Worcester County Freedom Trail

About 20 companies have pulled their advertising from the Glenn Beck TV show in the last few days, apparently because he postulated that President Obama a racist based on his inappropriate remarks about police action in the Robert Gates arrest last month.

What you might not know is why this is happening. The news media would have you think it’s all about Beck’s remark. In fact, what is happening is that the advertisers are caving due to pressure from a political action group called ColorofChange.org. From their site:

ColorOfChange.org exists to strengthen Black America’s political voice. Our goal is to empower our members—Black Americans and our allies—to make government more responsive to the concerns of Black Americans and to bring about positive political and social change for everyone.

Using the Internet, we will enable our members to speak in unison, with an amplified political voice. We will keep them informed about the most pressing issues for Black people in America and give them ways to act. We will lobby elected representatives using email, the telephone, and face-to-face meetings. We’ll bring attention to the needs and concerns of Black folks by holding coordinated events in different parts of the country, running TV and print advertisements, and demanding that the news media cover our issues. We will also work with other groups—online efforts and other organizations that are doing related work—to magnify our impact.

What confuses me is that many public figures have postulated about Obama and his racial attitudes after years of listening to wild man Rev Jeremiah Wright. Why pick on Beck? Well, it’s a perfect storm for ColorofChange.org, which has been fairly invisible til now. Beck has the 3rd most popular show on Fox News, with over 2 million viewers. And Beck not only made the racism comment, but also picked on ColorofChange.org’s founder, Van Jones. This is an important tidbit because Jones is Obama’s Special Advisor for Green Jobs, Enterprise, and Innovation. So ColorofChange.org couldn’t let that one slide. Thus the push to undermine support for Beck’s show.

Thus far, major companies like CVS, GEICO, and Wal-Mart have pulled their advertising from the Beck show and moved it to other time slots on Fox News.

Maybe we should organize a boycott of companies who overreact to community organizers?!?!?

Ack! I can feel my freedom slipping through my fingers as I write. I’m just starting to read through the 1018 page Obamacare bill. I still have a ton to read, but I’m already concerned. First, the scary part. On page 22 of the “Americas Affordable Health Choices Act HR3200,” the new health care czar is required to study how things are going. It appears the government will be able to come knocking on my company’s door and insist they have a right to examine our financials, regardless of the fact that we’re a small, private company. According to the bill:

The Commissioner, in coordination with the Secretary of Health and Human Services and the Secretary of Labor, shall conduct a study of the large group insured and self-insured employer health care markets. Such study shall examine the following:

(D) The financial solvency and capital reserve levels of employers that self-insure by employer size.

What?!?! My company’s solvency and capital reserves are no one’s business but mine and the board of directors. The government has absolutely no constitutional authority to come barging in here to go through my books.

Now a stupid part. On page 23, the bill requires the new health care czar to report on those companies who self-insure. According to the bill:

(2) REPORTS.—Not later than 18 months after the date of the enactment of this Act, the Commissioner shall submit to Congress and the applicable agencies a report on the study conducted under paragraph (1). Such report shall include any recommendations the Commissioner deems appropriate to ensure that the law does not provide incentives for small and mid-size employers to self-insure.

What’s wrong with self-insuring? My company self-insured prescription coverage for years. It was the right decision for everyone: our employees (prescriptions were covered 100%) and the company (it was cheaper than the prescription options on our health insurance).

Since when is the government in a position to make smart decisions about how my company should operate? I can balance my budget and make a positive contribution to the GDP. Can the US government?!?! I think not!

As if the assault on American’s freedom and capitalism wasn’t bad enough, it just got worse. The Obama administration has several formerly private sectors on tinder hooks waiting for more bailout money. The Treasury Secretary is now resorting to blackmail to get CEOs from these companies to resign (see story about Wagoner at GM). And now, hot off the press, Rep Barney Frank is determined to make the government responsible for setting EVERYONE’s salary in the new Pay for Performance Act of 2009:

Now, in a little-noticed move, the House Financial Services Committee, led by chairman Barney Frank, has approved a measure that would, in some key ways, go beyond the most draconian features of the original AIG bill. The new legislation, the “Pay for Performance Act of 2009,” would impose government controls on the pay of all employees — not just top executives — of companies that have received a capital investment from the U.S. government. It would, like the tax measure, be retroactive, changing the terms of compensation agreements already in place. And it would give Treasury Secretary Timothy Geithner extraordinary power to determine the pay of thousands of employees of American companies.

The purpose of the legislation is to “prohibit unreasonable and excessive compensation and compensation not based on performance standards,” according to the bill’s language. That includes regular pay, bonuses — everything — paid to employees of companies in whom the government has a capital stake, including those that have received funds through the Troubled Assets Relief Program, or TARP, as well as Fannie Mae and Freddie Mac.

The measure is not limited just to those firms that received the largest sums of money, or just to the top 25 or 50 executives of those companies. It applies to all employees of all companies involved, for as long as the government is invested. And it would not only apply going forward, but also retroactively to existing contracts and pay arrangements of institutions that have already received funds.

The Pay for Performance Act of 2009 will start with companies who’ve accepted bailout money. But don’t be surprised when it spreads its wings to all private sector companies.

At this point, we would do well to heed the words of Russian Prime Minister Vladimir Putin’s at the opening ceremony of the World Economic Forum in Davos, Switzerland, in January 2009. From the Wall Street Journal:

Esteemed colleagues, one is sorely tempted to make simple and popular decisions in times of crisis. However, we could face far greater complications if we merely treat the symptoms of the disease.

Naturally, all national governments and business leaders must take resolute actions. Nevertheless, it is important to avoid making decisions, even in such force majeure circumstances, that we will regret in the future.

This is why I would first like to mention specific measures which should be avoided and which will not be implemented by Russia.

We must not revert to isolationism and unrestrained economic egotism. The leaders of the world’s largest economies agreed during the November 2008 G20 summit not to create barriers hindering global trade and capital flows. Russia shares these principles.

Although additional protectionism will prove inevitable during the crisis, all of us must display a sense of proportion.

Excessive intervention in economic activity and blind faith in the state’s omnipotence is another possible mistake.

True, the state’s increased role in times of crisis is a natural reaction to market setbacks. Instead of streamlining market mechanisms, some are tempted to expand state economic intervention to the greatest possible extent.

The concentration of surplus assets in the hands of the state is a negative aspect of anti-crisis measures in virtually every nation.

In the 20th century, the Soviet Union made the state’s role absolute. In the long run, this made the Soviet economy totally uncompetitive. This lesson cost us dearly. I am sure nobody wants to see it repeated.

Nor should we turn a blind eye to the fact that the spirit of free enterprise, including the principle of personal responsibility of businesspeople, investors and shareholders for their decisions, is being eroded in the last few months. There is no reason to believe that we can achieve better results by shifting responsibility onto the state.

And one more point: anti-crisis measures should not escalate into financial populism and a refusal to implement responsible macroeconomic policies. The unjustified swelling of the budgetary deficit and the accumulation of public debts are just as destructive as adventurous stock-jobbing.

I learned yesterday that FedEx said they will cancel a $3.5+ billion order for Boeing jets if President Obama signs the “card check” legislation. This bill is a desperate attempt by unions to reverse their declining numbers. But it will add significant costs for businesses if it passes. Read the US Chamber of Commerce’s analysis.

From the Wall Street Journal:

“It is exceedingly unlikely that we would purchase those airplanes” should Congress change the law, said FedEx spokesman Maury Lane. The legislation could cripple the company and eliminate the need for the extra planes, Mr. Lane said.

Now here’s a real life story from Gov Mitt Romney about how card check” can destroy. He fought the unions on this when he was our Governor. Governor Deval Patrick couldn’t wait to approve the legislation. Now there’s a big problem:

In 2006, my last year as governor of Massachusetts, I vetoed a card-check bill that allowed public workers to organize if a majority signed union authorization cards as opposed to casting a traditional secret ballot. The veto was a gain for the rights of employees and employers to a fair election, but the victory was short-lived.

After I left office, organized labor had another run at replacing the secret ballot with a card check. With the support of Democrats in the legislature, that same bill I had vetoed was passed again in 2007 – and my Democratic successor signed it into law. What happened next is a cautionary tale for Congress as it moves toward a vote on national card-check legislation.

With this powerful new tool, for the first time ever in Massachusetts, a charter school was unionized. One reason so many parents want their children in charter schools is precisely because they operate free of union contracts, so that when administrators want to try something new, they can implement it quickly.

For this, charter schools are fiercely resented by teachers unions as a competitor to failing public schools. Charter schools use a merit system, rewarding teachers according to results in the classroom. They don’t have complicated work rules that smother creativity, nor are they burdened with termination rules that make it almost impossible to dismiss an incompetent teacher.

The union drive started last year when the American Federation of Teachers met with a small group of teachers from the Conservatory Lab Charter School in Boston. Throughout the summer, they worked behind the scenes to sign up a majority of the 20 teachers at the school. Administrators learned of the successful organizing effort only after the decision to unionize had been made. For parents who may have liked the idea of a union-free school, there was no chance to be heard.

Not surprisingly, the chairman of the school’s trustees is worried that a collective bargaining contract will be loaded with so many workplace restrictions that it will make it harder for the school to fulfill its mission to experiment with new ideas.

Unfortunately, these kinds of underhanded power plays are what we can expect across the nation if card check becomes the law of the land.

I believe in the power of the individual over the power of the government, and that government must at all times be held accountable to the people. This is the surest path to a happy populace and a solid economy. In Massachusetts, our robust high tech and health care industries have given us a bit of respite from the recent economic crunch, but now we, too, are catching up with the hard times. From the Boston Herald:

Specialists say Massachusetts is catching up to other states that have been feeling the effects of the national recession, losing jobs in sectors that had not taken such a bad hit. The professional and business services sector, for example, lost 7,500 jobs, accounting for almost half of December job losses.

Those sectors follow “frontline industries” such as construction, manufacturing and financial services into job losses, said Robb Smith, director of policy and planning at the Executive Office of Labor and Workforce Development.

The office reported Jan. 22 that December’s unemployment rate was 6.9 percent, a full percentage point above November’s rate of 5.9 percent. The Massachusetts jobless rate has been consistently below the national level, but December’s numbers brought the state even closer to the national rate of 7.2 percent. The last time unemployment in Massachusetts was 6.9 percent was October 1993.

But let’s be clear. This is NOT a call for Beacon Hill to start messing even further in the lives of residents. Economic opportunities and societal wealth depend on private initiative. Government policies must encourage and incentivize opportunities so that individuals can generate economic growth and create employment opportunities. Government must not stifle free enterprise or the situation will worsen.

This is the time when government must get out of the way and encourage individuals to devote their talents to productive use…to greater personal fulfillment and intellectual development, while improving their own economic condition and that of others. This is the time to encourage entrepreneurial endeavors and reinvestment in successful businesses (through lower taxes). The dynamic interaction of driven individuals and government support (not government suffocation) will provide the surest path out of the economic crisis, providing for the needs of individuals and for the generation of the minimum required tax revenues to meet appropriate levels of government (police, fire, highways).

A key issue that is rarely discussed is “Business Churning Statistics.” Business churn is calculated as firm births plus firm deaths as a share of total firms. The business churn metric, more than any other, is a good indicator of the level of entrepreneurial activity necessary to move an economy.

Here’s how New England stacks up in terms of business churn:

Percent/National Rank

– New Hampshire 23.4% 34
– Massachusetts 23.2% 37
– Rhode Island 23.2% 38
– Vermont 22.5% 42
– Maine 22.0% 44
– Connecticut 20.4% 46

Note that all of the New England States rank in the bottom third of the nation’s entrepreneurial activity. The sad truth is that no one can benefit from a business that is never started.

Some may attribute this lack of entrepreneurial activity as a result of globalization and the subsequent outsourcing of service sector jobs. But Massachusetts’ position in the business churn is little changed going as far back as 1999, when Massachusetts was ranked 39. And 1999 was prior to the current outsourcing of service sector jobs.

A 2006 study of “small business friendly states” concluded public policy is a big problem:

This list from the SBE Council measures states on 29 criteria, including tax rates on income, property and capital gains; health-care regulations; crime rates; government spending; bureaucracy; and labor costs. The Index focuses only on public policy measures, so indicators such as workforce availability, education, or skill, or affluence of the population are not included. This year South Dakota topped the overall list, followed by Nevada (No. 2), Wyoming (No. 3), Alabama (No. 4), Washington (No. 5), Florida (No. 6), Mississippi (No. 7), Colorado (No. 8), Texas (No. 9) and Michigan (No. 10).

The places that scored lowest on the list are Washington, D.C. (No. 51), followed by New Jersey (No. 50), California (No. 49), Rhode Island (No. 48), Maine (No. 47), Minnesota (No. 46), New York (No. 45), Hawaii (No. 44), Massachusetts (No. 43), Vermont (No. 42) and Iowa (No. 41).

Now is the time for government to get out of the way, before the economy falters further.

Apparently the federal bailout is finally making its way down to the local level. According to the Telegram:

City officials have identified more than $350 million worth of capital and infrastructure projects that could be eligible for federal funding as part of an $800 billion economic stimulus plan being talked about in Washington.

At the request of Gov. Deval L. Patrick and Lt. Gov. Timothy P. Murray, the city on Thursday provided the state with a list of capital projects and programs that met two criteria that have been set for the use of the federal stimulus money.

One criterion is that the projects have to be ready for “shovels in the ground” within 180 days of the release of the money and they must be completed within two years.

The other criterion is that the money has to be used for transportation, municipal facilities, clean energy and efficiency, information technology or educational facilities.

I will agree, there’s lots to be done to improve Worcester. But here are my concerns:

1. The purpose of the bailout is to encourage business development, not short term projects. If the federal government is paying for $350M worth of road and school projects, will the Worcester City Council see fit to reduce the onerous corporate income tax? The one that’s so outrageously high businesses are running away screaming. Did you know we haven’t had any new building construction downtown since 1990?

2. If this federal money is being routed through the state and then to the city, does that mean these projects are all considered municipal projects? If so, will they be saddled with the overpriced union-only requirements of the Worcester’s not so smart PLA’s (project labor agreements)? Union members comprise about 20% of the total pool of contractors. If the purpose of the bailout is business development, shouldn’t everyone have a fair shot at the projects — union and non-union?

The Worcester City Council isn’t really known for making the smartest decisions when it comes to business development and unions. Too much politicking and not enough concern for the city’s taxpayers. Let’s see if they can get the bailout right.

Great article from Michelle Malkin on the wastefulness and arrogance of the UAW. Maybe Gov Deval Patrick should talk to the UAW about borrowing $1B to bailout his administration’s spending mess?

So, let’s see how the UAW spends their members’ money (and how they’ll be spending your hard earned bailout dollars in 2009)…

Nero fiddled while Rome burned. The UAW golfed. While carmakers soak up $17 billion in taxpayer bailout funds and demand more for their ailing industry, United Auto Workers bosses have wasted tens of millions of their workers’ dues on gold-plated resorts and rotten investments. The labor organization’s money-losing golf compound is just the tip of the iceberg.

Earlier this month on my blog, I noted that the UAW owns and operates Black Lake Golf Course — a “championship caliber” course opened in 2000 that’s part of a larger “family education center” and retreat nestled in 1,000 acres of property in Onaway, Michigan.

Curious about how the UAW will be spending my money and yours, I sifted through the union’s most recent annual report filed with the U.S. Department of Labor (which you can find at unionreports.gov). Who knew hitting the links was so central to the business of making cars?

In May and November 2007, the UAW forked over nearly $53,000 for union staff meetings at the Thousand Hills Golf Resort in Branson, Missouri. In September 2007, the UAW dropped another $5,000 at the Lakes of Taylor Golf Club in Taylor, Michigan and another $9,000 at the Thunderbird Hills Golf Club in Huron, Ohio. Another bill for $5,772 showed up for the Branson, Missouri golf resort. On Oct. 26, 2007, the union spent $5,000 on another “golf outing” in Detroit. In May and June 2007, UAW bosses spent nearly $11,000 on a golf tournament and related expenses at the Hawthorne Hill Country Club in Lima, Ohio. And in April 2007, the UAW spent $12,000 for a charity golf sponsorship in Dearborn. In August 2007, the UAW paid nearly $10,000 to its for-profit Black Lake golf course operator, UBG, for something itemized as “Golf 2007 Summer School.” UBG had nearly $4.4 million worth of outstanding loans from the union. Another for-profit entity that runs the education center, UBE, had nearly $20 million in outstanding loans from the union.

Perhaps, the union bosses might argue, they need all this fresh air and exercise to clear their heads in order to make wise financial decisions on behalf of their workers. If only. UAW management has proven to be a money-squandering corruptocracy with faux blue-collar trim. Former UAW head Yokich, who built the Black Lake black hole is also responsible for bidding $9.75 million of workers’ funds in a botched bid to purchase the gated La Mancha Resort Village in Palm Springs.

And while the UAW and carmakers cry poor, they’ve operated massive joint funds for years that have paid for lavish items such as multi-million-dollar NASCAR racer sponsorships and Las Vegas junkets. The dire economic downturn hasn’t changed the behavior of profligate union bigs at the front office or the shop floor. Local Detroit TV station WDIV recently caught local UAW bosses Ron Seroka and Jim Modzelewski — both of whom make six-figure salaries — on tape squandering thousands of hours of overtime on such important labor security matters as on-the-clock beer runs and bowling tournaments.

At least the groveling Big 3 CEOs gave up their corporate jets. Where’s the public flogging for the greed-infested UAW fatcats reaching into our pockets to keep them afloat?

Continuing a prior post on the best and worst of 2008, let’s move on to a few more topics.

Most Under-Reported Story
The problems in the Worcester Public School system. According to the Worcester Regional Research Bureau’s report, Benchmarking Public Education in Worcester 2008, student enrollment dropped 8.2% from 2003 to 2007 while the budget grew 11.41%. In what world does that make any kind of sense? The city has to get control of spiraling retirement costs (up 29.13% from 03 to 07) and health insurance costs (up 72.57% over the same time period). For instance, why in the world aren’t our teachers provided with a health insurance option like the much more affordable Group Insurance Commission, which is available to state employees? From what I’m told, the teacher’s union is dead set against this as they use health insurance as a way of hiding pay raises and other teacher benefits.

Best Political Drama
Without a doubt, the corruption on Beacon Hill. House Speaker Sal DiMasi’s accountant indicted, former State Senator Dianne Wilkerson arrested for taking bribes, Boston City Councilor Chuck Turner arrested for taking bribes...need I say more?!? Oh, I almost forgot State Senator Jim Marzilli and his arrest on multiple counts of assault, disorderly conduct, and something in the lewd behavior category!

Worst News for Worcester
The supposed development of CitySquare. Developer Young Park is dragging his feet, the City Council looks like a bunch of boobs in their negotiations with his firm, and the dual tax structure is killing downtown.

Btw, extra boos to City Councilor Michael Germain who had the gall to chide the business community for “not engaging the council on the tax-rate issue until the night of the tax classification hearing.” (Telegram, Nov 26, 2008). I’ve been a Worcester resident for over 20 years and ever since I moved to town, businesses have been complaining about the dual tax structure that was put in place in 1984. In what sand dune has Mr. Germain been sticking his head?

Best Use of Local Taxpayer Money
Give it back to the taxpayers! Speaking of which, what happened to the property tax relief Governor Patrick promised throughout his campaign? That’s all he talked about for months on end. Even when the budget looked good, he cried “poor man” and turned his backs on the taxpayers. Is anyone surprised?

And here’s a fun roundup of Worcester Online 2008 by Jeff at Wormtown Taxi.

I don’t understand. There are dozens or more dating service web sites that cater to the GBLT community. How is it that the government can force eHarmony to change it’s core business because a gay person wants eHarmony rather than Match.com? What’s next? A gay person will want to buy a Toyota Corolla from General Motors, so the government will step in and force General Motors to change it’s business and start producing Corolla’s? Or my business will have to discontinue it’s focus on the tech community and start to work with retailers if a gay person objects to our business model?

This from Fox News:

Online dating service eHarmony has agreed to create a new Web site — “Compatible Partners” — for gay and lesbian users, the New Jersey Office of the Attorney General announced.

Created as part of a settlement with Eric McKinley, a gay man from New Jersey, the Web site will provide services for users seeking same-sex partners by March 31, New Jersey Division on Civil Rights Director J. Frank Vespa-Papaleo said.

eHarmony, which was founded by Dr. Neil Clark Warren in 2000, said the settlement was triggered by a Law Against Discrimination complaint filed by McKinley against the online service on March 14, 2005. As part of the agreement, eHarmony will pay McKinley $5,000 and will provide him a one-year complimentary membership.

eHarmony — which was not found in violation of the law — also agreed to ensure that same-sex users will be matched using the same or equivalent technology used for its heterosexual clients. It will also post photographs of same-sex couples in its “Diversity” section of its Web site and in advertising materials.

Registration on the “Compatible Partners” site will be free to the first 10,000 users. The site and eHarmony will maintain individual matching pools and registration information. As a result, users of the “Compatible Partners” site and eHarmony.com cannot be paired together, the company announced.

“With the launch of the Compatible Partners site, our policy is to welcome all single individuals who are genuinely seeking long-term relationships,” eHarmony Vice President of Legal Affairs Antone Johnson said in a statement.

Congratulations to President-Elect Barack Obama and VP Elect Joe Biden. They ran a phenomenal campaign. Two years ago, Obama was an unknown senator from Illinois. In January, he will be the leader of the free world. A bit scary, but we hope for only the best for him and for us. And congratulations to Senator John McCain and Governor Sarah Palin. I only wish they had run the vigorous campaign of the last 2 weeks over the course of the whole campaign.

The big question now is, which Obama will govern? The far left politician we saw in the primaries or the centrist of the general election? From Concerned Women for America:

The big question is whether Barack Obama will be as pragmatic in his governing as he was in campaigning. He won the Democratic primary by being deeply beholden to the hard left wing of the party. During the general election, he successfully moved to the center by throwing his long-time pastor, Jeremiah Wright “under the bus” and denying his association with long-time supporters and former friends. The big-government spending by the Democrats directly benefits its constituent groups and party loyalists. But their expectations pale in comparison to the expectations of the radical left who consider him one of their own. They will not stand for the compromises that Obama will have to make if he wants to successfully govern the whole nation.

We know very little about this man and what we do know does not inspire confidence. We can only hope that he will be as pragmatic as he has been in the past. Even his admirers say that he has exploited those around him to his benefit at each stage of his life. He has been willing in the past to adjust to the expectations of any new situation that he has faced and any new constituency that he represents –– he routinely took on the characteristics necessary to succeed in whatever circumstance he encountered. Thus, like a chameleon he tends to take on the “colors” of those who surround him. Let us hope that he will, like so many past presidents, rise to the expectations of the office.

It’s hard to tell who Obama intends to be. Dealing with politicians is tough enough; I feel better when I know a few of their core beliefs. So far, what little we know about Obama focuses on his preference for redistributing the wealth of hard-working Americans.

Speaking of which, don’t be surprised if the stock market tanks. Now that Obama is taking office, shareholders are going to run screaming from the market as the capital gains tax is going to double, if Obama, Reid, and Pelosi have anything to say about it. I’ve already heard from an investor who plans on halving his stake in several companies. As of noon on the day after the election, the market is down over 300 points (-3+%).