Sunday, December 27, 2009

Blatantly Unbridled Greed...

Talk about unbridled greed…In spite of the bad economy, the state’s dire financial situation, and Governor Christine Gregoire’s proposal to cut $1.7 billion from schools, and eliminate the Basic Health Plan to solve the budget shortfall, state employee unions are refusing to forego a five percent increase for more than 21,000 people already averaging over $70,000 a year. This amounts to around $83 million in “step” or longevity-pay increases for almost a third of the state’s workers typically in their first six years on the job. State workers earn about a third more than private sector workers in comparable jobs.

After the legislative session ended without new state employee contracts, Gregoire struck a deal with the unions that has the taxpayers picking up 88 percent of health care costs and left pay arrangements from the 2007-09 contract intact.

Newspapers all over the state have issued editorial warnings to the Governor and Legislators as they contemplate new taxes for 2010. Stating the need for “radical” thinking in these tough times, newspapers encouraged the state to dig deeper for more government efficiency — particularly with regard to these pay and benefit increases. The Spokane Spokesman-Review said, “State Unions must be part of fair fiscal solution,” and others said talk of new taxes would be premature without going back to the bargaining table with state employee unions. We couldn’t agree more, and add the Business Journal's voice to those already calling for the Governor to say a firm “No” to the unions.

Bremerton's Fish Statues

Considering both the financial situation of our state and the City of Bremerton, I was certainly surprised to see the Bremerton City Council approve spending $250,000 of state money on the installation of some statues of fish and fisherman on Pacific Avenue. Ostensibly, these statues are going to bring tourists downtown.

What I have a serious issue with is the statues being designed by a Colorado firm — and built by a company in Mukilteo. Don’t we have artists right here in Kitsap County who are capable of doing this? It’s not often that any city has an opportunity to spend that kind of money on art, but when they do, shouldn’t they focus on spending it with local artists?

Personally, I believe all five of the Bremerton City Council members who voted to spend that money outside of Kitsap County — Nick Wofford, Will Maupin, Brad Gehring, Carol Arends, and Adam Brockus — owe the local arts community an apology. And while I doubt the ability of a fish statue to make serious inroads for tourism, I do think the Council should rescind its approval of this project as presented and insist the money be spent locally as a condition of acceptance.

And what’s the matter with our local artists? Why aren’t they showing up at Bremerton City Council meetings en masse and loudly protesting the Council’s blatant disrespect for their abilities and talent? Is it any wonder the Council doesn’t think twice about bypassing them?

I really like and appreciate public art. But if the One Percent For The Arts program can’t be managed any more effectively than spending our money out of state, while local artists won’t take any more action than whining about it to each other, than the program should be abandoned altogether. Considering the state’s $2.8 billion (and growing daily) budget shortfall, there are certainly better uses for that money than improving the bottom line of some company in Colorado.

Friday, December 11, 2009

Democrats to seek higher limit on the federal debt

From the Washington Post...
Measure to be included in defense bill
House Republicans vow to block Pelosi's plan

House Speaker Nancy Poliosi (D-Calif.) said Thursday that she will include legislation to raise the debt ceiling in a must-pass defense spending bill headed to the House floor next week.

"We need to have a vehicle so that the Senate can vote on it, and it is our intention to have something on the Department of Defense bill," she told reporters at her weekly news conference.

House leaders have not settled on how much to raise the debt ceiling, now at $12.1 trillion. Figures as high as an additional $1.925 trillion are under discussion, aides and lawmakers said. Republicans vowed to block such a move, despite the potential consequences.
"It will be an opportunity for us to point out the excessive spending that's going on in this Congress," said House Minority Leader John Boehner (R-Ohio).

Treasury officials have told congressional leaders that they must raise the cap before Dec. 31 or risk running out of money for Social Security checks and veterans' payments due in early January, Democrats said. By law, the Treasury can borrow no more than Congress legally permits.

The House voted this year to raise the debt limit to nearly $13 trillion, but the Senate never acted on the matter. Now, the issue is complicated by the competing demands of moderates in both chambers, who are expressing increasing concern about the nation's rising debt load.

President Obama called this week for a jobs bill to combat the nation's 10 percent unemployment rate. That could add billions of dollars to budget deficits already driven to record heights by the worst recession in a generation and the emergency measures intended to ease its effects.

Senate Budget Chairman Kent Conrad (D-N.D.) and other moderate Democrats have threatened to vote against a higher debt limit unless Congress creates a bipartisan task force, composed primarily of lawmakers, to address the budget problem. Conrad and Senator Judd Gregg (R-N.H.) introduced legislation Wednesday that would invest such a body with broad power to force tax increases or spending cuts through Congress.

"We understand in the short term you add to debt to avert [economic] collapse. We understand that. We also understand at some point you need to pivot to address our long-term debt, because at some point, it's unsustainable," Conrad said Thursday.

Fiscal conservatives in the House known as"blue dog" Democrats say that any plan to raise the debt ceiling should include a new pay-as-you-go law that would prohibit lawmakers from approving tax cuts or spending increases without offsetting the cost elsewhere.

"If we're going to have to take a vote that acknowledges our fiscal irresponsibility, let's add something that changes our habits in the future," said Rep. Walt Minnick (D-Idaho).

The Senate opposes the proposed pay-go rules, and Pelosi opposes giving an independent task force the power to make budget decisions.

Treasury Secretary Timothy F. Geithner and other White House officials met Thursday with Conrad,Senate Majority Leader Harry Reid (D-Nev.) and more than a dozen other senators to develop a version of the task force that Obama and Pelosi might accept. One possibility: Obama could appoint a task force by executive order, although that body would be significantly weaker than one created by law. After the meeting, Conrad said he would consider the idea, but only if lawmakers rejected his original proposal.

"The first thing we want is a vote," he said.

Wednesday, December 02, 2009

Economic Development 101 — Southern Style

Was anyone really surprised when Boeing made the announcement that it intends to locate the second 787 production line in South Carolina?

Reading an online Seattle Times story the weekend before the announcement, and then reading the comments, made me understand how badly the Boeing machinist’s refuse to “get it.” They remind me a lot of the Republican Party here in Washington State — they would rather be “right,” than move towards the center and actually win.

The machinists find themselves in this particular predicament because they have abused the right to strike more often than not. Talks between the union and Boeing over a 10-year no-strike clause that the company reportedly needed in order to bring the second Dreamliner line to Everett, broke down on the eve of the announcement. Senator Patty Murray asked both sides to meet in her Washington D.C. office and resume talks. The fact Boeing failed to even respond, spoke volumes.

The Machinist’s union has failed to grasp the fact that in our global economy their past, strike-won victories were little more than skirmishes in a much larger economic war they will lose in the end unless their strategy — and attitude changes.

For example, was there anyone — other than the Boeing machinists — that didn’t think they were not only arrogant, but just plain greedy, to strike this last time, while the economy all around them was tanking?

Some posters on the Times’ site talked about how if the company thinks a two-plus year delay (caused by who?) for the 787 is a problem now, just wait until they try and build those planes in South Carolina.

Here’s a news flash… South Carolina, along with several other southern states (most notably Georgia, Tennessee, Alabama, Texas, and Mississippi) have been patiently waiting for this day. All have trained their workers diligently; refined and streamlined their permitting processes so it only takes weeks, or at most months, to permit a major manufacturing facility — not multiple years and millions of dollars of environmental “process.” They’ve tailored their tax structures so they’re not only business-friendly, but people-friendly and fair, with neither side carrying the load for the other; and provided tax incentives to attract economic development — instead of treating business as the enemy the way we do here.

The economic incentive package tailored to land the Boeing assembly facility easily received key approval in the South Carolina Senate. The full Senate voted 44-0 on low-interest construction bonds and incentives that include a sales tax exemption on fuel used in test flights. To qualify, a company would have to create at least 3,800 full-time jobs and invest at least $750 million in the state over seven years. This looks like a win-win to me. Can you imagine our state doing this?

What has really struck me is the arrogance of the machinists. They honestly believe they’re the only ones with the skills to build airplanes. If you think a bunch of redneck hicks just off the tobacco plantation are going to be building those 787’s, you better think again. It will be the same quality of people who build the high-dollar BMW’s in South Carolina, upper end Mercedes in Alabama — where Boeing already has major facilities — Ford’s in Georgia, Nissan’s in Tennessee and Mississippi, and Toyota trucks in Texas. If you haven’t been down to Dixie in a while — if ever — you will be shocked at the high level of skill and technical expertise you’ll find. Granted, building airplanes is much more technical than cars, but the assembly line principle is still the same. It’s simply a matter of educating workers what to do — not them being too stupid to learn it, as the machinists seem to think.

While both Boeing and the Machinist’s union blame each other for the strike problem, which brought this issue to a head, I believe that the decision to locate the line in South Carolina had at least as much to do with this state’s policies, and excessive over-regulation, as it does with the union. Even though Bill Boeing started the company here, Boeing owes this region nothing. It’s a global company, competing in a global economy. Boeing has been a good corporate citizen, providing thousands of upper income jobs for people here, and supporting multiple non-profits. But it reached the tipping point when the machinists refused to agree to a no-strike clause.

It has been a long, slow process, but if you look closely, you’ll find Boeing is reducing its corporate footprint in Washington, albeit slowly but steadily, and has been for years. The large new shopping center sitting just South of Boeing Renton is physically located on top of what once was a Boeing facility.

Boeing has made its wishes and needs known to the state, which for the most part have routinely fallen upon deaf ears. Moving its headquarters to Chicago, should have been a 2x4 to the side of the head of the legislature and Governor. Our Governor’s response? A loss of 900 jobs will not matter that much. That kind of arrogance, and the long-held philosophy that businesses is an adversary instead of an asset, has come home to roost.

Our state’s main transportation infrastructure is in shambles. making it difficult to conduct business regionally. Time is money, and it’s very costly to move people and equipment between plants located from Everett to Renton. Meanwhile the Puget Sound Regional Council is pushing to toll I-5 and I- 405. How many more ways can we find to shoot ourselves in the foot, and help states like South Carolina steal our major employers?

Meanwhile Gov. Christine Gregoire expressed her disappointment with Boeing’s decision by saying, “We did all we could to demonstrate that Washington is the best place in America to build airplanes. State and local government worked hand in hand with our capable Congressional delegation, business and community leaders, educators and countless others to show our collective support for locating the second 787 assembly line here.”

Well Governor, it wasn’t nearly enough. This isn’t a problem that just cropped up overnight. It’s been decades in the making.

The bottom line is, the rules and regulations in this state — even given the concessions the state has made to the aerospace industry — are overly restrictive and still make it hard to do business here. The legislature, and those special interest groups that fund the election of legislators, refuse to deal with this simple fact in any way, shape or form. And therein lies the main problem.

South Carolina just gave us a lesson in Economic Development 101. The question is, was anyone in Olympia paying attention?