Hard Times at the NC State Legislature

From the NC Spin e-mail newsletter:

It is becoming more obvious that the strains of a bad economy are starting to show...

The State Health Plan was the big controversy of the week...

Democratic Senators were completely caught off guard when Senate Majority Leader Tony Rand, who has become the chief (and apparently only significant) spokesperson in the Senate for the plan, offered an amendment to break the logjam that eliminated the controversial (pharmacy benefit) provision but increased dependent premium costs. As is generally the case in our State Senate, this decision was made behind closed doors without proper warning for Democrats and left many of them confused and somewhat upset. They said so on the floor of the Senate, at which time Rand decided it was time to take them to the woodshed. Rand called for a recess and a closed door Democratic caucus...

Premiums for dependent coverage will increase even more than had been proposed, making up some 30 million of the proposed savings. Taxpayers will make up the other $51 million...

Because this was done so quickly and behind closed doors, Capitol Press Corps members were understandably confused about what was done and where the money went. After the session they cornered Rand and peppered him with questions. Tony Rand is usually a pretty cool guy, especially when dealing with the media, but became irritable and even jokingly threatened to kick one female reporter...

(Rand) says if we are having this much trouble over saving $51 million, just think of what it is going to be like trying to cut three billion from next year's budget...

(Legislators asked North Carolina State Treasurer) Janet Cowell about her perspective on employee furloughs, another topic of current discussion. Cowell commented that furloughs could be viewed negatively by the rating agencies and threaten our credit rating. Why? These agencies look for signs that our government is acting responsibly, meeting challenges and dealing with them directly. Cowell correctly stated that furloughs might be interpreted as a sign that the state wasn't willing to address the real issue of government expenditures that exceed revenues and could cause the rating agencies to lower their opinion of our state's financial management.

Cowell's remarks reportedly upset some who favor furloughs but should not have.  The Treasurer was asked a specific question about how the markets might view furloughs, not her personal opinion about the practice. She answered, as she should have, as the "keeper of the public purse." 

UNC President Erskine Bowles appeared before legislators that same day urging them to give him authority to furlough employees in lieu of having to fire them, a sentiment supposedly shared by House Speaker Joe Hackney.  

  
 

Comments

[brandonB]

"cut three billion from next year's budget"

--Is this really where we are now?

[Joe Guarino]

We are not seeing anywhere near that level of cuts right now, Brandon. But it may be necessary the next cycle around, and it may get messy. It will be miraculous if the ruling party does not resort to raising taxes further.

[Reggie Greene / The Logistician]

We as a society have to take responsibility for where we find ourselves today. By recognizing that, we can potentially turn it around.

We have a tendency to forget the BASIC, big picture stuff and then we complain when things are in a state of deterioration.

Things on this planet Earth are actually quite simple:

1. Innovation and technology, leading to building and creating "things," determines EVERYTHING in a civilized society. (If you don't personally know a scientist or inventor in your neighborhood advancing society's interests, or some kid who WANTS TO DO SO, you have a long term problem.

2. New technology, followed by production, generates JOBS, JOBS, JOBS. The tax revenues derived from those technological enterprises determine what government ultimately can and can not do. No innovation and no production of things, no tax revenues.

3. It has been shown throughout history that the more hours that one works, the more that one produces, up to a point, of course. (We do not want people collapsing from exhaustion. However, exhaustion is WAY, WAY, WAY, beyond 40, or 60 hours a week. Take a break, or seek relaxation, and you fall behind your competition.

4. When the vast majority of society's time is spent trying to generate food to eat, that society is in trouble. Food production has to be relegated to the few, so that the others can engage in the advancement of innovation and technology, and the trade and exchange of the products produced.

5. The simplest way to reduce rising health care costs? Stop eating crappy and fatty foods, smoking, and drinking alcohol, and begin to exercise vigorously. You'll see a dramatic reduction in illness and disease.

6. Retirement, when you still have talent/skills and the ability to contribute, kills your society and generates all sorts of other problems. People who work until the day they die, assuming that they are still capable, are more productive members of society, physically and mentally.

6. As a general proposition, war does not generate income. There are very few positive economic ramifications to war. It is a resource drain, totally apart from the fact that it kills potentially productive members of society.

7. When you treat a certain segment of society unfairly, they become less motivated, and less capable, to work in concert with you to pursue the societal interests.

If one looks back in history, these factors repeat themselves. It's simple COMMON SENSE

A society which seeks the easy way out, and seeks more leisure time, is ultimately doomed. It might ride its success for a relatively short period of time; however, it can not do that for very long.

Plain and simple.

We, as a society, are talking all around the points that matter. We're fooling ourselves by engaging in the debates in which we find ourselves. It's like a boat sinking because of a leak, and the sailors are all arguing about how to dump the water out of the vessel.

[brandonB]

"Innovation and technology, leading to building and creating "things," determines EVERYTHING in a civilized society"

"you fall behind your competition."

--These two points say a lot. I'm not a socialist, but I think when emphasis is placed on development for "the greater good" rather than coming out on top of your competition, more people benefit from it.

"Food production has to be relegated to the few"

--I believe hydroponic technology can really end hunger. We have a vacant lot where I live, at Cone/Summit. I wonder how much food could be grown inside these 3 empty buildings, using hydroponics? One advantage of hydro, when your crop "gets sick", you know it almost immediately, rather than waiting weeks for the symptoms to manifest themselves on a large scale farm. Food also grows faster this way.

"Stop eating crappy and fatty foods, smoking, and drinking alcohol, and begin to exercise vigorously. You'll see a dramatic reduction in illness and disease."

--People feel like "the government wants to control us all and make us slaves" when they hear this, but it's the truth. Sure, you can eat what you want, but it's unfair to expect society to look out for you when you are ill, after you've shown so much disregard for your own health for decades.

"People who work until the day they die"

--And the thing is, it's the ones who don't have "big ideas", it's the worker bees who are working through retirement.

"war...is a resource drain"

--Some feel it's the only option and refuse to evolve to diplomacy. There are a lot of folks who think killing can solve it all. I personally feel like war is a primitive, uncivilized, and outdated institution. I'm speaking about war, not self-defense.

[Joe Guarino]

brandonB and Reggie, thanks for all the thought behind your comments. The state of NC has a more immediate problem over the next couple of years that has to be addressed. You are both addressing "big picture" ideas, many of which may be helpful in the long run; but unfortunately there is also the short-term problem to address.

Reggie, I have been a bit uncomfortable with the exporting of large chunks of our industrial base; and also have been a bit skeptical that an economy based primarily on technology and services will be sufficient for the long-term interests and security of a nation as large as ours. I also think it is good for fathers to have some time with their families every day away from work.

Your statements regarding retirement are excellent. We have a culture, however, of seeking early retirement, and your proposal would require a massive cultural change. Part of the basis for this culture is the way that certain public sector and union jobs are structured. But many pursue early retirement through seeking disability-- some real, and some less than real.

The human body and the aging process do not necessarily permit work in certain occupations beyond a certain point. And then there is human motivation, and the tendency of various systems to undermine it.

[Reggie Greene / The Logistician]

Joe: On the spending time with the family issue, while admirable, and valued in our society, we can't have it both ways. One can not stay on top if one takes time to rest and relax, unless one is working significantly smarter, faster, or more efficiently than the competition.

If your competition is also spending the same amount of time with their families, you might have a chance.

However, the notion that we have time to rest is what significantly got us where we are. Leisure time has never been a good concept long term. Resting generally encompasses putting one's antenna down, lowering one's focus, and thus missing things when the competition is running past you.

It's fine to want to spend time with one's family. However, there are both consequences which we desire, and those which we don't. We just need to recognize that and not others for our condition.

[Reggie Greene / The Logistician]

That should have been "not blame others..."

[Joe Guarino]

Reggie, I don't entirely disagree. It is certainly possible to be more productive and efficient, and to get one's work done more quickly in a shorter period of time.

But you are right-- one way international competitors can do better is to work more hours. This is an advantage we have over the Europeans-- we work much more than they do. But the Asian economies, with their respective work ethics and work requirements (and their lower cost of doing business), are very signficant competitors.

[Reggie Greene / The Logistician]

It's more than a little disingenuous for us here in the States to complain as a nation when we are not 100% focused and committed to maintaining the number one industrial status. If it really were all that important to us, we'd wouldn't go home to our families. We'd sleep in the office or the factories. It's obviously not THAT important to us. In the world of competition, there is no such thing as balance.

[Joe Guarino]

That is, Reggie, a part of the equation. But we also have to consider advantages in labor costs and the myriad of regulations some foreign competitors don't face-- environmental, HR, work safety, etc. We have allowed unequal trade, and that has had its impacts. It is not just a matter of us getting outhustled.

But in the future, it may be our governmental debt or our increasing statism that hurts us competitively. Already, governmental policy has been a huge factor in plunging us into a financial crisis that has hurt us competitively.

[Reggie Greene / The Logistician]

There will always be inequality in the universe. Some have certain natural resources; others are close to trade routes or where the winds blow strongly; some have great growing climates, others not; some have waterways, others desert; some can jump higher, and some can stroke the keys on the piano better. It's never fair in competition. Some have communication systems, others not. It's never going to be fair, so it's effectively a non-issue.

[just saying]

Is the problem truly that we are falling behind other nations? It seems to me that the current economic crisis is affecting the entire world, including Asia. Much like the Great Depression, it's not just an American problem.

And would we want to trade our way of life for, say, life in China? The rank-and-file person works there works a back-breaking schedule under brutal working conditions for meager wages and a living environment below what would be acceptable for the poorest American. Is that really the model we should aspire to?