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How Government Subsidized Housing Becomes Unsustainable and the Going Galt Revolution!

March 9, 2010 Leave a comment

Here is an interesting article from the Buffalo News on the growing expense to local governments of providing subsidized housing within their communities. One has to wonder, given the inordinate amount of corruption, influence peddling, and general kleptocratic reign of the Democratic Party in most urban areas in the U.S., why housing projects like this aren’t investigated more thoroughly. As it is, projects like this, sustained by what should be a now dubious socialist morality giving preferences to “the poor” (Democratic operatives), are a slap in the face to taxpayers in an already depressed and over-taxed area.

As the article indicates, the government is now spending more than twice the amount on developing these housing projects than they are selling them for. If this is becoming the norm, it is simply not sustainable and to continue a practice like this in light of the state of government finance, it is supremely irresponsible.

An amazing quote from the article:

Private companies are no longer involved in developing these homes. Instead, subsidized housing in Buffalo is exclusively the domain of nonprofit organizations, including City Hall. The federal government now provides full construction funding as well as subsidies as long as home buyers qualify as low or moderate income.

That’s generally the case with 50 subsidized homes that Belmont Shelter Housing Corp. developed in the Hickory-Kane-Kamp Road area at the City of Buffalo’s request. The homes cost, on average, $190,000 each to build, with the largest houses in the group costing as much as $200,000 for construction, soft costs, subsidies and soil remediation.

The houses sell for an average $82,000 after subsidies.

This is the kind of governmental malpractice and disregard for over-burdened taxpayers that inspire the acerbic quotes from the comments section of the article. I include some of them; they are priceless. Going Galt anyone?

___________________________________

*Well, it’s 5am, have to go to work to help the poor who made bad decisions in life have a better house then me. You’re welcome.

*What bothers me is the union practice of block voting for Democrats. Buffalo has been so heavily Democratic for so long that any beneficial political opposition wilted away decades ago. Another voting block consists of African Americans with over 90% voting for Democrats. Couple the two voting blocks and they are invincible. Everything is stagnant. This is why people give up hope and leave. Two of my children never returned after going away to college. Both are doing very well. Most of my family is gone. I am still here fighting for the rest and for friends, but I too feel New York State is hopeless.

*You Buffalo leftie loonies are complaining? Give me a break. Why do you vote in these liberals into office and then complain about it. Next you’ll gripe about Obamas health care as you wait in line months. But hey the 30 million illegal immigrants will be covered at your expense. I might that 30million will be 10x that when they bring their families in. So figure 200 million low income, no money, no education coming to a theatre near you. You got what you deserved people of Buffalo.

*The cost of materials and labor for these homes is probably more like 115,000. and the rest is the profit the builder/developer makes. They don’t care if they sold for a dollar, they got their money in the bank right from our tax dollars

*They are not proceeding with Phase 3 because the News and the public are finally watching what they’re doing. Don’t worry. They’ll just do it somewhere else, so they can launder the money to their friends and supporters, all in the name of redevelopment.

*The less you do, the more you get. Real incentive to be a success. If you average out all of the help given, it works out to being similar to having a job that pays $13/hr. So, work a job, clean the snow off your car, drive to work, work 8 hrs, drive home, and pay taxes OR sit on couch and play video games and get free gas, free food stamps to buy the best food possible, get free equity and pay no taxes?Who are the real dummies here? Yes, us working stooges with a conscience. I am going to open up a Church of Foodstamps so I can get in on some of this free money!

*Most people in this metro area DONT live in $240k houses and those that do have good jobs …have saved a down payment, pay some decent mortgages and pay some pretty steep property taxes…..this program that gives a couple of REVERENDS close to $1,000,000 – to build THREE whole homes – really gives one reason to pause….and have some serious questions race thru their heads as they drink their morning coffee.

*I live in a decent, yet modest, home that I bought 16 years ago for $90,000. I figure I might be lucky to get $120,000 for it now. It just sickens me that my tax dollars go to subsidize someone purchasing anything other than a “starter” home.I sure wish the government would sell me a $200,000 + home for $90,000 or less. This just sucks!

*Glad my wife and I work 3 jobs so low income people have a better house then us. I’m happy I get to get up at 4:30 and work 10 hours tomorrow getting a project out so low income people can have a better house then us. Keep working people, millions on welfare are depending on you.

*Wow the two guys I was behind at the store the othere day were buying (now cout them) 27 pkgs with 2 steaks in a pkg of T Bone steaks. Now that a whole lot better than my family eats and my wife and I both work hard. And guess how they paid for those steaks, you guessed it, food stamps

*Great! More rhetoric-have you ever even driven through the east side. Look at all of the side streets off of Fillmore & Jefferson. There is no “revitalizing” these neighborhoods. Nobody in the year 2010 with a family and a job and a sense of community responsibility is going to choose to live there. Give successful african americans a chance to live in a decent neighborhood somewhat close to their own people, and maybe we find that they become the role models-not the drug dealers.

*make sure to include enough money in the subsidy to provide Glocks to all the family members who live there….and “morning after pills” for all the females…..

The unconstitutional Reid Bill

December 28, 2009 Leave a comment

Law professor Richard Epstein has made one in a number of arguments that show how the Patient Protection and Affordable Care Act-the Reid Bill-is ultimately unconstitutional.

His argument is available at the Point of Law website in its entirety.

Even though other, equally valid arguments have been made about the Bill’s unconstitutionality in the context of its overreach by limiting individual choice, Epstein focuses on the Bill’s constitutional defects based on the Court’s past rulings in ratemaking cases.

Epstein says that this interpretation is confirmed by the CBO, which says that the Reid Bill essentially makes private health insurers a public utility and it places onerous new responsibilities on them at the same time it constricts their revenue stream.

This arrangement will most likely not pass constitutional muster, because the Fifth Amendment affords regulated health-insurance companies protection against the taking of property without compensation and without due process of law.

In ratemaking cases, Epstein contends, the Supreme Court has determined that the Constitution requires that regulations permit regulated firms to recover a risk-adjusted competitive rate of return.

In plain language, that means that any regulatory scheme placed upon a private industry, must allow it make  a return on their investment and to make enough profit to remain competitive with other insurers.

Epstein believes that the Reid Bill fails this test as it limits the ability of health-insurance companies to raise rates, and restricts their ability to deny coverage, thus making costs of providing insurance out of reach for insurers and will drive them out of the individual and small group plan insurance markets. This makes the regulatory scheme confiscatory and the Reid Bill unconstitutional.

Backlash against health care bill growing in the benighted fever swamps…of New York

December 24, 2009 Leave a comment

New York’s Senate Minority Leader David Skelos sent a letter yesterday to New York Governor David Paterson which encourages him to join a lawsuit that is being pursued by seven other states challenging the Constitutionality of what has to be known as the “Cornhusker Kickback” and the “Nebraska Compromise,” a Medicaid deal cut to secure the vote of holdout Bill Nelson for the Senate’s health care bill.

The Attorney Generals of seven states- Texas, South Carolina, Alabama, Colorado, Washington, Michigan and North Dakota – have announced that they will be jointly investigating the legality of the deal which permanently exempts Nebraska from paying Medicaid costs that the rest of the 49 states must pay.

Skelos wrote the letter recognizing that Paterson and New York City Mayor Bloomberg have criticized the health care reform bill on the basis that it will force New York into a situation where it will be losing $1 billion or more annually. In comments to WBEN-AM Radio on December 21 in Buffalo, Paterson said the Senate bill would “punish” New York for its own charity (New York has some of the most generous Medicaid benefits in the U.S.) and that health care spending by the State is already at “the limit.” Paterson also said the bill would force New York to close hundreds of health care facilities in the state.

Gov. Paterson has been struggling to bring the State’s spending under control and has been warning the Democratic-controlled legislature that New York is on the brink of insolvency.

Skelos’ letter contained this plea:

“Governor, you and Mayor Bloomberg have called the health care reform bill passed by the Senate a fiscal disaster that would impose greater Medicaid costs on New York City and State,” Skelos wrote.

“Senators Schumer and Gillibrand are claiming that the Senate bill protects the status quo for New York but that is not good enough as other states are reaping a windfall.”

“An unfair federal Medicaid reimbursement level already shortchanges our state. And now, because of a questionable vote-buying deal, that burden could increase significantly.”

“If it takes legal action by the states to prevent such clear discrimination then I urge both of you to support such a suit.”

New York City Congressman Charles Rangel has also reassured the madding crowd that the final bill will protect New York but admitted, “there are a whole lot of things that we have to reconciliate.”  Rangel will likely be one of 7 legislators who will be meeting early next year to draft a final bill in the reconciliation committee.

"Trust me. New York has a lot of allies and I'm on the committee!"

Another Liberal Democrat Principality Called a “National Disgrace.”

December 15, 2009 2 comments

I posted this article from a few days ago which reported that test scores from a huge majority of the students in the Detroit Public Schools were  essentially the worst in the history of such testing. The article documents the disbelief by some educators that the scores were what could be expected if students had merely guessed at most of the answers.

Although I did not make the connection overtly in the post, my intention was to show that areas suffering under the  control of liberal Democrats- and that have been for years in many cases- are utterly dysfunctional in almost every aspect.

In the urban areas of America-and I live in one-the Democratic Party has ruled pretty much unopposed for a long time. Since many of those places have been in a seemingly unstoppable death spiral since the 1960s, perhaps it is time that these people-the Democrats- take some responsibility for the consequences of the bad ideas they like to impose on the rest of us.

Yeah. I know. I’m dreaming.

But, there is cause and effect. And one of the purposes of this blog is to document the effects of bad, left-wing ideas and the nature  of their fallout.

It happens all the time, but the liberal advocacy media (LAME, or the entity that used be known as the mainstream press) is incapable of noticing these things for what they are.

Once in a while though, things get so bad that even the LAME has to look into the affairs of the local Democratic Party junta and write what it sees.

It appears that this is happening in Philadelphia, as the Philadelphia Inquirer has had enough of the crime rate there and did some good ol’ fashion gumshoeing about it.

The result is a four-part series that looks into the reasons why “Killadelphia” which has  one of the highest violent crime rates in the country,  also has one of the worst conviction rates.

The Inquirer inaugurates its series with an editorial called  A National Disgrace. It begins:

Often after a heinous murder or a police shooting in Philadelphia, the suspect is found to have a lengthy criminal record or an outstanding warrant for another crime. That prompts many to ask: “Why wasn’t this creep in jail?”

A four-part series that begins in The Inquirer today answers that question. It details a criminal justice system practically built to perpetuate crime, rather than stop it. Thugs go on committing crimes until they escalate into murder.

Police may do a good job of capturing suspects, but after that comes the revolving door. Various breakdowns in the legal system enable thousands of suspects to go free.

What is incredible about this editorial is that the Inquirer not only dismisses the excuses of the City’ s ineffectual liberal Democrat District Attorney, Lynn Abraham, they lay much of the blame at her doorstep. The paper found that the conviction rate for violent crimes in the city was a meager 20 percent. Abraham, who has been the D.A. for eighteen years disputes those numbers. The Inquirer responds:

District Attorney Lynne M. Abraham disputes The Inquirer’s findings regarding the low conviction rate compared with that in other cities. However, Abraham – who has been the DA for 18 years – has failed to keep her own records that could benchmark the office’s results.

Then after listing the many ways that the city’s criminal justice system is failing, the paper finishes by revealing its relief that Abraham’s tenure as  D.A. has come to an end.

An overhaul of the court system isn’t easy, since there are so many disconnected parts. But much of the burden for leading the reform could come from the DA’s office.

It’s good for the city that Abraham did not run for reelection and will leave office next month. It will be up to incoming DA Seth Williams to bring real change.

A fresh approach to managing and tracking cases could boost convictions and reduce the number of cases that get dismissed. But broader reforms are also needed to fix a broken system.

A quick review of Abraham’s biography reveals that she is part of a gun regulation group, that she criticized the Catholic Church about the molestation scandals long after they were over, and she was a Pennsylvania delegate to the Democratic National Convention in 2004, where she cast her vote for Kerry, and in 2008  casting her vote for Obama. I would have thought that a person with those kind of  progressive credentials would have made her untouchable to the LAME.

Maybe the LAME will start waking up to the fact that most of America’s problems are within its urban areas where the Democratic Party has ruled for a long time. You wonder, though, if they’ll ever get around to asking the obvious questions, like we do here at the intrepid Conservativepolicynews blog.

Some of the comments left by online readers  of the Philadelphia Inquirer’s editorial are priceless by the way. I reproduce some of my favorites below for your entertainment.

bill at
This was all brought to you by the Philadelphia Democrat party. People, by the way, who have been endorsed endlessly by the same editorial board who just now is seeing a problem that has been obvious for decades. Hope. Change.

joedog
Philadelphia is not unlike many a Third World city with a small, well protected and relatively safe Center City area protected by a ring of security for the affluent surrounded by neighborhoods that are filled with violent criminals run amok. Why?

BurbGuy
A once great city has been destroyed by Democrats, Liberals and scum of the earth violent animals. The only difference between Philadelphia and Detroit is that Philly only gets half as much snow.

bobg1812
Just another symptom of the disease killing the city since the 1950s we will never get the world class city we deserve with third rate politicians running the city

lem127
Call me naive, but this story is shocking. These are hard facts that show beyond any doubt that the Philadelphia government is truly broken.

Wassup!

Societal decay. Acts that people used to be ashamed of, are now celebrated. Kids out of wedlock with multiple fathers seems common and ok today. 14-year old mothers pushing baby carriages is commonplace and not given a second glance. Being a single mothers is normal and bragged about like it should be rewarded. Going to jail seems to be a badge of honor. Having warrants is the norm for some people. Bad credit seems to be acceptable. Drug addiction is a “disease” and is accepted as easily as the common cold. Boys walking around with their butts hanging out of their pants is now normal. Unemployeed men being taken care of by a bevy of naive women is the norm. It just never ends. This once great country, like the Roman Empire eventually did, is falling, and it will be a Third World

RBA
This is the result of one-party rule where the “good government” crowd is nonexistent. It’s all a cesspool of political subgroups (blacks, asians, jews, unions, etc.) all slicing up their pieces of the pie for their constituencies. It’s been this way for so long people don’t realize it’s not that way everywhere else. I’m not saying Philadelphia’s Republicans would be any better. They operate in the same system and wrote the book on this kind of corruption when they ran the Philly machine in the first half of the 20th Century.

Ben Dover
get a gun, its the only real protection you have in philadelphia

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Texas v. California

November 29, 2009 3 comments

The budget crisis that has been afflicting California for the past year has been headline news. Because of it,  California should be the  symbol for the  failure of the welfare state and centralized planning as over-generous social programs, a bloated bureaucracy, and the disproportionate influence of public employee unions has bled the government dry and brought it to the brink. In the past year, there have been many so many extreme measures taken by the California government that it is has been hard to follow.   In order to make up a budge shortfall that is predicted to reach over $40 billion by 2010, California has had to do the following from 11/08 to the present:

-Furlough of all public employees for three days every month.

-Eliminate Columbus Day and Lincoln Holidays

-Asked the Federal government to back state bank-guaranteed notes,  Obama refused, thus lowering California’s credit rating, making it harder to obtain much-needed loans.

-With its credit rating lowered, California began issuing IOUs in order to meet its short-term financial obligations.

-Has  promised to release 37,000 prisoners from the state’s prisons.

-Has cut thousands of jobs from education and health care.

All this has caused a massive exodus of business leaving the  once mythical state of unfettered personal freedom, spiritual exploration, and endless sunshine to fall into an unemployment rate that is now at 12.3%; one of the highest in the United States.

Then there’s Texas.

As a poll in Chief Executive magazine found, Texas was the best place in the United States to do business. (Guess which one was the worst? Yep, California.) Also,  amidst a national recession, with the national average rate of unemployment near 10.5%, Texas had positive job growth in October 2009 and has kept their unemployment rate below the national avg., with the highest being reported  at 8.3%. Many Texas economists and businessmen believe that they have hit the bottom this year and are expecting sustained job growth for 2010.

According to two separate studies, one by the Brookings Institution and one by Forbes magazine, the 5 top job-creating cities in America are located in Texas.

And, of course,Texas had a $11 million budget surplus for fiscal 2009.

The difference in the economic trajectories for these states generally goes unreported, I believe, because they show the strength of fiscal conservatism and the utter failure of liberal economics.

This is confirmed by an article Trends Magazine and reviewed by Tony Gattis at newgeography blog. The article asks the question: What’s wronmg with California and what’s right with Texas? Gattis says, “It really comes down to four fundamental differences in the value systems embodied in these states:”

First, Texans on average believe in laissez-faire markets with an emphasis on individual responsibility. Since the ’80s, California’s policy-makers have favored central planning solutions and a reliance on a government social safety net. This unrelenting commitment to big government has led to a huge tax burden and triggered a mass exodus of jobs. The Trends Editors examined the resulting migration in “Voting with Our Feet,” in the April 2008 issue of Trends.

Second, Californians have largely treated environmentalism as a “religious sacrament” rather than as one component among many in maximizing people’s quality of life. As we explained in “The Road Ahead for Housing,” in the June 2009 issue of Trends, environmentally-based land-use restriction centered in California played a huge role in inflating the recent housing bubble. Similarly, an unwillingness to manage ecology proactively for man’s benefit has been behind the recent epidemic of wildfires.

Third, California has placed “ethnic diversity” above “assimilation,” while Texas has done the opposite. “Identity politics” has created psychological ghettos that have prevented many of California’s diverse ethnic groups and subcultures from integrating fully into the mainstream. Texas, on the other hand, has proactively encouraged all the state’s residents to join the mainstream.

Fourth, beyond taxes, diversity, and the environment, Texas has focused on streamlining the regulatory and litigation burden on its residents. Meanwhile, California’s government has attempted to use regulation and litigation to transfer wealth from its creators to various special-interest constituencies.

Gattis says the article also has  six forecasts for both states:

  1. …expect to see California’s loss of jobs to Nevada accelerate…
  2. …expect to see a backlash in California and across the country against regulations, especially green initiatives that can’t clearly demonstrate a positive ROI…
  3. Watch for the smart money, including venture capital, to begin migrating to Texas for start-ups in many areas, including energy, info-tech, manufacturing, and biotech. Just as Delaware’s tax laws once encouraged numerous businesses to incorporate there, even when they had no connection to the state, Texas will become a magnet for new businesses by offering cheap land, a favorable regulatory environment, a business-friendly culture, and a large supply of skilled labor. Unless California revamps dramatically, expect to see its economy languish, even as the recovery takes off.
  4. To make its business climate even more business-friendly, Texas will invest heavily in secondary education and work hard to attract the best talent to its research universities (note the recent Tier 1 proposition and funding). Keep an eye especially on the University of Texas, which already has a first-rate campus and faculty. Within 10 years, UT, as the locals call it, may well rival Stanford or Berkeley.
  5. Other states will adopt tort reform measures pioneered in Texas. Unlike California and most other states, Texas has been aggressive in minimizing the enormous burden of frivolous lawsuits…
  6. Look to Texas to become a cutting-edge cultural mecca. Houston has always offered a vibrant cultural scene, ever since the Alley theater company was founded there in 1947 by Nina Eloise Whittington Vance. In the 1950s, John and Dominique de Menil moved to Houston with one of the most significant private collections of art in the world and began donating art and money to the Houston Museum of Fine Arts. Both institutions have grown to world-class status since then. In the coming years, this trend will spread to the major cities of Texas (take that, Dallas!), attracting the best talent and money and shifting the cultural balance of the nation away from New York and San Francisco.
This should be vital information for  those of us living in blue states. Although difficult, it is important to make the effort to break the hold on state government that  liberals, public employee unions, central planners, career politicians, identity politics-the Democratic Party- have  on  state government.
We have a successful, realistic model in Texas. Let’s learn from it.

The Economics of Fascism

November 18, 2009 Leave a comment

To fight the Empire is to be infected by its derangement … Whoever defeats the Empire becomes the Empire; it proliferates like a virus … thereby it becomes its enemies.

-Philip K. Dick

I remember the day that it happened. The sky was dark and covered by grey clouds. The air was bitter and wet snow was being splashed up by vehicles on the street. I was walking in mid-winter and pondering why the study of history was so fraught with despair.

Sometimes enlightenment comes in flashes but awareness is not always pleasant.

As the wind kicked up and I passed the vast, broken landscape of my de-industrialized city, that flash happened. Words are used to construct a reality around us and they are the most important of tools for politics. We are immersed in words and our cognitive understanding of our place in history and the history of the nation is usually limited by the words and imagery uttered by the cognoscenti and approved of by some “authority.” Mostly, these are very limited sources.

But, the truth is out there.

One of the most astounding things that needs to be dealt with by anyone in this world, is how the individual is sold on the idea that he lives in liberty and is ultimately the sovereign of any democratic government, but in reality has very little power to promote change. In the United States,  there has been an anxiety amongst many that democracy has been under threat of extinction.

Power has a tendency to self-perpetuate and to see itself as having an entitlement to lead, rule, and control the levers of  social action.   In the U.S., there is  no better evidence of the decline of the “people’s sovereignty” than the fact that  the government and the more influential media venues have been increasingly under the control of a hereditary political class. Certainly, the temptations for leaders to insinuate their progeny into the  power class is great as the rewards are tremendous. This is one of the side-effects of ever-expanding government economy based on spending and the government having a large portion of the  the economy under its regulatory control. Expansive government, as most historians have recognized, is the seedcorn of corruption.

But just how expansive is the  government economy in the U.S.? As a reform movement, conservatism states that one of its principals is limited government. But just how limited do conservatives want the government to be? It is easy for the critics of conservatism to poke holes in one of its most important principles when there never seems to be a comprehensive plan to initiate serious reform. Or worse, when conservatives actually expand the government while they are in power.

I think that the following video will be helpful for those who truly want to understand the framework of the centralized state and its history in the U.S.

In the video, Professor Thomas DiLorenzo, one of the most important economic historians in the country today, discusses the  nature of  the Fascist economy.  He clearly suggests, albeit in revisionist fashion, that the centralized state that exists in the U.S. today  has a lot in common with the economics of Fascist Italy. He also discusses why the free market economy, that supposedly championed by conservatism and reviled by the Left, has probably not existed in the U.S. since the beginning of the Civil War.

It is a very interesting journey into economic history and is a good starting point for anyone interested in understanding modern, centralized, state-controlled economic ideas.

Some of the more fascinating highlights:

  • The comparison between Fascist economic thinking and modern liberal thinking about central government planning.
  • Abraham Lincoln as economic nationalist
  • Connection between American centralization and the Bismarckian Welfare State of Germany-one of the first welfare states in Europe.
  • Alexander Hamilton’s arguments for a centralized economy at the founding.
  • The fondness for Fascism amongst American political elites of the 1920s and 1930s.
  • The Fascist attack on classical liberalism.