Sharf For Colorado

Can’t Anybody Here Play This Game?

28 July 2010, 10:00 am

This morning on the way into work, I heard Mike & Mike discussing an ESPN report on the health standards of food in major league stadiums. Let’s just say that Upton Sinclair would have been unsurprised.

So here we have concessions in government-financed (and often government-owned) stadiums, covered under government health standards, easily available to government health inspectors, and catering to patrons of government-favord monopolies (and yes, I love baseball, too), and they’re still serving up a little extra protein with those corn chips, all over the country.

This is exactly the sort of thing the government ought to be regulating. How about we let them get this right before handing over additional responsibility?

Filed under Regulation.

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Discount That Optimism

28 July 2010, 9:50 am

On Sunday night’s Backbone Business, we discussed the problems with (mostly) public pensions. PERA, Colorado’s Public Employee Retirement Administration, is not exempt from these issues.

The biggest issue with public pensions is that, for some reason, they’re allowed to game the number that describes how much money they need to have in hand in order to cover future expenses.

We should always discount future cash flows according to the required rate of return of the project. In this case, the project, a government guarantee, should be discounted at the same rate as comparable government bonds. Corporate pensions, a company guarantee, discount at a rate equivalent to a basket of highly-rated corporate bonds, since that closely matches their obligation. The economic reason for this is that a lower interest rate is associated with lower risk.

The problem is that government pensions are allowed to discount at the expected rate of return of their investments, in effect presenting a risky investment as though it were a sound one, and therefore underfunding the plan.

Currently, PERA takes full advantage of this loophole, and discounts its obligations at 8%, the expected return on its investments. Needless to say, despite whatever reforms were passed in the last session, it’s not enough, and the taxpayers are going to be left holding the bag.

Eventually, we are going to have to transition to a defined contribution plan, and with the unfunded obligation growing rather than shrinking, the sooner we make that decision, the less painful it will be.

Filed under Campaign, Issues, PERA.

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Biases – Who Cares for the Poor?

27 July 2010, 5:49 pm

I’ve mentioned before how much I enjoy walking the district, and not just because I get to meet people who agree with me. You learn more from the people who disagree, and how they disagree. Usually, we manage to do that without being disagreeable. After all, it’s surprising to me when people taken the campaign more personally than I do.

But then, there are the times that are revealing. I started a conversation with one voter, who asked how I felt about the Taxpayer’s Bill of Rights. I’ve never made any secret of the fact that I support it, especially the provisions that require taxpayer approval for any increase in taxes. I firmly believe that recipients of new funds should have to make the case of the worthiness of their cause to the people whose money they’ll be spending, not merely to legislators who see an opportunity to buy votes with taxpayer dollars.

The voter, who, as it turns out, works for a very left-of-center think tank here in Colorado, vociferously disagreed. Nothing wrong so far. Then, this:

She: I’m a member of society, and I’m willing to do my part and pay more if I have to
Me: Fair enough, but you do realize that there are plenty of private charities that you can contribute to, that are just as much a part of society, and do just as much good
She: Well, you go ahead and contribute to your religious groups (slight pause) and your secular groups….
Me: Ma’am, please don’t put words in my mouth. I didn’t mention religious groups at all.
She (spitting nails at this point): Well, I know what you meant.
Me: No, you don’t. Although, remember that the soup tastes just as good when the Catholics serve it.

This is problematic on a number of levels. I don’t have any reason to believe the woman was reacting speficially to my yarmulke. That is, I’m willing to give her the benefit of the doubt and assume that she has a problem with religion in general. But the close-minded opposition to the assumed close-mindedness of the religious is an especially destructive sort of prejudice. It undermines our civil society, those institutions that exist independently of the government, and provide a community connection for both the giver and the receiver.

There is also, perhaps a cautionary tale here for those religious (and secular) organizations whom the government uses to provide needed social services. These groups, seeing an opportunity to do more, can all too easily be converted into clients of the state, dependent on the government not only for money for service delivery, but also for general overhead. And after that, they can become easy prey for those who, like my neighbor, hold them in disdain.

Nobody ought dispute the need for a government safety net. But the temptation to “do more,” laden though it is with good intentions and sympathy for those who need our help, also carries its own risks.

Filed under Issues, State Spending, Taxes, Walking the District.

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Washington Park Progressives

26 July 2010, 9:01 am

Progressive diners, that is. Thank you to the Naeses, the Downs, and the Foleys for opening their homes to a “Progressive-Conservative” Dinner for local and statewide candidates. I had the chance to join Scott Gessler, JJ Ament, and Mike Fallon for a culinary trip through the neighborhood, and a chance to meet some of their neighbors and discuss politics.

Thanks also to those generous folks who contributed to the campaign coffers. Every bit helps!

Filed under Appearances, Events.

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The Quantum Theory of Government

21 July 2010, 1:39 pm

Back in the early days of quantum theory, Sir William Bragg used to say that on Mondays, Wednesdays, and Fridays, physicists thought of the electron as a wave, and on Tuesdays, Thursdays, and Saturdays, as a particle. The Obama Administration, and their Democrat counterparts here in the state, have adopted a similar theory of taxation.

First, it was the state Democrats insisting that a fee wasn’t a tax, except when it was. Now, the Obama Administration, in response to Virginia’s lawsuit against Obamacare, has changed its tune about the penalty you will soon pay for not carrying health insurance. Initially, they claimed it wasn’t a tax, in order to avoid rhetorically breaking the President’s promise not to raise taxes on anyone making less than $250,000 a year.

Now, in response to the lawsuit, which claims that the government can’t impose a penalty for not engaging in commerce, and that the IRS can’t be used to collect penalties unrelated to taxation, the Administration has decided that it’s a tax, after all. Which will create difficulties of its own.

The Constitution limits the direct taxation authority of Congress pretty severely. While the 16th Amendment permits income taxes, this isn’t an income tax. And while it permits capitation taxes, those taxes have to be in proportion to a state’s population, which this also isn’t. So we’re left with a situation where something is a tax on Monday, Wednesday, and Friday, a fee on Tuesday, Thursday, and Saturday, and a penalty on Sunday.

The resolution to the quantum paradox, most agree, is that the electron and other particles aren’t really particles or waves at all, but something else entirely that has features of each. I think it’s pretty clear what’s what in this case, but no doubt the Democrats will soon be arguing that it’s neither a penalty nor a fee nor a tax, but something else altogether.

The one common denominator to all these definitions is that it means more money for them, and less for you.

Filed under Issues, Taxes.

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