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Wednesday, July 14, 2010

California Becomes the National Leper like Greece is for the EU II. They Need All our Money and More.

California Becomes the National Leper like Greece is for the EU II. They Need All our Money and More.


Written 2.10.2010 revised 7.14.2010

Abstract: Surveying the civilized world, even including places like California if we must, we note that many nations are sinking into a murky swamp of unrecoverable debt and now many nations are theoretically obliged to cut spending and take severe austerity measures to cut their deficits. They resist with all their might. Such a process is the very last item on a long list of progressive programs in California and nearly all of those failed states that emulate this wreckage such as New York and Illinois. They spend; they do not cut; they beg unashamedly. The progressive leaders of many states in the US and Europe in general apparently believe there is some pot of gold hidden by the ‘rich’ and that monotonically increasing taxes will eventually recover enough of that undeserved loot to cover current expenses and pay off a bit of the massive debt they have brought upon us. Their quest for other people’s monies to solve their financial woes is in high gear, flush with beads of sweat, soggy socks and headed for a massive collision with economic reality and financial stability. What is at stake here is the accumulated wealth of the entire planet if the far left can implement their taxes and Cap and Trade Follies. They can spend much more than we have and they are doing so now. Remember Bastille Day [anniversary today from 1789] when the price of a loaf of bread exceeded the pay of the average worker?[1] This is happening on a broader scale now in both the federal union and several of its wanton states.

How to best read my blogs:

[I offer extensive quotes in this blog so that the reader can view the exact language and can be confident that nothing was taken out of context or that nobody was misquoted. The easiest way to take in the salient points is to read the emphatic points in the quotes and then peruse my comments. Comments on my comments are always welcome: ryckki@gmail.com.]

The unchecked growth of leftist government is the most serious menace we could experience as a collection of societies on this planet.  We could cite the repulsive histories of the USSR, PRC and other similar financial, economic and social disasters as overwhelming proof against the left and their failures, but such a lesson is not convincing evidence to millions who have their hands out for alms, drugs or other remedies or ameliorations to their squalid existence. Compounding this problem, elitists who display the glittering laurel wreaths of the cognoscenti[2] and parade around as Ivy League-educated ‘progressives’ argue against success in any form that evades big government’s taxes and controls and demonstrate to the ‘poor’ that their plight is solely due to the greedy capitalists hence justice must be served only after they ‘spread around the wealth’ of the avaricious wealth hoarders as president Obama has orated. As such, the mere promise of goodies, particularly for no expended effort, perhaps accompanied by drugs or other amenities, provides a magnetic and hypnotic snare that traps millions. 
 
Many governments are on a fiscally terminal, psychotic spending binge reminiscent of the old California[3] opium dens of the last century. The patrons are going to smoke it all up before they expire. Once governments attain a certain level of power they tend to fortify their position with massive spending programs that have a built-in tendency to capture and sequester certain blocs of voters into their party. This is the opiate of liberal governance. The principle objective is always to make   people dependent upon government so they will continue to vote for alms and whatever they can get. The political leaders act as paternal advisors always offering ‘help’ and sound advice to those who they would victimize as long as tax revenues or fees can back up their offerings. This drama resembles a leper colony where the inhabitants are soothed and made cheerful by the handouts they get as they can do nothing for themselves given their hopeless condition. This creates a spiral of financial ignorance tempered with poverty and disease and that set regenerates leftist governments as we see in most of the world. They just cannot get their tax machines up and running without a large set of whimpering poor folk who are on the brink of starvation from the evils of capitalism. This course of action tends to continue to amplify and infect the entire society until some revolution or sudden financial collapse happens and then governments are forced to change economic direction if the citizens are auspicious enough to realize what is happening and can vote. If not, it just gets worse. 
 
Our horrible financial history of debt:
 
When some social problem arises, or the cure to an existing problem festers, such as poverty, the first option of leftist governance is always to spend more money whether they have the economic and financial basis to do so or not.  Money can always be borrowed at a price. The temptation to spend everything a given country owns is illustrated by FDR who went to war on his own whim and transformed an entire nation into a military machine resulting in the death of 400,000 US soldiers and more civilians along with 31 million others world wide and fashioned a debt equal to the U.S. GDP. The ostensible excuse was to save us from Fascism but, then, we inherited a nuclear cold war for a half century from  one of our ‘allies’ (the Soviets) after that scuffle and that was also costly since it is still progressing. Many believe that this massive spending was part of a personal grand plan crafted by Roosevelt to aid Europe, ignoring or modifying our several Neutrality Acts[4] while antagonizing Japan and deliberately provoking a war. The tragic predicament here was that FDR was expertly counseled that another involvement in a second Great War would mire the US deeper into the enduring depression after the termination of hostilities and we would be stuck with massive debts even if we won. He was prepared to sacrifice our entire economy perhaps for decades for selfish, personal geopolitical reasons, many born of arrogance, mental illness or corruption. Nothing could be viewed as more irresponsible, but Germany, England, Italy, France and other countries have also willingly followed this path toward financial oblivion. A careful reading of the 1957 book: War and Aftermath 1914-1929 by Pierre Renouvin enlightens us on the curious practice of ‘diplomacy,’ its manifold failures and questionable utility, and the unavoidable events that led to World War 1, the conduct of World War 2 and the many wars of the 1920s.[5] FDR was not that different from Wilson, the Kaiser, Lloyd George, Winston Churchill and the leaders of Germany, Austria, Italy and most European states. Such detailed histories do not offer us much solace or hope that governments can make reasonable decisions about spending, debt, taxation or war.[6] Thus, they have little prophylactic value. Given a plausible excuse they will spend away everything we have.
 
Some of our states resemble the PIIGs[7] of the European Union:
 
California[8][9][10][11] New York and now Illinois,  soon New Jersey and Maryland, along with several other tottering states, are all in deep financial trouble and are so frantic that they will do odd things like try to peddle and tax dopes at high tax rates  to get some cash. Greece, Spain and Ireland are in the same shape in the EU. Although the Golden State is more than broke [they have a 500 bln pension fund liability on a 105 bln budget that is 30% in deficit] they can still conjure up some purchase orders for furniture, cars and other goodies to satisfy the personal comforts of the state agency officials.[12] The legislators gave themselves nifty raises and continue to spend vast sums on illegal aliens that are encouraged to vote despite the ignored laws, and probably often, to bolster their supporters.[13] This is progressive we must understand. States are finding ways to get the federal government to take on full funding of local problems such as foster children.[14] Thus, the convenience and low cost of other people’s money [OPM] is central to the progressive expansion of government in failed states such as CA, IL and NY and that list will expand.
 
Some key items that offer us the flavor of this stew:
 
Arnold flips into the game with threats like this From Feb 4, 2010:

“Unless the federal government coughs up $6.9 billion dollars more for California, Governor Arnold Schwarzenneger says he will completely eliminate a host of social programs, including Healthy Families, the state sponsored health insurance for children; CalWORKS welfare program; and In-Home Support Services for the elderly, blind, and disabled (IHSS).”[15]-- California Budget Crisis Cuts Close to the Bone New America Media, News report, Aaron Glantz, Posted: Feb 04, 2010 [Emphasis is mine in all quotes.]

An update:

“July 14 (Bloomberg) -- Illinois let $5 billion of bills go unpaid. Washington closed state offices. California may cut 200,000 workers’ pay to the minimum wage. Minnesota is delaying tax refunds for a second year.

As fiscal 2011 budgets took effect July 1, state and local governments coping with revenue declines from an economic slowdown are fulfilling legal obligations to balance their books by shaving costs and raising taxes to protect a key constituency: owners of $2.8 trillion of municipal bonds.

“States have taken all measures so far to make sure they keep capital markets open by honoring their debt payments,” said Richard Ciccarone, a managing director for McDonnell Investment Management LLC in Oak Brook, Illinois, which owns $7 billion of municipal bonds. “They are doing everything they can.””[16]—Bloomberg Business Week” California May Cut Pay, Illinois Holds Bills to Bar Downgrades July 14, 2010, 1:22 AM EDT

And, that is the key note in this song—other people’s money to keep this political cancer metastasizing. Those bond buyers need to be convinced that their investments will be safe unlike what Obama did with GM where the secured bond holders were sent to the back of the creditor’s line and whacked a goodly amount. Where, could we ask, might our bankrupt federal government get money for this gift to California and her wanton sisters? Perhaps the West is unaware that we are 14 trillions in debt thus generating threats that our AAA credit rating will be slashed and so we just boosted the debt limit to 14 trillions, for the moment and that may not be enough until November and that is not enough to carry us into 2011 and beyond.

Whatever disease has destroyed the mental facilities of those in Washington and Sacramento have apparently infected the German state as they now are willing to supply alms to the Greeks who are as irresponsible, lied about their debt structure and are as spend thrifty as any U. S. state.

“Wolfgang Schäuble, Germany's finance minister, has asked officials to prepare a plan in time for a summit of EU leaders on Thursday, according to reports in the German media. The options include either a loan from EU states or some sort of institutional EU response.”[17]--Germany backs Greek bail-out as EU creates 'economic government' By Ambrose Evans-Pritchard, International Business Editor 09 Feb 2010

The Greeks, famous for subterfuge in financial matters[18][19], may be compared to the Californians in their craving to avoid any austerity process that might even slightly deflate their sacred socialism. The apparent threat here is complicated but may result from the stark fact that Greece might default on their debts, denominated in euros, and might even exit the EU. This is the only substantive difference when comparing the Golden State to the US as presumably California is not permitted to withdraw from the union although this might be tested by the rest of the states very soon if the financial situation becomes much worse. This appears as some form of blackmail to me.

Similarly, if we compare the looming Spanish Case and compare that to New York we can draw a similar parallel and that is: if California is bailed out then what about New York? Is NY not too big to fail? This argument now extends to MI, MD, NJ, OR and some other states that are swimming in debt and have no prospects to pay off the principal for eternity. As NYC believed for decades, they can just keep borrowing and borrowing and spending forever.[20] Emergency money finally came from the teacher’s union pension fund in that case to rescue the city as President Ford refused a direct grant. The Golden State cannot dredge funds from their phony socialist pension fund because it is wildly under funded.

Thus, the frantic grab and grunt. What is most fearful and bothersome about the mentalities of Abraham Beam, Gordon Brown, Barrack Obama, the Californians, Europeans and others is the total lack of fiscal responsibility. They must believe that there is some mountain of wealth buried just beyond their view by the ‘rich’ and that a simple hike in taxes will transfer some of that into the hands of the progressive leaders so they can do good with those ill-gotten gains. Such a psychotic and collective view is financially and socially unsustainable.

The quest for loot:

“Illinois, which is selling $900 million of bonds for capital projects this week, won’t let investors down, said Governor Pat Quinn. Moody’s Investors Service lowered the state’s credit grade last month by one level to A1, matching California as its lowest-rated state.”--

It May Be Time for a Bunker Mentality: The Economy is Crashing and We have a New Dictator in Charge.[21]

We need to think seriously about a few things in light of the recent political and economic disasters we are swimming in. We have some serious problems that are not being considered or given only light treatment:

[1] We have a nation with fully ¼ of the population that has an IQ lower than 85[22]. We have people who cannot grasp even the simplest notions about business, society and conduct. Many of our cities are now simply rescue missions or sanifary flop houses.[23] Many of our high schools have dropout rates of 50% or more.

[2] We have 2 million felons in prison now and some 5-10 million more on ‘probation’ or who have served their terms and even more including those who are still committing crimes and haven’t been caught yet. There is much sympathy for druggies.[24] California is now releasing felons for financial reasons and because of court orders that require felons to be pampered and given medical care exceeding the average citizen.

[3] We have 12-20 million illegal aliens running around the country hustling drugs, voting here and there while evading taxes and 5 million of them got sub-prime or zero-down ‘affordable’ housing mortgages[25] at the urging of our government. California is festooned with illegal aliens.

[4] We have college-educated citizens who believe that carbon dioxide is a pollutant[26] and that we must tax every form of energy to save the polar bears.

[5] We have fully 1/20 of our society who wants to take drugs rather than work and many of these have an IQ exceeding 120 or at least Ivy League trained in something. We have cities where drugs are not only tolerated but they are celebrated.[27] We have drug ‘rehab’ programs that do nothing but waste money, provide a new networking system for druggies and temporarily revive druggies so they can return to their habit with a lower dose and at lower cost. This is the only cost-control mechanism I can find in the swamp of social programs.

[6] We have very large cities where the crime rates are the highest in the world for their sizes. The solution is to let the miscreants go free. San Francisco hides teenage illegal aliens from drug convictions and pays to send them back home on planes. I wonder if they rate first class service.

[7] We have so-called experts who advise us that paying excessive taxes is ‘patriotic[28]’ and that the government can solve our social problems if only they had some more tax or borrowed money.

[8] We have millions of people who believe that we can subsidize the auto industry in Detroit[29] and that they can compete in the market place with their bloated $80 dollar per hour wages and benefit costs against other auto makers with 1/3 of those costs.

[9] We have an ‘educational’ system where we cannot give and publish the results of standardized tests because it makes some students ‘feel bad.’ We have teachers in our public schools systems that apparently cannot read and are rated well in their job performances evaluations.

[10] We have ignoramuses that think that a ‘redistribution’ of wealth will allow everybody to live above the average. We have people who think now that Obama will pay for our mortgages and fill up our gas tanks for nothing. We have losers who were given zero-down mortgages and were given a second chance after a close inspection of their financial abilities and 70% of those are now in default and a few didn’t even make the first payment after adjudication.

[11] We have university professors expounding on the logic of the Neo-Keynesians featuring Paul Krugman[30][31][32][33][34][35] who advocates running the printing presses so as to flood the economy with paper money and that will produce prosperity some time down the line. He thinks the government must hire a lot of the terminally unemployed.

[12] We have phony ‘scientists’ and assorted EcoNazis fudging data and groping for massive Cap and Trade taxes to fund their ‘research’ and to provide trillions for third world dictators.[36]

We ought to be firstly concerned and secondly prepared to avoid taxes and fees as much as possible. There will come a tipping point or a Black Swan[37] [or even worse a Brown Swan[38]] that will pull us all down and leave the progressives in control of everything if we let them. These people must be exposed and voted out of power before they bankrupt the world.

Debt is very destructive and can ruin our society and allow the government to pull off another October Revolution or its counterpart. These people are vicious, frequently drug dependent and hate corporations—the very source of almost the entire tax base and the source of 98% of our jobs. California and Greece are examples of a leprotic disease that can infect us all if we let them. They will borrow and promise and spend and promise and bawl and beg to the edge of oblivion if we let them. They must learn hard work and fiscal discipline however difficult that is for them. We cannot let them trash our system.

Here is a sample of their left-wing political follies of the sort that encourages legislation:

“The initial thought, given the somewhat crude nature of the device and amateuristic attempt at execution, was that this must be the work [The Time Square Bomber ed] of an American. And not just any American, but a right winger, maybe angry at the government. Maybe a member of the Tea Party movement.

This from Robert Dreyfuss at The Nation: "It may be that the Pakistan-based Taliban, the Tehrik-e Taliban Pakistan (TTP), has quietly established a Connecticut franchise while we weren't looking. That's possible. But it seems far more likely to me that the perpetrator of the bungled Times Square bomb plot was either a lone wolf or a member of some squirrely branch of the Tea Party, anti-government far right. Which actually exists in Connecticut, where, it seems, the car's licence plates were stolen."[39]--Times Square bombing: The Tea Party movement was involved May 5, 7:25

The far-leftist government we now have, bordering on a dictatorship, will concoct any story or reason to blame their political opposition of crimes, subversive activities or outright terrorism and this sick, political posturing reminds us of the Show Trials in the rotten old USSR or the fact-finding methods of the Gestapo or NKVD or even more progressive the East German Stasi.[40]

This is their mentality:

“Her point [Contessa Brewer of MSNBC ed.] in the perfect example of bigotry, is that all who do not blindly follow the White House and Democrat party are somehow interchangeable with violent militia groups. Tea Party, conservatives or domestic terrorists in her view, and the view of many in the media, are one in the same.”-- Contessa Brewer of MSNBC talking in an audio in Times Square bombing: The Tea Party movement was involved.

This is what our twisted media and leftist government officials have degenerated into: fabricators of political news and absolute facts.

rycK [a squirrely 5th generation Californian in exile]

Comments to: ryckki@gmail.com


[1] Citizens: A Chronicle of the French Revolution (ISBN: 9780679726104) Alfred a Knopf Inc, 1989..

[5] War and Aftermath 1914-1929 by Pierre Renouvin Harper & Row, 1968. Hardcover. First edition.

[7] Portugal, Italy, Ireland, Greece and Spain. I add in California, New York and Illinois for the moment. The list is expanding.

[12] “State officials spent nearly $45 million on new vehicles in a budget year, almost $30 million on new furniture and more than $2 million on questionable meetings and conferences at upscale hotels around the state. The California Department of Transportation spent the most on vehicles ($10.4 million) and the Department of Motor Vehicles bought nearly $2 million worth of furniture. The Department of Consumer Affairs had the largest off-site conference tab at $245,430.” http://www.rightsidenews.com/201002108616/politics-and-economics/broke-state-spends-75-mil-on-cars-furniture.html

[13] “Regardless, lawmakers twice gave themselves hefty raises in less than a year during the budget crunch and substantially raised the salaries of their staff members. Legislators in the not-so-Golden State also continue to support costly programs for illegal immigrants. California spends $4 billion a year to educate illegal aliens, $775 million on their medical care and about $500 million on other welfare benefits not covered by the feds.” http://www.rightsidenews.com/201002108616/politics-and-economics/broke-state-spends-75-mil-on-cars-furniture.html

[14] “With a $20-billion budget gap, California needs every penny it can get from the federal government, and now that the child welfare money actually can be spent on helping youth rather than supporting outmoded programs, the state must grab it. Too often, rules limit the usefulness of federal money. Not this time. AB 12 allows the state to multiply the power of its dollars many times over. Lawmakers should not miss the rare chance to simultaneously save money and help Californians in need. http://www.mercurynews.com/breaking-news/ci_14280410

 
[15] California Budget Crisis Cuts Close to the Bone New America Media, News report, Aaron Glantz, Posted: Feb 04, 2010 http://news.newamericamedia.org/news/view_article.html?article_id=0152bbe37f5edc31175bd7fa21a197ee

[16] Bloomberg Business Week” California May Cut Pay, Illinois Holds Bills to Bar Downgrades July 14, 2010, 1:22 AM EDT http://www.businessweek.com/news/2010-07-14/california-may-cut-pay-illinois-holds-bills-to-bar-downgrades.html

[17] Germany backs Greek bail-out as EU creates 'economic government'

Germany is preparing to drop its vehement opposition to a rescue package for Greece, fearing that a rapid escalation of the debt crisis in Southern Europe could endanger German banks and damage the euro. By Ambrose Evans-Pritchard, International Business Editor Published: 8:36PM GMT 09 Feb 2010http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/7199625/Germany-backs-Greek-bail-out-as-EU-creates-economic-government.html

[19] Their military budget is a state secret!

[20] “US economic stagnation in the 1970s hit New York City particularly hard, as trading on the New York Stock Exchange fell while the city's welfare spending continued. The city neared bankruptcy during the administration of Mayor Abraham Beame but avoided that fate with the aid of a large federal loan. A statement by Mayor Beame was drafted and ready to be released on October 17, 1975, if the teachers' union did not invest $150 million from its pension funds in city securities. "I have been advised by the comptroller that the City of New York has insufficient cash on hand to meet debt obligations due today," the statement said. "This constitutes the default that we have struggled to avoid."[8] The Beame statement was never distributed because Albert Shanker, the teachers' union president, finally furnished $150 million from the union's pension fund to buy Municipal Assistance Corporation bonds. (President Gerald R. Ford angered many New Yorkers two weeks later by refusing an outright grant to the city, a decision famously, if inaccurately, summarized by the New York Daily News headline "Ford to City: Drop Dead.") http://en.wikipedia.org/wiki/History_of_New_York_City_(1946–1977)

[21] It May Be Time For a Bunker Mentality: The Economy is Crashing and We have a New Dictator in Charge. http://rycksrationalizations.blogtownhall.com/2008/11/22/it_may_be_time_for_a_bunker_mentality_the_economy_is_crashing_and_we_have_a_new_dictator_in_charge.thtml

[22] The Bell Curve: Intelligence and Class Structure in American Life (ISBN: 0029146739)

By Herrnstein, Richard J. and Murray, Charles Free Press of Glencoe , Inc, Old Tappan, New Jersey, U.S.A., 1994.

The Babbling Brooks of the NYT Babbles about Education.

http://rycksrationalizations.blogtownhall.com/2008/07/29/the_babbling_brooks_of_the_nyt_babbles_about_education.thtml

[23] San Francisco, Protects, and Adores Sleaze and Illegal Aliens. This Effort will launch a Parasite to the CA Governor’s Office. http://rycksrationalizations.blogtownhall.com/2008/07/09/san_francisco,_protects,_and_adores_sleaze_and_illegal_aliens__this_effort_will_launch_a_parasite_to_the_ca_governor’s_office.thtml

[24] Fresh Ideas for a Tired Crusade By TIMOTHY EGAN Contributing Columnist Published: April 1, 2008. http://www.nytimes.com/2008/04/01/opinion/01egan.html?_r=1&hp&oref=slogin

[32] Krugman Confuses Bacchus, Baucus and Baloney with the Threshold for Healthcare. Not Enough Big Government in the Latest Episode

http://rycksrationalizations.blogtownhall.com/2009/09/18/krugman_confuses_bacchus,_baucus_and_baloney_with_the_threshold_for_healthcare__not_enough_big_government_in_the_latest_episode.thtml

[40] “The MfS monitored political behavior among GDR citizens, and is known to have used torture and intimidation to mute dissent. During the Peaceful Revolution of 1989, “http://en.wikipedia.org/wiki/Stasi

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