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Socialism’s economic effects depend on your perspective

Posted in Economy, Taxes, Transparency on March 11, 2011| 2 Comments »

By John Sachs
Guest Columnist

Is socialism good or bad? Let me give you something to think about. My answer to that question is this: it depends on who benefits from it.

There are those folks who say that socialism in any form is always bad because it is communism in its infancy.

Next, they say that almost all government programs should be privatized and administered by and for the benefit of a capitalistic, free enterprise system rather than for the general population.

Next, they say that any government regulation of free markets serves only to advance communism and that it restricts the effectiveness of any benefits to be derived from unfettered capitalism. Now hold on to that thought as I’m coming back to it.

Do you think that these folks really mean that all socialism is bad and even evil? Do you think that they really want government totally out of the free market system? The answer is a resounding NO. Then when do these same pure free enterprise advocates find themselves solidly in favor of socialism? When do they cry out FOR rather than against “socialist” programs?

We only have to look back to 2008 and the $700 billion dollar bailout of Wall Street to see a perfect example of free enterprise advocates praising socialism. When we 300 million middle-class American citizens bailed out the greedy, incompetent, scions of Wall Street, none of them complained of socialism. Certainly not! When the masses of taxpayers were rescuing the financial industry from crushing losses created by the free enterprise system, that was just fine and dandy. Socialism, for that purpose worked perfectly—for the super wealthy.

Skip forward only one year to 2009 when Wall Street had been restored to comparatively good health by the massive infusion of government capital. What did Wall Street say and do then? They said for the government to get out of their way and let them manage their industry as they saw fit. In addition, (are you ready for this?) they paid themselves billions in bonuses with the taxpayer rescue funds as though they had done something to deserve it. That defies not only logic, but also defies understanding how the American public —Republicans, Democrats, and Independents alike– could stand aside and allow this to happen.

How could 99% of American taxpayers accept this? How could our elected representatives be allowed to do this to us so they can get personal re-election donations from the super wealthy? Why haven’t we en mass recalled or impeached or better yet imprisoned (in one of their own privatized hellhole prisons) each and every official responsible for allowing this to happen? It just defies logic and understanding. Yet the unthinking American public buys into the lies we are fed as to why we should absorb capitalism’s losses and applaud those officials who caused it. To socialize Wall Street’s losses but privatize their gains just won’t cut it with me. Does it with you?

If Wall Street is too far away for you to relate to, look at Farmerville. $50 million rightfully belonging to Louisiana taxpayers went to bail out the private enterprise poultry plant there. And another $11 million in federal aid bailed out the chicken production folks. If this isn’t socialism, what is it?

The next time you hear or mistakenly think that socialism or socialistic programs or government-run programs are bad, remember the examples mentioned above. Your view of socialism as to whether it’s good or evil really depends on who benefits. That sword cuts both ways. Both the goose and the gander must be allowed or denied its benefits equally.

Do you think this topic is important? If not, then you had better ask yourself why the people of Tunisia, Libya , Egypt, Yemen, Bahrain, Iran, etc. are demanding back what is rightfully theirs but was stolen by their respective dictators and their top1% super-wealthy supporters. If by the use of purchased political favoritism and deceit, the super-wealthy top 1% of Americans continue to gain ownership of the assets rightfully belonging to the other 99% of us, then we in America are heading down the path that Egypt took.

In case you are wondering how close you are from being included in the top 1% super-wealthy in our country, understand If you don’t earn an average $2,700 per hour or $5.4 million per year, you aren’t there yet. Thus, when the federal government or a state governor and legislature sell national or state assets or privatize almost all public services, you are being robbed while at the same time you are paying for the “privilege.”

Join in demanding a stop to the privatizing of those assets that belong to you and the others of us in the 99% category.

Hurry! Congress is now in session and the Louisiana legislature convenes April 25.

So are you against socialism? Is it inherently evil? Funny thing isn’t it, that the answer is not a resounding YES. Your answer must depend upon whether or not YOU benefit. If your government gives you special benefits denied to the rest of us, then stop calling the government programs that help the rest of us “socialistic” or you are a hypocrite. The only solution is for you to refuse to accept any assistance of any kind from your local, state and federal governments. In my book, you’ll be an okay kind of guy. But a hypocrite? Not acceptable. Not at all.

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Education MFP funding is elaborate legislative shell game

Posted in BESE, Education, House, Senate, Layoffs, Legislature, Legislators, Politicians, Revenue, Taxes, Transparency on March 8, 2011| 1 Comment »

Public school teachers at the bottom of the seniority ladder are being called in by their principals in parish school systems across the state to hear the bad news: because of budgetary cutbacks, their contracts will not be renewed next school year.

It’s bad enough when State Superintendent of Education Paul Pastorek insists that poor grades are the fault of the teachers and schools, not poverty or the lack of public support of education. The mindset in Pastorek’s office is not more funding, but more charter schools.

Teacher layoffs are something that should never happen in any society that pretends to make education a priority. But it is happening right now so perhaps we should take a quick refresher course in Louisiana history or civics or what some might prefer to call the Big Lie.

Think back for a moment to a campaign that took place 21 years ago. It was 1990 and Louisianans were being told that legalized gaming (that’s gaming, not gambling; gaming was the nice way to say gambling which, of course, was illegal and carried bad connotations) was the panacea for all the state’s fiscal problems.

We once thought the same thing about oil and gas but that myth was exploded in the eighties when the oil patches dried up with six-dollar-a-barrel oil (remember those days?). So legislators began looking around for other sources of revenue. Never mind computer technology, Fortune 500 businesses, or some other livelihoods with an emphasis on education and some modicum of intelligence. No, it had to be something that could be fed to the masses, something that would be in keeping with Louisiana’s third-world, banana republic image.

Presto! The idea of legalized gambling, er, gaming was born and the politicians nurtured the concept and they were oh, so slick in the way they did it. Casino gambling was too much to throw at their constituents from the get-go, so first came the Louisiana Lottery, approved in 1990 with the first scratch-off games going on sale in 1991. Skeptics immediately dubbed the Lottery as a tax for those who were not good at math.

The legislature passed riverboat gambling in 1991 once the Lottery was up and running and the following year approved a bill to allow New Orleans to build a land-based casino.

And just how did lawmakers sell the hard-nosed Baptists of north Louisiana on gambling? Why, education, of course. In December of 1986, The Louisiana Association of Educators agreed to support and work for the lottery, provided at least 75 percent of the proceeds are dedicated to education, a stipulation to which Gov. Edwin Edwards quickly agreed. That number now hovers somewhere around 35 percent, less than half of what was originally sought.

Politicians from the governor all the way down to local school board members were busy touting the financial windfall for education that was sure to come from gaming revenue. After all, hadn’t the Support Education in Louisiana First Fund been a good thing for state education?

The Support Education in Louisiana First Fund had its origins in September 1986 with a proposed amendment that would dedicate about $540 million from oil and gas leasing production in the outer continental shelf lands in the Gulf of Mexico. Known as the 8(g) fund, it has pumped more than $500 million into the state’s general fund for education since 1986. Or has it? In 2010, the Louisiana Legislature allocated $109.1 million in 8(g) funds to the Minimum Foundation Program (MFP) to fund public education in Louisiana. Or did it?

Since its inception, the Louisiana Lottery has transferred almost $2.3 billion to the state treasury but it wasn’t until 2003 that the legislature got around to passing a bill calling for a constitutional amendment dedicating lottery proceeds to the MFP. That law became effective on July 1, 2004. Last year, the legislature allocated $137.4 million in State Lottery proceeds to the MFP. Or did it?

And then there’s the $10 billion Education Jobs Fund passed by Congress last year. Also known as EduJobs, Louisiana’s share was $147 million and was supposed to be added to the MFP. But was it? Remember, this is Louisiana.

Even as many of the state’s local school boards had already factored their share of that $147 million into their budgets, Gov. Bobby Jindal on Nov. 11 announced plans to redirect the money. Just that quickly, at the whim of a “reform” politician, it was gone.

It turns out that the Support Education in Louisiana First Fund, the State Lottery proceeds allocated to education in Louisiana, and the EduJobs fund are nothing but part of an elaborate shell game and skullduggery, the political equivalent of a stage magician’s misdirection tactic. Smoke and mirrors.

Instead of allocating the full $3.3 billion to the MFP from the state’s General Fund as it had before the existence of 8(g), the State Lottery, or EduJobs funds and then adding those allocations to produce the education windfall Louisiana voters had expected, they were first subtracted from the General Fund. Only then were the combined $393.5 million in 8(g) funds, State Lottery proceeds, and EduJobs funding added back to the legislative appropriation which by that time, had shrunk to less than $3.1 billion.

The net gain to education from 8(g), EduJobs, and the lottery?

Zero. It was all a big con. Mission accomplished. Politicians 3, Louisiana 0.

So now, after the 2010 legislature gave top priority to pet projects, appropriating more than $500 million on non-governmental organizations (NGOs) such as councils on aging, golf courses, tennis courts, and community centers, and projects that should have been financed by local governments, the state has run out of money and teachers are being laid off.

And instead of budget cuts, Superintendent of Education Paul Pastorek sees the problem as bad teachers and failing schools. The more things change, the more they stay the same.

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Jindal administration in lock-step with national GOP privatization addiction

Posted in Boards, Campaign Contributions, Commissions, Governor's Office, House, Senate, Legislature, Legislators, OGB, Office of Group Benefits, ORM, Office of Risk Management, Prison, Privatization, RFP, Request for Proposals, Taxes, Transparency on March 1, 2011| 3 Comments »

Could it be mere coincidence that the word privatize sounds a lot like privateer?

Remember the clamor to privatize Social Security? Advocates wanted Americans to be allowed to control their own retirement money by investing it in the stock market. To many, it seemed like a good idea at the time.

Fortunately, calmer heads prevailed and all the privatization rhetoric quieted, its disappearance pretty much coinciding with the collapse of several Wall Street investment banking firms and the subsequent trillion-dollar congressional bailout. Millions of Americans saw their 401k funds evaporate. Suddenly, social security privatization didn’t seem like such a hot idea.

Despite that, Gov. Bobby Jindal espouses what he considers a panacea to the state’s fiscal woes: privatization. Even if state property must be sold and the fate of thousands of state workers, along with their retirement and health benefits, are thrown into jeopardy, privatize. In that regard, he is in lock-step with Republican governors all over the U.S.

The answer to every fiscal ill that beleaguers the state is privatization, according to Jindal. Sometimes privatization can even extend into the already private sector, especially if state help for private enterprise through Jindal’s economic development air program happens to benefit campaign contributors.

LaShip, owned by Gary Chouest, was the direct beneficiary of Jindal’s $10 million investment in state funds for expansions to the Port of Terrebonne in 2008. Chouest, his businesses, which also include Chouest Offshore and C-Logistics, and his family members made a minimum of 18 campaign contributions to Jindal totaling $85,000. The funds came from a $1.1 billion state surplus. Ironic, given that the state today is faced with a $1.6 billion deficit.

Then, of course, there is the infamous chicken plant in Union Parish.

When Pilgrim’s Pride decided to close its plant in Farmerville, Jindal scurried to find a buyer for Pilgrim founder Lonnie “Bo” Pilgrim. California-based Foster Farms eventually purchased the plant after the state put up $50 million. Lonnie Pilgrim and Foster Farms both contributed generously to Jindal’s campaign.

Anyone who has followed Jindal should not be surprised. More than 200 key Jindal appointees combined to contribute more than $784,000 to his campaign.

Coincidence, says Jindal Press Secretary Kyle Plotkin who added that those contributors supported Jindal’s plans for reforming Louisiana and for improving the state’s image.

Nor does Jindal consider his repeal of the Stelly Plan in 2008 to be detrimental to the state’s financial well-being even though experts said the action would create a $350 million revenue loss in the first year, 2009. The Stelly Plan was approved by a majority of Louisiana voters but Jindal repealed it, saying his action would save single income tax filers as much as $500 a year and joint filers $1,000. That sounded great until one peeled back the layers and found that the $500 savings would be realized only by single filers making as much as $90,000 a year and to save $1,000, joint filers would have to make more than $150,000 per year.

Louisiana’s median household income was $43,635 in 2010.

It was little more than a year ago, in January 2010, that then-Commissioner of Administration Angelé Davis released the highlights of the administration’s “streamlining measures implementation plan.” Among those highlights were a 10 percent reduction in the numbers of cars in the state’s automobile fleet, sale of unneeded state property, better contractor oversight, and the establishment of a “Privatization and Outsourcing Unit” within the Division of Administration (DOA) “to serve as a resource for all departments and agencies for identifying and implementing appropriate privatization and outsourcing initiatives.”

To that end, the report said a Request for Proposals (RFP) had already been issued by the Office of Risk Management (ORM) “to evaluate the potential cost savings and/or service improvements with outsourcing the claims management and loss prevention services for all lines of coverage to a private company.”

The privatization of ORM was, in fact, accomplished when Mandeville-based F.A. Richard and Associates (FARA) was awarded the contract to take over operations of the agency, beginning with its Workers Compensation unit. The phased-in takeover is scheduled to be complete in 2013 at a cost of $68 million under terms of FARA’s contract with the state.

Proposals were taken on the privatization of at least one other agency but none of the proposals were attractive enough to gain administration approval.

No matter. Even without waiting to see if the privatization of ORM proves to be a wise move, Jindal is plunging ahead in his efforts to privatize other agencies, including state prison facilities, the Office of Group Benefits (OGB), and, if you watch what’s been going on with charter schools, public education.

As was the case of ORM, the privatization of any state agency would require the concurrence of the State Legislature. With recent party switches by several legislatures, Jindal now enjoys a Republican majority in both the House and Senate.

Privatization has already been tried once with less than satisfactory results.

OGB, beginning on July 1, 2003 offered state employees the option of selecting a Managed Care Option (MCO) administered by FARA, the same firm that is in the process of taking over ORM. A state audit later revealed that FARA was paid $8.6 million more than its $20 million limit, a 43 percent cost overrun.

OGB has since terminated its contract with FARA.

State Sen. Butch Gautreaux (D-Morgan City) has gone on record as opposing the privatization of OGB.

“I am very concerned about the governor’s efforts to sell off OGB,” Gautreaux said in an email. “I sit on the (OGB) board and attend the meetings. We’ve developed a reserve of over $500 million and again the governor is looking at raiding those funds for short term and recurring expenses. This will be a catastrophic move,” he said.

The privatization of state prisons also is also a matter of concern.

DOA recently published a request for information on the privatization of state correctional facilities in Allen and Winn parishes. Both facilities, while state-owned, are presently managed by private firms from Nashville, TN., and Boca Raton, FL.

Figures obtained from DOA show that it presently costs the state about $17.5 million per year to pay the two firms to operate the facilities in Allen and Winn. Avoyelles Correctional Center, which was built from the same architectural plans as those in Winn and Allen and which is state-operated, presently costs about $26 million per year.

The obvious questions then become how can a private company in business to make a profit do so without charging a higher per diem and how can the private companies operate Winn and Allen at one-third less cost than the state spends to run Avoyelles?

Simply put, the private firms pay their employees much less than the state pays its corrections officers. That alone is a major cause for concern among employees of facilities run by the state that might be privatized sometime down the road.

Private firms also offer less in the way of rehabilitation and educational programs. Basically, they operate on the concept of lock and feed. Moreover, because the prisoners will still be the state’s responsibility, the state would continue to bear the cost of prisoners’ medical care. Tough-on-crime types might question the need of rehabilitation and educational programs, being of the “lock-‘em-up-and-throw-away-the-key mindset but medical care can’t be denied.

That might be good for the hard-liners but that philosophy wouldn’t seem to do much to discourage repeat offenders and that flies in the face of Jindal’s highly-touted press release a couple of weeks ago when he boasted that the state’s recidivism rate for first- and second-year prisoners dropped by 33 percent under his administration. It’s the moral equivalent of Jindal’s having his cake and eating it, too.
Privatization necessarily goes against the grain of his stated objective of assimilating prisoners back into society through education and occupational training. He can’t privatize and expect lower recidivism rates, too.

Projecting the current rate of $31.51 per-day per-prisoner now paid parish sheriffs to house state prisoners over the 20-year contract sought by the Department of Public Safety and Corrections, the state would pay a private firm upwards of $700 million. Jindal appears ready to trade that obligation for $66 million in up-front cash sought from the sale of the Allen and Winn facilities.

That $700 million is roughly the same amount the state would pay if it continued to pay the two private firms to operate the facilities. But at least the state would still own the facilities.

But there remains one other factor to toss into the equation that no one has talked about.

While the state is paying $31.51 per day to house its prisoners in the local jails, the federal government is paying upwards of $50 per day to house illegal immigrants.

Given the choice of earning an extra $18.49 per day, a 58.7 percent bump, a lot of sheriffs will opt for the economic consideration of tossing out the state prisoners in favor of dealing with the feds. Where would that leave the state if it has no facilities of its own?

There’s no reason to think that a private firm, once it purchases the state facilities, would not do the same thing when its contract with the state comes up for renewal and the state would have no choice but to acquiesce.

Jindal has also mentioned the possibility of selling several state buildings—buildings that, ironically, were constructed less than a decade ago in an effort to get state offices out of paying rent on privately-owned office space—and of drawing on future State Lottery proceeds.

That would put the state in the position of paying for the buildings twice—all for the sake of obtaining one-time revenue for recurring expenses, according to House Appropriations Committee Chairman Jim Fannin (D-Jonesboro). “We would still have to pay off the mortgage on the buildings while we paid rent to the new owners,” he said.

Privatization has become Jindal’s addiction and he is acting like a desperate street junkie willing to do just about anything to get a quick fix.

And as with the case of all addicts, that can be a dead-end street.

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Louisiana Voice introduces Jindal Bingo

Posted in Civil Service, Education, Ethics, Governor's Office, OGB, Office of Group Benefits, Privatization, Taxes, Transparency, Vitter on February 17, 2011| 1 Comment »

Okay, readers, LouisianaVoice is introducing a new game for everyone to play. It’s called JINDAL BINGO.

You play it just like you play regular bingo except instead of letters and numbers, Jindal catch-phrases will be called out and when you have a square that is labeled with the catch-phrase that is called, you cover it with a kernel of pure corn. The first person to complete a vertical, horizontal, or diagonal line with five straight kernels is the winner. The prize, we’re sorry to say, is another four years of Jindalisms.

Okay, get your cards ready and let’s play:

We’re in the state 90% of the time

Transparency

Stop whining

I have the job I want

Do more with less

Will be forthcoming

Veterans’ medals

A great idea!

Privatize

Three things:

Leadership and Crisis

Absolutely

BP

Merge UNO and SUNO (No one in New Orleans voted for me anyway)

Berms

No pay raise for classified employees

More berms

Gustav

Merge Tech and Grambling? No way. North Louisiana loves me.

Screw up State Employee Health Insurance Contract

Blame the moratorium for everything

Will not take stimulus money

Took stimulus money but didn’t tell anyone

FREE SPACE: DID NOT ENDORSE VITTER

Most ethical administration

Student-based budgeting

Building a better Louisiana

Race to the Top. No, wait. TOPS. I meant TOPS.

Chicken plant

Vitter who?

North Louisiana Protestant church testimony

Veterans Honor Medals

Deep Water Horizon

Photo-op

Hands-on leadership

Accountability

Tax breaks

No tax increase

P.S. Please feel free to log on and add any other Jindalisms you can recall. We need as many as possible to make the game competitive.

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State can’t wean itself of golf course involvement

Posted in Budget, House, Senate, Legislature, Legislators, Public Records, Taxes, tagged , , , , on February 1, 2011| Leave a Comment »

The State of Louisiana just can’t seem to wean itself of its involvement in the golf course business.

Even though several golf courses in Louisiana have gone under in recent months, the state continues to invest its resources into the construction and management of several facilities across the state.

Most recently, the Office of State Purchasing received proposals for the management of the Black Bear Stay and Play Lodge at the Poverty Point Reservoir State Park near Delhi.

While the proposed bid opening was on Jan. 4, no contract has been awarded, nor has any information been forthcoming as to the bidders’ identities or if the bid opening was even held on schedule.

The 7,100-yard, 300-acre course was designed by Bechtol Russell Golf of Austin, Texas, and constructed by Weitz Golf International. It is operated under the administration of the Department of Culture, Recreation, and Tourism (DCRT).

The request for proposals (RFP) stipulates that lodge personnel shall include a “first-class” hotel manager, meaning that he or she must be knowledgeable, experienced, and effective, and that the contractor shall submit a detailed monthly accounting of all transactions.

The lodge includes 17 guest rooms, a swimming pool and fenced tennis court and maintains a 61 percent occupancy rate, according to the RFP, which also said the DCRT “intends to work diligently with the successful proposer to ensure the profitability of a Stay and Play Lodge operation at Black Bear Golf Course. The economic, professional, social, and recreational elements critical to the success and image of a quality golf environment are foremost in consideration.”

The RFP also said the State Legislative auditor, federal and internal auditors of the Division of Administration “shall have the option to audit all accounts directly pertaining to the contract for a period of five years” after the contract goes into effect. “Records shall be made available during normal working hours for this purpose,” it added.

A check of the Legislative Auditor’s web page could find no instance of an audit ever having been conducted of either the Black Bear Golf Course or Poverty Point Reservoir State Park.

The Louisiana Legislature last year appropriated $301,000 for the Black Bear Golf Club and since 1997 the state has poured more than $141 million into golf courses all over the state.

The Black Bear course was constructed on private property owned by the Poverty Point Development Corp. under the auspices of the Louisiana Department of Transportation and Development as part of a retirement community developed by State Sen. Francis Thompson and his brother, Mike Thompson. Once completed, the golf course was donated to DCRT with the proviso that a “professional manager” be appointed to administer the day to day operations of Black Bear.

The manager who was initially appointed was Mike Thompson. Thompson was convicted in federal court in January 2010 for violation of the Hobbs Act and in July, he was sentenced to 18 months in the federal correctional facility in Pollock. Specifically, Thompson was charged with having an employee of the Poverty Point Reservoir District perform work on Thompson’s private property during the time the employee was on the clock at the district.

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