Monday, October 5, 2009

The Fog of Olive's Budget

Berndt Leifeld, Town of Olive Supervisor, released the Town of Olive budget today in the Town of Olive office in West Shokan, next to Davis Park. Several members of the Town of Olive Republican Committee were present as well as Mr. Leifeld (D), Town Clerk Sylvia Rozelle (D), Town Boardsmen Peter Freidel (R)and Bruce LaMonda (D), and several concerned citizens.

In 2004 Errol Morris released Fog of War, a two-hour interview of Robert McNamara (D), co-architect of the Vietnam War. The term "fog of war" relates to the inability of military commanders to avoid error. Even the best general will inadvertently lose men because of tactical or strategic blunders.

When it comes to government budgets, there is a different kind of fog from the fog of war. In a military setting, fog is unavoidable because it results from the technical, perceptual and other difficulties associated with the use of military violence. In the case of government budgeting, the fog is deliberate. Both parties have budget fog machines that blow aplenty so that budgets barely can be seen, and the Town of Olive is no different. Berndt Leifeld and his Democratic colleagues are ethical and act in good faith within the boundaries that government permits. Mr. Leifeld and Mr. LaMonda were supportive of questions and forthright in their answers. However, the fog has set down.

In particular, and this is consistent with required practice, the amount of reserve dollars on deposit is not mentioned. I am told that the amount of reserves that the Town of Olive is holding is allegedly in the seven digits, as much as two thirds of the Town's total tax bill of $3.3 million. This would be astonishing if true. We are in an environment where holding cash poses long term risks. Interest rates are at all time lows. The Federal Reserve Bank has taken a potentially inflationary stance, doubling the nation's bank reserves a year ago. Although deflation is possible, large cash positions are as much a crap shoot as investing in commodities.

Mr. Leifeld indicates that interest rates on the reserves are down 95%. According to the revenue line item "interest and earnings" on page 18, the amount fell from $28,000 to $5,000. Is this the time to be holding a cash surplus instead of cutting taxes? Usually, investors look for high returns, not low ones.

The budget indicates a reduction in expenditure on buildings from $69,000 to $52,000. This may be a costly reduction. If buildings are not maintained, then they have to be replaced. For too long the State of New York has allowed infrastructure to deteriorate while it has played budget games, squandering future generations' birthright for short run political gain and self indulgence. It would be a pity if the Town is saving $17,000 and in exchange spends millions to build new buildings.

The construction of new buildings in the coming years hardly makes sense. It is much better for the environment and more cost effective to rehabilitate existing structures, to include new extensions, rather than greenfield. Should the town be charging ahead with (a) current high tax rates while (b) cutting services simply to (c) build new town offices?

Although appropriations for highway general repairs are increasing by $276,212 or 4.6%, I am told that not all of this year's budget has been spent. Allegedly, the highway department was told that it must not use the full budget for this year but rather return funds of as much as $200,000 to add to the new building reserve fund despite deteriorating roads. For example, Piney Point Road is a roller coaster at the intersection of Route 28.

The budget reports that personal services costs for the Town Board, Justices, Town Supervisor, Assessors and Town Clerk, have increased. This is puzzling beause according to the Democratic Party media we are in a deflationary economy. Are we mixed up, or is it the New York Times, which keeps talking about recession, depression and deflation? If there's deflation, why are costs rising? And if there's inflation, why did the Democrats spend $5 trillion on bailouts, handouts to the ultra-rich.

Mr. LaMonda states that Workers' Compensation costs have escalated due to increased claims. Mr. Leifeld notes that the Town highway employees' labor agreement forces a four percent wage increase that is unavoidable. But social security is not going to increase this year, and low-income retirees cannot necessarily afford new Town buildings.

Sunday, October 4, 2009

I Made A Mistake Donating to The McCain Campaign

Last year I donated to the McCain campaign. When I did, I did not realize that McCain is a Roosevelt-Rockefeller-Bush Republican, i.e., supporter of incompetent big business, friend of government waste, stupidity and opponent of the free market. My neighbor, Clayton, remarked today that McCain aims to take over the Republican party in order to advance his extremist views.

I made a major blunder last year contributing to McCain. I have resolved to focus on local and county elections, and possibly state elections if a reasonably enlightened candidate who aims to slash government spending by 10% or more decides to run. The current Republicans on the national level are moronic socialists, essentially Democrats, and I have no interest in them. Unless a good candidate for president appears, in three years my money will go to pay off my car loan. I can't afford to contribute to loot-and-spend reactionary extremists like McCain.

Mass Media Anxiety Syndrome: A Conservative Neurosis

For many decades conservatives have complained about media bias. Media bias is nothing new. In the early days of the republic the newspapers were affiliated with parties. There were Democratic Republican newspapers and there were Federalist newspapers. In the 19th century that continued. The New York Times was, in the 19th century, a Republican newspaper. No one complained that Republican newspapers were biased toward the Republicans and Democratic newspapers were biased toward the Democrats. Rather, it would have been strange if the newspapers tried to be objective.

In the 1890s Adolph Ochs bought the Times and claimed to have invented a new approach to news: objectivity. The Times would state the facts. Of course, as Kurosawa's classic Japanese movie Rashomon shows, there is no such thing as objectivity. There is such a thing as falsifiability, which means that it is possible to find evidence to prove a theory wrong. But asking human beings to be objective in the sense of shedding all psychological biases, selective perception, perceptual distortion, fundamental attribution error, prejudice and many other biases that riddle all perception is asking them to be gods. People are not gods, and the New York Times is not objective.

Perhaps we can say that, like many other forms of snake oil that were for sale in the 19th century, the New York Times is one. It claims to sell you objective news, but its claim is fraudulent. Either that or all of cognitive psychology, philosophy and organizational theory for the past 75 years has been mistaken.

So the New York Times, the television stations and magazines are biased in favor of the Democrats. That is not very surprising. What is curious is that at some point all of the Republican newspapers, including the Times, became Democratic, and none of the Democratic newspapers became Republican. Part of the reason may be that the Democrats assumed a majority in the 1930s, at which point the labor laws drove up costs for less successful newspapers. Because the Republican papers were less successful, labor law had the unforeseen effect of shutting down many Republican newspapers such as the New York Herald Tribune. Whether that is so or not I don't know, but one outcome of the New Deal seems to have been to strengthen the Times, which had supported the same policies. In turn, many regional newspapers either copied the Times and became Democratic or else because a majority had turned Democratic Republican papers found it difficult to survive.

A similar explanation applies to television stations. An organization theorist named Arthur Stinchcombe pointed out that when organizations form around the same time they frequently have similar structures. Like architecture, organizational policies reflect period fads. The television networks first succeeded in the 1950s (although their parent radio networks first succeeded in the 1920s). By the 1950s the nation was largely "Progressive" and social democratic. Hence, these ideas have been dominant in the television world as well.

Another explanation might be the aggressive occupation of American cultural institutions by left wingers. This has been especially true of universities. As journalists increasingly came to be trained in American universities, they began to parrot the ideology in these benighted institutions. Thus, it may be that socialist journalism parallels increasing socialism in the professions and business.

I continually hear and see conservatives and Republicans complaining about the bias in various Democratic Party organs, whether it be the Times, PBS, the networks, etc. The widespread anxiety about Democratic bias is misplaced. The media is Democratic, so bias is to be expected. Are we outraged that Ahmadinejad doesn't like us or that China is obsessed with Taiwan? I think not. Becoming agitated every day about the Democratic bias of Democratic news sources is neurotic, a neurosis that I call Mass Media Anxiety Syndrome, MMAS.

As with any anxiety-related disorder, one treatment is to act to overcome the anxiety. In other words, Republicans and conservatives should not be complaining about the Democratic bias of Democratic news sources, which are not, never have been, and cannot be objective. Rather, they should be asking themselves the following questions:

1. Why do I read Democratic Party news sources? If all Republicans stopped reading the Times, it would likely fold, or else be severely crippled. If you are a Republican or a conservative, why are you reading the Times? You help the Democrats by reading the Times.

2. Why are there so few Republican news sources? I can think of Reason Magazine, City Journal, National Review, and one or two others. Why haven't the Republicans found a way to get funding for Republican newspapers and radio stations?

One of the contributing causes of MMAS is likely intellectual laziness. I do think that the Republicans have been intellectually lazy in failing to support Republican news outlets, and lazy about finding a way to start mass media outlets of their own.

In other words, don't get mad, get even.

Friday, October 2, 2009

On Plumbing in The Two Americas

Increasingly there are two Americas: the first is comprised of investment bankers, commercial bankers, mortgage bankers, professors, real estate developers, judges, and others on government out-patient support. The second is of productive, value-creating Americans on Main Street in the private sector who lose because of government. Increasingly, the values that guide the two Americas are incompatible. The first America believes that they have the right to dispose of the value that the second America creates. The second America works hard and pays. The first America consumes the first America's wealth and boasts of its morality in compelling the second to pay.

Let us suppose the two Americas separate. The first America will see a surplus of theories about why judges create efficiency; why people who do not work deserve ten thousand dollars in health insurance; and why critics of the president are violent racists who deserve jail time. The first America will see a shortage of plumbers and rising prices as each attempts to do as little work as possible and each steals from each. The first America will have plumbing that remains unfixed.

The second America will see a surplus of plumbers. Repair and house prices will fall. But there will be a shortage of academics, judges and investment bankers. Productive people will produce wealth relative to the amount of money in circulation. Innovation will be rampant.

The first America will learn to live with broken plumbing and lots of theories about how to redistribute wealth, none of which work and all of which offer de facto guarantees of funding for investment banks, universities and judges. The first America will print money and hand it to the most powerful, claiming that they are selfless and charitable in doing so. They will become gradually poorer as investment bankers, lawyers, professors, and journalists consume ever larger shares of wealth. The second America will become richer, as America did until 1970, through hard work and innovation.

In which America would you prefer to live?