I first saw John Kasich in person at a county Lincoln Day dinner in early 2007. Though the former congressman was a bit under the weather, his animated, passionate style and strong convictions were still quite evident. When he said, in essence, that “Ohio is circling the drain,” you knew he meant it, even though I doubted it.
I shouldn’t have. With the election of Ted Strickland, I believed that trouble was probably on the way. I didn’t appreciate that it was already here.
A recent USA Today chart compiled from government data reported that from 2001 to 2010, Ohio’s economy contracted. Not by much, mind you — 0.7% — but only auto-overdependent Michigan fared worse (-7.1%), and no other state grew by less than 6%. As a whole, despite the Internet bubble, the 9/11 attacks, and the recession, the country’s gross domestic product (GDP) grew by over 16% during the decade. Meanwhile, the Buckeye State’s economy spent the time mired in mediocrity and worse, and all those who could have done something about it did was damage.
Republicans promote economic growth, low taxes, and minimal regulation, right? If that were the case, 2001 through 2006, with the GOP in firm control of all branches of government, should have been the Buckeye State’s golden years. Instead, Governor Bob Taft, a pliant legislature, and pay-to-play cronies at ORPINO (the Ohio Republican Party In Name Only) increased taxes in 2003 and allowed state government, its headcount, and its workforce costs to grow at alarming rates. Ohio’s economy barely budged during those years, and was second-worst in the country (again, only Michigan trailed). On a per-capita basis, the state’s GDP grew by less than 0.3% per year. During 2003 through 2006, while the U.S. economy as a whole added over 6.1 million jobs, Ohio added a pathetic 6,000, gaining back hardly any of the 191,000 jobs lost during the decade’s first two years. The state’s 2005 revenue-neutral tax restructuring, which included an awful gross-receipts tax, did more harm than good.
As bad as the Taft era was, it was just a warmup. Under Strickland, with the hugging cooperation of Republicans in the legislature, Ohio’s economy tanked well ahead of the recession as normal people define it (July 2008 through June 2009). After losing 7,000 jobs in 2007 while the country gained almost 1.1 million, the state saw over 400,000 jobs — an astonishing 7.7% of the workforce — vanish during 2008 and 2009. Under “Turnaround Ted,” there was no jobs recovery; fewer Ohioans were working during Strickland’s final month than when the recession officially ended 18 months earlier.
If the Strickland administration did anything meaningful to stop the bleeding during its four-year reign, I certainly didn’t see it. Dayton high-tech icon NCR, the home of the original cash register over a century ago, left the state for Georgia; politicians of both parties, who clearly weren’t maintaining their business community contacts, were totally blindsided. The only thing I recall Ted Strickland doing is begging Washington for stimulus money. All that did is enable the state to keep its bloated structure essentially intact for two years while delaying and worsening the ultimate day of reckoning. Strickland, who fortunately became the first incumbent Buckeye State governor since 1974 to fail to win reelection, though by a scary-slim margin, left a state which had shrunk by over 3% during his four-year term — fifth-worst in the nation, beating out only Nevada, Michigan, Florida, and Arizona — and an $8 billion budget hole for Kasich, his successor.
Kasich and legislative leaders first pushed through SB5, a union-limiting cost control measure similar in many ways to Wisconsin’s better-known budget repair law, despite a poor performance by the PR-averse ORPINO, the opposition’s fundamentally dishonest claims, and some opponents’ sickening, Badger State-like childishness. As of this writing, Kasich and the GOP-dominated legislature, which lost the House in 2008 but won it back in 2010, appeared on the verge of meeting the budget challenge without raising taxes.
There’s a new constructive attitude in state government which, despite early stumbles, some by Kasich himself, shows signs of becoming contagious. “A new way, a new day,” and moving “at the speed of business instead of at the speed of a statue” may actually be more than corny slogans.
Most important, though it’s far too early to get overly excited, the state’s workforce is finally growing again. Through May, Ohio added 70,000 seasonally adjusted jobs, the fourth-highest in the country in percentage terms, and easily the best of any industrial state. It’s the best January through May result since 1994, which will not surprise longtime Buckeye State residents, as that is about the time when second-term governor and alleged Republican George Voinovich became just another tax-and-spend politician. The Kasich administration has also scored key corporate saves of companies which were considering leaving the state.
If anything will keep Ohio from legitimately turning around, it’s the state-reliant, business-hostile comfort zone in which too many relatively disengaged Buckeye State voters reside. That’s the only plausible explanation why the 2010 gubernatorial race was as close as it was.
The state’s Tea Party adherents have been among the nation’s most active. To help sustain Kasich’s early momentum, they will need to redouble their efforts in the coming months and years. Fortunately, the movement’s leadership is aggressively acting to meet that challenge. Its “We the People” Convention in Columbus on July 1-2 promises to serve as Activism 101 for sensible conservatives, and to build an effective counter to the Alinsky-driven left. Buckeye State residents and out-of-staters who want to leave a free, solvent state and country to their children and grandchildren should seriously consider attending.
Tuesday, June 28, 2011
IMPACT OF 70 MILLION ADDED LEGAL IMMIGRANTS IN 24 YEARS
Tea Party gathering in Cheyenne, Wyoming at the invitation of popular radio talk show host Dave Chaffin at KGAB 650 AM. Every Monday at 7:00 a.m., we discuss the accelerating consequences of the legal and illegal immigration invasion of America.
On Saturday, I spoke on the RePatriot Radio station WNJC 1360 AM, (archived) with Rita Bonilla and Alice Navoa both Hispanic-Americans from California and Arizona that see the face and language of American changing toward Spanish dominance. They also see the welfare rolls swelling, schools failing, hospitals overwhelmed and prison populations exploding.
When I began reciting the numbers to them, they gasped at the speed of America’s language, ethnic makeup and culture radically and forever being devolved into a third world country like Mexico.
Anyone can see it in the devolvement of our schools via academic dumbing down of curriculums. Parents can see it in the utter chaos of multi-lingual classrooms where no learning is taking place. Anyone can see it in the dropout/flunkout rates as high as 76 percent in immigrant-laden cities like Detroit, Michigan. Anyone can see it in the shoplifting of $35 million daily from our stores across America by the poor. We can see it in the illiteracy rates now at 42 million Americans who cannot read, write or perform simple mathematical equations. Crime rates reflect it with 2.3 million prisoners. We can see it in the inability of our Congress to pass anything meaningful to resurrect this economy but instead—continue costly and immoral wars, deficits, trade imbalances, scandals and joblessness, 13.4 million American children living in poverty and unemployment of 15 million Americans.
Just like Congress along with the past five presidents, the legal immigration invasion continues without a whisper.
According to the Pew Center, Fogel/Martin Study and U.S. Census Bureau, the United States, at the current immigration rate, will add 70 million legal immigrants by 2035. By 2050, that number will approach 100 million legal immigrants from third world countries with third world cultures—cultures of poverty. Your guess for illegal immigrants will be about 800,000 to 1.1 million annually—so that number will be horrific as we allow a sub-class to develop within our country.
While I have seen what is coming from my world travels and I have written thousands of columns in the past 35 years as to our impending overload—no national leader will raise a finger, speak a word, stand up or speak out. I’m dumbfounded at how inept, apathetic and ignorant our Congress and president remain to think we will survive this Human Katrina invading our civilization.
I can’t beg enough people to see Roy Beck’s simple five and 10 minute videos of what our kids face:
In a five minute astoundingly simple yet brilliant video, “Immigration, Poverty, and Gum Balls”, Roy Beck, director of www.numbersusa.org, graphically illustrates the impact of overpopulation. Take five minutes to see for yourself.
“Immigration by the numbers—off the chart” by Roy Beck
This 10 minute demonstration shows Americans the results of unending mass immigration on the quality of life and sustainability for future generations: in a word “Mind boggling!”
On David Muir on ABC News Sunday night, he said the face of the nation will be permanently changed from white to a non-white “majority-minority” within 39 years.
As I sat there, he never mentioned a single point about the consequences of adding 138 million people to this country with our environmental, water, resource and energy predicaments ALREADY beyond solving in 2011. It won’t matter whether we are a black, white or brown nation if we can’t water, feed and warm ourselves. I am beginning to comprehend that the media and our elites live in denial or are just plain stupid or refuse to educate our citizens for some arcane reason. CNN, FOX, ABC, NBC, CBS, Charlie Rose, Bill Moyers, Bill O’Reilly, David Gregory, Bob Shieffer, Matt Lauer, Scott Pelley, Diane Sawyer and Brian Williams are either brain dead as to what we face—or they celebrate the disintegration of our civilization. I’ve written every one of them a half dozen times asking them to interview 35 of the top experts in the world on what we face. Not a single response in 10 years!
What we’re doing to ourselves defies my intelligence. Millions of my readers have circulated my column about the “Tragedy of Detroit” published in News With Views in October of 2009 along with vivid pictures. Detroit constitutes a symptom. You’re encouraged to circulate this column with the five and ten minute video around to every American alive.
Why? If we don’t stop mass immigration by reducing it to less than 100,000 annually, our kids will curse us for our arrogance, stupidity and utter disregard for their futures. Without any action from us, 39 years will pass and this monster immigration equation will visit utter calamity upon our children. I can see it as clearly as I saw it in other third world countries. The future is already here in China, India, Mexico and Bangladesh. The future is already here in Detroit, LA, Miami, Houston, New York and Chicago. It will only grow worse.
And, like the Titanic, we continue steaming for the same fate at full speed. I’m appalled at the apathy of the Main Stream Media and the utter disconnect of the American people as to what they bequeath their children.
I am not optimistic about our future as a civilization as the water, energy, resource and immigration equations begin to play out with that 138 million added people within 39 years. That moment will be here in a blink.
POISON POLITICS
Without much public notice, governments in Europe and the United States are redefining the meaning of dietary supplement adulteration. Through that redefinition, those governments are laying legal foundations for the removal of a large number of dietary supplements from the market. The actions, reminiscent of government political control of science in national socialist countries of the 1930s, deprive people of a most basic freedom of choice, the right to choose which nutrients to ingest.
In the Sixteenth Century, Swiss philosopher, alchemist, physician, and scientist Paracelsus made an observation that became the essential principle of toxicology: “All things are poison, and nothing is without poison, only the dose permits something not to be poisonous.” In other words, dose determines toxicity. The Paracelsian principle applies to everything, even water. If consumed at a certain dose level, water will cause injury, including death. Conversely, virtually everything has a dose level at which it will not cause injury. From the truth written by Paracelsus came laws European and American that included a presumption that nutrients consumed safely were lawful and that the government bore the burden of proof to show a dose level at which significant and unreasonable harm would occur before it could restrict consumer choice.
Nutrients, like most substances in our environment, are the subject of imperfect scientific knowledge. Conclusive proof of safety is the rare exception. It is thus the case that when we eat common fruits, vegetables, or meats, we do so with some degree of risk that is unavoidable. For all we know we may be in a known or emerging subset of the population that suffers an “allergic” reaction to the nutrient or some other adverse effect and, in certain instances, the reaction may be fatal. Consequently, freedom to choose among nutrients carries with it a degree of risk that is unavoidable. Historically mankind has gladly accepted that risk, limiting government intervention to instances where significant and unreasonable harm was generally occurred.
An alternative view has swept the health governors of Europe and federal and state health regulators in the United States. That view holds inconclusive science concerning the relative risk of commonly consumed nutrients as inherently vulnerable territory warranting government controls and restrictions. The absence of sure knowledge of safety, which creates uncertainty, leads those who favor this alternative view, called the Precautionary Principle, to advocate banning or restricting public access to nutrients until such time, if ever, as sure knowledge of safety is acquired. While that principle has logical importance when a substance is inherently volatile in even tiny amounts (like fissile or some explosive materials), it becomes a bane on freedom of choice when it is imposed on nutrients for which there is a long history of safe human consumption within a wide range of doses.
Advocates of government management of science have long embraced the Precautionary Principle as a means to insinuate government into private decisionmaking. They have rejected the Paracelsian Principle not because they view it as false but because they view all that which is not presently provable in science to be potentially dangerous and to invite government control. At least since the 1930s, national socialists have embraced the Precautionary Principle as a justification for government sovereignty at the expense of individual freedom. The Germans used the term Vorsorgeprinzip (which means precautionary principle), as their term for the need to establish prohibitions to bar public choice in the midst of perceived vagaries in science.
In the Twentieth Century, the Precautionary Principle again became a means of government control when it was adopted as Principle 15 at the 1992 Earth Summit in Rio. On February 2, 2000, the European Commission Communication on the Precautionary Principle revealed the principle presumptively the law of risk for all 27 member states of the European Union. In Europe today no unauthorized nutrient may lawfully be sold; each must be approved by the European Food Safety Authority (EFSA) following a safety and bioavailability review.
All member states of the European Union are obliged to enforce EFSA’s nutrient bans. This gross assumption of power over the most basic human decisions concerning what to ingest represents a massive deconstruction of European food markets. Before the EFSA requirement, European countries largely followed the Paracelsian Principle, permitting their people the freedom to choose nutrients in any dose level except that which was demonstrably unsafe (with the burden resting on government to establish a lack of safety). EFSA has used the Precautionary Principle to flip the Paracelsian Principle on its head. Now substances that have been consumed safely are presumed unsafe until such time as a party pays a half million dollars or more to prove the product safe to EFSA’s satisfaction. Rather than constituting a scientific determination, food safety has become, as never before, a political determination. Moreover, proof of safety essentially requires proof that the product at the dose level sold produces no demonstrable physiological effect, whether good or ill. That is because any demonstrable effect helpful to some or most is almost invariably harmful to a minority (e.g., those allergic to the substance). If harmful to any, EFSA may well ban the product, leaving in the market only those doses that are so low as to be of no benefit.
In the United States, the movement toward greater government restriction of the nutrients we may freely ingest has taken many forms. Through the current Good Manufacturing Practice regulations for dietary supplements, the FDA is succeeding in driving from the market manufacturers of products that have been safely consumed. Through the Food Safety Modernization Act, Congress has compelled FDA to increase its enforcement activity, multiplying the harm. FDA deems all manner of technical violations, including record-keeping violations, to be adulteration even in the absence of any proof that a finished product poses any actual risk to health.
On April 12, 2004, the FDA banned from the market all dietary supplements containing ephedrine alkaloids, regardless of the dose level sold. It did so despite the absence of any scientific proof that ephedrine alkaloids in daily dose levels lower than 20 mg per day posed any risk of injury. The agency’s basis for the ban was its assumption that all ephedrine alkaloids increased blood pressure and heart rate, creating a risk of injury to the heart or even death in some with pre-existing conditions. The agency lacked evidence of heart toxicity of any kind for doses levels of 20 mg or less.
In February 2003, the tragic sudden death of twenty-three year old prospective Baltimore Oriole pitcher Steve Bechler raised political demands for FDA to ban ephedra. Bechler had consumed three ephedra pills on an empty stomach before commencing a grueling day of training. Although no proof of causality existed to establish ephedra as the reason for Bechler’s death, those interested in achieving greater FDA control over supplements seized on the event and publicized it as if causality had been proven. In fact, Bechler was overweight and had vigorously practiced in extreme heat without sufficient hydration.
In an adulteration case my firm brought on behalf of Nutraceutical Corporation against the FDA, we prevailed at the district court level. We argued that FDA acted arbitrarily and contrary to statutory authority when it banned all ephedrine alkaloids without scientific proof that every dose level posed a significant and unreasonable risk of injury. The United States District Court for the District of Utah agreed, holding the ban unlawful. The decision sent shock waves through Congress as members either ignorant of science or in love with the FDA clamored loudly for legislative action to compel the ban. Against that backdrop, the United States Court of Appeals for the Tenth Circuit reversed. It held FDA possessed the discretion to remove from the market a nutrient it deemed potentially harmful without the necessity of proving that the dose sold actually caused harm. That decision effectively invited FDA to implement across the board the Precautionary Principle.
With its ephedrine ban restored, FDA no longer is restricted by the distinguishing principle of Paracelsus. Rather than have to prove a dose harmful to ban its sale, FDA may now declare any nutrient potentially harmful at some dose level and then ban it at every dose level (as it did with ephedra). That sweeping authoritarian power denies American consumers essential freedom of choice and invites an endless series of agency actions that will, bit by bit, remove from the market all manner of nutrients disliked by regulators for one reason or another. In the United States, as in Europe, politics has triumphed over science, and government control has replaced freedom of choice.
Sheriff Babeu: More Troops for Korea Than for Border
Arizona Sheriff Paul Babeu wants to know why there are far more troops deployed at the Korean border than at the U.S.-Mexico border while his county is being overrun by illegals.
Babeu, who was named the 2011 National Sheriff of the Year by the National Sheriffs’ Association on June 19, noted that there are 28,500 American troops stationed in South Korea to help defend against North Korea, and U.S. troops have been there for 58 years.
But only 520 National Guardsmen are deployed in Arizona, which has a 276-mile border with Mexico.
Babeu is sheriff of Pinal County, between Tucson and Phoenix and 80 miles north of the Mexican border. His officers regularly confront illegal aliens, human traffickers, drug smugglers and potential terrorists.
The Obama administration recently announced that it would extend the deployment of 1,200 National Guard troops along the border for three months, but Babeu charged that those numbers “fall far short” of what is needed.
“We need 6,000 armed soldiers on our borders to protect America,” Babeu told CNS News.
“Homeland Security starts at home. The gravest national security risk that we face is right here with the unsecure border with Mexico.”
Babeu said the 6,000 troops should be deployed for a two-year period, including 3,000 in Arizona and 1,000 in each of the other three border states.
Babeu said in an interview with Newsmax last year that his deputies routinely face drug gangs armed with AK-47 automatic rifles. He also said that more than 20 percent of illegals passing through his county are OTMs — Border Patrol jargon for “other than Mexicans” — and some are coming from “nations of interest” known for terrorists, such as Iran, Yemen, Somalia, and Jordan.
Babeu told CNS News about his recent award: “I think it has everything to do with us standing up for America, standing up for the rule of law and not being shouted down by the president and his men trying to make like somehow we’re being un-American for enforcing the law and wanting a secure border.”
Babeu, who was named the 2011 National Sheriff of the Year by the National Sheriffs’ Association on June 19, noted that there are 28,500 American troops stationed in South Korea to help defend against North Korea, and U.S. troops have been there for 58 years.
But only 520 National Guardsmen are deployed in Arizona, which has a 276-mile border with Mexico.
Babeu is sheriff of Pinal County, between Tucson and Phoenix and 80 miles north of the Mexican border. His officers regularly confront illegal aliens, human traffickers, drug smugglers and potential terrorists.
The Obama administration recently announced that it would extend the deployment of 1,200 National Guard troops along the border for three months, but Babeu charged that those numbers “fall far short” of what is needed.
“We need 6,000 armed soldiers on our borders to protect America,” Babeu told CNS News.
“Homeland Security starts at home. The gravest national security risk that we face is right here with the unsecure border with Mexico.”
Babeu said the 6,000 troops should be deployed for a two-year period, including 3,000 in Arizona and 1,000 in each of the other three border states.
Babeu said in an interview with Newsmax last year that his deputies routinely face drug gangs armed with AK-47 automatic rifles. He also said that more than 20 percent of illegals passing through his county are OTMs — Border Patrol jargon for “other than Mexicans” — and some are coming from “nations of interest” known for terrorists, such as Iran, Yemen, Somalia, and Jordan.
Babeu told CNS News about his recent award: “I think it has everything to do with us standing up for America, standing up for the rule of law and not being shouted down by the president and his men trying to make like somehow we’re being un-American for enforcing the law and wanting a secure border.”
White Working Class Will Decide Obama’s Fate
Significant numbers of white working class voters are expected to show up at the polls in 2012, and their level of support for President Obama will very likely determine if he is re-elected.
That’s the view of Ruy Teixeira, senior fellow at the Center for American Progress Action Fund.
He points out that Obama lost the white working class vote in 2008 by a margin of 18 percentage points. But in 2010, Congressional Democrats lost by 30 points in this demographic.
“While the first number is a figure Obama could live with repeating, the second could very well prove fatal,” observes Teixeira in an article published by The New Republic.
And that 30-point deficit “seems increasingly possible given the recent bad news about the economy,” he adds.
Looking at individual states, Teixeira notes that in Ohio — a state Republicans need to win to unseat Obama — white working class voters could represent as much as 56 percent of voters in 2012. Anything close to the 30-point deficit will deliver Ohio to the GOP candidate, according to Teixeira, co-author of the book “America's Forgotten Majority: Why the White Working Class Still Matters.”
The 30-point deficit would also sink Obama in Florida, whose 29 electoral votes “would assure Obama’s re-election, assuming he manages to carry the 18 states that Democrats have carried in every presidential election since 1992,” Teixeira says.
States with high percentages of white working class voters that Republicans could strongly contest include Minnesota, Wisconsin, Pennsylvania, and Michigan.
As to whether a surge toward the Republican candidate among white working class voters is likely, Teixeira cites the “bleak economic situation confronting most members” of this voting bloc and says: “Scarily so.”
That’s the view of Ruy Teixeira, senior fellow at the Center for American Progress Action Fund.
He points out that Obama lost the white working class vote in 2008 by a margin of 18 percentage points. But in 2010, Congressional Democrats lost by 30 points in this demographic.
“While the first number is a figure Obama could live with repeating, the second could very well prove fatal,” observes Teixeira in an article published by The New Republic.
And that 30-point deficit “seems increasingly possible given the recent bad news about the economy,” he adds.
Looking at individual states, Teixeira notes that in Ohio — a state Republicans need to win to unseat Obama — white working class voters could represent as much as 56 percent of voters in 2012. Anything close to the 30-point deficit will deliver Ohio to the GOP candidate, according to Teixeira, co-author of the book “America's Forgotten Majority: Why the White Working Class Still Matters.”
The 30-point deficit would also sink Obama in Florida, whose 29 electoral votes “would assure Obama’s re-election, assuming he manages to carry the 18 states that Democrats have carried in every presidential election since 1992,” Teixeira says.
States with high percentages of white working class voters that Republicans could strongly contest include Minnesota, Wisconsin, Pennsylvania, and Michigan.
As to whether a surge toward the Republican candidate among white working class voters is likely, Teixeira cites the “bleak economic situation confronting most members” of this voting bloc and says: “Scarily so.”
Main Street for Sale: How Banks Are Selling US Public Landmarks to Foreigners
Foreign governments and businesses are buying more and more public U.S. assets such as schools, airports and even parking lots, and U.S. banks such as Goldman Sachs are only happy to help them.
On Wall Street, running these so-called Infrastructure Funds that buy such assets are big banks with over $140 billion, including Goldman Sachs, Morgan Stanley and Australian infrastructure specialist Macquarie, according to research compiled by the Huffington Post and MSNBC.
"Goldman says it will be involved with 'ownership and operation of public services, such as airports, toll roads and shipping ports, as well as power generation facilities, physical commodities and other commodities infrastructure components, both within and outside the United States,'" the Huffington Post reports.
Why buy a slice of American life?
Because it's a good investment with little competition.
"Most assets are monopolistic in nature and have limited competitors, creating the opportunity for stable, long-term investment returns. Investment choices include economic assets and social assets," says Quadrant Real Estate Advisors, real estate fund manager with assets in the U.S. and Australia.
The market size of such assets runs between $12 trillion to $20 trillion, about the same size of the American mortgage market.
"Given the market and potential return opportunities, institutional investors should consider infrastructure a strategic investment allocation," Quadrant concludes.
While not new globally, privatization is a fairly recent trend in the United States.
Some Republicans like it because it pumps local governments with sales revenue and lets them move head acting fiscally responsible.
Democrats like it for the same reason and for the injection of investment capital that comes with it, as evidenced by the Obama Administration's encouragement of Chinese sovereign wealth funds to invest in American infrastructure and former Democratic Chicago Mayor Richard Daley's privatization of Chicago's Midway Airport, Chicago's Skyway road, and Chicago's Parking Meters.
Ratings agencies, meanwhile, have rewarded cities and towns that privatize assets.
Cash-strapped cities, states and towns have worried municipal bond investors, especially after star Wall Street analyst Meredith Whitney told "60 Minutes" last December that widespread defaults in the sector were likely, threatening to climb into the hundreds of billions of dollars.
That hasn't happened up to now, although Whitney is sticking to her guns and pointing out that when federal stimulus programs end and all that money flowing into state and local governments dries up with it, defaults will rack up.
"It's going to be big," she tells CNBC.
"What was troublesome is people took (the call) that it would have to be this year. I never said that. But that's the size we're looking at."
"We are in our fourth consecutive year of over $100 billion in state budget gaps. This month, the federal stimulus money runs out. The federal stimulus money — over $480 billion — went to states and it has padded budget gaps by 37 percent," says Whitney, CEO of the Meredith Whitney Advisory Group in New York.
Add to that, the level of unfunded liabilities such as pension obligations is on the rise, Whitney says.
On Wall Street, running these so-called Infrastructure Funds that buy such assets are big banks with over $140 billion, including Goldman Sachs, Morgan Stanley and Australian infrastructure specialist Macquarie, according to research compiled by the Huffington Post and MSNBC.
"Goldman says it will be involved with 'ownership and operation of public services, such as airports, toll roads and shipping ports, as well as power generation facilities, physical commodities and other commodities infrastructure components, both within and outside the United States,'" the Huffington Post reports.
Why buy a slice of American life?
Because it's a good investment with little competition.
"Most assets are monopolistic in nature and have limited competitors, creating the opportunity for stable, long-term investment returns. Investment choices include economic assets and social assets," says Quadrant Real Estate Advisors, real estate fund manager with assets in the U.S. and Australia.
The market size of such assets runs between $12 trillion to $20 trillion, about the same size of the American mortgage market.
"Given the market and potential return opportunities, institutional investors should consider infrastructure a strategic investment allocation," Quadrant concludes.
While not new globally, privatization is a fairly recent trend in the United States.
Some Republicans like it because it pumps local governments with sales revenue and lets them move head acting fiscally responsible.
Democrats like it for the same reason and for the injection of investment capital that comes with it, as evidenced by the Obama Administration's encouragement of Chinese sovereign wealth funds to invest in American infrastructure and former Democratic Chicago Mayor Richard Daley's privatization of Chicago's Midway Airport, Chicago's Skyway road, and Chicago's Parking Meters.
Ratings agencies, meanwhile, have rewarded cities and towns that privatize assets.
Cash-strapped cities, states and towns have worried municipal bond investors, especially after star Wall Street analyst Meredith Whitney told "60 Minutes" last December that widespread defaults in the sector were likely, threatening to climb into the hundreds of billions of dollars.
That hasn't happened up to now, although Whitney is sticking to her guns and pointing out that when federal stimulus programs end and all that money flowing into state and local governments dries up with it, defaults will rack up.
"It's going to be big," she tells CNBC.
"What was troublesome is people took (the call) that it would have to be this year. I never said that. But that's the size we're looking at."
"We are in our fourth consecutive year of over $100 billion in state budget gaps. This month, the federal stimulus money runs out. The federal stimulus money — over $480 billion — went to states and it has padded budget gaps by 37 percent," says Whitney, CEO of the Meredith Whitney Advisory Group in New York.
Add to that, the level of unfunded liabilities such as pension obligations is on the rise, Whitney says.
Sunday, June 26, 2011
Big Government Gets Ugly
It's not unusual for the federal government to provoke widespread retching among its citizens, but it rarely does so intentionally. The new warning labels required on cigarette packs, however, have that goal. Designed to evoke disgust with smoking, they may also induce revulsion at excessive uses of power.
The old cigarette warnings inform consumers of straightforward facts, such as: "Smoking Causes Lung Cancer, Heart Disease, Emphysema, And May Complicate Pregnancy" and "Quitting Smoking Now Greatly Reduces Serious Risks to Your Health." Thanks in part to such labels, Americans today fully grasp that smoking is unsafe.
But the point of the new labels is not to ensure that potential and actual smokers understand the hazards of the habit and make an informed choice. The point is to get people to avoid cigarettes whether they want to or not.
The Food and Drug Administration finds it intolerable that despite all the efforts to stamp out smoking -- through tobacco taxes, advertising restrictions, educational campaigns and smoking bans -- nearly 50 million Americans continue to puff away. The hope is that repeated assaults with nauseating photos will kill the urge.
So anyone electing to smoke will have to run a gauntlet of horrors: a corpse, a diseased lung, rotting gums and a smoker exhaling through a tracheotomy hole.
All this is made possible thanks to legislation passed in 2009 and signed by President Barack Obama. If it sounds like the sort of bossy, intrusive, big-government approach championed by Democrats, it is. But it passed by overwhelming majorities in both houses, with most Senate Republicans in support.
Health and Human Services Secretary Kathleen Sebelius imagines that the FDA is filling an unfortunate information gap. With these labels, she says, "every person who picks up a pack of cigarettes is going to know exactly what risk they're taking."
By "every person," she means every person who's been trapped at the bottom of a well for the past 50 years. Everyone else already knew. Cigarette companies have had to provide health warnings since the 1960s. The current labels allow no fond illusions about the fate awaiting tobacco addicts.
Sebelius apparently thinks the health information has been widely overlooked. Not to worry. Vanderbilt University law professor W. Kip Viscusi has found that smokers greatly overestimate the risk of dying from ailments caused by tobacco. If the government wanted to make sure that Americans were accurately informed, it would have to tell them smoking is considerably less dangerous than they assume.
Our leaders think that since stark facts haven't done enough to deter tobacco use, scary images are in order. The FDA predicts that by 2013, the new warnings will diminish the total number of smokers in the United States by 213,000.
Contain your excitement. The agency admits that the overall effect is "highly uncertain" and that its estimate could be way off. Even if its forecast comes true, the change would cut the prevalence of smoking by less than one-half of 1 percent.
As it happens, there is not much reason to expect even this microscopic reduction to materialize. Last year, researchers commissioned by the FDA exposed adults and teens to such images to assess the likely impact. Despite the emotional punch of the pictures, they didn't seem to induce adults to stop smoking or deter teens from starting.
Based on the experience of other countries that have tried hideous photos, including Canada, Britain and Australia, Viscusi sees no grounds for optimism. "Smoking rates decline after the warnings but at the same rate as they did before the advent of warnings," he told me. "The key for judging whether there is likely to be an effect is whether the warnings shifted the trend in smoking rates in these other countries, and they did not."
Why not? Maybe because people already knew the risks. Maybe because most smokers enjoy tobacco enough not to care. Maybe because people soon learn to ignore the nasty pictures the way they tune out other warning messages.
The likely ineffectuality of this mandate does not discourage anti-tobacco crusaders. Its basic character, however, should spur everyone else to ask what business the federal government has interfering with a transaction between legal sellers and informed buyers who are minding their own business.
The new labels thrust the government further into gratuitous regulation of personal behavior, motivated less by medical concerns than moralism. Now, that's ugly.
The old cigarette warnings inform consumers of straightforward facts, such as: "Smoking Causes Lung Cancer, Heart Disease, Emphysema, And May Complicate Pregnancy" and "Quitting Smoking Now Greatly Reduces Serious Risks to Your Health." Thanks in part to such labels, Americans today fully grasp that smoking is unsafe.
But the point of the new labels is not to ensure that potential and actual smokers understand the hazards of the habit and make an informed choice. The point is to get people to avoid cigarettes whether they want to or not.
The Food and Drug Administration finds it intolerable that despite all the efforts to stamp out smoking -- through tobacco taxes, advertising restrictions, educational campaigns and smoking bans -- nearly 50 million Americans continue to puff away. The hope is that repeated assaults with nauseating photos will kill the urge.
So anyone electing to smoke will have to run a gauntlet of horrors: a corpse, a diseased lung, rotting gums and a smoker exhaling through a tracheotomy hole.
All this is made possible thanks to legislation passed in 2009 and signed by President Barack Obama. If it sounds like the sort of bossy, intrusive, big-government approach championed by Democrats, it is. But it passed by overwhelming majorities in both houses, with most Senate Republicans in support.
Health and Human Services Secretary Kathleen Sebelius imagines that the FDA is filling an unfortunate information gap. With these labels, she says, "every person who picks up a pack of cigarettes is going to know exactly what risk they're taking."
By "every person," she means every person who's been trapped at the bottom of a well for the past 50 years. Everyone else already knew. Cigarette companies have had to provide health warnings since the 1960s. The current labels allow no fond illusions about the fate awaiting tobacco addicts.
Sebelius apparently thinks the health information has been widely overlooked. Not to worry. Vanderbilt University law professor W. Kip Viscusi has found that smokers greatly overestimate the risk of dying from ailments caused by tobacco. If the government wanted to make sure that Americans were accurately informed, it would have to tell them smoking is considerably less dangerous than they assume.
Our leaders think that since stark facts haven't done enough to deter tobacco use, scary images are in order. The FDA predicts that by 2013, the new warnings will diminish the total number of smokers in the United States by 213,000.
Contain your excitement. The agency admits that the overall effect is "highly uncertain" and that its estimate could be way off. Even if its forecast comes true, the change would cut the prevalence of smoking by less than one-half of 1 percent.
As it happens, there is not much reason to expect even this microscopic reduction to materialize. Last year, researchers commissioned by the FDA exposed adults and teens to such images to assess the likely impact. Despite the emotional punch of the pictures, they didn't seem to induce adults to stop smoking or deter teens from starting.
Based on the experience of other countries that have tried hideous photos, including Canada, Britain and Australia, Viscusi sees no grounds for optimism. "Smoking rates decline after the warnings but at the same rate as they did before the advent of warnings," he told me. "The key for judging whether there is likely to be an effect is whether the warnings shifted the trend in smoking rates in these other countries, and they did not."
Why not? Maybe because people already knew the risks. Maybe because most smokers enjoy tobacco enough not to care. Maybe because people soon learn to ignore the nasty pictures the way they tune out other warning messages.
The likely ineffectuality of this mandate does not discourage anti-tobacco crusaders. Its basic character, however, should spur everyone else to ask what business the federal government has interfering with a transaction between legal sellers and informed buyers who are minding their own business.
The new labels thrust the government further into gratuitous regulation of personal behavior, motivated less by medical concerns than moralism. Now, that's ugly.
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