Bernie Sanders: Wrong On Everything

Just because you surge in the polls doesn’t make you right, which means, I’m sorry to say, that what Bernie regularly posts on his taxpayer-

Yeah, ok, but he really knows what to do with the money.

Yeah, ok, but he really knows what to do with the money.

funded Senate site is filled with the wrong ideas, the wrong policies, and the wrong fixes to problems that would not have been wrought had the government not intervened in the first place.

Oh, and in case Bernie’s supporters want to tout his lead in the laughable Democratic race for the nomination:  Bernie is competing against someone with more baggage than the 3rd-largest airline in the US.  And on the Republican side, Trump is still holding a lead in many polls.  So let’s hope Bernie’s supporters don’t count their allocated, government-issued Freedom Chickens before they hatch.

Since Bernie’s site is “dynamic”, a quick snap of the page, as I expect it to change and be filled with other topics such as “Sanders Questions Need for Soldiers to Have Ammo” and “Sanders Quiet on Vets Dying in VA Hospitals While He Was On the Senate Veterans Affairs Oversight Committee”.

Sanders: How I'm Wrong In Eleven Easy-to-Read Articles

Sanders: How I’m Wrong In Eleven Easy-to-Read Articles

Let’s start with jobs, since unlike a lot of Sanders supporters, most Americans want to work for a living.  What’s Big Bernie’s take on jobs?

Easy.  Let’s ban energy production in the US!

11.4:  Sanders, Merkley, Leahy Introduce Bill to Ban New Drilling on Public Land

WASHINGTON, Nov. 4 – Sen. Bernie Sanders (I-Vt.), Sen. Jeff Merkley (D-Ore.) and Sen. Patrick Leahy (D-Vt.) introduced legislation today to help accelerate the transition to clean energy by ending all new federal leases for oil, gas or coal extraction on public lands and waters.

As others have noted, since the Obama administration has already drastically reduced the leasing of public lands for commercial oil drilling, to a 3-decade low, what, exactly, does Bernie expect to accomplish?  Other than make it harder and more expensive, in the long run, for people who work for a living to put gas in their cars?

Here’s where Bernie really sticks it to those evil energy-producers:

“Worry less about your campaign contributions and worry more about your children and grandchildren,” Sanders told Republicans who continue to deny the science on climate change. “We are taking on the Koch brothers and some of the most powerful political forces in the world who are more concerned with short-term profits than the future of the planet. I’ve got four kids, and I’ve got seven beautiful grandchildren. We have a moral responsibility to leave our kids a planet that is healthy and inhabitable.”

Sanders doesn’t, however, apparently want to leave them a planet where when they turn on the light switch a light comes on.  First of all, there is no “clean” energy.  A wind turbine isn’t made from daisies and cow dung.  It’s made from steel, carbon, and many are routinely backed up by gas-fired energy when the wind doesn’t blow.  You need a gazillion of them to even hope to start matching current energy demands.

Also, Sanders seems to avoid mentioning those companies with their hands out for federal dollars that seek short-term profits rather than the future of the planet.  I guess not everyone is as saintly as Bernie when it comes to what power they choose to consume on a daily basis.

Look at that great federal solution that satisfies future energy needs, cleanly!

Look at that great federal solution that satisfies future energy needs, cleanly!

Oh, and since the national infrastructure won’t be divested of cars anytime soon, Bernie creates more dependency on Middle East oil – which is something no “leader” in American politics should be supporting.  Ever.

And how does restricting oil/gas drilling in the US help out those middle-class people who want a job, say, working for a company that drills for oil?

But enough about Americans wanting to do the jobs the government won’t let them do.  Let’s cut defense spending!

11.10:  Sanders Votes Against Increasing Defense Spending

Not three days before the Paris massacre, the ever-reliable Bernie Sanders took out his favorite whipping boy, and whipped him, just days before yet another massacre perpetrated by the insane might, just might, mean we shouldn’t be cutting defense spending even lower than it has been under Obama.

Timing, as always, is irrelevant when the dictatorship of the proletariat must be overthrown to make way for the pan-utopian Socialist future that awaits us, or whatever garbage is being peddled by Sanders and the mindless ilk that support an ideology responsible for 100 million deaths in the 20th century.

“If we are serious about ending waste, fraud, abuse and excessive spending, we have got to focus on all agencies – including the Department of Defense.”

Although Bernie fails to mention even one other agency that he wants to take a look at.  Like the Department of Energy, maybe?  Or maybe entitlements as a whole?  Nope.

But hey, are we really entitled to a defense here?

But hey, are we really entitled to a defense here?

“This bloated Pentagon budget continues to pour money into outdated weapons systems that don’t function properly.”

The bloated Senate payroll continues to pour money into outdated anachronisms that don’t function properly, but Bernie still takes his paycheck.

Oh, and the outdated systems?  They’re outdated because new systems won’t be authorized by Barack Obama’s signature on the budget.  Secondly, if by “don’t function probably” Bernie means “able to strike with unmatched power anywhere in the world”, then he might be slightly confused about what the word “function” means.  Granted, he was barely an apprentice carpenter four decades ago, so what does he know about the design and function of weapons systems?  Other than that they don’t fire low-information votes into the ballot box for him?

“The Department of Defense is the only federal agency that cannot pass a clean audit.”

The Fed isn’t audited and 40% of every dollar spent, under budgets Bernie votes for, is paid for by borrowed funds.  Secondly, apparently Bernie’s never heard of DCAA (Defense Contract Audit Agency) and DCMA (Defense Contract Management Agency), two huuuuuuuge federal agencies that audit all DoD contracts, and if defense contractors fail the audit or have anything wrong in their estimates, the contractors are fined, and they eat the cost overruns if necessary.

Does Bernie know what an audit actually is?  Does Bernie know his budgets include funding these two agencies?

“Many of its major acquisition programs suffer from chronic cost overruns.”

As does nearly every government contract.  Bernie is silent on the Obamacare website’s cost overruns.  Why isn’t he crying out for an audit of HHS?  Nearly a trillion dollars spent on a website.  One.  Trillion.  Dollars.   That’s huuuuuuge money.  Did that “work properly”?  But hey, it’s health care, so whatever.

“Virtually every defense contractor has been found guilty or has reached a settlement with the government because of fraudulent and illegal activities. This has got to change.”

This is an enormous accusation, since the DFAR is so complex it is virtually impossible not to screw something up in terms of meeting the massive and frequently conflicting regulatory requirements.  So “settlements” are often small and routine fines for failure to comply with the DFAR.

And considering there are thousands of defense contractors and sub-contractors, Bernie is claiming that the hard-working Americans that work for these firms, and some of them are small, family-owned machining shops, are actively seeking to commit fraud.  Does any business model start with “How can we defraud the US Government”?

What Bernie really wants is the DoD budget to be spent on entitlements, not defense.  He figures there are more retired people than people working in the defense industry, and he can count votes.  It’s that simple.

And, finally, after trashing the Department that employed them, Bernie has a tribute to veterans. No word yet as to which side of his mouth he’s delivering this message from:

11.11:  Sanders Statement on Veterans Day

“Today, we honor the sacrifice of our nation’s veterans and their families. The truth is that we can never repay the debt that we owe to those men and women who put their lives on the line to defend our country. Our commitment to care for our veterans must extend to every day of the year – not just Veterans Day. We have a moral obligation to keep our promise to provide for the wounded and their families and ensure that all veterans receive every benefit they have earned and deserve.”

Oh, and look at how Captain Oversight honored veterans – by ignoring the facts of the outrages occurring in  VA hospitals that were plainly available to him.  Bernie was Chairman of the Senate Committee on Veterans’ Affairs (2013 – 2015).  This occurred on his watch.

Bernie has all the qualities one looks for in a leader:  Hubris, an amazing ability to ignore innate contradictions in his policy positions, and

Hey, who needs consistency when you've got Marx behind you?

Hey, who needs consistency when you’ve got Marx behind you?

an uncanny ability to ignore the deaths that he had the power and responsibility to prevent.  He doubles down on these massive, apoplexy-inducing failures, by now making trite statements regarding the sanctity of veterans on his website.

These are just a few samplings of how wrong Bernie is, but with a full head of steam (and taxpayer dollars, and “big” union dollars behind him), it’s hard to keep up with the Most Disingenuous Man In The World.







Gleaming The Bern

If there’s one thing Bernie Sanders knows, is that when the going gets tough, the tough – or in this case, the Bernie – simply doubles down on

We would be wise to listen to The Slater.

We would be wise to listen to The Slater.

the stupid, and goes even further into the Realm of the Unbelievably Economically Illiterate.

In his most recent iteration of this Bernie Behavior ™, he uncorked the idea of spending another $18 trillion on new, um, spending – in addition to the record spending, deficits, and debt we’ve already enjoyed under Barack “Deficit spending is unpatriotic unless I’m the one doing it” Obama.  Because the last stimulus worked out so well.  ($650 million for Digital-to-analog television converter box program?)

Bernie’s taxpayer-funded meme generator has this graphic all over the internet of late, and it would be hilarious in its unintended comedy if it weren’t also hideously obscene in what it means to promulgate, much less support, this level of lunacy:

Why not make it 36 trillion?

If it’s such a great idea, why not make it 36 trillion?

But let’s take Bernie one disaster at a time.  It’s the only way I can get through it.

1.  Medicare for All – $15 trillion

First of all, covering everyone under Medicare means that what’s currently happening with Medicare – that the true costs of care are shifted onto commercial rate-payers – means that an entire system of payments that don’t cover hospital or provider costs results in hospitals and providers that will have to cut back on the care they can offer.  In other words, by covering everyone with the same plan, you actually decrease access to care.  You can’t ignore costs of providing care by only looking at what you’re willing to pay.  Try that at an auto mechanic’s shop and see how that works out for you.

Note that this has been happening for years now under Medicare, and is also happening now, as predicted, with the other aspects of centralized health care, in that Obamacare co-ops are folding like the cheap financial tents they are.  In what should come as a surprise to

Oh, so I've got at least through the next few weekends not to worry about this consuming 100% of my paycheck? Cool.

Oh, so I’ve got at least through the next few weekends not to worry about this consuming 100% of my paycheck? Cool.

Bernie, wishing things to be true does not make them so, so quadrupling down on Medicare is like stomping on the accelerator after you realize you’re headed for a cliff.

Oh, and where’s that $15 trillion going to come from?

2.  Social Security – $1.2 trillion

Touted as a way to increase benefits and shore up its looming insolvency – a pairing of phrases that should give even a 6th-grader mathematical pause – Bernie figures why not throw a big money bomb at the problem and hope it goes away.

First, let’s do a little envelope math here:  $1.2 trillion of $13.4 trillion in unfunded liabilities (as of 2014) is 9% of the total unfunded liability.  That’s not even a dent in it.  It’s not even a scratch.

Worse, the unfunded obligation seems to go up by that same $1.2 trillion amount – annually:

Social Security ran a $71 billion deficit in 2013, closing out four years of consecutive cash-flow deficits as the program’s unfunded obligations continue to grow.[1]According to the 2014 annual report from the programs’ trustees, the combined 75-year unfunded obligation of the Social Security and Disability Insurance Trust Funds (referred to collectively as the OASDI Trust Fund) is $13.4 trillion, a $1.1 trillion increase from last year’s unfunded obligation of $12.3 trillion.[2]

So the spend won’t even touch the unfunded liability, only changing the benefits and raising the retirement age will do that.  Which is not on Bernie’s table of offerings here to “fix” the problem.

Oh, and where’s that $1.2 trillion going to come from?

3.  Rebuild roads, bridges, and airports:  $1.0 trillion

Apparently the existing (near) $1 trillion “stimulus” wasn’t enough to rebuild our crumbling infrastructure, although, as reality kicked in on a massive spend of that scale, it turns out that the bulk of it went to nothing at all like rebuilding roads, bridges, and airports.  It was sold as a means to reduce unemployment, with guarantees of a return to a “new normal” U3 rate of 5% back in 2009 – and with tales of horrific unemployment if we didn’t spend a trillion now, immediately.

Which, as it turns out, had little to no effect on unemployment, as the prime driver for the unemployment rate decrease was people leaving the workforce, a good percentage of which were doing so under extended unemployment benefits and lax disability requirements for SSDI, which made it much easier to do nothing and get paid for it.  The stimulus has largely been classified as a bust, but Bernie wants more of the same.

Why?  Why would he want to do something that has been shown to fail, again and again?  That transferring wealth from one sector (the private) to the other (the public) does not necessarily result in a net positive?  Considering that the federal government scrapes off its operating costs, and that the dollars become political playthings for politicians to use to enhance re-election results, why would an aging Socialist believe that the state knows better than the individual what to spend a dollar on?

Because Socialism.  That’s why.

Oh, and where’s that $1.0 trillion going to come from?

4.  College affordability:  $750 billion

One of the reasons college tuition goes up 2x-3x the rate of inflation is because tuition is subsidized by our loving godparents, the federal government, under the guaranteed student loan program.  So now, spending what’s close to the 2009 “stimulus” total on colleges is going to do what, exactly?  Make colleges reduce their tuition rates?  Make students smarter?  Reduce loan debt by shifting the cost of what would have been the loan onto taxpayers, which, in effect, raises taxes on people most likely to be paying off their own student loans to pay for the schooling of current undergrads?

Even I can’t distill this lunacy into its purest form.  It’s like trying to gaze into a singularity.  I might glimpse it, once, but then I’d go insane.

As others have noted, repeatedly, if you make money available to pay for something, the price of it will go up to match the availability:

Federal student aid, whether in the form of grants or loans, is the main factor behind the runaway cost of higher education. As Cato Institute economist Neal McCluskey explained in an April 2012 article for U.S. World & News Report:

“The basic problem is simple: Give everyone $100 to pay for higher education and colleges will raise their prices by $100, negating the value of the aid. And inflation-adjusted aid–most of it federal–has certainly gone up, ballooning from $4,602 per undergraduate in 1990-91 to $12,455 in 2010-11.”

Bernie wants to increase this lunacy, which will only a) drive up the tuition prices, b) incentivize an even larger student loan debt, and c) make the problem he purports to solve worse by enabling the educational industry to happily raise its own spending on the backs of students, all under the guise of making education more “affordable” for all.

Oh, and where’s that $750 billion going to come from?

5.  Paid family and medical leave:  $319 billion

This is simply another labor cost in the form of regulatory requirements that, despite what it sounds like, in terms of a cute-and-fuzzy-who-could-argue-against-this statement, is just another cost of labor, like the Medicare deduction.  This is yet another way to fund a federal program that will net payments to those who choose to have a family (in part).  Which is essentially asking people who do not have children to help subsidize the costs of those who do, which is another form of federal re-distribution and policy-making hiding behind the fig leaf of health care.

In thinking about this purely in terms of benefits, the cost of this paycheck deduction would come directly out of gross pay for the individual, and/or the costs to the employer – but essentially those costs will be borne by the consumer that buys the product or service the company provides, resulting in less demand for that product or service as costs go up.

Which might mean some people get fired for having increased benefits.  Funny how wishing for something nice in one hand might leave you with something else less nice in the other hand.

So where, exactly, is that $319 billion going to come from?

6.  Bolster private pension funds:  $29 billion

Here’s a place to start:  Where’s the $29 billion going to come from?  Taxpayers?  And to what end?  The federal government is going to essentially give a grant to private pension funds to cover potential losses?  What could possibly go wrong here?

7.  (Yuuuuge) Youth Jobs Initiative:  $5.5 billion  

The real "stimulus".

The real “stimulus”.

1 million jobs for disadvantaged youth.  This price tag results in a $5,500 per person subsidy.

Sanders’s bill, which he introduced in a D.C. neighborhood with relatively high unemployment and crime rates, would send $5.5 billion to local and state governments to fund job-training programs. Much of the money would go to helping unemployed African Americans. Sanders suggested the investment could pay for itself if it keeps more young black men out of jail.

Sanders seems to be living in a dream world where a jobs program would magically return its investment if it kept more young black men out of jail.  It’s being done right now, in terms of spending, and that hasn’t seem to have done a thing in terms of minority unemployment rates, incarceration rates, or the future prospects of the disadvantaged.  In fact, $18 trillion has been spent on Great Society programs since the 1960’s, and how’s that working out?  In short:

The best thing we can say for the Great Society economic programs as a whole is that they amounted to a gigantic waste of the taxpayers’ money. Many, however, were worse than wastes; they actually caused harm.

Bernie’s fix for this problem?  Spend more.

And yes, I have to ask, once again:  Where is that $5.5 billion going to come from?

All that said, I can tell you where the money for Bernie’s spending won’t be coming from:  Bernie’s pockets.  He’ll just be making even more money if enough people vote for him for President.



Slaughterhouse EB-5

Further evidence that Peter Shumlin is right to let Vermont college graduates know that Vermont has good, high-paying jobs available, Seldon

Hey, it worked for Grenada!

Hey, it worked for Grenada!

Industries, a small water-purification maker in Windsor, recently shut its doors unexpectedly, leaving all 32 employees without a job.  A few weeks ago, Shumlin actually went so far as to almost beg St. Michael’s College graduates to stay in Vermont, saying:

“We’re trying to tell the story,” Shumlin said. “It’s a myth that we do not have jobs for young people in Vermont. The facts are that we have jobs.”

Just 32 less of them now, it seems.  Now it’s true that Vermont does have jobs, but when Shumlin says this, one wonders which Vermont he thinks he’s living in:

Shumlin said there are thousands of open jobs in Vermont at dozens of employers who are “clamoring” for graduates, and that many of the jobs available are high-paying. Some starting salaries are in the $90,000 to $100,000 range, he said.

The actual data on job expectations provided by his own Department of Labor tell a completely different story, as has been discussed at some length.  In terms of short-term job prospects, 9 of the top 10 jobs in terms of growth for 2013-2015 (the report is from 2014) do not require a college degree.  In fact, the one occupation that does, nursing, is not a degree offered by St. Mike’s, which might be a bit of a kick in the shins to the Purple Knights, courtesy of outgoing governor Peter Shumlin.

Seldon Industries, however, is a more unique story, in that its existence, and subsequent closing, were made possible by the EB-5 program.  A

Leahy: So you're telling me 32 Vermonters can lose their jobs with no warning in a program I support? Ha ha ha ha! Ahem.

Leahy: So you’re telling me 32 Vermonters can lose their jobs with no warning in a program I support? Ha ha ha ha! Ahem.

significant piece of its EB-5 funding was paid for by foreign nationals who “invest” in US companies, to the tune of $500,000 or $1,000,000, and in return acquire a green card.  It’s essentially allowing wealthy foreigners to jump the immigration queue, and since the dollars come from these individuals, the investments are viewed as not coming out of taxpayer pockets.  That said, Vermont’s EB-5 Regional Center is run and  administered by the State of Vermont, the only state in the country to do so.  Clearly Vermont’s politicians are involved, so there is a cost and an impact being borne, in taxes and in policies being put forward – especially for those now out of a job at Seldon.  The 6 investors (there was a $3 million investment by EB5 investors at $500,000 per) are still likely to see their green cards, but the dollars and “investment” are another thing entirely.  Meaning entirely gone.

Even as recently as June, 2015, Seldon was to land a huge contract with Senator Leahy’s “help”, although now I’m sure the Senator won’t be knocking down doors finding jobs for 32 people:

Just three months ago, Seldon Technologies was celebrating a new contract to provide water purification devices to Mexican public schools. The deal, arranged with Senator Patrick Leahy’s help, was to mean production of a half million units, and Seldon officials expected to expand their 37-person workforce.

Seldon’s closing begs the question:  If they were on the verge of an enormous contract, why did they shutter the facility three months later?  Why would a US Senator pose for a photo op at a facility that had to know they were about to go under?

Other Vermont EB5 ventures, like Jay Peak, have run into controversy.  Jay Peak converted the EB-5 investments into loans, without the investors’ knowledge.  So much for the state’s oversight in running the EB-5 Regional Center:

Vermont strong? Only if foreign 1%er checks don't bounce.

Vermont strong? Only if foreign 1%-er checks don’t bounce.

The management of Jay Peak Resort is defending its right to convert $17.5 million in equity stakes held by immigrant investors into unsecured, nine-year loans. The conversion was implemented on Aug. 31, 2013, without the knowledge or consent of 35 immigrant investors who each put up $500,000 toward the construction of Tram Haus Lodge, which is part of the Jay Peak Resort. The deal was disclosed to reporters and the Vermont EB-5 Regional Center last year, but investors were not sent a copy of paperwork for the original loan until May of this year. Jay Peak has since offered a second IOU to investors that shortens the repayment period to five years. The promissory note is secured by the value of Jay Peak Resort, says company president Bill Stenger. But a group of 20 disgruntled investors question the value of the guarantee. Several say they expected to receive the principal on their investments at the end of a five-year period.

The Tram Haus Lodge, which was constructed in 2008, is the first phase of $312 million in EB-5 investments in Jay Peak Resort, located in the Northeast Kingdom.

But don’t worry, there was nothing illegal or unethical about completely re-structuring the “investment”:

The company and the state’s Agency of Commerce and Community Development say the decision to convert the equity investments into loans was entirely within the company’s rights.

Jay Peak owner Ariel Quiros said the transaction was “200 percent” ethical.

Oh, it’s 200% ethical.  That’s different.  I’m sure that’s twice as re-assuring to the investors who ponied up big piles of cash to have their investment re-structured without their knowledge, at the whim of Jay Peak, all done under the guidance and oversight of the State of Vermont.

One of the selling points of EB-5 is that the money is an investment, with a return – but the reality is that there is no guarantee on the funds, on re-payment, on ROI, nothing.  But those facts are clearly not emphasized to foreign investors, who were completely taken by surprise by Jay Peak’s actions.

Another EB5 project in Vermont, AnC/Bio, a medical company specializing in stem-cell technology, plans to build a brand-new manufacturing and research facility in that well-known, high-tech, Silicon Valley East corridor of northern Vermont known as “Newport”.  Clearly, if you’re thinking about building a cutting-edge technology center, anywhere in the US, you’d first think “Newport, Vermont.  Obviously!”.  The project’s developer, Bill Stenger – the same Jay Peak developer – says it will create about 400-450 jobs:

And he says Vermont is a good place for those 400-450 jobs to be created. About half will be local workers trained to make devices, and the rest will be scientists.

“Because we’re close to major colleges and universities. There are a tremendous number of reasons why living and working in our part of Vermont has value. Safe, clean, environmentally beautiful, a facility that’s state of the art and debt-free,” Stenger said.

Vermont’s major colleges and universities are located in Burlington – at least those that offer significant degrees in STEM fields.  I didn’t realize Vermont had an extra 200 scientists just lazing around coffeehouses in Burlington.  Burlington to Newport is 2 hours by car.  Is Stenger assuming PhD candidates at UVM will move to Newport to work at AnC/Bio?

Investors will seize an opportunity, whether it comes from the private or the public sector.  In this case, it’s politicians seizing the opportunity by looking for investments that are completely outside of the normal taxation realm, trading cash from the foreign 1% for US citizenship, just as long as they can make it look like the money is going to create jobs.  In fact, if indirect jobs are claimed to be created, that also helps sell the EB-5 “investment”, meaning if a local deli gets more customers because a new factory went up outside of town from an EB-5 investment, then that indirect job counts.  Except that estimating what jobs might be created isn’t an empirical matter; it’s completely guesswork, and open to spurious claims of job creation, by both the EB-5 project and the politicians that love them.

So what our politicians are telling foreigners is:  If you’re wealthy, you get to the cut to the front of the line.  What’s interesting is that the same politicians supporting EB-5 as a way to generate growth are frequently the same politicians who publicly demonize the domestic 1%.

As others have noted, it’s really just the fastest way to get a green card, for 10,000 wealthy foreigners per year:

“There have been some rare but highly publicized failures in the EB-5 program,” said Steve Yale-Loehr, an immigration lawyer at Miller Mayer and a professor of immigration law at Cornell Law School.

Foreign interest in the EB-5 program has grown dramatically in the last few years. Applications were sluggish until the recession, Yale-Loehr said. But then, when domestic financing for construction projects was tough to find, some developers started to look overseas for financing.
There were just 700 visas issued in 2007; in 2014, for the first time ever, the program reached its quota of 10,000 visas through the EB-5 program and had to stop accepting applications. The quota was reached again this year.
For wealthy foreigners, the EB-5 program is the best bet for getting U.S. citizenship. Other options—finding an employer or a family member to sponsor them—have long backlogs and a lot of paperwork. The EB-5, by contrast, is a relative breeze.

“Most of them are doing it because they want the green card and it’s the fastest or best way to get a green card,” Yale-Loehr said.

Great for the crony! For everyone else, not so much.

Great for the crony! For everyone else, not so much.

Unfortunately for Vermonters, if the “investment” tanks, the loser is not the State of Vermont, it might be the person who ponied up half a million under the assumption that this money meant a real investment, but it most certainly is the Vermonter who thought they had a job at Seldon Technologies.  Especially when their own Senator proudly claims it as one of his accomplishments in June, but is nowhere to be seen come the shutdown in September.

Oh, and if you happen to be the head of the state’s EB-5 program, and then, shockingly, find yourself working for Mt. Snow after it received $52 million in EB-5 funding?  Well, hey, that’s just cronyism.  Er, I mean, “coincidence”.

The Inequality Czar

Bernie Sanders is pretty consistent on a few things.  He’s consistently wrong about policy and economics, but he’s also consistent in his

Captain Justice speaks. Hearken, all ye with earnings that shall be tithed.

Captain Justice speaks. Hearken, all ye with earnings that shall be tithed.

messaging.  His current inequality message sells because it puts the responsibility on someone else for things that haven’t gone right, or for things that have gone wrong in peoples’ lives.  It’s a form of absolution.  A cheap form.

In Bernie’s World, taxes are more like a tithe attached to the evil 1% to atone for their sins of earning more money than someone else.  So if you get a second job to earn more money, well, you’re becoming more unequal in the Sainted Eyes of Bernie.  Now you must render more unto Caesar.  Even if you’re earning more because you’re working 60 hours a week versus someone else working 40, well, those additional 20 hours you decided to work aren’t yours to keep in the first place, when everything and everyone belongs to the State.

Bernie waded deeply into Liberty University recently to give more of his hard-earned opinions on how to fix the horribleness of America, a place so fetid and unequal that millions of people want to leave their home countries to come here, and risk their lives in doing so.  Let’s let Bernie’s magical words speak for themselves:

There is no justice, and I want you to hear this clearly, when the top one-tenth of 1 percent — not 1 percent, the top one-tenth of 1 percent — today in America owns almost as much wealth as the bottom 90 percent. And in your hearts, you will have to determine the morality of that, and the justice of that.

I hate to break this to Bernie, but there is nothing – zero – in the Constitution about allocating powers to the US Senate to dispense economic

Hey, what's another $9 trillion saddled onto the unborn?

Hey, what’s another $9 trillion saddled onto the unborn?

“justice”, a term so broadly based and Orwellian that it’s laughable on its face.  A Congressman telling us about justice, while he sits atop almost 19 trillion in debt, 8 trillion of which was accumulated in just the last 7 years or so, means he is unconcerned with the debt he’s saddling future Americans with who never got a vote on it.  Bernie has participated in the doubling of our nation’s debt in the shortest window in history – and wants to double it again!  As others have repeatedly stated, there’s not enough national income to tax to cover that kind of spending, let alone double the existing debt and debt payments.

And what happens when interest rates go up?  The percentage of the budget that goes to interest payments skyrockets, crowding out spending on everything else.  One of the many risks inherent in massive debt leveraging.

Bernie’s selling of injustice has the happy by-product of keeping him in his cozy, swaddled gig, where he gets paid – by the half of the country that pays net income taxes – to tell people that they’re earning too much money, and how much, when, and where he shall dispense with the income they have earned.

But if we’re going to talk about income inequality, we also have to talk about tax inequality.  Basically, because Bernie believes in a very progressive tax structure, he’s saying that the government values people with higher earnings at a higher level than those people who earn less.  The tax code does not treat people equally.  It specifically treats them unequally, by design.  An inequality that Bernie himself wants to increase, and has gone so far as to float the idea of resurrecting the 90% income tax.

Bernie continues:

In my view, there is no justice, when here, in Virginia and Vermont and all over this country, millions of people are working long hours for abysmally low wages of $7.25 an hour, of $8 an hour, of $9 an hour, working hard, but unable to bring in enough money to adequately feed their kids.

Here’s a thought:  If you can only earn $8 an hour, don’t have kids, because you can’t afford them.  Secondly, the bulk of people who work minimum-wage positions or slightly above are teenagers or part-time workers, not people who are relying on that wage as their only source of income.

But to take his inequality pretzel to the next level:  If I work 60 hours per week at two jobs for $10 an hour, and earn more money than the

Even if I have to give my extra hours to Bernie?

Even if I have to give my extra hours to Bernie?

person who works 40 hours per week at $10 an hour, are we unequal in terms of income?  Yes.  So by Bernie’s logic, that additional $200 I would earn at my second job would need to be re-distributed to the people who only work 40 hours.

Where, in this roiling miasma of envy, does the motivation to work more go?  Does motivation to work that second job increase, or decrease?  By this reckoning, why would anyone want to improve their educations to go get a higher-paying job?  Get additional training?  Better their skillsets?  Why, when there is no reward for your hard work?

A better question, which cuts to the core of the inequality issue:  Is all labor of equal value?  Is the labor of someone working at a fast food joint equal to the labor of a doctor?  If they both work 40 hours per week, shouldn’t they be paid the same, if income equality is the goal?

The reason they are not paid the same is because people are different, and provide different skillsets at work, and some work is more unique and more difficult than others.  The doctor can walk into a fast food joint and be flipping burgers on day one, but the burger-flipper cannot perform a triple bypass, and 100 million people can be taught how to flip burgers but there’s less than 1 million doctors.

To put this in real terms, would you be willing to receive treatment from a doctor who was paid $10 an hour?

Oh, that's right - of the half of the country that pays income taxes, the top 50% pays 97.7% of all income taxes collected. I agree that this is completely unequal - what is the 2.3% *doing* all day?

Oh, that’s right – of the half of the country that pays income taxes, the top 50% pays 97.7% of all income taxes collected. I agree that this is completely unequal – what is the 2.3% *doing* all day?

But to deconstruct Bernie’s meme a bit further, let’s take a look at the data about who pays what in terms of incomes taxes in the US.  Hint:  It’s not the 99%.  It’s the 97.7%-ers:

Note that the number of returns is roughly half the population, and yes, I know that that includes joint returns, but a significant portion of the country doesn’t even file.

And even given that, almost 100% of the income tax revenues come from the top  50% of earners.  Not on the backs of the poor or downtrodden, as Bernie likes to claim.

Finally, since we’re speaking (endlessly) of inequality, Bernie’s wife, Jane Sanders, strapped on a $200,000 golden parachute while quitting her job at Burlington College.  I assume that that $200,000 in income was equally distributed among those who earn less in the Burlington area?  Of course Bernie and Jane gave this additional income away to those who really needed it, right, under the auspices of equality and justice?

Let’s take a look at how that might have worked out:

Now you can *totally* feel the Bern!

Now you can *totally* feel the Bern!

So it looks like Bernie and Jane’s re-distribution plans would net local Burlingtonians something equivalent to a latte’.  Once.  Per person.

Maybe it’s time to stop feeling the Bern and throw some cold water on his false narratives, always “argued” in a vacuum.  When the numbers are actually trotted out, Bernie’s “burn” fizzles out – but as he’s demonstrated, you don’t have to be right to win an election.  You just have to find enough people to believe that they a) deserve something for nothing, b) rich people are keeping them down, and c) the only way forward is to elect people who promise them both (a) and (b).

Bernie has never stopped promising both  (a) and (b), because it works for him, every time – which probably says something about Americans more than it does about a carpetbagger from Brooklyn.


The Hamster Wheel

Brooklyn’s own Bernie Sanders (purported Democrat; ruler of as yet

Bernie's version of the ideal Republican. (Not pictured: The permanent tax spigot attached to the hamster, er, man's wallet.)

Bernie’s version of the ideal Republican. (Not pictured: The permanent tax spigot attached to the hamster, er, man’s wallet.)

undisclosed underground kingdom populated with lumps and proles) was taking a swing through New Hampshire recently to help the downtrodden better understand the meaning of Labor Day.  The irony of a man whose entire existence – virtually of his lifetime earnings – are taken from the earnings of others through taxes seems to be completely lost on Sanders.  Although maybe as part of Lenin’s Vaunted Vanguard ™ he’s perfectly aware of the irony, but he’s OK with it.  An omelet and eggs, you see.

Let’s take a brief sampling of Bernie’s words to his adoring crowds in the “Live Free Or Die” state, which, if they continue to support Sanders, will get one of those two options in their state motto delivered more quickly than the other.

“Working people and their unions fought for a more responsive democracy and built the middle class,” Sanders said in his prepared remarks in Manchester. “Today we can and we must follow their example. It’s time to rebuild the crumbling middle class of our country and make certain that every working person in the United States of America has a chance at a decent life.”

First of all, the majority of the industry in the US prior to the 20th century – and well into it – was agriculture, which wasn’t unionized.  Farmers don’t have time to picket.  Secondly, unions never reached more than 35% of the labor force – in 1954, 60 years ago – and have declined steadily ever since:

In 2014, the union membership rate–the percent of wage and salary workers who were members of unions–was 11.1 percent, down 0.2 percentage point from 2013, the U.S. Bureau of Labor Statistics reported today. The number of wage and salary workers belonging to unions, at 14.6 million, was little different from 2013. In 1983, the first year for which comparable union data are available, the union membership rate was 20.1 percent, and there were 17.7 million union workers.

Workers built the middle class, not unions.  If unions are such a great idea, why are they at their lowest ebb in US history?  Wouldn’t now be the time when union membership should be surging?

If Bernie wants to “rebuild” the middle class – and I can picture a another “stimulus” package coming with that exact wording slapped onto it – then cut their taxes.  Cut corporate taxes to make them more profitable so they will hire more people.  Rescind your call for taxing repatriated earnings and you’ll see a couple of trillion dollars in corporate cash brought back to the US where it will be invested and spent.  Instead, corporations are borrowing money for cash requirements now – due to the ZIRP policy the Fed has imposed – and avoiding tax penalties for bringing earnings home that have already been taxed once.

For Bernie, though, taxed once, twice, three times – it doesn’t matter.  Corporations must obviously be punished for turning a profit:

“At a time when almost all new income and wealth is going to the people on top while millions of Americans work longer hours for lower wages,” he said, “the time is long overdue for us to create an economy which works for the middle class and working families of this country, and not just the 1 percent.”

And how would Bernie create this magical re-distributive economy?  By increasing corporate costs and reducing productivity!

Stimulus: It's Crumbilicious!

Stimulus: It’s Crumbilicious!

Today, the Democratic candidate for president said, workers in the United States must be guaranteed paid medical and family leave and paid sick time and vacation time. With real unemployment at more than 10 percent, Sanders proposed a $1 trillion program to rebuild America’s crumbling roads, bridges and other infrastructure projects and create 13 million decent-paying jobs.

Ah-HA!  Another stimulus program!  Wasn’t that the one Joe Biden was put in charge of in 2009?  Where did the near trillion-dollar spend go, Bernie?  Who’s to say that a new stimulus, paid for by taxing and borrowing, will again fail to reach the middle-class that needs to stop

Bernie's version of successful stimulus spending.

Bernie’s version of successful stimulus spending.

crumbling like an over-excited coffee cake?

Like all federal spending, special interests, often (gasp!) in the form of organized labor or state governments, received the bulk of federal largesse.  In a sort of world-turning-upside-down sense of logic, the 2009 stimulus spent more on propping up state and local government spending ($58 billion) than it did on aid to people affected by the economic downturn ($37 billion).

Bernie’s essentially arguing to fund his voting constituencies money out of the taxpayer’s pocket.  And since the bulk of taxes paid are not paid by the bottom half of income earners in this country, Bernie is using rich people to buy poor peoples’ votes via a ‘stimulus’.

How would increasing health care costs, by imposing paid sick time, family leave, etc., make corporations more competitive?  How would a corporation that depends largely on labor and has labor as a predominant cost be able to maintain a margin of 3% annually if their labor costs increase?  Bernie seems to think that profits are evil, but profits are what allow a corporation to exist in the first place.  No profits, no jobs.  Sure, it’s not as sexy as “No Justice, No Peace”, and looks lousy on a hemp-based t-shirt, but it’s perfectly true.

If you reduce profits and the margin, then fewer people will be employed.  How would that build anything other than an increasing dependency on the government?

Which, in the end, is Bernie’s goal:  A nation of hamsters spinning on stimulus-built wheels.


A Tale of Two States

Vermonters, let’s face facts:  New Hampshire is an upside-down Vermont.  Or, maybe more accurately, Vermont is the upside-down state,

I like this map. It's old-timey!

I like this map. It’s old-timey!

and New Hampshire has been right-side up all along, but Vermont’s politicians never seem to have noticed.  As it turns out, there’s some data to back this New England economic inversion up.

First, let’s take a look at the two states side-by-side, in terms of Median Household Income and the Unemployment Rate.  While both Vermont and New Hampshire enjoy (“enjoy” being a relative word here) a low unemployment rate, there’s just a slight difference of note regarding incomes:

Vermont strong! Um, except for incomes.

Vermont strong! Um, except for incomes.


Now let’s take a look at New Hampshire:

Hmmm. How is this state not like the other?

Hmmm. How is this state not like the other?

So, if an enterprising young individual was looking to choose a state to live in, and had NH and Vermont to choose from, which state do you think would be more appealing?  A $15,000 difference in median household income might be a deciding factor, no?  Does Peter Shumlin tout New Hampshire’s low unemployment rate and higher incomes than Vermonters, since he’s always talking up Vermont’s low unemployment number?

Speaking of incomes, you can only spend what you take home.  If given a choice, would you want to live in a state with a higher aggregate tax bite, or a lower one?

state local tax burden vermont

Consistent top 10, baby! And *above* the national average!

And how is New Hampshire so different?  Take a look at a the ranking column:

When it's better to be in the bottom 10 than the top 10.

When it’s better to be in the bottom 10 than the top 10.

Now let’s talk the size of the labor force.  One state has an increasing labor force, while one sad, desolate state’s labor force is consistently decreasing.  10 bucks to the first person who can guess which state is suffering from labor force shrinkage.  Go on, guess.  I double-dog dare you.  I perhaps might even triple-dog dare you.

First, let’s look at Vermont:

Hey, those are great trendlines.

Hey, those are great trendlines.


New Hampshire:

Decreasing unemployment rate and an increasing labor force. This is not Vermont.

Decreasing unemployment rate and an increasing labor force. This is not Vermont.


In short, New Hampshire has higher incomes, lower tax rates,

And choosy college grads, too.

And choosy college grads, too.

a similar unemployment rate, an increasing labor force, and an ongoing uptrend in

incomes versus Vermont’s stagnating income.

If given a choice, which state would you choose?


Tweet-Meister Bernie

Since Democratic presidential nominee hopeful Bernie Sanders – youthful, engaged, energetic – has a Twitter presence, I figured I’d take a

Speak truth to power, Bernie!

Speak truth to power, Bernie!

look at what young, hip-hop-happenin’ Socialists do in their free time on social media.

As it turns out, Bernie’s all over the map on Twitter, enough to make even a relatively young man delirious in trying to parse out the contradictions.  But here we go:


  1. Bernie loves the Pope!  Or he does, only when the Pope talks re-distributive utopias:
It's moral to hand over monies to a central government that increases their control over the purportedly "free" people is also just and moral?

It’s moral to hand over monies to a central government that increases their control over the purportedly “free” people is also just and moral?

In other words, Bernie’s OK with using the Pope’s pontifications (ha) about allowing a moral excuse for the confiscation of wealth, but where are Bernie’s re-tweets regarding the Pope’s position on abortion?  Bernie is pro-choice, and support funding for Planned Parenthood, but I don’t see a Tweet from the Pope saying he supports those positions.  Bernie claims to oppose corporate welfare, but is OK with subsidies for Planned Parenthood.

Bernie also seems to miss the difference between philanthropy, which is the voluntary giving of money, time, and resources, versus the confiscation of money, time, and resources, to be put to use in furthering the expansion of a centralized government, one that has the nice side-effect of keeping Bernie in comfy shoes for the rest of his days.  I guess part of the “just distribution” means Bernie’s going to get just what he deserves?

If I decide to work 60 hours a week instead of 40, is it “just” that I get taxed at a higher rate for those additional hours?  Why should my additional labor be confiscated at higher levels than those who choose not to work more?  Is that “just”?  How “just” is it that those who choose to only work 20 hours get money from me?

2.  Fundamental changes:  Corporation Style!

Agreed. Let's lower the corporate tax rate so we're not the highest in the OECD. How's that for a start, Bernie?

Agreed. Let’s lower the corporate tax rate so we’re not the highest in the OECD. How’s that for a start, Bernie?

First of all, “disastrous trade policies” has nothing to do with the cost of labor in China versus the US.  It is cost that drives decision-making in corporations, and if a component of a product or service is lower, then it is more competitive, and likely to win business.  This is true when the individual consumer buys an apple pie at the grocery store, as it is when a corporation buys components built in China or in Des Moines.  It’s a market, it is choice – and granted, Bernie tells everyone he’s pro-choice, but apparently only for certain things.

A critical line here:  “allowed corporations to shut down in America”.  In other words, Bernie, at the point of a federal gun, wants to disallow corporations from making decisions based on the company’s and their customers’ best interests.  This isn’t because Bernie’s a fan of Big Labor – nope, that couldn’t be it, at all.  Bernie’s simply in favor of increasing the price of all goods by making sure they are all domestically-produced, with all of the inherent costs associated with doing business in the United States.

Which will have the eventual effect of reducing demand for the product, because as price goes up, demand goes down – which means there will be job layoffs due to reductions in demand.  The good news for Bernie is that because the Fed allows for unfettered spending, he can vote to increase unemployment benefits for 3 years instead of two, ensuring that at least a few of the unemployed will be receiving federal checks during one of several of Bernie’s upcoming election cycles.

Oh, and since we’re at it:  Former countries in the USSR, like the Ukraine, having some first-hand experience with centralized economic planning, know that lowering and simplifying taxes will increase economic growth:

A group of experts wants to cut payroll taxes on employers, exempt reinvested corporate income from taxes and reduce the involvement of government officials in tax collection.

These are some of the ideas that may emerge in the final recommendations on Aug. 27 of the advisory National Reform Council, which is tasked with helping parliament draft legislation to ease one of the worst tax systems in the world. Ukraine’s taxes are punitive and bureaucratic, prompting massive evasion and a shadow, off-the books economy that may rival the official one.

A panel of experts held a press conference on Aug. 25 to talk about competing versions.

According to Volodymyr Dubrovskiy of Reanimation Package of Reforms, the problems run deep — from the way the value added tax is administered to an excessively high 42 percent payroll tax.

The corporate income tax, as structured, encourages companies to conceal at least part of their profits.

Dubrovskiy and others want to decrease the payroll burden to a single, flat rate personal income tax of 20 percent and eliminate the social security payments paid by employers. At the moment, the high taxes discourage employers from legal employment and “punish them for paying salaries,” Dubrovskiy said.

In other words, increasing costs via trade barriers – not “policies” – doesn’t help anyone, because it increases the price people pay for goods, so it hits the people at the low end of the income spectrum the hardest.  Ironically, Bernie’s arguments for erecting trade barriers impacts the people he’s selling this idea to the hardest, because they are least able to absorb the inevitable price increases.

This is the fruit of the thinking that surrounds centralized planning and control of businesses.

3.  Bernie takes on The Evil Wondertwins – aka, The Koch Brothers:

I also believe both brothers want Luke Skywalker to join Darth Vader in moving to the Dark Side of The Force.

I also believe both brothers want Luke Skywalker to join Darth Vader in moving to the Dark Side of The Force.  No independent confirmation on this yet, though.

The billionaire class “wants it all”?  What does Bernie Sanders want, and what idea does he regularly sell on the campaign trail?  Money.  90% of it.  That’s just shy of 10% of “all”, Bernie –  but the Koch brothers are the bad guys?  Bernie wants to replace someone else’s supposed greed with his actual own greed.  Interesting, and shameless.

Here’s how economic works, Bernie, so pay attention:  The Koch brothers don’t gain a thing by people earning $3/hour.  Why?  Because that means those people then have less money to spend buying things.  If demand for a product goes down, fewer items are purchased, resulting in reduced profits.  And Bernie claims to think this is what the Koch brothers want?

See how easy that math was?  It’s in nobody’s interest to have less money, unless, of course, you’re a hack politician who uses class division memes to keep yourself in a job that doesn’t require any actual work.

I’ll just leave alone the assumptions Bernie’s making regarding the Kochs wanting all poor people to be rounded up and jettisoned into a lake of fire, because it’s patently stupid and insulting.

4.  And finally, who doesn’t need a lecture on morality from a man who supports funding of an organization that sells baby parts?

But I guess we're OK with the immorality of saddling unborn generations with trillions of debt that they didn't get a vote on.

But I guess we’re OK with the immorality of saddling unborn generations with trillions of debt that they didn’t get a vote on.

Yeah, let’s talk about “moral responsibility” – as if any American needs a lesson on morals from a politician.  How about the fact that the “moral” effects of clean energy subsidies enrich the wealthy and not the poor?  18 billion dollars sounds like a lot of money to me:

There’s a new study out, under the imprimatur of the Energy Institute of the Haas School of Business in Berkeley, California, entitled The Distributional Effects of U.S. Clean Energy Tax Credits.  As the title implies, it looks at who actually profited from the various “green energy” tax credits across the United States. SPOILER ALERT! It wasn’t the poor folks.

How much money are we talking about? Well, the paper says that from 2006 to 2012, the taxpayers have been on the hook for $18 BILLION DOLLARS to fund these subsidies, money that would have otherwise gone into the General Fund.

Look at all those morals, trickling up to the evil 1%.  So the government’s efforts to live up to its moral responsibilities have in fact saddled the poor with debt that the rich are benefiting from.

Morality takes a holiday, courtesy of Big Government.

Morality takes a holiday, courtesy of Big Government.

Even a consistently inconsistent Socialist like Bernie Sanders can’t escape the inherent fallacies present in all the ideas he espouses.  Nothing is free.  Morality isn’t earned by spending other peoples’ money.  Creating generations of dependents robs people of their independence.  Which seems not to matter to Bernie, as long as they re-elect him.

Oh, and since Bernie seems to think that there’s an endless supply of money – his advocacy for increasing social security benefits doesn’t seem to match the ability of the program to pay them.

By all means, then, we should increase benefits.

By all means, then, we should increase benefits.

Only in the socialist utopia can a politician argue for increasing benefits at a time when the program is going to be unable to pay out existing benefits as early as one year from now.  But when you’re riding a magic unicorn, like Bernie Sanders is – one paid for by taxpayers – logic is on an eternal holiday.

Increase spending at all costs! That I won't have to bear!

Increase spending at all costs! Costs that I won’t have to bear!


Health Care In Vermont: The Overruns Strike Back

Several years ago, when Peter Shumlin and a crowd of adoring sycophants raised their tiny, shrill voices in a chorus of acclaim for single-payer in Vermont, a few people were raising their hands and asking questions about how to pay for it, regardless of the merits of a single-payer system itself.  Those people who had the temerity to ask impertinent questions were routinely shouted down, and found themselves in

Not only are we shoving you off a cliff, we're going to incur a couple of hundred million bucks in costs for nothing! Ha ha ha! Ahem.

Not only are we shoving you off a cliff, we’re going to incur a couple of hundred million bucks in costs for nothing! Ha ha ha! Ahem.

league with those awful people who wanted to shove Grandma off a cliff.

As the reality of the single-payer implementation materialized, even Shumlin had to finally concede that there was, indeed, no way to pay for it.  He delayed his plan to finance single-payer, and only released the plan after his last election, which he won by only a few thousand votes, over a last-minute challenger who had little to no campaign funding and support behind him.  Then, well past the November election, Shumlin announced single-payer was dead in December 2014, and finally presented his financing plan as evidence of its death, almost 2 years after he was mandated to do so.

So what’s happening now with Vermont’s defective “single” payer website?  The administrative costs are ongoing, and going up, well beyond the scope of what was originally promised to not cost Vermonters anything.  From VT Digger:

The Shumlin administration has placed a partial dollar amount on state staff costs stemming from manual processes and workarounds associated with Vermont Health Connect’s messy open enrollment period earlier this year.

The amount? $800,000 per month. That’s for the costs incurred for “staff augmentation” needed to process renewals manually “this winter and spring,” according to Vermont Health Connect spokesman Sean Sheehan.

The renewal and open enrollment period was from November 2014 to March 2015, which would mean the state paid at least $4 million to work around the incomplete IT system.

“Staff augmentation” is code for “additional unanticipated payroll spending for a website that was promised to work easily for all Vermonters at no additional cost to Vermonters, because it would be paid for by federal monies.”  As it turns out, implementing your own version of an exchange website is expensive, will incur costs not anticipated in the original scope, and will impact Vermont’s overall state budget negatively when it’s already operating on razor-thin margins.

So another $4 million is paid out of pocket to process routine, standard, run-of-the-mill changes made to health care plans that used to be done entirely outside of the state’s control.  Now, in order to provide health care to Vermonters, these changes are now being ably handled by the same people who once said it wouldn’t increase the budget by a dime, and would, in fact, save money.

This is a failed project, by any project management standard.  The scope, cost and schedule have all slipped, multiple times, and there is no

What do you mean this isn't an effective way to cut hospital costs?

What do you mean this isn’t an effective way to cut hospital costs?

solid date in place for recovery, nor any kind of a finalized recovery plan.  In fact, a large-scale IT project that switches software vendors in the middle of the project is an air-horn klaxon-esque indicator that the requisite requirements work was not done up front, which is what any project manager knows is critical to success.  The state cannot escape the triple constraint any more than it can escape the reality of gravity, or, apparently, the reality of Vermont’s politics.

Vermont Health Connect’s implementation was a political vehicle for Shumlin, not a project to actually provide health care.  Even if you issued every Vermonter an insurance card, magically, insurance that was paid for out of a unicorn’s lockbox of gold coins hidden deep in a cave in Buel’s Gore, that in itself does not provide one second’s worth of health care to any Vermonter.  It is access to health care, not an insurance card, that should determine whether or not Vermonters have what Peter Shumlin has called a “right” to health care.

Vermonters have access to health care.  They had it before the state decided to spend several hundred million dollars failing to create a website.  The mix of payers was available to every Vermonter, regardless of income level – commercial insurance, Medicare, Medicaid, VHAP, etc – every Vermonter had access to one of the payers, and had access to care.

The website itself is meaningless.  It’s just an enrollment vehicle, and even in that it fails.  It also fails because it’s not integrated with Medicare, or military health plans, and can’t handle plan changes without laying out hundreds of thousands of dollars in additional spending, monthly, to process the changes manually.

Would health care costs decrease if the dollars spent to implement a website were spent on care instead?  If we spend $200 million on a website, and the state’s largest hospital’s budget is $1 billion (in net patient revenues), then Shumlin threw 1/5 of a year’s worth of budget away on an unneeded failure.

As Shumlin’s own website states, he’s “determined” to get tough things done:

As Governor, Peter is determined to get tough things done. Since his inauguration, he has been working hard to create jobs for those who need them and raise incomes for those who have jobs, control skyrocketing health care costs, expand broadband and cell service to every corner of the state, reduce recidivism, invest in quality education opportunities, and rebuild our roads and bridges. Taken together,

Nope. We're gonna need a bigger rope. Or a global budget?

Nope. We’re gonna need a bigger rope. Or a global budget?

these and other key goals represent an ambitious agenda to create a brighter economic future for Vermonters.

I guess Shumlin’s definition of “control” means something entirely different to him than it does for the rest of us.  If anything, Shumlin increased the cost of health care, by:

  1. By deciding to create a Vermont version of a health care enrollment website when the federal version was available, he’s incurring millions in additional costs in the creation, maintenance, and manual support required to keep the site operational.
  2. Increased the financial reporting and regulatory compliance burdens on all the state’s hospitals, which in part means additional staff hours required to maintain unique budget reporting to the Green Mountain Health Care Board.

Not one of the things done by the Shumlin administration has provided care to a Vermonter that needs it.  Not one thing.  And instead of getting tough things done, Shumlin is now quitting the office, and the Vermonters he was so “determined” to help.  While the Green Mountain Care Board awarded Blue Cross/Blue Shield a 5.9% increase, this was lower than the request rate increase of 8.6%, which will mean that there may or may not be monies available for reimbursement at the lower, approved rate.  Kind of like how Medicare only reimburses a certain dollar amount for any procedure, regardless of actual hospital costs.

It turns out that helping himself to a several governorships was Shumlin’s most successful achievement, considering that all of his determination has not changed the reality on the ground that hospitals, insurers, and patients have to live with, on a daily basis.

The True Activist: Bernie Sanders

Senator Bernie Sanders (a title and name combination that should send the economically and historically literate running for the bathroom due to the high levels of nausea this induces), recently decided to again ignore history (of which he was a large part of) and economics (because his only economics background is in re-distribution, not actually generating wealth) to criticize a favorite punching bag of his:  CEOs.

The article is from TrueActivist, which means, as one would suspect, that FalseActivists have already been purged from the party by being

Someone has to keep the comrades in line.

Someone has to keep the comrades in line.

lined up behind the factory and shot in the head, as happens in all the great revolutions.  Like all good apparatchiks, one is only a mis-spoken word away from being labeled a capitalist pig sympathizer.

But let’s get on with it.  Some things are just better waded into quickly, like icy lake water:

Senator Sanders, in his no-nonsense approach, released a report identifying 18 CEOs responsible for wrecking the economy.

In response to 80 CEOS recently publishing a letter on the Wall Street Journal lecturing America about deficit reduction and urging them to “act on the deficit and reform Medicare and Medicare,” Sanders had the following to say:

There really is no shame. The Wall Street leaders whose recklessness and illegal behavior caused this terrible recession are now lecturing the American people on the need for courage to deal with the nation’s finances and deficit crisis. Before telling us why we should cut Social Security, Medicare and other vitally important programs, these CEOs might want to take a hard look at their responsibility for causing the deficit and this terrible recession.

First of all, CEO’s aren’t “Wall Street leaders”, they’re not trading stocks or securities.  They’re running companies.  To equate them with the group of people that Sanders and the Occupy movement demonized is wrong, and wholly inaccurate.

Secondly, before Sanders talks about “reckless and illegal” behavior, why does he continue to vote for budgets that fail to address the largest unfunded liabilities in the history of the world?  Is that not reckless?

The USG’s unfunded liabilities for these three programs is staggering:

The actual liabilities of the federal government—including Social Security, Medicare, and federal employees’ future retirement benefits—

Start climbing.

Start climbing.

already exceed $86.8 trillion, or 550% of GDP. For the year ending Dec. 31, 2011, the annual accrued expense of Medicare and Social Security was $7 trillion. Nothing like that figure is used in calculating the deficit. In reality, the reported budget deficit is less than one-fifth of the more accurate figure.

And the above numbers are from a 2012 estimate.  It’s only gotten worse.  But Bernie’s last line, in this one paragraph, focuses down into a singularity, incredibly, the summation of his entire worldview:

CEOs might want to take a hard look at their responsibility for causing the deficit and this terrible recession.

So, now, it’s CEOs who are responsible for the government spending more than they take in – not the government that does the spending.  With one fell swoop, Bernie has absolved himself of responsibility for the budgets he himself has authorized, signed, and supported.  What he really means is that government spending is more important than the finances of businesses, the same businesses that provide the dollars he uses to buy votes every six years.  Oh, and he completely ignores Fannie and Freddie causing the housing implosion, one of the primary drivers of the recession – and that these same entities are lining up to do it again.

I guess words like “hubris” and phrases like “self-awareness” are absent from Bernie’s Brooklyn-based lexicon.  As surely as mirrors and combs are absent from the taxpayer-supported (meaning CEO-supported) socialist cave Bernie’s been living in all his life, while lecturing others how to live their lives, he’ll always find someone else to blame other than the government.

In case you were wondering, Bernie has more to say on this subject:

Our Wall Street friends might also want to show some courage of their own by suggesting that the wealthiest people in this country, like them, start paying their fair share of taxes. They might work to end the outrageous corporate loopholes, tax havens and outsourcing provisions that their lobbyists have littered throughout the tax code – contributing greatly to our deficit.

Friends?  Courage?

First of all the wealthiest Americans pay the vast majority of income taxes.  It’s an overwhelming avalanche of tax revenues.  Let’s break it down for the Senator so even he can understand it:

Roughly half of Americans pay no net income taxes.

Of the top half that do pay taxes, the top 50% of earners pay 97% of all income taxes collected.

The top 1% of incomes earners pay more in taxes than the bottom 90%.

In other words, Bernie’s lying to Americans by making “fairness” statements.  If the tax code were fair, every American would contribute something in federal income taxes.  That’s called shared responsibility.  Instead, Bernie argues that all the responsibility, for all spending, fall on the shoulders of a tiny fraction of people who are already carrying the load for the rest of us.

Populism sells, and Bernie’s got a warehouse full of it, ready to go.  And now, Bernie argues for simplification of the tax code, whether he realizes this or not:

Many of the CEO’s who signed the deficit-reduction letter run corporations that evaded at least $34.5 billion in taxes by setting up more than 600 subsidiaries in the Cayman Islands and other offshore tax havens since 2008. As a result, at least a dozen of the companies avoided paying any federal income taxes in recent years, and even received more than $6.4 billion in tax refunds from the IRS since 2008.

First of all, you don’t “evade” taxes by following the law, the laws that Congress writes.  The tax code is 74,608 pages long.  If Bernie

Hey, let's triple the tax code! What a great idea!

Hey, let’s triple the tax code! What a great idea!

wants to make sure corporations are paying a “fair share” – which, by the way, the US corporate income tax rate is higher than all the other OECD countries – then he should be voting to blowup the tax code and start fresh, and simple.  But that would remove his ability to grandstand, and make claims that corporations don’t pay income taxes – when what they’re doing is applying the US tax code, as written, which Sanders, as a Congressman, is responsible for.

Several of the companies received a total taxpayer bailout of more than $2.5 trillion from the Federal Reserve and the Treasury Department.

So three companies received $2.5 trillion?  That seems like a big number.  That must look great on their income statements.

Many of the companies also have outsourced hundreds of thousands of American jobs to China and other low wage countries, forcing their workers to receive unemployment insurance and other federal benefits. In other words, these are some of the same people who have significantly caused the deficit to explode over the last four years.

If a company reduces costs – like a bank that installs ATMs, for example – and has a reduced need for tellers as a result, it’s now the company’s fault for deficit increases because those former tellers are now unemployed.  Even though unemployment insurance is paid for by the employer, and then the federal government extended unemployment coverage to 52 weeks from 26, that action is now the responsibility of the employer.

The sound you just heard are the jaws of economically literate people hitting the floor.

The deficit isn’t exploding because of unemployment payments.  It’s exploding because of entitlements.  Entitlements constitute over half of federal spending, and their growth rates are consistently increasing.  Pensions (Social Security, etc), Health Care (Medicare, Medicaid, SSDI), and Welfare – add those up and it’s 62% of the budget.federal outlays 2015

So no, Bernie, corporations and CEOs aren’t causing deficits and debt.  You are, and the organization you belong to, and you’re shoveling debt onto generations of unborn because it gets you right back into your cozy Senator lifestyle after every election cycle.




Back In Black

Recently, the State of Vermont published a revised revenue forecast for 2016 that puts the state

Laughter is the best medicine.

Laughter is the best medicine.

budget, finally, back in the black.  Is this financial wonder due to strong economic growth, a “snapback” from the Great Recession?

No.  As the report itself states, on Page 1 (h/t to Vermont Digger):

The slowest economic recovery in post-WW2 history will likely continue in FY16 and FY17, with some acceleration bringing slightly above-average revenue gains, though very close to previous expectations. Virtually all of the current changes in General Fund revenues relative to the prior January forecast, per the below chart, are the product of statutory changes made in the last legislative session, and represent about $30 million in new tax revenues.

So the budgetary forecast wasn’t “fixed” based on significant reductions in YOY spending, nor by accelerated economic growth.  The General Fund revenue growth is all based on new taxes.

These tax changes primarily impact the General Fund, with the largest tax changes affecting personal income and sales taxes. Without these new tax revenues, the General Fund would have increased by about $9 million in FY16 and declined by about $1 million in FY17, relative to January projections.

But even this outlook has its caveats, as indicated near the end of the report, specifically regarding the General Fund (the largest revenue source in the budget), on Page 15 (1st paragraph):

As illustrated in these tables, and consistent with past projections, longer term revenue growth from the mix and structure of the taxes in the three funds analyzed herein is unlikely to keep pace with recent levels of expenditure growth (emphasis added).

In other words, tax revenue growth rates do not match expenditure rates, which means the state is still consistently budgeting to spend more than it takes in.

But the real impact of Vermont policies is being felt where it’s always felt – in the lives and pockets of working Vermonters.  The forecast cites the low unemployment rate Vermont is “enjoying”, as if that constitutes evidence of some kind of recovery:

Vermont employment growth has also strengthened in recent months, with year over year growth in the past 12 months accelerating to 1.4%, vs. 0.7% in the preceding 12 month period. This has pushed the State unemployment rate to 3.6%, the lowest in New England and the fourth lowest in the U.S. 

Vermont employment has increased in recent months, but compared to historical employment levels the state is still an employment trainwreck.  The number of employed Vermonters, what the state’s forecast calls “employment growth” has increased from prior months, to 336,550 in June 2015.  In January 2015, that number was 334,550, so clearly some hiring is occurring.

2015 Unemployment snag

But to put this in a larger perspective, the last time Vermont had 336,550 employed, it was October 2012.  In other words, it’s taken Vermont 2.5 years just to climb back to 2012 levels of employment.

To give it more of a historical perspective:  What was Vermont’s highest employment level in the last 10 years?  344,150, in April 2006.  Which means Vermont now has roughly 8,000 or so fewer people employed now than 10 years ago.

2006 Unemployment snap

Vermont’s labor force – the number of people available and willing to work – has shrunk in almost direct correlation to the decrease in employment numbers.  The labor force in April 2006 was 356,700.  In June 2015, the labor force is 348,950, a difference of -7,750.  This is why Vermont’s unemployment rate in April, 2006, of 3.5%, looks so much like June 2015’s unemployment rate of 3.6%, even though we have about 8,000 fewer people employed.

To put this a bit more painfully, Vermont has lost an average of 800 jobs every year for the last 10 years.

So while the state’s latest forecast loudly touts the low unemployment rate, it neglects to mention that a) the total number of Vermonters employed is at historical lows, and b) the labor force itself has shrunk.

A shrinking labor force is not an indication of economic health.  It’s an indication that there are fewer opportunities for employment in the state.

Oddly, the report also discusses income inequality (page 7 of the report), as if a more equal distribution of wealth is a desired goal, and discusses the “owners of capital” as if it’s straight out of the Marx/Engels reader.  But as more and more people drop out of the labor force, it’s entirely unsurprising that incomes are reduced.  In fact, since the state’s own long-term labor forecast calls for the largest job growth sectors to be in the service industry, whatever policies the state has been putting into place to improve the economy, and thereby the incomes of Vermonters, is not working.

By the state’s own admission, its economic policies are having the opposite of the desired effect:

Vermont's economic policies in a nutshell.

Incomes are down in the recession – so let’s fix that by raising taxes!

The report goes on to state:

Income growth has become increasingly concentrated among the highest income groups over the past 30 years and this has continued during the current economic recovery. past 30 years and this has continued during the current economic recovery.  Between 2009 and 2012, recent studies estimate that virtually all real U.S. income growth accrued to the highest 1% of all income tax filers.  These same analyses, however, suggest that in Vermont, income inequality has not been quite as pronounced, with income growth among the top 1% during this same period of 21.8% vs. growth among the bottom 99% of about 4.6%. They also suggest that longer term income inequality, though growing from lows in the late 1970’s to levels in 2012 not seen since the late 1920’s, are similarly less pronounced in Vermont than in the nation as a whole.

So income growth is only good if it’s at the lowest income groups?  Considering that the highest income groups pay the vast majority of income taxes collected, is the state arguing for reduced incomes at the highest levels so things are less “unequal”?  How will budget gaps be filled when the rich are no longer quite so rich?  Since half the country pays no net income taxes, how, exactly, would increased state expenditures be paid for if the 1% didn’t have increased incomes?

As the report says on Page 11:

The increasing volatility in revenues due to a growing reliance on Personal Income,

Deep thoughts for a Vermont legislature.

Deep thoughts for a Vermont legislature.

Corporate and Estate taxes, was on full display in both FY14 and FY15. In FY04, these three tax categories comprised 50.6% of Available General Fund tax revenues. In FY15, they represented 60.9% of revenues, and are expected to exceed 62% within the next five years.

So while bemoaning inequality, the report also states Vermont has become and is increasingly becoming reliant on personal incomes to constitute the bulk of General Fund revenues.  Shouldn’t the state, then, be celebrating wage inequality?  Who else is going to fund the General Fund?

The state’s forecast now shows that the anticipated budget will be in the black, but so did the prior years’ budgets, which sometimes required a budget recission one month after the budget was passed. When the legislature scrambles to find yet another tax, this time in the form of one on sugary drinks, one which places both an additional cost of compliance on the backs of business owners and increases the aggregate tax burden on Vermonters, and then counts itself as a fiscal hero for doing so, the environment is created that assumes that this is the way budgeting and the state’s economy blame shiftshould work.  In other words, Vermont will see these same steps taken again and again.

What’s really happening is that the state is patching holes in a sinking ship, and is running out of things to patch it with.  What doesn’t help is the state’s continuing demonization of those who pay the majority of the bills in the state, and who will share an ever-increasing burden of doing so.