Duped Illinois Taxpayers "Assumed" Massive Tax Hike Money Would Pay Off Bills, But Instead It Paid Off Public Employees

" 'I think the public assumed...that the money would be used to pay off our unpaid bills and make us fiscally sound.... That money is gone. It's spent' on state pension payments and Medicaid, she said."

The "she" is Illinois Comptroller Judy Baar Topinka, a Republican who, per the Wall Street Journal (link), "warned [today] that the state is on track to end its fiscal year June 30 with $8.3 billion in unpaid obligations." 

I have commented before on the precarious state of Illinois' finances.  It is worst among states in unfunded public employee pension liabilities, and it has one of the worst business environments.  Democrats, aided and abetted by some Republicans, have created this mess over many years.

This year, Democrats, who hold the governor's office and have solid control of both chambers of the state legislature, enacted massive income tax hikes of 67% on individuals and 45% on corporations, along with what to many were token and largely symbolic spending cuts.

But it's still not good enough to fill the seemingly bottomless pit that is the state's public employee pension obligations.  Private workers who pay for state government took a hit during the Great Recession, but not public workers.  But a day of reckoning may not be far off.

John M Greco

Related Posts:
Illinois Now Worst Among States in Risk of Default on Debt. And Illinois Voters Like It That Way. We’re Number One!

Annals of Inanities -- Obama Edition: Obama Now Predicts Republican Genocide, Obama Enriches Friends, Don't Buy Mansions & Fancy Suits, and Voters Must Think I'm a Republican

*  Republican Genocide?:  An Obama official predicts that proposed Republican budget cuts will lead to 70,000 deaths (link).  Well, two can play this game.  I predict that not enacting those cuts will lead to an economic collapse that will cause 71,000 deaths. How's that?

*  Obama Spreads the Wealth Around -- To His Friends:  In the first two years of Obama's presidency, "Bosses at bailed-out Fannie, Freddie were paid millions" (link).  That's $17 million, to be exact.  Obama doesn't hate the rich, he just hates the rich who aren't Democrats.

*  Do As I Say, Not As I Do, Obama Style:  Obama, who owns a mansion, once told graduating seniors not to “take your diploma, walk off this stage, and chase only after the big house and the nice suits...." (link).  Now it turns out he buys expensive suits.  When will this all end?  Next thing we know he'll be starting wars in Muslim countries.

*  I'm Not Unpopular, It's All Those Guys Who Just Got Elected:  Ultra-liberal media talker and Obama acolyte blames Obama's unpopularity on voter unhappiness with all those Republicans it just sent to Congress (link).  That's what passes now for analysis in Democrat circles.

John M Greco

Annals of Inanities -- Liberals Edition: Dissent is Now Unpatriotic, Repubs Are Always "Extreme," & Will Race Trump Sexual Tilt at McDonald's?

* Republican Dissent is Unpatriotic:  Remember when liberals proclaimed dissent to be the highest form of patriotism?    Remember when being anti-war was the moral high-road?  Remember when kinetic military actions in a petroleum-rich Muslim country was just a war for oil?  Remember all the vicious anti-war protests?  Well, that was during the Bush/Hitler/Darth Vader/Haliburton administration.  Now wars are OK.  A virulent hateful ultra-liberal speaks up (link) about Obama's Libyan war:  "Republicans are attacking the Commander-in-Chief during a time of war! . . . There should be no debate: we should be kicking [Gaddafi's] ass . . . Whose side are you on, Sarah: are you with the terrorists, Sarah, or are you with the President of the United States? . . . Where's the patriotism of the Republican party? . . ."  This is what liberalism is to many -- a principle-free 24/7 all-politics zone.  You can't make this stuff up.

* Democrat Schumer Being Honest:  Sen. Chuck Schumer of New York, the No. 3 Democrat in the Senate and a vicious liberal partisan, lets the cat out of the bag in an open mike flub, which even the liberal New York Times felt compelled to report(link):  'apparently unaware that many of the reporters were already on the line, [Schumer] began to instruct his fellow senators on how to talk to reporters about the contentious budget process.... Schumer told [fellow Democrat Senators] to decry the spending cuts that [Republican Rep. Boehner, the Speaker of the House] wants as extreme. “I always use the word extreme,” Mr. Schumer said. “That is what the [Democrat] caucus instructed me to use this week.”'  Jay Homnick at The American Spectator comments (link) on Schumer: "To me he is the Bernie Madoff of moral capital. He got all the Orthodox Jews to invest their moral capital with him and he cleaned them out."

*  Watch liberals' heads explode -- does race trump sexual orientation, or is it the other way around?:  Black girls feel disrespected and so beat the crap out of a transgendered man (link).  Although my observation in these situations is that the race card trumps the homosexual rights card, these two factors more or less cancel each other out, so that not much will come of this from the liberal grievance lobbies. 

John Greco

April 12, 1861: Mystic Chords of Memory Will Yet Swell the Chorus of the Union

The American Civil War began 150 years ago today.

Detail from the Soldiers and Sailors Monument in Indianapolis, Indiana (click to enlarge).  I see liberty, victory, longing, waiting, reunion; an African slave holding up his broken chains to Lady Liberty, the symbol of America.  The monument was formally dedicated on May 15, 1902; Civil War General Lew Wallace (Indiana native and author of Ben-Hur) was the master of ceremonies.

Lincoln closed his First Inaugural Address, on March 4, 1861, with this plea:

"We are not enemies, but friends. We must not be enemies. Though passion may have strained it must not break our bonds of affection. The mystic chords of memory, stretching from every battlefield and patriot grave to every living heart and hearthstone all over this broad land, will yet swell the chorus of the Union, when again touched, as surely they will be, by the better angels of our nature."

Richard Balsamo

Annals of Inanities -- Obama Edition #4

* Obama's Justice Department now brings a lawsuit to force a school district to accede to a patently unreasonable demand to accomodate the Muslim faith of a teacher (link).  Some religions are more equal than others.

* Obama returns from vacation in South America and is locked out of the White House (link).  If this had happened to GW Bush, this story would have been headline news for weeks in the liberal media -- Bush the idiot, Bush the moron.  Remember when Bush tried to open a door that was locked when he was at a meeting abroad and was ridiculed in the liberal media?  It was a momentary, meaningless incident and not even at his own house.  But what's good for the goose is good for the gander.  To my liberal friends -- now who's the "moron"?  Remember when Obama, the Commander-in-Chief, mispronounced "corpsmen"?  No, well, you're not alone, but if Bush had done that it would have been front page news for a week.  My thought -- why not stop all this nonsense.

* Do we need a Cray super-computer to understand Obama's oil exploration policy?  The liberal Washington Post observes (link) in a recent editorial: "As for offshore drilling, Mr. Obama’s enthusiasm for punching holes in the ocean floor off Brazil is hard to reconcile with his decision, announced Dec. 1, to keep the waters off the East and West coasts and the eastern Gulf of Mexico off-limits to exploration indefinitely."  The answer is No, we don't.  Encouraging offshore drilling in Brazil and elsewhere while blocking such in the US is not about the environment, it's about the ultraliberal goal to cut America down to size, to attenuate its strengh toward some vision of a global economic rebalancing.  Obama makes perfect sense.

* The Obama team has now so expanded the definition of who is disabled that one observer speculates (link) that a majority of American adults might now be classified as disabled for purposes of the Americans With Disabilities Act.  Give Obama a little more time and he'll have everyone down as disabled, for special protections and government services, except most white males of course.

* Obama is, no surprise, against Republican efforts to restore the D.C. public school choice program, even though he himself sends his children to a private school (link).  That's pretty common, of course, among Democrat politicians (cf. Jesse Jackson).  Arron Goldstein at The American Spectator:  "If the Obamas truly believed in public education they would send their daughters to a public school. But when it comes right down to it President Obama doesn't really believe in the efficacy of public education. His support for public education begins and ends with the teachers' unions. In the grand scheme of things, it is a classic case of public education for thee but not for me."

John M Greco

Detroit's Population Crashes as Ignorant Residents Flee the Liberal Paradise

"Detroit’s Population Crashes" shouts the Wall Street Journal headline (link) the other day.  For some this must be stunning and perplexing news.  After being run by liberals and controlled by unions for generations, in what by now should be a worker’s paradise and the envy of the world, Detroit is in shambles and going feral (link) as most residents and businesses of past decades have fled the city.

Expressing disbelief at the data, a major liberal union leader (but I repeat myself) lashed out at those who left: “This is a great city, with great, safe neighborhoods that have wonderful schools, with honest and efficient government, and with a highly skilled and hard-working labor force that any business would be lucky to have. That people have left here just shows you how stupid the average American is, to be incapable of recognizing this city for what it really is.” This is an unconfirmed report.

Writes Steven Malanga at City Journal in "Feral Detroit" (link):

Though some blame Detroit’s population losses on larger economic forces, economists Edward Glaeser and Andrei Shleifer argue in a groundbreaking paper that the city’s problems are mostly self-inflicted. (The paper, called “The Curley Effect,” gets its name from legendary Boston mayor James Curley, who favored Irish residents and pushed other groups out.) After winning election in 1973, Detroit’s first black mayor, Coleman Young, consolidated his power, driving white residents, who had voted against him, out of the city by withdrawing services from their neighborhoods. Eventually, Glaeser and Shleifer write, Detroit became “an overwhelmingly black city mired in poverty and social problems”—and shrinking fast.

Meanwhile, proving that stupidity is both contagious and mutually reinforcing, the recently-arrived Italians and the long-entrenched unions who now own Chrysler are actually boasting in TV commercials that their cars are made in Detroit (link) -- "Imported from Detroit" is the new tag line.  Demonstrably, the Italians have actually never been there.

More from Henry Payne at National Review Online (link).

(The photo is from the poignant photo essay at the blog Sweet Juniper, also linked above)

John M Greco

Related Post:
Chrysler Boasts that Its Cars Are Made by Detroit Union Workers. Yes, That Detroit, Those Workers.

Annals of Inanities -- Obama At War Edition

* On the way out of the door for yet another vacation, Obama the anti-war man and Nobel Peace Prize winner ordered the American military to attack the government of a sovereign nation in the midst of a civil war.  Despite having the largest and most powerful military in the world, and being the leader of the free world, a "senior administration official" said (link): “how it turns out is not on our shoulders.”  Jonah Goldberg (link): "It is bizarre beyond mortal ken the way Obama is trying to pretend that we are not leading this effort and that we are not responsible for how it ends. First of all, we run NATO, so handing this off to NATO is like GE handing off a project to a European subsidiary and then claiming it’s not their project."  Reports are that Obama and his senior advisers have been huddling for days trying to figure out how to blame all of this on George Bush.

* Although the American military has been attacking Libyan government forces and installations to protect the "rebels," apparently our military is not "officially" communicating with those it's acting to protect.  The New York Times reports (link): "American military officials have said there are no “official communications” with the rebels.... Contact with the rebels would reflect a direct American military intervention in the civil war of another country." So according to the Obama team, attacking militarily one side in a civil war is not "direct military intervention in the civil war."   Remember when Democrats thought Obama was the smart and truthful one?

* Obama has lost his own vice-president, Joe Biden, who one in reference to Obama's race said admiringly that Obama was "clean and articulate."  Biden said (link): “I want to make it clear, and I make it clear to the President, that if he takes this nation to war without Congressional approval, I will make it my business to impeach him. That’s a fact. That is a fact.”  Well Obama has done just that.  Now Biden said that when GW Bush was president, but what's the diff?  Biden is a man of principle and I'm sure he's working to impeach Obama right this very minute.

* To fool Joe Biden, Obama and his team are not calling hostile military action against a foreign government a "war".  It's a "kinetic military action" (link) or a "scope-limited action."  George Orwell, call your office.

* President Barack Obama speaking to American military men and women at the Jacksonville, Florida, Naval Air Station in October 2009 (link):  "I promise you this -- I will never rush the solemn decision of sending you into harm's way.  I won't risk your lives unless it is absolutely necessary."  So there we have it -- despite all appearances, our military intervention, excuse me, "kinetic action", in this Libyan civil war was not rushed and is "absolutely necessary."

* Where are the raging anti-war demonstrations throughout America?  Surely those protesters were anti-war and not just anti-Bush?  Surely they marched out of deeply-felt principle and not just anti-Bush fad and fashion?  Where have they all gone?  Gone to flowers everyone.

* Now Obama has outsourced the military command of American troops to the Canadians.  Mark Steyn, though, thinks he can do better (link):  "...as much as I like the idea of Canadian military commanders randomly invading Muslim nations, I feel the gig should have gone to a Mexican general. After all, the Administration pretty much insisted this is a job Americans won’t do."

John M Greco

Annals of Inanities -- Liberals Edition #1

* The group is affluent, well-educated, and overwhelmingly white -- ergo racist according to the calculus of some modern liberals (cf. Party, Tea).  But this time it's the National Public Radio audience (link) that must be racist.  How unexpected.

* Yet another (link) major Democrat is outed as a tax cheat.  This time it's Senator Claire McCaskill of Missouri (link).  Upon being caught, she says that her tax evasion makes her "sick to her stomach".  Oh sure, and if you believe that I have a bridge to sell you.  If you or I did this we'd be prosecuted, but if tax evasion by a prominent Democrat were a crime Obama would still be working to fill his cabinet.  Democrats vote for taxes, Republicans pay them.

* A Florida judge named Richard Nielsen rules that Islamic law, rather than Florida law, must be used to settle a legal dispute between two Florida Muslim groups (link).  Asked whether his ruling extends to honor killings and raping wives, the judge reportedly said: "What the hell, why not?  What so big about Florida law anyway -- it's hard even for me to understand.  This Muslim stuff is much simpler."

* A planned terrorist attack drill in Iowa features anti-illegal-immigration whites as the terrorists (link).  The world is awash in terrorism and other violence by radical Muslims, and in Iowa liberals want to make white anti-illegal-immigration foes the dangerous, evil ones. One Doug Reed, lead exercise planner, undoubtedly struggling to keep a straight face, said "the exercise is not intended to be political." 

John M Greco

Annals of Inanities -- Obama Edition #3

* A few weeks ago an American Immigration and Custom Enforcement agent in Mexico was killed by drug dealers.  Now we find out that our ICE agents in Mexico are unarmed by order of the Mexican government (link), and Obama is so OK with this he's sending 20 more agents in.  Obama requires Border Patrol agents to use bean bag bullets on our side of the border (link); perhaps our ICE agents in Mexico could at least use the same.

* Remember when Obama referred to the "57 states" in the American union, or the "Austrian" language.  If you're a liberal who gets his or her news only from the liberal media, you don't.  Fair-minded people know politicians, and the rest of us, sometimes misspeak, especially when tired.  Michele, Bachman, after one of those slip-ups, needed to defend herself and called out the liberal media from reporting hers but not any of Obama's.  That's why it's best to think of the liberal media as the mouthpiece of the Democrat party. 

* Michael Walsh at National Review Online envisions Obama's presidency as opera buffa, an art form "filled with characters like our 44th president: someone pretending to be something that — by character or temperament or work ethic or talent — he’s not. In the end, though, the mask always comes off — and sometimes, there are tears."  Obama Rex. 

* John Hinderaker of PowerLine blog argues that Obama, who has embraced the trappings of high office while eschewing the responsibilities of it, really aspires to be the king, as in Britain -- an adored demi-god without direct responsibility of governing:  Let's Make Obama King.    

John M Greco

Recent Reads of Note -- Political Edition

* Stanley Kurtz, author of the recent Radical-in-Chief, writes at The National Review about Obama's radicalism and why the word fits, contra Michael Medved's opinion: Contra Medved.

* Andy McCarthy writes at The National Review about the grand alliance between ultraliberals/leftists and radical Islamists -- the social compact, the general will, submission, and other folderol:  Jean-Jacques Jihad.

As a perfect illustration of McCarthy's thesis, and as if to immediately provide further evidence of this mutual support  -- what David Horowitz has called the Unholy Alliance --though certainly none is needed, a now former senior executive at uber-liberal National Public Radio, one Ronald Schiller, famously caught (link; link) recently on undercover video bemoaning Jewish Zionist control of the media to radical Muslims whose donations he was seeking, is, according to Wikipedia (link), Jewish, and, according to various internet comments, gay.  Gay Jews don't seem to fare well under the sharia of radical Islam, but then American liberalism's cultural self-loathing trumps all.

* Mark Steyn writes in The New Criterion on Western cultural suicide:  Dependence Day: "If I am pessimistic about the future of liberty, it is because I am pessimistic about the strength of the English-speaking nations, which have, in profound ways, surrendered to forces at odds with their inheritance."

John M Greco

Obama the Anti-War Candidate Starts Another War

Obama's been a busy guy.  He barely had time after an invigorating 18 holes to fill out his March Madness basketball brackets before rushing off to vacation in Brazil.  But while scurrying out the door he did take a moment to order the US military into yet another war against a Muslim country, our third at last count.  Supposedly a big factor was the urging of the Arab League, but that bunch of upright citizens of the World definitely do not have Obama's back (link).  Another war for oil, as the liberals would say?  I need to say it for them since they're not saying it now.  How many Americans might die for our intervention in a tribal civil war between bad guys and maybe, maybe not quite such bad guys?  [Addendum:  Per Andy McCarthy at National Review (link):  "[T]he Libyan “rebels” ... refer to their battle as “the jihad” — Islamic holy war .... and, of course, screaming, “Allahu Akbar!” as they fire their guns into the air."]  Why does everyone in the "Arab street" seem to hate Westerners in general and Americans in particular except when an air strike is needed against tribal enemies?  The only thing, the only thing, of value I thought Obama would bring is an end to the wars in Afghanistan and Iraq, and yet not only are we still there, he's doubled down in the former.  I certainly never expected him to attack another country, and yet now we're bombing and killing people in Libya. 

Obama received prior approval from the Muslim Arab League, but neither sought it nor received it from the US Congress, to launch an attack on country totally nonthreatening to the USA with no apparent national interest involved.  Obama the Senator, as anti-war candidate:  "The President does not have power under the Constitution to unilaterally authorize a military attack in a situation that does not involve stopping an actual or imminent threat to the nation." (link)

Well, I'm waiting for all the liberal condemnation of Obama the warmonger, starter of illegal hostilities, but I'm not holding my breath.  Bush with blood on his hands, Bush/Cheney the war criminals, BushHitler the baby killer.  Impeach Bush.  What about all the terrorists this will breed?  What about closing Gitmo, still open over two years into the age of Obama.  What about the fierce moral urgency of change? 

Or was it all just political?  Of course it was.

John M Greco   

Annals of Inanities -- Obama Edition 2

* Obama's State Department, run by one Hillary Clinton, is attacking (link) the US Military, headed by Commander-in-Chief Obama, for allegedly mistreating its prisoner Pfc. Bradley Manning, the soldier who allegedly leaked reams of secret, sensitive material to WikiLeaks.  Now the spokesman for the Obama/Clinton State Department is taking the fall (link).  Clinton and her minions keep forgetting that a Democrat is now president, not a Republican -- no need to fabricate and smear anymore.

* Everyone knows that the Social Security system is a pyramid scheme, where today's contributions from some people are used to pay today's benefits to others.  There is no Al Gore lockbox, there is no money set aside -- it's all a fiction.  And yet, and yet, the unserious Barack Obama's position was recently reaffirmed:  there is no problem because the trust fund, which we all know does not exist, is "solvent" until 2017.  This incessant effort to fool the foolable and the inattentive -- Charles Krauthammer deconstructs it here.

* Obama has just said that his administration is "encouraging offshore (oil) exploration and production" (link).  No sentient being could possibly believe an ounce of this.  Obama doesn't just subscribe to the Big Lie theory, he's an underwriter.

* Obama's buddy Attorney General Eric Holder, who recently referred to blacks as "his people" (link) in defending himself against serious charges of reverse racism, is now requiring the Dayton police department to lower its testing requirements so that more blacks can pass the test.  Why not just eliminate testing all together?  Why do policemen and other public servants need to know anything at all?

John M Greco

Recent Reads of Note -- Daniels & Steyn

* In the March 2011 New Criterion, a great journal of criticism, physician and author Anthony Daniels, one of my favorites who sometimes goes by Theodore Dalrymple, writes compellingly of an experiment of his, motivated by a regret of formal training in literature, in which he somewhat randomly selected two slim books of WWII-era poetry, by two poets unknown to him and seemingly most anyone else, from a dusty shelf in an old used bookshop to see if he could discern whether the poetry was any good.  He could and, by chance, it was.  On the Doorstep of Valhalla.   Four fragments I will return to enjoy:

One of my many regrets—and there comes a time in life when regret is almost inseparable from memory itself—is that I received no formal literary education, at least not after the age of sixteen....  Even now, nearly half a century later, as I walk through the woods around my house in France and the sunlight comes variegated through the leafy canopy, I cannot but think of the poem that begins: “Glory be to God for dappled things—/ For skies of couple-colour as a brinded cow.”

To say that the verse of both men has been forgotten is not to court contradiction....  I felt slightly nervous at being moved by both, as if I lacked the discrimination to realize that they were rightly consigned to the literary equivalent of Trotsky’s dustbin of history, in other words to the shelves of the unsaleable in a shop that was destined to close when the slender resources of its new owner ran out.

It is difficult not to see in the contrast between the two poets the caesura in European culture, or rather sensibility, caused by the First World War; Elwes could not see that his generation was sacrificed for nothing; Monahan could see nothing else. Oddly enough, I find myself able to sympathize on both sides of the caesura, with both of Elwes and of Monahan—nostalgic for the past, I am immersed in the modern.

Just as Elwes saw the war in clear moral terms as Monahan did not, so too he saw love as lasting and permanent, as Monahan did not. It is as if enchantment and disenchantment were lenses through which the two of them looked at the world, each lens no doubt with its power of distortion, but each also capable of revealing truths that the other cannot.

* The inimitable Mark Steyn writes trenchantly, sarcastically, and somewhat forlornly about the recent Islamist terrorist attack on American servicemen in Germany, citing Western fecklessness and unrelenting demographic arithmetic in Arid Uka’s Gratitude.  Excerpt: 

According to Bismarck’s best-known maxim on Europe’s most troublesome region, the Balkans are not worth the bones of a single Pomeranian grenadier. Americans could be forgiven for harboring similar sentiments after the murder of two U.S. airmen in Germany by a Kosovar Muslim....  Remember Kosovo? Me neither. But it was big at the time, launched by Bill Clinton....  And the Left didn’t mind at all — because, for a modern Western nation, war is only legitimate if you have no conceivable national interest in whatever war you’re waging....  A decade on.... a young airport employee is so grateful for what America did for his people that he guns down U.S. servicemen while yelling “Allahu akbar!”

John M Greco

Obama Gets Tough on Leakers of His Team's Secrets. Surprise!

Obama has been coming down very hard on federal workers who leak government secrets to the press.  But remember when liberals said leaking was one of the highest forms of patriotism?  Apparently only if it might embarrass Republicans.

From the liberal website Politico (link):

The Obama administration, which famously pledged to be the most transparent in American history, is pursuing an unexpectedly aggressive legal offensive against federal workers who leak secret information to expose wrongdoing, highlight national security threats or pursue a personal agenda....  That’s a sharp break from recent history, when the U.S. government brought such cases on three occasions in roughly 40 years....  But legal experts and good-government advocates say the hard-line approach to leaks has a chilling effect on whistleblowers, who fear harsh legal reprisals if they dare to speak up. 

GW Bush was derelict in his failure to stifle leakers of national security secrets, intimidated, I think, by the liberal media elites.  Now here's one Bush policy Obama has actually changed.  Whistleblowing on Democrats can't be tolerated.

John M Greco

Annals of Inanities -- Obama Edition 1

* Recently the Obama-appointed Attorney General of the United States, one Eric Holder, who happens to be black, was before a US House committee testifying on his refusal to prosecute the perpetrators in the well-documented black-on-white Philadelphia voter intimidation case.  In justifying his actions, he referred to blacks as "his people." (link; link; link)  Apparently whites and Asians are not "the people" of the Attorney General of the United States.  That post-racial Obama stuff has always been smoke and mirrors.  But my liberal friends assure me that Obama loves America and is a great patriot, so I feel better.

* Obama lieutenant Katherine Sibelius, the head of HHS who runs Medicare and is one of the point persons pushing Obamacare, has finally admitted that the Obama team's figures on the purported financial savings from their Obamacare and Medicare "reforms" are fake (link) because of double-counted "savings".   Republican Rep. Pitts said:  “The same dollar can’t be used twice [in counting savings].  This is the largest of the many budget gimmicks Democrats used to claim Obamacare would reduce the deficit.”  This was obvious from the very start but Obama and his minions have kept lying about it to fool the foolable and the inattentive. But my liberal friends assure me that Obama loves America and is a great patriot, so I feel better.

* When a US Border Patrol agent was shot and killed last year in an altercation with armed illegals, apparently there was speculation on the internet that BP agents are required by the Obama Administration to first use bean bag rounds (whatever those are) when force is necessary against illegals with real guns.  At the time, Obama's crack Homeland Security team dismissed such (link) as "increasingly bizarre internet-fueled rumors".  Well, now the Obama team finally admits (link) that indeed our agents fired bean bag bullets while the bad guys fired real ones.  Good grief -- it's as if Obama and his acolyte Napolitano would rather our agents err on the side of getting killed rather than risk harming hostile illegal aliens armed with real guns and real bullets.  But my liberal friends assure me that Obama loves America and is a great American patriot, so I feel better.

* Obama preached incessantly in his campaign about the "fierce moral urgency" to closing the Gitmo prison for Muslim terrorists and signed an order hours after becoming president to effect just that.  Though his acolytes still hope for that change, not only is Gitmo still open two years later but now Obama's appointee Eric Holder of Justice (see above) apparently feels that Muslim terrorists are also "his people" because he's keeping them around in Gitmo another year or two (link).  And our troops are still in Iraq and Afghanistan -- another signature Obama promise turned to dust.  But my liberal friends assure me that Obama loves America and is a great American patriot, so I feel better.

* A German-born Kosovo Muslim, feeling so indebted to the American military for protecting his and other Kosovo Muslim families against the Christian Serbs a few years back, showed his gratitude by opening fire on American troops in Germany, no doubt presuming they were either Christians or Jews, shouting the de rigueur "God is Great" in Arabic of which we are now so familiar.  He would have killed more but his gun malfunctioned, which is why so many Muslim terrorists prefer beheadings with swords -- less prone to jamming.  The American Commander-in-Chief, who grew up in some unique family cultural blend of Islamic-tinged atheistic communism, sort of a red diaper baby with a Muslim motif, announced he was "saddened" by the "tragic event."  Just as with the Ft. Hood massacre by another jihadist, the words "Islamic" and "terrorist" are not part of Obama's lexicon.  The great Mark Steyn takes him down here (sample: "As any Homeland Security official can tell you, “Allahu akbar” is Arabic for “Nothing to see here.”).  But my liberal friends assure me that Obama loves America and is a great American patriot, so I feel better.

John M Greco  

Investing Solo – Preferred Closed End Funds & JPS

In the last couple of months I’ve written a few posts here (link) about how I’ve been increasing the allocation to floating rate securities in my debt portfolio in anticipation of rising interest rates -- floating rate senior loans, both an unleveraged mutual fund and leveraged closed end funds, augmented with moderate positions in individual floating rate equity preferred stocks and the variable rate bond CEF GFY. My FR exposure is now about 10% of my debt portfolio.

However, since some market mavens think that the sluggish economic recovery will keep the Fed’s interest rates low for some time, perhaps years, not only am I holding firm on most of my fixed rate debt (my last post on the Pimco CEFs managed by Bill Gross is here) I’ve actually added to it a bit in the past couple of weeks. I’d like to think this approach resembles more a barbell than a dumbbell.

What continues to attract me are so-called preferred securities, a motley crew that consists of both traditional equity preferred stocks and the somewhat newer so-called hybrid preferreds, which are actually bonds, either de jure (exchange-traded bonds) or de facto (trust preferreds and trust certificates). The attraction is their high yield, pure and simple. The hybrid preferreds, what I prefer to call exchange-traded debt, are mostly fully taxable but “provide the highest yields of any investment grade fixed income security,” according to preferred fund manager Donald Crumrine in a recent interview (link) published by the Wall Street Transcript. Moreover, the equity preferreds are taxed at the qualified dividend rate, currently 15%, as are also trust preferreds from foreign banks in what appears to me to be a strange quirk in the tax laws.

There are some newer ETFs in preferreds but I prefer the CEFs for the enhanced yields that leverage provides. I figure if I’m going to take the interest rate risk of preferreds why not double down and add some leverage to juice the yields. There are three families of preferred CEFs – Nuveen, John Hancock, and Flaherty & Crumrine, each with four offerings. At my recent look at the metrics of all of them, which I array in table form, I once again find the Nuveen funds most attractive in the metrics I value, which include a high ratio of net investment income to distribution, positive undistributed net investment income worth at least a month’s distribution, sizeable discount to net asset value, moderate leverage, no destructive return of capital, and good average portfolio credit. At this point in time, I like the Nuveen trio of JTP, JPS, and JHP best, and have recently found that JPS, which happens to be the largest of the three, has had the most attractive combination of size, discount, and distribution, so it’s the one I’ve been adding to of late.

Since the relative attractiveness of the CEFs can vary over short periods of time, especially since the discount can change daily, when I decide to add to a position I might find one CEF relatively more attractive than the others on that day. In this Nuveen family, I also hold JTP.

As of yesterday, JPS sports an annualized distribution of 8.1% trading at an 8.0% discount to net asset value.  This discount is well below the 5-year average, usually an attractive feature when other investment indicators are favorable.  Nuveen represents at its web site that about 37% of the JPS holdings are equity preferreds, which are taxed at the 15% rate. My back-of-the-envelope calculation is that this translates to a fully taxable equivalent yield of about 9.0%. I’ve got moderate credit risk, more so on the equity preferreds, significant interest rate risk, and the looming phase-out of bank trust preferreds (which will offer capital gains to the extent that the CEFs’ cost bases are below par but reduce the investable universe of hybrid preferreds). But for the high yield, I’m staying modestly invested in this space with some alpha money.

I’m an individual investor with no background in finance or securities, writing things down to help organize and clarify my thinking. Of course, nothing I say constitutes investment advice of any kind – merely an account of my personal observations and decisions. My core portfolio is a conservative and diversified mix of equity and debt mutual funds, ETFs, and some closed-end funds (CEFs) across investment styles, management firms, and accounts, and I invest a relatively small amount (about 10%) somewhat more aggressively in the perhaps ultimately futile pursuit of alpha.

Mike Parenti

Wisconsin Public Unions vs Taxpayers -- Dispatches from the Front

Reports from the front on the battle in Wisconsin between over-compensated public union workers and the over-extended taxpayers who foot the bill:

Howler.  A New York Times article (link) proclaims that a new Rasmussen poll on the dispute may be biased (presumably against the union side).  Yes, that New York Times, the apotheosis of bias, accusing someone else of it.  Well, I guess if anyone can recognize tripe it would be a tripe peddler, although Rasmussen is about the most trusted name in polling.  The only dupes likely to relish this serving of offal are the dwindling number of readers the New York Times has left.

The difference between lightning and a lightning bug.  Supporters of the union side are want to blur any distinction (link) between public and private unions -- hence the railing against "corporate power" and "big money." In fact, the differences between public and private are fundamental, significant, and in the Wisconsin dispute, dispositive (as the lawyers say).

Hmmm -- So that's why all those protesting teachers don't understand that they're grossly over-compensated:  "Only 39% of the 8th graders in Wisconsin public schools are proficient or better in mathematics, according to the U.S. Department of Education, despite the fact that Wisconsin spends more per pupil in its public schools than any other state in the Midwest." (link)

Uh-oh.  The unions have lost liberal Richard Cohen writing in the liberal Washington Post (link):  "It was one thing when unions went after giant corporations run by guys who played golf at restricted clubs. But when it comes to government workers, we are the boss and we pay the bill. To quote what Sam Spade told the woman he loved in the "The Maltese Falcon," "I won't play the sap for you." When it comes to public-sector unions, my sentiments exactly."

Welcome to the future -- a preview of medical care if the Democrats have their way:  At least three faculty physicians from the University of Wisconsin Family Medicine Department are filmed proudly handing out confirmation of illness statements to union protesters so they could obtain excused absences from their teaching duties, all proving too much even for a big liberal writing in the liberal Atlantic (link).  Hey, who says we need to do a careful interview and physical examination of the patient to make a diagnosis?  That old school stuff discriminates against doctors who can't do physical exams, or don't know how, to say nothing about how needing a doctor's statement discriminates against those who aren't actually sick.  Medical ethics is a retro-capitalist construct.  No doubt the UW Dept of Family Medicine is a hotbed of support for Obamacare. 

So that's why our school maintainence bill is so high.  Wisconsin unionized teachers drop their garbage where they stand (link).  Overheard by a mind reader: "hell, cleaning up after myself isn't in my union job description, and after all, I'm creating jobs for unionized clean up workers." 

But didn't Obama say all that violent rhetoric was off limits?  So much for the liberals' new age of civility -- (link).

Who are these guys?  Unions to bus in outside agitators to join Wisconsin protests (link).  Boy, that side really knows how to community organize.
 
John M Greco 

Related Post:
Wisconsin = Ground Zero in the Escalating Struggle Between Hard-Pressed Taxpayers & Coddled Public Workers

Reflections on the Devolution in Chicago

The Wall Street Journal reported (link) this past week on some new data from the U.S. Census Bureau:

A larger-than-expected exodus over the past 10 years reduced the population of Chicago to a level not seen in nearly a century. The U.S. Census Bureau reported … that during the decade ended in 2010, Chicago's population fell 6.9% … [to] fewer than [was] reported back in 1920…. [T]he recent recession accelerated a migration both to the metropolitan area's farthest suburbs and to the Southern U.S…. The influx of residents to outlying areas could … —particularly minorities—could make those regions more politically diverse. For instance, said University of New Hampshire demographer Kenneth Johnson, "DuPage County could become less Republican."

Chicago’s retiring Mayor Daley, a Democrat and the longest serving mayor in city history, having just surpassed his father in that regard, has been popular not so much because of what his is but rather because of what he is not – a worse alternative. One must not conflate popularity with cost-effectiveness.

Despite the Daley Democrats the steady migration to the suburbs and the South continues. Residents are voting with their feet in search of safer neighborhoods, cheaper and more honest government, better schools, more reliable services, and, of course, better job prospects in areas more friendly to the businesses that maintain and create them.

And to what new lands are these residents fleeing? To towns and states where the policies and values of Republican and conservative voters predominate. But in what should be fodder for a million PhD theses, in a triumph of will over experience, of desire over judgement, many of these refugees from failed Democrat polities don’t miss a beat and continue voting for Democrats from their new homes, against the very Republicans who made their new neighborhoods worth moving for. Validating the principle that you can fool some of the people all of the time, they continue to vote for Democrats who promise them more things with less accountability.

The foundation of a democracy rests on the wisdom of its people, and in the wisdom of such citizens lies the hope of our Republic.

John M Greco

Related post:
Democrat Voters Migrate to Republican Areas For Better Jobs, Safer Neighborhoods, and Better Services, But Then Still Vote For Democrats; Go Figure

Wisconsin = Ground Zero in the Escalating Struggle Between Hard-Pressed Taxpayers & Coddled Public Workers

Wisconsin has become ground zero in the escalating struggle between private-sector taxpayers and the government workers who live large off their labors.

Study after study in recent years has shown that public sector workers not only have higher job-specific wages than their private counter-parts but have much richer benefit packages as well, including pensions that private sector taxpayers can only dream about.

States and local governments are struggling mightily in the wake of the Great Recession, and some are functionally bankrupt. The largest single driver of this crisis is well known -- wages and benefits to public workers, who are usually represented by a union.

The new Republican governor of Wisconsin, Scott Walker, supported by a Republican majority in both houses of the state legislature, is finally standing up for the people who actually foot the bill for the largesse extended to government employees. He is proposing that benefits for state workers begin to come in line with those of the private workers who pay the bills.

Most private workers, the taxpayers, pay a big piece of their health care insurance costs, while I read that Wisconsin public workers, not unlike their counterparts across the country, pay little to nothing for theirs. Karl Rove states on the Hannity show that in Wisconsin “virtually every state employee pays zero” into his/her retirement plan. Meanwhile, in Illinois, a state with worse finances than Wisconsin, the number of retired public workers with pensions over $100k per year is skyrocketing. This is grossly unfair and unsustainable.

Unionized teachers are now mobbing and agitating in Madison, the state capitol, replete with ugly, violent imagery and revolting disrespect for the environment (Ann Althouse posts:  link; link; link).

President Obama, now lying (link) in speeches about cuts in his new federal budget plan, is calling this attempt by Wisconsin taxpayers to save their state from destruction “an assault on the unions.” In Illinois, Democrat Gov. Pat Quinn, who made his name posing as a taxpayer advocate (falsely, in retrospect), is proposing, for the state with arguably the worst finances in the country, I kid you not, a budget for the next fiscal year with increased spending and borrowing (link), even after a recent 67% hike in the personal income tax rate. Denial ain’t just a river in Egypt.

This struggle needs to come to a head, and the sooner the better for our country. It can’t go on any longer. Either the taxpayers who foot the bill or the public workers who live off their labors will be in control. With one we recover and go forward, with one we devolve into bankruptcy and chaos.

John M Greco

Related Post:
Wisconsin Public Unions vs Taxpayers -- Dispatches from the Front

Annals of Government-Run Enterprises: Why Is This Train Late?

Accurate transcription of an automated announcement the other day on a Chicago Metropolitan Rail Authority commuter train on the way to the Loop:

“This train is operating approximately 30 minutes late due to late arrival of equipment due to earlier delays.”

I kid you not.

And some of us want these people run our health care system.

2/13/11 -- Addendum:  Lest anyone thinks this message was a one-off, in fact it is one in the railroad's standard pre-prepared repertory that I have heard many times over the years. 

2/13/11 -- Addendum 2:  From the Associated Press (link):  "Despite plenty of warning that last week's blizzard was on its way, officials of Metra say the Chicago-area commuter train system wasn't prepared to deal with the storm. They also told the Chicago Tribune on Friday that they didn't get the word out about reduced services and long delays."

As Glenn Reynolds of Instapundit would say -- We're in the very best of hands.

John M Greco