes, they tend to react by producing less.

“The budget that President Obama proposed on Thursday is nothing less than an attempt to end a three-decade era of economic policy dominated by the ideas of Ronald Reagan and his supporters.”

The Reagan policies produced 25 years of unprecedented growth.  So the inexperienced President Obama is going to undo this because…?  The Democrats love to point to the economy during the Clinton years, but you have to look a bit more closely.  During the first two years of the Clinton’s time in office the economy was basically flat.  The economy didn’t really start moving until 1995.  What coincided with that?  Oh, yeah, the Republicans took control of Congress.  Taxes were cut and the economy took off like a rocket.

If you look at the term of George W. Bush, after 9/11 and the recession he inherited, he again cut taxes and the economy took off.  The stock market didn’t start it’s downward spiral until about six months into 2007.  What coincided with that?  Oh, yeah, the Democrats took control of Congress.  Coincidence?  You decide.

So now we have the new president deciding to trash the policies that have successfully grown the economy under Reagan, Clinton, and Bush.  At the same time he is going to saddle future generations with massive debt on top of a looming Social Security and Medicare bill coming due.

I consider myself an optimist, but for the first time in my life I am actually fearful that one man could destroy the U.S. economy in his first 100 days and rush this in under the guise of an emergency, where there is no debate, no time to read what is getting put into law, just slam it in and trust the the most inexperienced president in the last century that it will be all right.  Do you feel better now?

Can We Dump this Canard Over the Side?

More than anything else, the proposals seek to reverse the rapid increase in economic inequality over the last 30 years.

This economic inequality hogwash is dishonesty at it’s peak.  The so-called economic inequality is a sign of the success of the economy.  Think about it, the economy has a floor but not a ceiling.  That is, your income cannot go below zero, but there is no limit to how high it can grow.  So as incomes rise higher and higher, yes, they are going to move further from zero.  This is like saying that air travel is worse today than when the Wright Brothers flew because planes fly higher now than they did in 1903!  So let’s pass a law that says airplanes can’t fly higher than 2,000 feet so we don’t have a great inequality in altitudes.

There is nothing stopping anyone from having that high income if they work hard, use their talents, and succeed.  America is not about punishing the successful.  Many who start out at the bottom move up.  Many who came here as immigrants start at the bottom.  If the Democrats want to improve the numbers, let them control the illegal immigration that is probably inflating the numbers on the bottom.  Let’s stop turning success into failure.  How many people would like to be like Bill Gates?  How many people think America would be better off if we were all like Willy Loman?

The Big Flameout

The Productive Ones Set Sail to More Favorable Tax Climates

Let’s suppose for a moment that the stimulus works and the economy takes off.  With what President Obama has in the works, and the massive taxes that he plans to impose on the top earners, and the carbon taxes he plans to levy on businesses that weill be passed along to the consumers in higher prices (there goes your $8 tax break), and the masive debt he is loading on future generations, the stimulus will soon flameout, and a bigger recession will follow.  This time we won’t able to borrow and spend our way out of it.  Tax cuts won’t matter because there will be no one earning anything to tax.  The wealthy will have packed up and moved to more favorable tax climates and Barack Obama’s historic presidency will have flamed out as well.