Why government should not compete with business

The outside auditor’s management report for Cass County was released earlier this week. An earlier report by the County Auditor on the County Collector’s office had been blocked from being released on the county website. When the outside audit was delivered, the county Powers-That-Be relented and allowed both reports to be posted on the Auditor’s section of the county website.

There has been a firestorm about these reports since their release.  There has been accusations and counter-accusations on local Facebook groups and other internet forums. If you read the management report closely, you’ll see why a commissioner abruptly resigned last year and why another chose to not run for re-election.  The outside auditor is particularly damning on the actions and methods of the county commission and vindicates the county auditor.

But that is not the theme for today’s post. We should use these auditor reports to develop county Policies and Procedures to insure future occurrences do not occur.  In the business world, this is known as “Lessons Learned.” That is why we have auditors and auditor reports.

I would suggest that at the top of those lessons learned is this:

  1. Never compete with business. Especially, never compete with business when business has a proven track record, established customer base and existing infrastructure to support the product. In this case, the Broadband project should have been shown the door at its first appearance.  There is no way the county can compete with AT&T, Embarq, Sprint, CenTel, Comcast or Time-Warner in providing broadband internet access and provide a competing product at a competitive cost.  The rural customers that were to be served by the Broadband project don’t have the customer density to support Broadband at a reasonable cost.  That means municipal customers would subsidize the rural customers. The county’s competing product would have to do so at a price that is equivalent or lower than broadband service by AT&T, Sprint and others.  Any competent business manager or certified project manager would have seen these pitfalls and would not have approved the broadband project.  In business, this comes under Risk Identification, Mitigation and Avoidance—all part of a needed business plan that didn’t exist.
  2. Never subsidize new technologies or pilot plants without a proven vendor track record, customer base and established maintenance and support. In short, never be the first kid on the block with new technology until it has been proven.  In this case, the county subsidized the production of a pilot bio-fuels plant with the University of Central Missouri with no scope of work, project plan nor established schedule of deliverables, i.e., it was money thrown down a hole with no obligation of any return on investment.

The Commissioners violated other those and other common business rules and we now see the result. I don’t know the background of the two appointed democrat commissioners, Luke Scavuzzo and Terry Wilson. I would hope when they were selected to fill the vacant commissioner positions by Governor Jay Nixon, that he picked people with proven and successful business backgrounds for surely as God created little green apples, Cass County needs competent commissioners. We’ve not have any, as far as I can determine, for decades.

There oughta be a law!

Perhaps today’s blog title should be viewed as a question. Why should there be a law?  When I was growing up, our neighbor down the road had a standard statement whenever he was frustrated. “There oughta be a law!”

Be it a matter of taxes, the cost of cattle feed or when he just ran a bad weld on a seam, he said the same thing.  Repetition, of course, diminished the impact. I heard many say the same in the face of life’s adversity. In fact, I think there is (was?) a comic strip with that name. Whatever the reason, people seem to want government to resolve these situations.

Or, do we?

John Stossel wrote a commentary that appeared on Rasmussen’s website titled appropriately, “There ought Not to be a law.” Stossel takes the inverse view of this common statement and explains why more laws are not solutions to our woes. Sometimes the best solution, be it a new law or bailing out mega-corporations, is to do nothing.

 

There Ought Not to Be a Law

 

A Commentary by John Stossel

I’m a libertarian in part because I see a false choice offered by the political left and right: government control of the economy — or government control of our personal lives.

People on both sides think of themselves as freedom lovers. The left thinks government can lessen income inequality. The right thinks government can make Americans more virtuous. I say we’re best off if neither side attempts to advance its agenda via government.

Let both argue about things like drug use and poverty, but let no one be coerced by government unless he steals or attacks someone. Beyond the small amount needed to fund a highly limited government, let no one forcibly take other people’s money. When in doubt, leave it out — or rather, leave it to the market and other voluntary institutions.

But this is not how most people think. Most people see a world full of problems that can be solved by laws. They assume it’s just the laziness, stupidity or indifference of politicians that keeps them from solving our problems. But government is force — and inefficient.

That’s why it’s better if government didn’t try to address most of life’s problems.

People tend to believe that “government can!” When problems arise, they say, “There ought to be a law!”

 

The tea party gave me hope, but I was fooled again. Within months, the new “fiscally conservative” Republicans voted to preserve farm subsidies, vowed to “protect” Medicare and cringed when Romney’s future veep choice, Rep. Paul Ryan, proposed his mild deficit plan.

 

It is unfortunate that the United States, founded partly on libertarian principles, cannot admit that government has gotten too big. East Asian countries embraced markets and flourished. Sweden and Germany liberalized their labor markets and saw their economies improve.

 

But we keep passing new rules.

 

The enemy here is human intuition. Amid the dazzling bounty of the marketplace, it’s easy to take the benefits of markets for granted. I can go to a foreign country and stick a piece of plastic in the wall, and cash will come out. I can give that same piece of plastic to a stranger who doesn’t even speak my language — and he’ll rent me a car for a week. When I get home, Visa or MasterCard will send me the accounting — correct to the penny. We take such things for granted.

 

Government, by contrast, can’t even count votes accurately.

 

Yet whenever there are problems, people turn to government. Despite the central planners’ long record of failure, few of us like to think that the government which sits atop us, taking credit for everything, could really be all that rotten. 

 

The great 20th-century libertarian H.L. Mencken lamented, “A government at bottom is nothing more than a group of men, and as a practical matter most of them are inferior men. … Yet these nonentities, by the intellectual laziness of men in general … are generally obeyed as a matter of duty (and) assumed to have a kind of wisdom that is superior to ordinary wisdom.”

 

There is nothing government can do that we cannot do better as free individuals — and as groups of individuals working freely together.

 

Without big government, our possibilities are limitless.

I like Strossel’s writing. I invite you to follow the link and read the entire article. I don’t agree with everything he writes but I do agree most of the time.

His last sentence is intriguing. “Without big government, our possibilities are limitless.” NASA, surprisingly, is taking a step in this direction, albeit a small step.  NASA is privatizing our ground-to-orbit launch systems.  There have been a number of successes, small ones given the size of NASA’s current budget. It is an opportunity for a company or consortium, if they take the risk.

Limited government, limited regulation, will free innovation and growth.  That is what we need for the 21st Century or we will go the way of the Roman Empire, fragmented and powerless.

State Employee Benefits

A question was posed yesterday concerning retirement benefits for MO Legislators.  The Missouri General Assembly Legislators, by design, are part-time positions only.  Their yearly salary is capped at $31,000 per legislative year.

As a part-time legislature, compensation is low with the General Assembly, and most senators and representatives hold jobs outside their legislative duties. Law makers are paid $31,351 per legislative year. — Wiki

The legislators are term limited to eight years as a Representative and eight years as a state Senator.  A total for any individual of sixteen years. The question is whether Legislators should receive a state retirement.

No.  The Missouri Constitution clearly states that Legislators are part-time.  The office is not designed to provide a “living wage” nor should it be.  Legislators should be in office to serve the state and their constituents, not to be served by the state.

Almost immediately, another asked if that retirement ban should extend to other state employees and to police and firemen.  My opinion to both is a qualified, “Yes.”

Many (most?) corporations across the country no longer provide company retirement plans.  They have switched to 401K plans with some degree of matching employer funds.  For those who don’t know what a 401K plan is, it is an employee savings plan where an employee can save for retirement and not be taxed on those funds until they are withdrawn at retirement.  Most employers will contribute, to some degree, “matching funds” to those plans. The amount of contribution can vary from zero to one hundred percent match of the employee’s contribution.

Over a period of years the 401K fund can grow quite large.  If an employee moves from one job to another, he can take those funds with him and continue to contribute to them at his new job.  For me and those whom I worked with, the 401K plan has worked very well.

Only those corporations saddled with unions still have a company retirement plan. In some states, even those pension plans are shifting to 401K plans.  Public service employees, like unions, still balk and ignore this trend.

As a recently retired engineer, I know what it is to work toward a goal of being independent in retirement.  I’ve  planned my retirement through most of my working life. I admit it’s not as big as I would have desired, but my plan has worked well enough.

One of the contributors of the discussion stated that without a retirement plan, a state provided pension plan, no one would want to be a state employee or a Police Officer or Firemen.  For the latter, if a retirement plan was their motivation of joining the Police or Fire Departments, they are in the wrong profession.

But that argument still exists for some.  In truth, the state can no longer afford state provided pensions.  The individual must take responsibility for his future.  What the state should do is to provide the tools to allow the employee to make his own decision: ignore the situation as many do, or use those tools to create a personal plan and the mechanism for the employee to fund that plan. The responsibility of the state ends there.

The corruption of state pension plans, driven by public service unions, must end.  We know the farce of the Wisconsin state pension plan where the state provides the funding and the union member contributions go to the union central committee to be used for political contributions to liberal and socialist organizations. That is nothing more than theft. It is misusing public moneys to fund a plan while the so-call individual contributions are siphoned into political contributions for the democrat party.  If that isn’t a criminal act, it should be. 

States can no longer provide cradle to grave support for their citizens as they can no longer provide such services to their employees.  People and employees must manage their futures independent of the State.  The argument that the lack of pensions and other state-provided benefits will prevent people from filling state positions is as false as the idea that the State must provide universal healthcare. The concept doesn’t work nor can we afford the expense. 

The day of personal responsibility must return. The proper role of the state as an employer is to provide the tools and, perhaps, mechanisms for the employees to create their own futures.  The day of the state management of personal benefits is over.  Let’s move forward with plans that reinforce personal responsibility instead of state dependency.

Obama’s coming to town…hide your valuables!

Well, not coming to town, coming to Congress. The White House says not to get any high expectations.  WH leaks says that he wants to spend another $300Billion and some “tax cuts.”  

Well, they’re not tax cuts. You’ll pay the same amount.  No, all Obama wants to do is cut the tax withholding rate.  The democrats call it a payroll tax. It isn’t. It’s just a reduction of your pre-payment on your income taxes.

Yes, you’ll see a bit more in your paycheck. Comes tax time, however, you’ll have to furnish the difference between the withholding rate and the actual tax rate out of your pocket.  If you have plans for a tax return, it’ll be gone or reduced.  So, you see, it isn’t a tax cut at all.

 According to people familiar with the White House deliberations, two of the biggest measures in the president’s proposals for 2012 are expected to be a one-year extension of a payroll tax cut for workers and an extension of expiring jobless benefits. Together those two would total about $170 billion.

That’s what democrats call a tax cut—cutting the withholding rate of payroll deductions and expired unemployment.

Senate Republican leader Mitch McConnell predicted Obama’s Thursday night speech to Congress on jobs legislation would include “more of the same failed approach that’s only made things worse over the past few years.” 

The White House has been downplaying expectations.  As soon as a date was agreed upon, the White House has been a sieve of information.  What is Obama’s strategy? More of the same.

The leaks have worked.  A number of congressmen from both Houses are saying they aren’t coming.  Why bother? It a “same old, same old.”

More Republicans skipping Obama’s jobs speech

When President Obama delivers his address on a new job-creation plan to a joint session of Congress on Thursday, he won’t be speaking to a sold-out crowd. Several lawmakers are still determining whether it is worth their time to stay in Washington to hear the president, and some are already planning to skip it.

Republican Rep. Paul Broun of Georgia is the latest to announce that he will not be attending, and will instead watch the speech from his office across the street. During the speech, Broun will post his comments about Obama’s remarks on Twitter, a tradition he keeps during State of the Union addresses.
“Dr. Broun will not be attending President Obama’s joint address, but he looks forward to hearing the president’s proposal for job creation,” Broun spokeswoman Meredith Griffanti told The Ticket. “Dr. Broun will instead watch the speech from his office where he will host a live town hall via Twitter to interact with his constituents.”
Broun remained in his office during Obama’s State of the Union address in January, providing his own commentary on the social networking website throughout the speech.
“Mr. President, you don’t believe in the Constitution. You believe in socialism,” one of Broun’s tweets read. 
Illinois Republican Rep. Joe Walsh was the first to announce his intentional absence last week, saying he didn’t want to act as a “prop” for Obama’s speech.

In the upper chamber, South Carolina Sen. Jim DeMint, a member of the Senate Tea Party Caucus, told Jon Karl of ABC News that he “probably” won’t show up either.

“If he sent a written proposal over first, I would go hear him explain it, but frankly right now I’m so frustrated I don’t think I’m going to go,” DeMint told ABC News. “I can’t imagine too many Americans wanting to hear another speech with no real plan attached.”

My feeling is that more people will be watching the NFL season opener than watching Obama shoot of off his mouth. 

Note:  my editor, Mrs. Crucis, was late reviewing my post.  So I’ll leave my typo above in place.  Usually she finds my misspellings and typing errors before you have a chance to see them.

On the Radio!

State Senator Brian Nieves
Today is a first.  I was invited on a radio program hosted by Brian Nieves and Dave Bailey on KWMO, Washington, MO.  The appearance covered my efforts in the passage of the “Don’t Tread on Me” vanity license plate.  Brian, a MO state Senator from Washington, MO, was the MO Senate liaison for the bill.

While it was only five minutes, I did get my few moments of fame.


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Not everyone in Washington sold us out.  I was heartened to hear my local US Representative, Vicky Hartzler (R-MO-4) voted NO against the debt increase bill.
At least there is one politician in Washington who has the guts to stand on her principles and uphold those who send her there.
Unlike Boehner and McConnell.  Spit!!

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The Cartoon of the Day is presented by Michael Ramirez.
And free cell phones and internet?
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The debt deal is done to all our detriment. Now the knives come out.

Beware The ‘Supercommittee’

Budget Policy: Congress’ debt-ceiling deal kicked the can over to a special bipartisan “supercommittee” that will make big decisions on spending cuts and taxes. Will that panel be top-heavy with liberals?
There is a lot to fear from the establishment of an umpteenth blue-ribbon commission designed to solve another dilemma said to be beyond the reach of the ordinary legislative procedures of the U.S. government.
One such recent supercommittee of sorts, the 2006 Iraq Study Group, recommended another Vietnam-style surrender for the U.S.; then-President George W. Bush turned the tables with Gen. David Petraeus’ successful Iraq surge initiative.
Tea Party activists are properly worried about Congress’ new supercommittee duping the public into accepting tax hikes and phantom spending reform.
FreedomWorks Vice President Max Pappas, for instance, charged last week that “Speaker Boehner is using the committee as a facade for potential tax increases down the road without having to commit to anything on paper right now while the debate is hot. So essentially, the supercommittee is the tax hike.”
Senate Majority Leader Harry Reid, meanwhile, is mocking “Republican leaders in the Senate saying there will be no revenue.” According to Reid, “that’s not going to happen” because “this joint committee” will agree to politically “painful” tax increases.

The entire article can be found here.

I’ve heard some call this group the “Politburo.”  I think it’s about right.