Municipal pensions are underfunded - now who would ever imagine that?

Fox News is reporting breathlessly a report that JP Morgan did not disclose to purchasers of municipal bonds that state and local governments had unfunded liabilities due to their pension funds to the tune of $4 trillion. Duh. I guess that the next breaking news is to warn buyers of US Treasurys that the US government has massive unfunded liabilities associated with social security. Maybe Fox assumes that buyers of government bonds are stupid. Tell me what fund managers do not know of the unfunded liabilities and I bet the number is zero and if it is positive then that fund manager needs to be fired. Fox’s Neil Cavuto who “broke” the story said that the alternatives were either that the state and local governments would have to dramatically raise taxes or cut back on services. Au contraire. What the governments will do is to cut back on pension and health benefits. Investors know this and investors also know that these unfunded liabilities are not very likely to force a default. This is different from issuing revenue bonds which are dependent upon the monies raised from the use of the project (such as a parking garage or a stadium). So I hate to disappoint Fox but JP Morgan disclosing the obvious would have virtually no impact on the market for municipals.

Basketball Rodriguez-Jones?

I would rather watch the Kansas City Royals play the Oakland A’s than any NBA game, including the playoffs. I have always loved professional baseball and used to like basketball as well. But the team-oriented sport of Magic’s Lakers, Bird’s Celtics, Isaiah’s Pistons and Dr J’s 76ers has devolved into a one on one showboating parody of the sport. Shack started backing defenders down in the post literally mugging them with his backside and it wasn’t ever called. Now everyone does it. I have never understood what is a foul and what isn’t. And don’t get me started about travelling. I have actually tried to watch some of the playoffs and only made it through the Boston-Miami game where Rondo got mugged by Wade in the last moments which was not called and Wade driving for a layup kicked Garnett and Garnett was called for the foul. I turned off the TV in disgust. I would have done the same regardless of the team since I don’t have a dog in the hunt. While watching some of one of the games between the Spurs and the Thunder, I noticed that at one point seven players were on the floor who were born outside the continental US. We’ve come a long way from where there were so few foreigners playing US basketball. Remember when Detlef Schrempf was a novelty and when his University of Washington team played at Duke, the Dookies chanted “Luftball”? Well the players on the court in the NBA game were: San Antonio Spurs Boris Diaw – France Tim Duncan – US Virgin Islands Manu Ginobili – Argentina Tony Parker – France Tiago Splitter – Brazil Oklahoma Thunder Serge Ibaka – Congo Thabo Sefolosha – Switzerland What does it mean that at the highest level of the sport, there are so few native born players playing? Sport has always been a vehicle for the lower economic classes to make it. Boxing has been the province first of immigrants, then blacks and now Hispanics. Baseball was first a sport whose stars were lower class southern whites, then blacks and now again Hispanics. Today, the most common names in major league baseball are Gonzalez and Rodriguez. Basketball has been a sport dominated by blacks and is the one sport that has relatively few Hispanics. I guess that there are not many seven foot Mexicans or Dominicans. After the southern universities integrated, their rosters were transformed from all white to mostly black. It still tickles me to see Ole Miss play Mississippi State with 10 blacks on the floor and the TV announcer saying “here come the Rebels!” However, the early entry of players into basketball has deteriorated the quality of the sport at both the college and the pro levels. There are no more fundamentals taught at either level. Do you think that is why suddenly foreigners are now starting to be so numerous among our best players?

Jonathan Pollard: The bad penny returns

One of the thorniest issues of our lifetime has reared its head again: the question of a presidential pardon for Jonathan Pollard. With the Israeli president, Shimon Peres in the country to receive the Presidential Medal of Freedom, some congressmen from both parties have introduced a resolution calling for Pollard’s release. Peres, himself, said that he would ask Obama to consider it. To refresh your memory Pollard is the spy who was given a life sentence for spying for the Israelis. It is not clear exactly what Pollard passed to the Israelis or how it was used. Some have contended that the Israelis gave the Russians critical information on US spies operating abroad and information on classified military technology in order to have Russian Jews be allowed to emigrate to Israel.. The problem as to the truth is that Pollard never stood trial but rather confessed to spying and was sent to jail. Consequently, the extent of his crimes and the consequences are classified and probably never will be told. Pollard was granted Israeli citizenship and has denounced his US citizenship. If he were pardoned he would be deported to Israel. One thing that I do know is that the Pollard case inflames many people that I know, especially those who are ex-military, ex-CIA and ex-FBI. Those people have told me that Israel (rightly so) puts Israeli interests above all others. They do believe that Israel is responsible for the loss of American lives, citing the murders of US spies abroad during the Pollard era and even before in the bombing of the USS Liberty during the six-day war in which 34 US sailors were killed and 170 were wounded. The surviving sailors said that the Israeli aircraft were unmarked and it was speculated that the Israelis wanted to deceive the Americans to think that the attackers were Arabs. Whatever you believe, it is hard to deny that the US did engage in a cover up in the Liberty incidence and sought to minimize it. Regardless, the very mention of Pollard’s names opens deep wounds and animosities. People that I know who are fiercely patriotic do not hide their animus toward Israel, toward the Navy establishment and toward Lyndon Johnson for what they perceive as turning their backs on Americans on the front line in the name of Israel, rather than US, interests.

Our zebra president?

Chris Rock plays a zebra in the new movie, Madagascar 3. On the Today show he was asked by Ann Curry if he were an animal which one would he be, of course he answered “a zebra”. Then he said that we had a “zebra president” who was black and white. Rock said that “I wanted to be the lion, you know, king of the jungle and all that,” he replied, “but that didn’t work out. Snake is always good. You know, scare people. But I’ll take the zebra.” “In honor of our zebra President. Black and white, white and black. … I love our President, but he’s black and white. He appeals to all. And that’s what I am going for,” the comedian said. Curry wondered aloud how the President might react to such an analogy. Rock laughed and replied, “I don’t know. … We ignore the President’s whiteness, but it’s there. It’s there.” Rock is right. We ignore the president’s whiteness. Why? His mother was white and his father was a black Kenyan making him one of the few true African-Americans. As an aside, I had a white African-American student – he was from South Africa but I have never had a black African-American in my classes. But what about the president? He is black because of convenience. He was raised by his white grandparents, went to mostly white private schools and seemingly only became black when he decided to run for political office. To that end, he married a black woman (also a product of white “elite” schools), moved to Chicago, became a community organizer and adopted blackness for political expediency. Barack Obama is smart. He knew that this was his avenue to political office. Consider the question of would a white radical ever be elected president? If that were so Bernie Sanders would be president not Obama. So for Obama, blackness is a matter of convenience. Unlike the vilified George Bush, you cannot find many blacks in important positions in his administration. He doesn’t even have a black official liar (press secretary). We see Axelrod and Plouffe out front in prominent roles but no blacks. Sure Valarie Jarrett is in the inner circle, but who else of color? Obama is no friend of black people. People of color have been adversely affected by Obama’s policies. If Obama were white, blacks would be rioting in the street. Yet the poverty pimps like Jesse Jackson and Al Sharpton know that their wealth and well being are tied to keeping the masses in line by attacking the so-called one percent (of which they are members) and the republicans rather than the democrats and Obama who are destroying jobs and preventing reforms that would redound to the benefit of their fellow persons of color. A zebra? In another time, Obama would be called an Oreo.

Cops, Firefighters and Teachers: More of the Same

Two things seem certain when politicians want to spend more money: its either for the children or for cops, firefighters and teachers. Well we are once again hearing that we need additional funding for cops, firefighters and teachers. Citing in nationwide layoffs, the president is asking for increased funding to restore these workers jobs. However, gone mostly unsaid is that the federal government is not the funding source for these workers. Rather, they are funded at the state and local levels and have fallen due to the decline in the revenues within the states. Any funding from the federal government will be temporary at best allowing for re-employment for a short period until the funding runs out. Then they will be subject to layoffs again. Remember Bill Clinton and the funding of 100,000 jobs for cops, firefighters and teachers? Well that program was a failure accused of being pork barrel politics that had little impact on crime. Much of the money went into administration and programs such as teaching children how to fish. Indeed, precious few new cops actually ended up walking beats. I am not making this up. Here is a story from Slate (not exactly a right wing journal) published in 2001 condemning the program as mostly wasteful. (see http://www.slate.com/articles/news_and_politics/politics/2001/11/invisible_cops.html). As one account of the program concluded “The Justice Department's own audits of the program alleged millions of dollars were misspent and thousands of jobs funded by the grants were never filled. In one case, a New Mexico tribe got $728,125 to hire eight extra officers. After the department closed in 2002, auditors said it was unclear where the money went or whether anyone was hired.” Also remember that one tactic commonly used by governments in the face of budgetary cutbacks is to layoff high profile workers. Instead of lowering the number of workers in administrative positions (the classic paper pusher), they will instead lay off cops, firefighters and teachers. My city of Knoxville has over 380 administrators in our school system alone. My bet is that these will be the last fired rather than the first.

Random Thoughts

Why haven't there been any calls for Eric Holder's impeachment over Fast and Furious? By the way, if not an impeachment then why no calls for a special prosecutor? And speaking of a special prosecutor, if one were appointed over the Valerie Plame triviality, then why none for the serious security leaks over Iran's nukes? DOJ has filed lawsuits against the state of Arizona for its immigration law, against Arizona Sheriff Joe Arpiao for enforcing the immigration law, against Texas for its voter ID law, against Florida for purging illegals from it voter rolls - its there a pattern here and did I miss any? All of a sudden, my voice recognition software in my SUV doesn't understand me - must be my southern accent. I said "phone" it said "moving to channel 53" which was some awful stuff called "smooth electric" so I yelled "phone idiot!" Then it called a friend of mine - I am not going to say the name - who is at a meeting in Las Vegas. Can you imagine if in the future the targeting systems are voice activated? We will probably end up bombing ourselves. One of the downsides of democracy is the rule of the majority. I am uneasy about 50.1 being able to expropriate the wealth of the minority through punitive tax hikes. I think that a worthy amendment to the constitution would be for tax hikes to be approved by a supermajority in both houses. There they go again. Jesse Jackson Jr (D-IL) has proposed raising the minimum wage to $10 an hour and linking it to the CPI. He stated that economists have shown that rises in the minimum wage have little impact. Well that is from only two rather isolated studies - one in the UK. In the main, the evidence was so overwhelming that it did cause unemployment that no real research has been done in the past 20 years. Of course it will cause unemployment and linking it to the CPI will deny youth a chance to learn the discipline of the workforce (very few adult heads of household work at the minimum wage). What should be done is to eliminate the minimum entirely and let the market determine all wages - not just those above the minimum. If individuals fall below the poverty line, then they will get subsidies from the myriad of programs out there.

Happy D-Day

Today marks the 68th anniversary of the landing at Normandy. I have read the account by Stephen Ambrose and an exception to my not going to movies was going to see Saving Private Ryan. That is because my beloved Connie's dad was a D-day veteran, landing in the first wave at Omaha Beach. He was a Bedford Boy and was a genuine hero. It therefore saddens me and alternatively infuriates me that the President did not deign to commemorate this day of supreme sacrifice. Instead he is fund raising (what else?) in California. It is puzzling that this president and his advisers are so tone deaf. Surely someone in the Obama camp must know that this day is important to so many Americans. It would take little time and less effort to issue a presidential proclamation. Yet nothing but silence. This is another confirmation as to why people like Artur Davis, a black former congressman from Alabama has left the democratic party. Davis said that Obama had the rare opportunity to unite Americans, yet at every turn he has done the opposite. The Pew research center has said that this country is more divided than ever. That division has to be put at the feet of Obama. He has deliberately governed to the far left. He has not made a single attempt to bring us together but has instead helped drive us apart. Interestingly, the division has not been along racial lines but instead along ideological lines. Indeed, Pew has found that there are deeper divisions now amongst Americans by ideology than by race, gender or religion. So I guess Obama has in a sense united races, genders and religions that share the same ideology. Regardless, ignoring D-Day is a sad continuation of a sad presidency.