Author Archives: jimgilvin

Jobs, jobs, jobs

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According to the Gallup polling group unemployment in the United States remains over 10%. The latest numbers from the federal government put the number closer to 9 %  but that lower number doesn’t include the 2.8 million people that have completely given up on the hope of finding a job.

Unemployment is a major cause of the ongoing real esate crisis and continues to impact families all over our nation and it is good to hear politicians repeating the phrase “jobs, jobs, jobs”. It is just a shame that government policies don’t seem to reflect the jobs mantra being espoused by politicians. 

President Obama has been on a charm offensive ever since the November elections trying to convince the American people that jobs are his number one priority now. Just last week he spoke to the same American Chamber of Commerce that he vilified a few months ago and he used the occasion to repeatedly emphasize the need for more job creation. Then less than three days later the director of the Congressional Budget testified before congress that the President Obama’s historic health care bill will cause the loss of 800,000 jobs.

800,000 jobs lost because of one stroke of the president’s pen?

It is nice to hear politicians finally talking about jobs. It’s just a shame that when it comes down to a choice between jobs and political goals they often make the wrong choice.

When your adversary is making a fool of himself, get out of the way

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Kyle Wingfield had another great column in the AJC this week about the unhealthy obsession many Georgians have with what is going on in North Carolina. It is a great article and it I have noticed the same phenomenom.

To put it simply there are a lot of liberals in Georgia that are constantly harping about the way Charlotte, NC is beating us to the punch in adopting liberal policies. Of course many of these policies are currently driving the states of California, Illinois and New York into bankruptcy but that doesn’t seem to worry them as much as the possibility of Atlanta without more trains.

You can read all of Kyle’s column here.

Lyndon Johnson once said “When your adversary is making a fool of himself, get out of the way”. I hope Georgia’s political leaders heed that thought.

Unions are destroying the Postal Service

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CNN reports that the United States Post office is admitting a $329 million dollar loss in the first quarter of the 2011 fiscal year. That means that the Post Office is on track to lose more than a billion dollars in 2011 and they will be looking for congress to bail them out.

“The Postal Service continues to seek changes in the law to enable a more flexible and sustainable business model,” Patrick Donahoe, the Postmaster General, said in a statement. “We are eager to work with Congress and the administration to resolve these issues prior to the end of the fiscal year.”

However a cursory review of the Post Office’s problem shows that it isn’t the economy or competition to blame. The reason the Post Office is destined for bankruptcy is that postal union  labor contracts are driving them out of business.

According to CNN the post office says they actually had a $226 million net income for the first quarter if you take out the costs related to retiree benefits and adjustments to workers’ compensation liability. So three months of retiree benefits and worker’s compensation charges cost the postal service $555 million. It would be kind of hard for any business to make a profit with that expense hanging over your head.

As a result of the enormous losses the Post Office is trying to eliminate Saturday delivery and cut 40 million hours of labor costs which could save them $2 billion. But of course that might not be possible because,

“the service is currently negotiating new contracts with the American Postal Workers Union and the National Rural Letter Carriers Association, which will probably object to cutting hours.”

Object to cutting hours? Imagine how the unions will object when the Post Office is driven into bankruptcy altogether?

RTWTH

“Green ” Energy plant converts $162 million dollars into thin air

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There is a great column about Soperton, Georgia’s Range Fuels ethanol plant in the Washington Examiner. Apparently the company managed to convert $350,000 in political campaign contributions into $162 million dollars worth of government loan guarantees, grants and subsidies. Unfortunately the refinery closed down last month and never really produced much ethanol.

Of course it snowed again in Alpharetta last night and Georgia is experiencing one of our coldest winters on record so Range Fuels may actually have been onto something. Obviously global warming can be solved by the simple conversion of taxpayer dollars into thin air. 

Read the whole story here and weep. Thanks to Kyle Wingfield of the AJC for bringing the story to my attention.

Which way forward Georgia… Texas or California?

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The state of Georgia is in a good place. Yes we have tremendous challenges. Our billion dollar deficits, failed banks, double digit unemployment and rampant home foreclosures are huge problems but nearly every state in the nation is facing such difficulties.

The difference between most states and Georgia is that we are in a perfect position to capitalize on the economic challenges facing us. Georgia can choose to develop an economic climate that will not only survive a difficult environment but actually thrive in it. 

Texas is already doing it. For more than a year now I have watched as the state of Texas has become a magnet for jobs and growth in the worst economy of my lifetime. In fact, as stated by Rich Lowry on National Review Online:

According to the Bureau of Labor Statistics, 214,000 net new jobs were created in the United States from August 2009 to August 2010. Texas created 119,000 jobs during the same period. If every state in the country had performed as well, we’d have created about 1.5 million jobs nationally during the past year, and maybe “stimulus” wouldn’t be such a dirty word.

What does Austin know that Washington doesn’t? At its simplest: Don’t overtax and -spend, keep regulations to a minimum, avoid letting unions and trial lawyers run riot, and display an enormous neon sign saying, “Open for Business.”

Of course since our state has the opportunity to make good choices we also face the chance of making a bad choice. Fortunately California provides a glimpse into the future of what Georgia would become if we choose our economic model poorly. To illustrate I suggest you read Mark Hemigway’s piece titled “Texas booms while California busts” in the Washington Examiner. The first installment of the five part series outlines the two contrasting business models:

Broadly speaking, the two states have many similarities. They have diverse economies, large urban areas, a border with Mexico and similar demographic make-up, with Hispanics a third of the population. Yet one state is failing and one state is succeeding.

California is facing budget shortfalls in excess of $20 billion each year for the next five years, and acquires $25 million in new debt each day. “We’ve been living in fantasy land. It is much worse than I thought. I’m shocked,” then California Gov.-elect Jerry Brown, D, told the Los Angeles Times.

By contrast, when Gov. Rick Perry, R-Texas, campaigned successfully for a third term this year, he ran ads touting the fact that his state has billions in surplus. In fact, Texas was one of only six states that did not run a budget deficit in 2009.

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Perhaps the most dramatic illustration of Texas’ superiority is that Americans have been stating their preference for the Lone Star State with their feet.

Between 2000 and 2009, California had a domestic outflow of 1.5 million people, while Texas had 850,000 move in from other states. From 2008 to 2009, Texas’ population inflow was double that of any other state.

So how have two similar states ended up in such radically different situations? The answer is smaller government.

The economic climates of Texas and California could not be more different and the results could not be more evident. Texas is a model for success and California is a model for failure.

The people of Georgia hold our destiny in the palm of our hands. Let’s just hope that the state’s extension of the GA 400 toll and Transportation Tax Increase aren’t indicative of the path our government intends to follow.

You can read all of  Mr. Hemingway’s article and follow the future installments here.