February 28, 2011

How Chris Christie Did His Homework - NYTimes.com

Matt Bai in the NYT Magazine skillfully recounts how NJ Governor Chris Christie takes on the question of teacher and public worker compensation, particularly pension and post-retirement health care benefits, which is the primary factor in the huge budget crisis in NJ. Below are his summary observations. (emphasis added)

The dilemma is severe states like NJ, AK, HA, CT, IL, DE, MA and WI which leaves few options for governors and legislatures as the long recession slowly dissipates with painfully slow job growth. States are simply going where the money is to rein in costs because stimulus largesse has disappeared and most have a constitutional requirement to balance the budget every year.

See graphic included in Bai's story (click on graphic to enlarge it).

"Now a new class of governors from both parties is promising to revisit union contracts in order to put their states on firmer fiscal ground. In Wisconsin, Scott Walker, an aggressive new Republican governor, just proposed legislation that would limit the rights of public workers to collectively bargain. “You can’t have one group who are the haves,” Walker told me recently, meaning government workers, “and one group, the private-sector workers, who are the have-nots.” Walker’s move led to protests in Madison, drawing President Obama into the debate and raising the prospect of French-style labor uprisings among public workers across America.

In part, the viral movement against public-sector unions is a result of political necessity. In states all over the country, balancing the budget has become an annual exercise in Copperfield-like illusion. Over the past decade, governors have exhausted all the easy options for eradicating, or at least hiding, deficits — building casinos and adding new fees, issuing bonds and securitizing tobacco revenue. Now, facing a painfully slow recovery and the end of stimulus spending from Washington, governors from both parties are finding that there are simply no more gimmicks left to exploit. They have to deal with what has long been an unspoken reality — that state governments have made a mountain of promises they can’t keep.

It’s also true, though, that what used to be unspeakable, politically, simply isn’t anymore. It’s not as if the problem of public pensions suddenly got so much worse than it was before (the shortfalls have been building steadily for years, after all), nor is this new crop of governors somehow genetically bolder than their predecessors. If politicians of both parties are suddenly willing to go after the pensions and health care plans of teachers and cops and firefighters, it’s probably not only because they’re out of budgeting options, but also because suddenly they see it as politically advantageous. In other words, not only are public employees’ contracts no longer untouchable for any politician who wants to stay in office, but it turns out that the opposite is true; taking the fight to the unions is a good way to bolster your credentials as a gutsy reformer with voters who have been losing faith for years in public schools and government bureaucracies."

February 24, 2011

New Rules for New Technology - NYTimes.com

   I have not yet read the FCC proposal to subsidize broadband deployment in hard-to-serve areas, but the policy shift to use revised rules of the Universal Service Fund to support broadband deployment makes sense in today's technology environment.
   This will not be an easy approval process because of the very high cost areas of the country often served by small companies. These companies are heavily reliant on the transfer of funds to remain viable in today's environment. Some accommodation will be required to keep them in business and/or to continue POTS service to these costly customers.
   But broadband is the service that must be promoted for people to access the Internet and all the benefits it brings.

"The proposal from the Federal Communications Commission to stop subsidizing rural phone lines and start subsidizing rural broadband connections is long overdue. Right now an estimated 14 million to 28 million Americans have no way of getting access to the Internet."

February 22, 2011

Federal, state and local debt hits post-WWII levels

As the demonstrations and battles rage between government employee unions and governors/legislators in debt strapped states, what's missing is any realistic plan, particularly from the public employee unions, to bring the unsustainable spending, deficits and debt under control. Of course, this is to be expected because unions' sole interest is to expand/protect the wages and benefits of their members.

But government has become too large and overbearing driven by an entitlement culture fostered by politicians promising more than they can deliver and entitlement recipients (us, the citizens), if not demanding ever more benefits, then strongly resisting cuts to existing programs. This has all been exacerbated by the Great Recession. Perhaps for the nation, this is a blessing in disguise because it has exposed the unsustainable nature of government spending... living too high on the hog.

It's a travesty that TeamObama's budget fails to show Presidential leadership. Perhaps the crisis is not yet severe enough for rational leadership rather than political rhetoric

Unsustainable spending simply cannot continue. The 'entitlement mentality' argues that rich people should pay more, thinking that will solve the problem. It won't. Without economic growth creating jobs and more taxpayers to support an increasing population, we simply cannot spend our way out of this problem.

Politicians argue about ideology; special interest groups push to protect their piece of the entitlement pie; media talking heads feast on the controversy. Yet, little cooperative and concerted action is taken to actually fix the problem. Truly, "We have met the enemy and he/she is us."

"But today the U.S. economy is in a polar opposite condition. The labor force is aging, U.S. manufacturing often lags behind Asian and European rivals, households are in hock up to their eyeballs, and consumer appetite for goods is tepid. In addition, inflation is tame and government spending locked into entitlement programs and debt service that will be hard or impossible to alter.
"We're not growing like we were after World War II, so the amount of debt you can bear and the trajectory are much worse," Rogoff said."

February 17, 2011

Watson's Natural Language Capability is a Tremendous Advance in Technology

Watson's overwhelming Jeopardy victory over humans this week is some of the best possible publicity for IBM.

We will soon see this technology applied to a number of tough data and information problems, beginning, most likely with medecine.

February 16, 2011

Analysis of the President’s Fiscal Year 2012 Budget | Analysis of the President’s Fiscal Year 2012 Budget | Peter G. Peterson Foundation | Our America. Our Future.

Read more analysis of the Obama budget proposal from the Peterson Foundation, a group with a realistic perspective by clicking the link above. Here's their summary, a good one at that.

"...President Obama’s proposed 2012 budget and the discussion in Congress represent a starting point to begin addressing our nation’s fiscal challenges. Both parties need to go much further.

The real threat to America’s long-term economic future is not short-term discretionary spending, but the long-term structural deficits that result in massive interest costs that would burden our nation for decades.

To address our long-term fiscal and economic challenges effectively, we need a bipartisan plan that fully tackles all of the major unsustainable areas of the Federal budget. The only way for us to win the future is with a bipartisan plan for the future: a set of sound and sustainable fiscal policies that solve our long-term structural deficits and can be implemented gradually as our economy recovers.

Despite the political challenges of reaching bipartisan solutions, the President’s Fiscal Commission is proof that this can be done. It is time for lawmakers from both parties to show leadership by putting our country on a path to economic prosperity and fiscal sustainability."

February 1, 2011

Motorola XOOM Ad

We'll probably see this ad on the Superbowl. It's sure to be a popular device, but can it challenge iPad2? Maybe 2011 is my year for a tablet. Will want to compare XOOM and iPad2 before purchasing.