Monday, March 30, 2015

The 3% Solution

'Live Long...and Balance the US Budget!'
'The Needs of The Many...Outweigh The Needs of the Few'

For some reason, perhaps because of the recent passing of Leonard Nimoy who became famous as 'Mr. Spock' on Star Trek alongside William Shatner's 'Captain-then Admiral Kirk', this statement of Vulcan logic came to mind as we read the most recent January 2015 CBO publication: The Budget and Economic Outlook 2015-2025.

We read these things so you don't have to. However, we hope you actually do want to read it so click on the link above to download the entire 177-page document so you can become of the truly very few who have ever taken the time and the effort to read one of the most important documents the federal government puts out every year.

Think of it this way: If you don't read it and understand the complexities of the federal government budget, how in the world are you going to be able to tell your elected Member of Congress or US Senator or President what to do...mainly because they have not read it either!

'The Needs of the Many' takes us to a global 100,000-foot view of what deficits can do to a nation...and it ain't pretty if history is any indication. We can talk all we want about not cutting this entitlement program or that one; this defense program or that one, or this domestic program such as housing or environmental protection or raising taxes or not.

The bottom-line is that unless we elect some grown-up adults who will take a sober and serious look at our national debt and annual deficit picture, at some point in the future, we may experience the same things other irresponsible nations have in the form of hyperinflation, depreciated currency, sky-high interest rates and inability to raise debt overseas without substantial strings attached.

Here are a few select quotes from the CBO Outlook mentioned above just to get your mind around the magnitude of the problem we all face together as a nation:
CBO expects that federal debt held by the public will amount to 74 percent of GDP at the end of this fiscal year—more than twice what it was at the end of 2007 and higher than in any year since 1950....
In CBO’s projections, outlays rise from a little more than 20 percent of GDP this year (which is about what federal spending has averaged over the past 50 years) to a little more than 22 percent in 2025 (see Summary Figure 2 on page 4). Four key factors underlie that increase:
  • The retirement of the baby-boom generation,
  • The expansion of federal subsidies for health insurance,
  • Increasing health care costs per beneficiary, and
  • Rising interest rates on federal debt.
Under current law, spending will grow faster than the economy for Social Security; the major health care programs, including Medicare, Medicaid, and subsidies offered through insurance exchanges; and net interest costs. In contrast, mandatory spending other than that for Social Security and health care, as well as both defense and non-defense discretionary spending, will shrink relative to the size of the economy....
By 2019, outlays in those three categories taken together will fall below the percentage of GDP they were from 1998 through 2001, when such spending was the lowest since at least 1940 (the earliest year for which comparable data have been reported).
Revenues are projected to rise significantly by 2016, buoyed by the expiration of several provisions of law that reduced tax liabilities and by the ongoing economic expansion. In CBO’s projections, based on current law, revenues equal about 18½ percent of GDP in 2016 and remain between 18 percent and 18½ percent through 2025.
You can see that what we have is a perpetual structural annual deficit problem that has not been addressed by the past 6 years of President Obama's Administration and Congress under Democrat and Republican control . Nor was it seriously addressed under 8 years of President George W. Bush and Congress either, under Democrat and Republican control.

We have now had 14 full years of not seriously addressing the underlying structural problems in our federal budget under both major political party's control. What is that old adage you see floating around the internet that has been attributed to Albert Einstein, but was never said by him:

'Insanity is doing the same thing over and over again and expecting different results'.

Here's something to consider that may be a little different...and so simple that everyone now elected to Congress and sitting in the White House can easily understand it:

'The 3% Solution'

This is so simplistic that no budget wonk on either extreme of the political divide is going to like it. Which is fine with us. We have been listening to the fringes of both the left and and the right now for the past 14 years and look at where that got us: $18 trillion national debt (about 'only' $13 trillion held by the public or overseas sovereign nations which is an important distinction to make) and still growing, not shrinking long-term.

Here's what we propose to reduce the federal budget deficit to zero in the next 8 years. With no new taxes. With no tax hikes.
  • Set an annual overall cap on federal government spending increases to 'only' 3% per year for the entire federal budget.
Take a look at this chart below:

In an almost ridiculously simple manner, all we did was take the official CBO figure of $3.504 trillion in outlays for last year, 2014, and extrapolated them out at a 3% annual growth rate for the next 10 years.

We held revenues the same as the CBO projections.

All other things being held equal, we can balance the budget by 2022. 7 years from now. With no tax hikes, no tax changes, no tax rate warfare.

Hold every other variable the same and voila! We can achieve budget balance nirvana in the next 7 years and the overall budget would grow by 3% annually, not any sort of absolute or even an inflation-adjusted cut to baseline spending.

What could be wrong with that?

The naysayers from the left will say: 'But you will be cutting off aid to women and children and throwing old people into the street!' Not with 3% annual budget increases across the board.

The naysayers from the right will say: 'You are gutting the national defense at a time we need more spending on defense!' We have been around enough defense budgets to know that there are billions of dollars being spent on out-dated and obsolete military programs and personnel that we could probably freeze the defense budget and still have the world's most dominant and efficient war machine to protect our freedoms and interests around the globe.

Or they will say from the right: 'This doesn't cut government fast enough!' Ok, fine then. Set the annual rate of growth to can balance the budget in just 2 years. Long about April of 2017. Look at the chart and see for yourself.

The problem will come when some bright-eyed and bushy-tailed young activist will point out that this will squeeze the major entitlement programs just at the very same time that millions of baby boomers will be retiring and going on Social Security and Medicare which swells those budgets simply by the sheer number of new applicants. Same thing with Medicaid at the state levels.

Well, you know what? That is the price we are all going to have to pay for not doing anything to reform Social Security and Medicare and Medicaid over the past 30 years when we had time to do it. And we collectively all failed. Miserably.

If you want to know how we think any of these entitlement programs can be reformed in a responsible manner, check any of our previous 529 postings and you will see what we have proposed so far. Or email us and we will point you in the right direction.

If we don't do anything to SS, for example, younger boomers can count on one of 2 things: their SS benefits will be cut by 25-35% or so relative to what they might be expecting to receive in the next 10-20 years while on SS. Or, to the converse, younger workers can expect to see their payroll taxes go up 25-35% to pay for more older people retiring per working taxpayer, heading down to an almost 1-for-1 match between worker and retiree in the not-too-distant future.

Or, and this should get advocates of bigger government particularly riled up, we could do nothing on SS and Medicare and Medicaid ever and keep current laws and eligibility in place...and totally gut the non-defense part of the federal budget that pays for many of the programs advocates of more government like in the first place. Pay the full SS retirement benefits and Medicare for every older American with no changes....and completely destroy the existing budgets for education, environmental protection, science and research and any other social program you may support.

Of course, nothing exists in a vacuum. Politics especially loves a vacuum. You see one that is left open and some political animal or opinion or view will fill it. That is just the law of the jungle.

A simplistic proposal such as The 3% Solution would be creamed in the maelstrom of talk radio from both sides from the beginning. However, our purpose is to show you that it can be done. If we have the collective will to advocate for it, that is, and force our elected representatives to either do this simplistic approach or take legislative actions that will achieve the same results in the same short 7 years.

It is worth thinking about. Because the 'needs of the many' (our future adult children and grandchildren and great-grandchildren) 'outweigh' the needs of us boomers who have spent everything there is to spend and then some and are passing along a huge number of unresolved problems we were either too scared or too dumb to make for this nation as a whole.

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Monday, March 23, 2015

Before There Was #IHateChristianLaettner, There Was 'We All Hate Frank McGuire!'

UNC Coach Frank McGuire
The Spark That Started The
Intensity of the Duke/Carolina
Now that we are in the heart of the NCAA Tournament, and 3 teams from Tobacco Road, Duke, Carolina and NC State, are in the Sweet Sixteen (where they rightfully belong) for the first time since 2005 and for the 4th time ever, we thought it might be an interesting time to look backwards and see how the Duke/Carolina rivalry got as big as it has over the years.

Duke and Carolina have never met for the National Championship, although they have been to a combined 33 Final Fours in their storied history. In 1991, both made the Final Four where the the Tar Heels lost to Kansas (and to Roy Williams, oddly enough) in the semifinals (when Dean Smith was ejected for 2 technicals) and Duke upset UNLV on their way to their first NCAA Title.

They could meet again this year in the Final Four but only in the semifinals, not the championship game.

Either way, a Duke/Carolina Final Four game would be one for the ages. We all hope we get to see one before long.

Many of you saw the recent, very well-done and produced 30-for-30 ESPN special, "I Hate Christian Laettner'. Duke haters loved it because it confirmed why they hated Christian Laettner in the first place.

Duke fans loved it because they loved Christian Laettner for the very same reason Duke haters hated Christian Laettner.  Especially going to 4 straight Final Fours and winning the first 2 National Titles for Duke.

We heard many people say that that is when they thought the real rivalry started. Some said, no, it was when J.J. Redick was at Duke. Others said, no, it was when Wojo was there or when Gerald Henderson clobbered Tyler Hansborough with his elbow. Others said it was when Christian Laettner elbowed Eric Montross and left him with a bloody cheek.

All of those would have happened way too late in history to have 'started' the rivalry. As intense as any of those feelings were on both the Tar Heel and the Blue Devil side of things, the heated rivalry started much further back in the sports history between the two universities located about 8 miles away from each other on 15-501 which runs between Durham and Chapel Hill.

Many young people are now all caught up in the rivalry which resembles the storied feud between Hatfields and the McCoys where the younger generation never really knew 'why' they were trying to shoot people from the other side in the first place. They just knew that 'they were Hatfields (or McCoys) and we Hatfields (or vice-versa, we McCoys) shoot those darned old McCoys (or Hatfields)'. That is all there is to it.

There's a little history you need to know about the Duke/Carolina rivalry before you can really understand why it is such a heated rivalry today.

Long before there was a #IHateChristianLaettner to hate at Duke, or a J.J. Redick, or a Michael Jordan to hate at Carolina or a Tyler Hansborough, there was a basketball coach at Carolina named Frank McGuire. He brought home an undefeated national championship to Chapel Hill in 1957, 32-0 after enduring not 1 but 2 triple-overtime games in the Final Four, the second against the Goliath of college basketball at the time, Wilt Chamberlain of the University of Kansas. (There's that UNC/Kansas thing going on again)

Frank McGuire was an Irish Catholic dandy of a coach and snappy dresser who came south from St. John's to challenge the supremacy of Everett Case, the coach at NC State who was clobbering everyone in the ACC. Case put the state of North Carolina on the map of college basketball. College basketball in North Carolina before Everett Case came to NC State from Indiana was just a nice diversion between fall football and spring baseball and golf and tennis when the weather was nicer.

Coach McGuire at one point 'declared war' against Everett Case, which sparked things up considerably on Tobacco Road. Just as Dean Smith would later 'go to war' against Vic Bubas at Duke; then Norm Sloan at State would 'go to war' against Dean at Carolina; then Coach K would 'go to war' against Dean and now Roy and everyone else is 'going to war' against Coach K.

All in the name of good fun and college athletics, of course.

Up until the late '50s, the basketball games between Duke and Carolina were not considered the #1 rivalry in all of college sports as some consider it today. Far from it. The football games were considered much more important each year since Duke had been a powerhouse in Southern football circles since 1931 and Carolina had a flurry of success under Charlie 'Choo-Choo' Justice from 1946-1950 and later in the 50's.

While intense in spirit on the field, the football players enjoyed friendships off the field, no doubt tempered by their shared experiences in World War II after the war when they returned from battle. Coach Wallace Wade, the winningest coach in the South before the War, returned to coach only 4 years after the war, saying that after fighting in war and seeing the bloodshed and the loss of life on the battlefield, football just didn't seem that important any longer.

Southern football was a game of sport fueled by whiskey sours, tailgating picnics and pageantry on warm Indian summer afternoons late in the fall. It was a game played by gentlemen, for the most part, and coached by Southern gentlemen who enjoyed the camaraderie of the whole show. And the cocktails. And straight martinis. And beer.

Frank McGuire changed all that. He blew into the South from New Yawk City in 1952 where he challenged the supremacy of Everett Case and the Wolfpack at NC State. He won a national title in 1957. He dressed in expensive New York-tailored suits. He recruited Long Island and New York City Catholic and Jewish Yankees to the South. And he generally pissed off most everyone he came into contact with, both friend and foe alike.

Frank McGuire had a bad habit of shading the rules when it came to recruiting big-time talent to come to what was then a much more rural North Carolina than it is today. Sometimes he got caught. Which led to the spark that set the Duke/Carolina rivalry on fire.

You know when and why the Duke/Carolina rivalry went ballistic?

It had nothing to do with the basketball court. Some point to the incident in 1958 where UNC Coach Frank McGuire requested a police escort to protect his Carolina players off the court after a loss at Duke.

From The Duke Report:
'In 1958 when Carolina met Duke in Durham, they both had 10-3 ACC records. Bradley decided to go with a smaller, faster line-up. It proved a brilliant strategy. Carolina chased them doggedly the whole game. There was a brief scuffle late in the game but no violence. Duke Player, Bobby Joe Harris, called a timeout with two seconds in the game just to rub it in a little, but the fans were not about to wait for two seconds. They rushed the court and the refs just called the game. Duke had played a great game and won it 59-46. 
McGuire suddenly decided his players were in mortal danger. As fans and Duke players evacuated the gymnasium, McGuire kept his guys on the bench until a police escort was brought in to usher his boys to the locker room. Bill Murray, Duke manager of operations, (and Duke head football coach) was outraged. He shouted, “In all my coaching experience I have never seen a more obvious exhibition. It was the most revolting act by a college coach I’ve ever witnessed. He’s created a monster…”

Some people point to the Art Heyman/Larry Brown fight as the tipping point in the rivalry but the Heyman/Brown fight didn't happen til February 4, 1961 . That fight just fanned the flames of passion and anger that already existed into a fever pitch.

Duke University Coach and AD
Eddie Cameron
Here's the real reason why the Duke/Carolina rivalry spilled over onto the basketball court and spiked into a feverish pitch that has not abated to this day.

Eddie Cameron was the athletic director at Duke in the '50's and truly was one of the most distinguished and finest Southern gentleman ever in college athletics. Yes, he is the reason why 'Cameron Indoor Stadium' is no longer called 'Duke Indoor Stadium' as it had been since inception in 1940 until 1972.

He alleged, not only as Duke AD but also in the interests of the relatively new and young ACC Conference, that Frank McGuire was cheating his rear end off over at UNC recruiting Catholic and Jewish guys from Long Island and the Bronx. Even the UNC administration folks knew about McGuire's gilding of the lily...they wanted to get rid of McGuire as much as Duke wanted to see him go too.

Cameron alleged some serious recruiting violations, probably over the Heyman recruiting in 1958. Frank McGuire went crazy...he hated Cameron for some reason, maybe the fact that he was a southern gentleman and McGuire was not. Or maybe because he was a hot-tempered New York City Catholic Irishman.

McGuire went on the radio to talk about the allegations and to defend his practices. He let it slip that it was a vendetta against The University of North Carolina at Chapel Hill Tar Heel basketball program led by Eddie Cameron of Duke and, by the way, 'Eddie Cameron is a prick!'

Duke Football Coach
Bill Murray
Duke Head Football Coach Bill Murray was in his football office when he heard this. According to Murray himself after a few
drinks at my parents' New Year's Day Annual Party that lasted from noon to midnight every New Year's Day with a legion of Duke luminaries hanging around all day drinking whiskey from Wallace Wade to George McAfee (teetotaler compared to the other guys) to Dumpy Haigler to Herschel Caldwell to whoever was around at the time, this is what happened next:

Bill Murray ran out of his office in a storm and got in his 1950 Chevy or something like that and roared out of the Duke parking lot spitting gravel every which way. He was heading to Chapel Hill to kill Frank McGuire with his own two bare hands for having dared call his friend Eddie Cameron a 'prick'.*

If you ever shook hands with Bill Murray, you know they were vice-like clenches of death. You could hear your own hand cracking whenever he shook your hand....and Murray did it to everyone.

Somehow, one of his assistants managed to get in a car and somehow get ahead of a furious Bill Murray on 15-501 somewhere and headed him off at the pass. Maybe near Piney Mountain Road or Erwin Road or somewhere.

The assistant somehow calmed him down and got him to turn around and go back to Duke.

Otherwise, the Durham Morning Herald would have had this headline: 'Duke Football Head Coach Bill Murray Kills UNC Basketball Coach Frank McGuire With His Own Two Bare Hands'

And a jury in Durham would have found him 'not guilty'.

That is the precise moment when the 'spark got hot' in the Duke/Carolina rivalry according to the old-timers who knew what happened for sure. Each of them would point to this moment in time when the otherwise competitive but reasonably cordial feelings towards the other university took a major leap upwards in intensity and emotion and, yes, anger, mostly directed at Frank McGuire.

It was one thing to compete hard on the basketball court or football field and then acknowledge each other in the spirit of sportsmanship after the game.

It was an entirely other thing for a head basketball coach at one school call the AD at the other university 8 miles down the road a 'prick' in public. Those were fighting words back then.

The Duke/Carolina rivalry was never the same after. For better or for worse.

*Story corroborated with one unnamed source on deep background whose identity is not to be revealed. Since almost all of the people involved with this rivalry are now dead, and none of this was reported in a public newspaper at the time, we are almost on the same level of much modern-day reporting: You just have to 'trust us' that it is true.

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Saturday, March 21, 2015

'President Obama Is Shredding The US Constitution!' (And Other Conversations Heard on Capitol Hill)

Or 'How To Not Win Friends and Influence Congress'
by President Barack Obama
Being in the chief of staff chair in both the US House of Representatives and the US Senate in Washington, you hear a lot of things.

Some things you don't want to repeat in polite company. Some things were so confidential you couldn't believe the virtual stranger told you such things.

The first thing you have to understand about people working on Capitol Hill is that they are human beings, just like you and me and anyone you deal with every single day.

They can be Members of Congress, US Senators, staff people, janitors, elevator operators, clerks or sergeant-at-arms. They are human beings first and foremost before they are public servants serving in the public trust as Thomas Jefferson was so fond of saying.

Since they are humans, they have feelings and emotions just like you do. The only difference is that what they do on a daily basis affects you and 310 million other Americans plus billions of folks around the world. Sometimes it is negatively. Hopefully it is mostly good, or else what are we doing with our government anyway?

With the last 6.2 years of the Obama Administration as a backdrop, we thought we would listen in to some of the conversations you might hear around a Republican chief-of-staff meeting with perhaps maybe 5-10 chiefs-of-staff in attendance.

We think it might be helpful to you to understand the critical difference it makes having a President in the White House who is not only 'comfortable' dealing with the US Senate and Congress but who might actually 'enjoy' the give-and-take and the banter and the struggle that goes on in our representative democracy.

Ronald Reagan did it. He played a lot of gin rummy with Democrat Speaker Tip O'Neill when he faced a recalcitrant US House that was opposed to much of the Reagan Revolution agenda in 1980 and 1984.

George H.W. Bush did it in 1989-1993. Got the 1990 Budget Act passed and signed that led to PAYGO, discretionary caps and entitlement spending moderation for the rest of the decade.

Bill Clinton did it from 1995-2000. In 1997, he signed a budget deal with Newt Gingrich, Tom DeLay and Dick Armey, the Three Spawns of Satan in many Democrats' book at the time, that actually balanced the budget for the last 4 years of the 90's and probably for the last time in any of our lives now living to be honest about it.

The Bush 43 years were not known for their bi-partisanship on Capitol Hill and look at what that got the Republicans? Lost the Senate and Congress in 2006, big-time. It took the election of Barack Obama in 2008 to unite the Republicans again.

These such conversations among chiefs-of-staff or legislative directors or other staff could be at a formal meeting; in a Member or Senator's office; at Bullfeathers or on a golf course (if playing golf with lobbyists was allowed anymore which it is not in which case it has become a 'small fundraiser' in which case it is legal).

The key point to try to see in such conversations is where the loss of comity and respect for individuals and the institutions of Congress, the Senate and the White House have seriously eroded our capacity to govern in Washington nowadays.

It is going to take some unusually gifted people to enter elective office and reverse these damaging trends. Much of it is basic 'common sense', 'deal-making' and the ability to 'Make Friends and (Therefore and Thereby) Influence Capitol Hill', to paraphrase Dale Carnegie.

President Obama apparently has not read the book on how to win friends on Capitol Hill.

The sooner we find new people to run for public office, though, the better we will all be.

Conversations Over a Beer on the Golf Course

'Didja see what Obama just did? He appealed to the Iranian people directly to urge them to tell the Ayatollah to support his nuclear deal?'

'C'mon! Are you serious? He did what again? Didn't he just get all involved with the Israeli elections and meddling in their political game? Who does he think he is..the Messiah of The World or something?'

'And then he told people that he wanted the United Nations to ratify this nuke deal with Iran but not the United States Senate! What is his deal anyway?'

'Yeah. We asked his legislative liaison to come to our office so we could discuss some amendments we are considering to the ACA this summer so that when the Supreme Court strikes down the exchanges in King vs. Burwell, we have some backstop ready to go legislatively which will plug the gap for the people who thought they were getting federal subsidies but won't under this decision.

All we heard was 'crickets'. Nothing.'

'Yeah. That is the same experience we have had with this President and his staff people for the past 6 years! Did you know my Senator has NEVER even met President Obama yet?'

'That is because your guy is from Idaho, Bub! No one even knows where Idaho is anyway.'

'Shut up! Sammy!' 'Shut Up Henry!'

'Seriously. In your wildest dreams, would you have ever imagined that a US President would be playing so footloose and fancy-free with the US Constitution?'

'Nixon did a pretty good job of that, didn't he?'

'He was a paranoid schizophrenic when it came to his political career. He covered up his involvement in Watergate which was a dumb thing to begin with. But at least Nixon respected the constitutional prerogatives of Congress and he stayed pretty much preoccupied with foreign affairs such as opening diplomatic relations with China and all that.'

'Yeah. I wish all Obama did WAS bug the RNC Headquarters in 2012! At least we coulda blamed Romney's loss on that and now we would be having impeachment hearings to get rid of Obama today! McGovern must have been laughing his rear end off during the while Watergate hearing mess.'

'President Obama pretty much has made it clear he doesn't like the US Constitution very much. It is too 'binding', he says. It prevents him from getting done for the American people what 'he wants to get done for the American people'. He is signing executive orders like they are orders for cheeseburgers at McDonald's except no one is paying for them!'

'This Iran nuclear deal is just like an 'executive order' to Obama. He could bring it to the US Senate for ratification which would build public and bipartisan support for it...but he won't. Why?'

'That is the $64 million question, then. Did you boneheads know that the President does not have to bring any treaty or international agreement to the US Senate for ratification if he doesn't want to? The Constitution says the President 'shall' have power 'by and with the advice and consent of the Senate, to make Treaties....' but that doesn't mean he has to submit anything for a treaty unless he wants to. Otherwise, it just becomes a bilateral or multi-lateral agreement that can be easily overturned when the next President comes around.'

'Yeah. You can bet Hillary Clinton will overturn everything Obama has done in these 2 terms. She was right there with him for the first 4 years of all this mess to begin with!'

'Did you know that no Democrat has replaced an incumbent Democrat in the White House by election since James Buchanan replaced Franklin Pierce in 1856?'

'Wow. And he was one of the great ones ever, wasn't he?  Buchanan was such a terrible President that no one in Congress wanted to commemorate his legacy with anything so his niece left money in her will to build him a park north of the White House on Meridian Hill'

'Who are you...the travel guide for the Travel Channel in your spare time?'

'Shut up, Henry!' 'Shut up Sammy!'

'Boys, boys! Calm down! We have a real constitutional crisis here with this President! From his sealed records before he ran for the White House to his ramming-through of Obamacare down our throats when the Democrats were in control of Congress and the Senate from 2009-2011 to the IRS harassment of Tea Party groups to the NSA tapping of phones to Benghazi to this 'secret' Iran deal to his snubbing of our only true ally in the Middle East, Israel, we have a real problem with a rogue President who really doesn't think the Constitution applies to him!'

'Well, one thing is for certain. We sure as heck would not be in the majority of the US Senate, the US Congress, number of Governors and state legislatures in record numbers since Harry Truman without Obama being in office, that is for darned sure! We have over 1000 more legislative and executive Republican offices now across the nation than before Obama became President in 2008!'

'Well, thank God for little miracles then!'

'Well, here's something the Democrats and Obama have not thought of yet: Every precedent Obama is setting right now can and will be used by every Republican President elected from now on! Turn-about is fair play, right?'

'Maybe. But Republicans like to play by the rules so we are probably going to go back and honor tradition such as restoring the filibuster in the US Senate and forgetting all about Harry Reid's insane 'nuclear option' to get people confirmed to various positions in the federal government.'

'Yeah. Republicans like to follow convention. They are like the guy who not only tucks his shirt in his pants; he tucks his undershirt into his underwear before he tucks his shirt into his pants!'

'Doesn't everyone do that?'

'Shut up Henry!'

'Well, I gotta get back to the office now. You know how complicated this budget mess is and entitlement reform and health care and financial services regulation and all that. Just a few of the 'little' problems facing us today as a nation.'

'Yup. Go get 'em, Sammy! I am sure this President will turn things around and the next 1.8 years will be smooth-sailing for everyone!'

'Yep. Sure it will. Sure it will.'

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Saturday, March 14, 2015

'The Center for the Eradication of Poverty Through Free Enterprise at The University of North Carolina at Chapel Hill'

'Thou Shalt Not Violate The Hatch Act!'
Much ado has been made about the 'attack on academic freedom' with the recent closing of the Center on Poverty by the UNC Board of Governors (BOG).

As far as we can tell, life goes on at every campus in the UNC System as it did before the announcement of the closing of the Poverty Center: students are going to class that professors and teaching assistants are teaching; the libraries are still open and people are following the basketball teams still playing in the tournaments.

In short, much of campus university life is going on just as it did before the Center for Poverty was opened at the UNC Law School in February of 2005.

Does anyone remember the circumstances of the 'founding' of the Poverty Center at UNC Law School in the first place?

Former US Senator John Edwards (NC) had lost his vice-presidential bid as running mate to failed presidential candidate John Kerry just 3 months previous. His platform included a lot of talk about  'Two Americas', the haves and the have-nots, and he wanted a place where he could continue talking about poverty and other issues of his political interest.

There was no 'Center for Poverty' at UNC before John Edwards wanted to set it up as a platform to advance his political interests. Later, confrontational and controversial professor Gene Nichol took over as director of the Center.

You would think that a university of that size would have had such a poverty center already on campus if that was a chosen priority of interest before a political figure decided he/she needs a place to hang their hat after a losing campaign at any level, yes?

The argument that the BOG closing of the Center for Poverty at the UNC Law School is an 'attack on academic freedom' has to be couched more in terms of it being closed as a result of 'reversing a political favor' first, doesn't it?

Beyond that, we got to thinking about what would have happened if, say, the tables had been turned and the Democrats in North Carolina now had 100% control of everything in state government from the Governor's Mansion to the Lt. Governor to the state general assembly after 140 years of straight Republican rule since right after the Civil War.

Let's make-believe and imagine that in 2004, after a person left the employ of a Republican US Senator in Washington, he/she asked friends and political supporters on the BOG and at Carolina at that time, since they were all Republicans, to set up 'The Center for the Eradication of Poverty Through Free Enterprise' (CEPTFE) at UNC.  The idea would be to work on issues this person considered important to eradicate poverty through the miracles of the private sector and expansion of jobs in our capitalist society in addition to advancing his/her political career.

Which may have included, oh, say...running for President of the United States of America in 2008, perhaps.

The Koch Brothers would have been asked to fund it separately from the University although the person in question would have been granted an adjunct visiting professor of the practice position to be paid for by the taxpayers of North Carolina. It would have been housed in the Kenan-Flagler School of Business because this person would have had an MBA from Carolina, not a law degree as John Edwards had which is why his preferred choice of venue was the UNC Law School.

Let's also imagine that the North Carolina General Assembly allocated over $1 million of your hard-earned taxpayer-paid money from inception in 2005 to 2010 to support this political figure and their efforts at CEPTFE (because that is exactly what was done for Gene Nichol and the Center on Poverty at the UNC Law School by the Democrats then in charge of state government in Raleigh).

Let's go on to imagine that over the years, this person may have taught a few classes in the business school on public policy and business. A few.

However, this person's main reason to get up every morning was to blast the Democrat in the Governor's Mansion at the time, Mike Easley and the Democrats who ran the GA at every single opportunity and public speaking engagement.

Every single day, this person wrote columns and gave speeches excoriating the Democrats in charge of North Carolina as to their ignorance about how to help poor people through the miracles of private business and proper training and education. There was no real academic research going on; instead of thoughtful persuasive arguments on the merits of the facts, this person just hauled off like a long-driver on the golf course who could smash a golf ball with a picture of Mike Easley or Marc Basnight or Tony Rand on it as far as humanly possible.

Here are some of the paraphrased quotes this person could have used (which are based on just some of the actual quotes used by Gene Nichol during his tenure)

'North Carolina must reject and inter its unforgivable war on private business…. It is a rank violation of our history, our ethics, our scriptures and our constitutions. We’re a decent people. We aren’t bullies. And we don’t like those who are'--March 2014

'(Governor Perdue is the) 21st century successor to Winken, Blinken and Nod' - October 15, 2013

'We’re engaged in a breathless competition to produce the most extreme government in America...Havoc nears. The result will be unlike anything we’ve seen in more than three decades'- (actual quote)

And those are the 'nice things' Mr. Nichol had to say about Republicans in public!

Would anyone care to guess how long this Republican political figure and the CEPTFE would have lasted under the Democrats once they took over the NCGA in 2010 in our hypothetical situation described above? About 'as long as it takes poop to go through a goose' as the old saying goes.

What is lost in this story is that it not as much of a case of 'academic freedom' as much as it is a case about the lack of 'civil public discourse'.

Everyone wants 'academic freedom'. But doesn't that mean 'universal' academic freedom? Where is the counterpart to the liberal Center on Poverty on any UNC System-wide campus? We asked some people who should know. They all shook their heads and said they couldn't think of any pro-enterprise center on any campus. One prominent Democrat actually started laughing out loud to our face when we asked them this question:

'Maybe there is a conservative Republican law faculty member at the UNC Law School we could talk to about this?'

'There are none!' he replied laughing so hard he could hardly breathe. 'Are you crazy?'

'Sorry. I lost my head there a second'
I had to admit nicely.

Another thing that many people either don't realize or respect is the fact that every single professor or teacher in the UNC educational system from top to bottom, from UNC-Chapel Hill to the smallest elementary school in Tyrrell County, is a 'public servant' of the taxpayers of North Carolina.

They are paid salaries by the taxpayers of North Carolina. They participate 100% in one of the nicest health care plans in the country, the NC State Employees Health Plan, paid for by the taxpayers of North Carolina. They participate 100% fully in the North Carolina State Pension Fund, one of the most fiscally sound state pension plans in the country.

'Public servants' are exactly that: People who choose to work in the public sector because they like to help other people in our state and communities. Once they are named or sworn in to their state government jobs, they become public servants to all of us: white or black or hispanic; rich or poor; smart or not-so-smart whether they disagree with the elected officials in Raleigh or not.

We can't have public servants serving only 'part' of the public, the part of the public they like or agree with. If anything, public servants have to divorce themselves of their own personal preferences and serve people they might not ever agree with or particularly want to work with because of some political difference of opinion.

They do it. 95% of them do public service well and in an honorable fashion, just as in any business  where 95% of the people do well-meaning, heartfelt good jobs.

Gene Nichol attacking the NCGA now run by the Republicans would be like you walking into your boss's office one day; telling him/her that they were a son-of-a-bitch bastard..but you wanted a raise anyway because you were such a good worker. Or your son or daughter yell and scream at you every day telling you what an awful father or mother you had been 'but, hey, mom or dad, can you buy me a new car for my birthday and give me an allowance of $100/week?'

That won't feed the bulldog as another quaint Southern expression might explain.

We had one person tell us that UNC professors have not been and never will be 'public servants'. As a result, public university professors had the opportunity and yes, the duty and responsibility to 'speak their minds about whatever they wanted to say' in essence.

That is not true. No one wants to frustrate fair and reasonable debate about anything. The day America can't talk about everything openly is that day America ceases to be America when you really think about it seriously.

However, public servants can't take taxpayer money and expect everyone to be happy when they start what is essentially a 'political vendetta' against anyone in state government. That is where Gene Nichol crossed over the line with the NCGA and the Republican Governor's office. It was just like the angry employee in the office or the spoiled kid asking for a higher allowance.

There are 'adult' ways to air political differences and there are 'childish' ways to air political differences. Presenting data in objective ways and offering to disagree in agreeable manners is the adult way to do so. Using ad hominem attacks on people's character and political beliefs is not.

In Washington, there is a thing called the 'Hatch Act'*. All federal employees have to abide by the Hatch Act which simply states that when you are on your federally taxpayer-paid job, you do the work of your country first and foremost and only. Period.

No politicking while on the federal pay tab. No fundraising on federal grounds. No nothing political while serving the public as a whole.

You want to be political? Go off the federal payroll and join a campaign and do it! Go ahead! Knock yourself out! If Mr. Nichol wants to be political and passionately advocate the issues of the poor, he should run for the US Senate or the Governor's Mansion or run a 527 off of publicly-supported state grounds at the University of North Carolina at Chapel Hill.

For any federal worker who wants to be political, they can request a leave of absence perhaps or they might have to retire altogether from federal service. They just have to be ready to drop all the political baggage at the door when they do come back from their leave of absence and be ready to serve the totality of the public with their talents and energy. Not their political party or interests.

North Carolina should adopt a version of the Hatch Act if they haven't done so already. If Gene Nichol didn't know there was already a Hatch Act-like statute on the books in North Carolina, perhaps they should teach it at the UNC Law School.


*The Hatch Act of 1939, officially An Act to Prevent Pernicious Political Activities, is a United States federal law whose main provision prohibits employees in the executive branch of the federal government, except the president, vice-president, and certain designated high-level officials of that branch, from engaging in some forms of political activity. The law was named for Senator Carl Hatch of New Mexico. It was most recently amended in 2012.

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Thursday, March 5, 2015

Values and Principles: Which is Which in Politics?

Diogenes swinging a lamp
'Can't we find an honest person
anywhere in politics?'
We have long been enamored by the public discussion of ardent activists on all sides of the political spectrum about what their driving 'principles' are and why a voter should vote for them to be their elected representative in any legislative body.

Typically, you will see a candidate 'promise' to do something and then get into office only to find out that they can't just snap their fingers and get it done as they 'promised' during the campaign.

Then, of course, their most ardent supporters call them a 'cop-out', a RINO, a liar, a cheat and a nincompoop.

No wonder so many people don't want to run for public office! Who wants to be called a 'nincompoop'?*

We have long thought that part of this problem was an incomplete knowledge and understanding of how our US Constitution works. It is a magnificently drawn document, one with enough checks and balances in it to frustrate even the most charismatic politician. It defends the rights of the minority party and does its darndest to make sure no one person becomes a tyrant and tries to runs America solely as he/she sees fit. It also guarantees that no political faction or party dominates for too long in our elective democratic republic.

We have come to learn that this confusion among candidates and their supporters may also have a lot to do with our collective lack of understanding of the differences between 'principles' and 'values' as a politician pursues his/her political 'goals' while in office.

What is the difference between political 'principles' and 'values' you say? They seem to be so much the same thing, don't they?

We recently had the chance to listen to a great lecture about these differences by Professor Geoffrey Sayre-McCord, Chair of the Philosophy, Politics and Economics (PPE) joint degree program between The University of North Carolina at Chapel Hill and Duke University.

If you ever thought philosophy was a dry, dead discipline, you need to go to one of Dr. Sayre-McCord's lectures and listen for awhile. He is quite entertaining and in this case, very enlightening about a question we have been pondering for a long, long time.

Here's one list of American political 'values' that may encompass most of the generally accepted political values we hold true in our society:


Many of these core values, much like the iconic rugged American cowboy of yesteryear, may be more of a dream nowadays than actual fact. Yet, they do encompass the promise of the American Dream as well as any we have seen lately.

Principles tend to be of a higher order of generally observed and accepted virtues, don't they? As in the following:


Political values tend to be of a nature that lends themselves to some sort of balancing between two competing values. For example, we all say we want 'freedom' in America. Are we willing to trade off a little freedom, however, to have a homeland security department that protects us from another 9/11 attack? Haven't we all given up a little 'freedom' to be frisked every time we get on a plane lately?

How about 'individualism', that rugged can-do spirit most of us say we want? Are you really willing to go it completely alone in this world without any access to government-funded Social Security and Medicare which is accessible to every senior citizen regardless of financial situation or annual income? Warren Buffett and Bill Gates might say they are willing to not partake of either federal assistance program but hundreds of millions of other Americans of more modest means probably won't.

Political 'values' tend to be 'trade-able', don't they? It is a matter of negotiation and compromise to see how far one value gets degraded at the increase of another political value. Less liberty for more equality, as in 'more taxes for the rich to provide more benefits for the poor or elderly' to name one recurring example in Washington forever it seems.

'Political Principles' don't seem to be negotiable. They seem to be sacrosanct, inviolable, extant forever.

'Honesty' is one of them. One thing is for certain in politics: Lying to anyone, whether it be an ally, your opponent, a lobbying group or your constituents, is a straight ticket to irrelevance in the public arena.

Sure there are individual cases where people can forgive a politician. Bill Clinton is a prime example. But they are few and far between.

During Dr. Sayre-McCord's talk the other day, it dawned on us that perhaps we need to separate political 'values and principles' from political 'goals and pledges' as a first step to cleaning up our current political debate. The sooner the better in our opinion.

We have been conflating them all together into some sort of meaningless gruel whereby our values are indistinguishable from over-arching principles which are undecipherable from political pledges and goals nowadays. That near about makes it impossible to figure out who's on first, what's on second and I don't know if we will ever get to third base or steal home again until we do.

We have recently been struck by the number of elected politicians who have started to decline signing pledges because they have come to realize how hamstrung they have become in office. They just can't get any deals or compromises done with hundreds of pledges hanging on them on each and every issue.

They might as well phone it in since a trained chimpanzee can be taught to vote yes or no on any issue if you give it enough peanuts or something as a treat each time they vote 'the right way', yes?

Let's take a look at just a few of them:
  • The Tax Pledge- Members who sign this pledge promise to never vote for higher taxes
  • The Social Security Protection Pledge- Members who sign this promise to never do anything to address any problem with Social Security other than when it is about to run out of money
  • Various Defense Pledges-Members who sign these pledges promise not to cut specific defense programs or the overall defense budget in absolute terms
  • Medicare and Medicaid Pledges-Members who sign these pledges promise to never do anything to change or reform either of the two largest medical care programs the world has ever known
  • Pro-Life Pledge-Members who sign this pledge promise to support pro-life positions
  • Pro-Choice Pledge-Members who sign this pledge promise to support pro-choice policies
These pledges are nothing more than a statement of their legislative goals and agendas. These pledges, in a somewhat simpleton way of boiling down very complicated issues to fit a bumper sticker, are really more of an indicator of where a candidate is likely to go once elected than an underlying value or principle, isn't it?

The problem comes because when the pledge is signed, it becomes a 'promise' to the voters, both those who supported the candidate and those who didn't. You can do many things in American politics except 'break a promise'. Because for some deeply inherent human reason, when you break a promise or a pledge, you become viewed as a liar and someone who can't be trusted. And with good reason.

We think there may be a way for candidates to clearly express their political and legislative goals by talking about what they would do once elected on any of these contentious issues named above. But they would have to stop signing these simple-minded pledges and focus instead on the values and principles they would hold high if elected to high public office.

Let's face the truth of the matter: Republicans who sign the Tax Pledge under the assumption that it would 'starve the beast' in Washington and deprive it of the revenues necessary to grow have been proven abjectly wrong. The government has still grown exponentially in the last 30 years and now we have a $18 trillion national debt to go along with it.

Know how to cut spending in Washington? Send people there who will CUT SPENDING IN WASHINGTON! Plain and simple.

Liberal Democrats (and Republicans) who sign any pledge 'not to touch SS/Medicare/Medicaid' to show seniors they are 'serious about protecting their entitlements!' are just as culpable as the Tax Pledge Republicans when it comes to not paying for what we are spending today and laying off that same $18 trillion national debt (soon to be $20 trillion, count on it) to our children and grandchildren.

SS/Medicare/Medicaid now make up well over 1/2 of the federal budget. When combined with defense spending and interest on the national debt, close to 80% of the federal budget is 'untouchable' if you have signed too many pledges not to do this, that or the other.

You ever wonder why nothing is getting done in Congress? Pledges are one main reason why.

Dr. Sayre-McCord got us thinking about what a candidate might sound like if he/she understood the difference between values and principles and stopped signing this simple pledges which some have described as 'going on autopilot' or worse, 'checking your brains at the door of Congress before you get sworn in'.

'If they had any to begin with...' we can hear many of you saying in a thought balloon over your head.

A conservative Republican running for Congress might say this:

'I am a small-government conservative (value) in the legacy of Thomas Jefferson and James Madison. I fear the concentration of power (value) in a few hands in Washington and prefer to allow the state and local governments handle as many issues as possible away from Washington help and interference.

My goal is smaller government at the federal level. (legislative goal) I will do everything and anything in my power to achieve that legislative goal. I don't like taxes any more than you do. (legislative goal) 

However, if I was presented with a legislative package that would reduce spending by $10 trillion over the next decade through a series of reforms and cancellations of federal programs that do not work, and the package included a $1 tax hike on everyone in the country to make sure it would pass the Senate, I would vote for it. (principle=honesty/integrity)

To do otherwise would be short-sighted and small-minded at this point in time.

A liberal Democrat could say almost the same thing in a mirror image of this statement:

'I am a big-government advocate (value) in the legacy of Alexander Hamilton. I support the concentration of power (value) in Washington because we can concentrate resources and redistribute them across the nation to make this a more fair country for everyone to live.

My goal is more government at the federal level. (legislative goal) I will do everything and anything in my power to achieve that legislative goal. I don't like cutting entitlements any more than you do. (legislative goal) 

However, if I was presented with a legislative package that would reduce our national debt by $10 trillion over the next decade through a tax hike on everyone in the country, and it included a series of reforms in entitlements and cancellations of federal programs that do not work, I would vote for it. (principle=honesty/integrity)

To do otherwise would be short-sighted and small-minded at this point in time.'**

Both of these statements convey the differing visions of how our country can and should be run. They both stay away from signing away their flexibility before they even get to Washington. They both stay true to the 'values' of America while maintaining the highest 'principles' of honesty, integrity and respect. 

At least they would not be insulting the intelligence of the electorate by 'promising' to balance the budget 1) without raising taxes! or 2) without cutting spending!

That would be a good first start.

*One possible word derivation of nincompoop- Late 17th century: perhaps from the given name Nicholas or from Nicodemus (by association with the Pharisee of this name, and his naive questioning of Jesus Christ; compare with French nicodème 'simpleton').

**(Voting for a tax hike AND a cut in entitlements might be the ultimate suicide mission for anyone, including a liberal Democrat in the safest possible district but follow this for illustrative purposes right now. Although it is right out of John Maynard Keynes' General Theory: raise taxes and cut spending during expansions; cut taxes and raise spending during recessions)

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