Arizona's Own Espresso Pundit

VisonGate...er...Gate

Pop quiz, I want to give $10,000 to my favorite State Representative.  Legal or Illegal?  Answer:  Obviously illegal. Even if I don't give him the money in exchange for anything, it's illegal for me to give him a gift. 

Hmm, what if I buy his car for $10,000?  Legal or illegal?  Well, if the car is worth $10,000 then legal. 

Ok, so what if I buy his car from him for $10,000 and then...let him keep it?  Legal or illegal?  Obviously illegal because I'm not really buying it, I'm using it as an excuse to give him $10,000.

Now let's change the scenario a bit.  A cool high tech company wants to move its headquarters to Phoenix, so the City of Phoenix gives the company $1.2 million in cash to relocate.  Legal or illegal?  Answer: Illegal.  It's an obvious violation of the state's gift clause. 

So explain this paragraph from the Business Journal to me.

The city of Phoenix is paying $1.2 million for two of the company’s three-dimensional imaging devices, called Cell-CTs, which can show cells turning cancerous. The instruments will be housed at VisionGate’s new downtown Phoenix headquarters so other researchers can use the technology, said Jason Harris, deputy director of the city’s Community and Economic Development Department.

That's the same as the car example.  The City of Phoenix "owns" the equipment, but the company still keeps and uses the equipment.  The transaction boils down to the city paying the Company to locate here.

Ironically, the company is called "VisionGate."  So is the whole controversy going to be called VisionGateGate?  How about VisionGateScam?  GordonGate?  I don't know about the name, but I have a rough idea who to call.  

Shelton's Education Bubble...

I'll be attending the Annual University of Arizona Lunch tomorrow.  I attended last year's lunch, and was quite entertained by President Robert Shelton's speech.  I couldn't quite figure out the theme, but I think the title was "We The Cultural Elite are Trapped in a State full of Cave Dwellers."

The opening set the tone...Shelton opened by telling a story about Tucson originally wanting the "insane asylum" to be located in Tucson, but ended up with the UA.  That set up the opportunity for this cheap shot. 

We actually have some great friends from the legislature here today (who probably sometimes feel like they are working at an asylum) and we are very appreciative of their support in a difficult and challenging time.

Rim shot...I'll be here all week. Of course, Shelton was serious.  He--and his appreciative audience--view themselves as the visionaries who are building the future while being stymied by the unsophisticated rubes who managed to get themselves elected.  He followed up by showing that he wasn't actually joking.

Sadly there are always some in any community who just can't bring themselves to envision the possibilities of a brighter tomorrow. The singular objective of these naysayers seems to be blocking those who dare dream of something better.

Shelton--remarkable for his lack of critical thinking--tossed out this fallacy.

Investing in education has always been the right thing. The returns are enormous.

Indeed, his speech and perhaps his entire world view, is dominated by this slogan.  Naturally, he threw it to the audience and they accepted it without question.  But are education returns really enormous?  Sure...to a point, but the returns aren't linear.  Take a country of subsistence farmers like America in the 1860s, or Japan and Korea after WWII, create schools to teach engineering, agriculture and medicine and you will see great gains. 

But Gender Studies?  Western Civ. from a Marxian perspective?  Endless courses through the paradigm of sustainability and Global Climate change?  Do those program yield enormous returns?  If your 25 year old son came up from his "home" in your basement and asked for another $50K, or he could finally get that masters degree in Sociology, would you calculate that the "returns are enormous"?

Actually, Sheldon and his uncritical cultural elite audience should take an intro to economics course and learn about Diminishing Marginal Utility.  Legislators and parents understand that the returns on education start strong, rapidly taper off and eventually decline.  So, much to Shelton's surprise, legislators have decided to fund things like, you know, dialysis. 

After he takes an intro to Economics course, Shelton should drop by a Freshman statistics class.  Check out this trick.

In less (sic) than two decades we've seen higher education's portion of the state budget pie in Arizona decline from more than 16% to 10%.

That's awesome.  Bureaucrats used to argue that when their agency didn't get the raise they had hoped for, they were getting a "cut."  That's always been a bogus argument.  If I don't get the raise I'm expecting, I can complain that my boss "cut" my salary.   But check out Shelton's argument.  He's claiming that UA got a "cut" because the other government expenses (mainly health care) grew faster than his budget.  So Higher Education used to be 16% of the state budget and now it's 10% of the state budget, so he's been cut 6%.   The pie is MUCH bigger than it used to be, but by golly, his share of the pie is smaller--even though his piece of pie is bigger, he's been "cut."

In response to this massive "cut" Shelton has been forced to...redraw his org chart. 

As a result, we have had to eliminate 600 positions. We closed 24 academic programs; merged nine other academic programs and consolidated four colleges into one.

Wow, eliminating "positions," (That's code talk for "vacancies") and merged programs.  Gosh, the pain must be awful.

He concludes his point about massive cuts by accidentally admitting that the cuts actually aren't massive.

The tragedy is that it doesn't actually take very much to restore the funding the UA has lost. It would cost about $15 per Arizonan per year -- a little over a dollar a month.

Golly, it's a HUGE amount when we are talking about funding, but it's such a small amount when we are talking about taxes. 

No line in the speech exemplifies the bureaucratic mentality more than this one.

In the end, the old dictum still holds true: you get what you pay for.  And there is no place where that is more true than in education.

You get what you pay for?  Really?  That expression was invented by bad managers selling uncompetitive products to captive audiences.  Remember those 56 inch flat screen TVs that cost $4,000 at Wal-Mart last year?  They are down to, like, $575.  Education is the only industry in which the "leaders" brag about worse results being achieved with higher costs.

I thought this next line was funny.  Have you ever talked to someone who said something really silly like "he literally ripped my face off."  Dude, if you put "literally" in front of a silly expression, you simply look foolish.  So check this out.

It is not an overstatement to say that the future success of this state depends on the success of the University of Arizona,...

Really?  That's not an overstatement?  I thought the future success of this state depends on Spring Training, or was it TGen?  No, it's the Science Foundation, no its the Discovery Triangle.  All Day K.  That's right...oh, I'm so confused.

But the audience wasn't confused and they weren't skeptical, they just clucked their tongues, enjoyed their salmon and commiserated that guys like Robert Shelton have to deal with the mouth breathers who run Arizona State Government.  Dude, Shelton's $550,000 isn't nearly enough, poor guy. 

Guys like Shelton--educated at Stanford, making millions off a government payroll, surrounded by like minded Mandarins--live in a bubble.  The sad thing about Shelton's speech is that he really believes it and he's presenting it to an audience that really believes it. Consdescending group think at its unexamined worst.

We'll see what Shelton says tomorrow.  I'm expecting to hear the complaints of the cultural elite whose half million dollar government salaries don't nearly compensate them for having to live in a backwater and deal with the unwashed troglodytes who govern them.

For all the liberal talk about "Sustainability"...

Whenever you see something like this...

LONDON—Spanish and Italian bond spreads over German bonds rose sharply to new highs, as did the cost of European sovereign-debt insurance, while the euro kept tumbling as euro-zone contagion fears continue to roil currency and debt markets.

Remember that 18 months ago...before anyone expressed a concern about "Sovereign Debt" I said this...

I don’t want to be a doomsayer or anything, but it looks to me like the world is headed for financial collapse. 

Let’s face it Americans can’t afford this much government.  The American standard of living is being propped up by government expenditures that are being financed  by nearly one trillion dollars in Chinese loans.  Americans in turn use these Chinese loans  to buy Chinese goods—so our huge trade deficit is financed by our huge national debt.   That’s about as sustainable as investors lining up to flip houses the town of Maricopa.

Voters of both parties support candidates who will give them the most goodies—but the federal government can’t afford to buy your old car, finance your new house, or replace your eighty- year old knee. 
The deficit in president Bush’s final year was an outrageous 400 Billion dollars…the White House projects that in President Obama’s first year the deficit will be four times higher—one point six trillion dollars.

I don’t have a solution.  It’s not like either political party is actually willing to balance the budget.  All I can say is that in the not too distant future, it’s all going to come crashing down and it’s not going to be pretty." 

Noonan on Nappy

Columnist Peggy Noonan had an excellent column last Saturday in which she opined that the President is in a bubble and needs a "Special Assistant for Reality" to set him straight.  Noonan provides some excellent insight into why Americans are rebelling against the TSA screenings--"it's not the inconvenience, it's the humiliation."

Noonan also takes on Janet Napolitano.  Those of us who know Napolitano are not surprised that the TSA is both authoritarian and tone deaf--those two traits marked her 6 year reign over Arizona--but now the rest of the country is starting to chaffe under the rule of this woman as well.  Noonan concludes the column with this mock exchange between the Special Assistant for Reality and the President.

President:Janet Napolitano won't like it. Drudge is always after her. He'll get all "Big Sis Bows Now." She might quit.

SAR: Oh God, yes. A twofer!

President: I'd look like I got rolled.

SAR: Then look strong. Fire her. She's been a disaster from day one. Now she's the face of the debacle.

President: Won't they think I'm weak?

SAR: No. They'll think you returned to Planet Earth. They'll think ground control broke through to Major Tom. They'll think you took a step outside the bubble.

"Rift" indeed

The Republic has an interesting editorial about the "rift" in the Arizona Republican Party.  Let's step back a second and compare the status of the two parties.  In the Republican Party, candidates are fighting to be Chairman, District Meetings are standing room only, formerly obscure District Chairman races are hotly contested and candidates are fighting for Precinct Committeemen spots. 

This activity is somehow being portrayed as a negative thing.  It's some sort of "rift," a "civil war" etc. 

If you want to see the alternative, take a look at the Arizona Democratic Party where Chairman Don Bivens has reluctantly held the office for four years and would love to resign, but can't find a suitable replacement.

 "It would not surprise me that we could get an agreement between now and January on someone who is willing to run and who does meet the criteria," Bivens said. "If we could do that ... I'd do a little dance out the door."

Ask yourself which Party seems healthier.

 

Accurate but Early?

The Republic has done a great job withthe Pension stories, but I poke a little bit of fun.  They have a follow up story about House Speaker Kirk Adams' efforts to reform the state pension system and I thought this headline was funny.  Prophetic maybe, but funny none the less.

 

 

When Irish Eyes are Frowning

If you have been following the news, you will know that Ireland is an economic basket case and is in danger of financial collapse and imminent default if it doesn't accept a massive bailout from the rest of the European Union.

Hard to believe Ireland was once touted by the establishment left "economic development" types as the model of the future. 

Five years ago, the hapless troika of Sue Clark-Johnson, Janet Napolitano and Michael Crow went to Ireland, saw the future and pronounced that it works.  The Republic devoted an entire Viewpoints section to the "Celtic Tiger" and the lessons that Irish-style central planning could provide for the backward politicians in Arizona.

Naturally Jon Talton acted as cheerleader  when the three returned and announced that Government and industry need to work together in order to move Arizona forward.  Here's what ASU President Michael Crow said at the time. 

"Government can have a role in competitiveness," he said. "In Arizona, government is seen as evil. In Ireland, the government is designed to add to the nation's competitiveness."

Here's Talton again arguing for more centralized planning and bolstering his point with a quote from his then boss, Sue Clark Johnson.

Ireland's towering achievement brings Arizona's limitations into sharp relief. But it also shows the remarkable global opening that could belong to Arizona with the right strategy, investments and commitment. The public-private collaboration that landed T-Gen demonstrates the success of this approach.

"Arizona needs to see this as a wonderful opportunity," said Sue Clark-Johnson, chairman, CEO and publisher of The Arizona Republic, another participant.

That type of clueless cheer leading for central planning, compassionate capitalism and government sponsored economic development would be sad if it hadn't come from the three most powerful people in the state--the Governor, the Publisher of the State's largest newspaper and the President of the state's largest university. 

Here was my response at the time. (This was in the days before permalinks, so scroll down to August 10th.)

So the Governor, the Publisher of the Republic and some TGen Board members headed to Ireland and decided that the secret to economic development was...more centralized planning and government subsidies for favored industries. 

It reminds me of the time in 1999 when my  barber told be to by Lucent on margin. 

Another participant, Senate Minority Leader Phil Lopes demonstrated that he not only didn't understand economics, but was also ignorant about history, when he compared Ireland's economic miracle to...Japan.

Here was my response at the time.

Dude, Japan?  Remember the 80s?  Huey Lewis and the News topped the charts, Cosby was king and Japan Inc. was the way of the future.  Capitalism was so dog eat dog.  Why compete when you could cooperate?  Pick the industries that were going to be the wave of the future and give them a leg up.  Gosh that sounded good at the time.  Of course Japan's economy virtually collapsed and has been bouncing along the recessionary bottom for nearly 20 years.  The Nikkei averages is about half of what it was at its 1989 peak.

Remember that these were Arizona's elite--Governor, publisher, university President, Senate Minority leader--falling for the centralized planning model and citing Ireland (and Japan) as favorable examples.  They then used their positions to try to move Arizona "forward" so that it could be like Ireland--all the while denigrating the unenlightened rubes in the legislature who refused to go along with Irish style government sponsored economic development.   

Now Ireland has collapsed and the elites have moved on...Napolitano resigned and in so doing, wiped out the entire Arizona Democratic party.  She's now in charge of strip searching children at airports.  Sue Clark-Johnson presided over the downfall of Gannett and then...was appointed to the board of APS--seriously, I can't make this stuff up.  Phil Lopes was crushed by Cajero Bedford.  Talton moved to Seattle.  The only one standing is Michael Crow who has raised tuition so much that students can't afford tuition.  He'll be gone in 2012--leaving ASU worse off than he found it. 

If only they had stayed in Ireland, Arizona would have been so much better off. 

How to Swim with the Sharks without...er, jumping them or something like that.

I attended the Goldwater Dinner with New Jersey Governor Chris Christie and about 1,000 of my closest friends last week.   Darcy has done a great job with GWI, and the addition of Clint Bolick has given GWI some seriously sharp teeth. 

One of the VIPs in the crowd saw me on the way in and said that this was the point at which Chrisie jumps the shark.  He's taking on the unions and is going to end up getting crushed like Arnold did in California.  "Mark my words, this time next year, Christie will have a 34% approval rating in New Jersey.

I have a lot of respect for this not-to-be-named pundit, and he's certainly right about what happened to Arnold--whose anti union initiatives lost at the ballot box.  Arnold responded with a classic Republican mistake of tacking left and ended up being despised by both parties.  He'll be lucky to finish his term with double digit approval ratings.

I think Christie's timing is better.  Ordinary Americans are starting to notice fire fighters who retire at 45 with six-figure pensions.   ?the public is beginning to realize that unions managed to elect people who would give away the store and now the municipalities and states that are left to pay the bills. 

In its recent series, the Republic has done a great job exposing the excesses of the local public pension system. 

So I think Christie's time has come.  He's not afraid to take on powerful interests in the most corrupt state in the nation. 

Here's the video of him at GWI.

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Fitz Doubles Down

I pointed out earlier that Arizona Daily Star Cartoonist David Fitzsimmons made a disparaging remark about Mormons on his Facebook page.  Fitz' comments would certainly be unacceptable in corporate America generally, but I believe that Newspapers need to be held to a higher standard than the rest of corporate Americia.  I think that Fitz' comments and the newspaper's lack of response is due to the fact that Mormons tend to be white and Conservative so the left believes that it's fair to mock them. 

An Espresso Pundit reader emailed Fitz and asked for an explanation.  I think his explanation shows that the original post was no joke.  Fitz simply doesn't like Mormons and he's not shy about expressing it.  (After you read the letter, substitute the word "Mormon" with "Jew" or "Jewish" and read it again.)

From: David Fitzsimmons
Date: November 19, 2010 7:34:24 MST
To:
Subject: Re: Your Facebook comment about Mormons

Thanks for writing.

Mormonism affects Pearce’s political views. Russell Pearce ,when asked about cutting  healthcare for the poor,  said they’ll be okay. Thousands of chronically poor will be okay. The man’s either a cretin or living in an insulated fantasy world where he believes everyone will be taken care of by the church on the corner. I’ll give him the benefit of the doubt and assume he beleieves that the sick and poor are the lillies of the field.

I am familiar with the Book of Mormon. All I’ll say is I must respect another man’s belief much as I respect his belief that his children are bright and his mate beautiful.

As for myself I am a happy atheist. As Twain said,”There’s only one Christian in history I know of and they crucified him early on.”

You owe an apology to the next person who dies because of Pearce’s witless cruelty—inspired and strengthened by his version of a loving God. And die they will. Mormons prefer to control social services within their own community and believe in extremely limited government. All of the political leadership in this state emanates from one district and one religion and one ethnic group and as a consequence, with that philosophy this state is a disaster. A joke. A tragedy.

I hope you are embarrassed  by these individuals and will hold them accountable.

Perhaps his fellow compassionate Mormons will hold him to task.

And perhaps angels fly.

I miss Mo Udall.

Be well.
Cheerfully,
David

 

The Vision Thing

Last month I wrote about my rim-to-rim Grand Canyon trip with a group of blind hikers from the Foundation for Blind Children.  The hike was extraordinary and was covered in the Republic as well as USA Today. 

The Producers of the Today Show were so impressed by the trip that they flew five of the hikers and two of the guides--including FBC Director Marc Ashton--to New York for an interview.  Here's a clip of the program in case you missed it. 

The FBC provides services for about 2,500 blind children and adults throughout Arizona and receives some state funding, but it relies on contributions from the community at large in order to offer a full range of services. 

The FBC raises most of that money during an annual dinner called "The Night for Sight."  I've attended the dinner for the past few years and I thought you might want to see pictures from this year's event. 

First, to ensure we remember why the Foundation exists, I thought I would start with a picture of Ellie walking the Night for Sight Red Carpet. 

 

 
Here, FBC Director Marc Ashton and FBC Board President--and State Land Commissioner--Maria Baier introduce VIPs to the crowd. 

 

First Western Trust Bank President Daniel Thompson and his wife Jenn with Superintendent of Public Instruction Elect John Huppenthal and Senator Elect Steve Yarbrough.

 

Here I am with my wife Debbie together with Congressman Elect Schweikert and his wife Joyce. 

Now for a little business---The Foundation for Blind Children qualifies for Arizona's Corporate Tax Credit for the Disabled.  This credit is similar to the $1,000 individual tax credit for schools in that it's a dollar-for-dollar offset.  However, corporate money can be used for the Credit for the Disabled and the limit is not measured in thousands, it's measured in millions.  That means that your company can help the FBC and get a dollar-for-dollar offset on your Arizona taxes.   (FBC qualifies for the $1,000 individual tax credit for schools and the $400 tax credit for organizations that serve the working poor as well.)

So if you are one of my Corporate Clients, you are going to get a phone call.  And if you aren't on my phone list, how about sending me an email anyway.  This is a great opportunity to help a good cause at no cost to you or your company.