Say Anything Blog

"One thing is sure. We have to do something. We have to do the best we know how at the moment.”

- Franklin Roosevelt

Measure #2 is North Dakota’s chance to, as FDR said “do something.”

These days, it is in vogue to use doom-and-gloom fear-mongering tactics to scare the voters.  I was going to write one final letter about hall the ways that Measure #2 will improve North Dakota’s Business Tax Climate and put more money into your pocket, instead, I think it is time for a reality check.

North Dakota is at a crossroads. 

With a billion dollar surplus, we are at the proverbial ‘fork in the road.’ We can either continue down the path we are going, or we can take detour and let the people that keep our state moving the taxpayers catch up. 

For years, we’ve heard about low wages and out-migration in North Dakota.  The hard truth is that North Dakota is an aging state even if the population stabilized.  We must create an environment in which younger and productive members of society will be able to succeed. 

The state legislature really does not have much power to improve the wage situation, except by allowing individuals to keep a as much of their paycheck as possible, and limiting the overhead cost of corporate taxes that stifle economic growth and competitiveness. 

If we do not make North Dakota a more competitive and attractive place, as sure as the sun as rise ALL taxes will go up because the fewer productive people in the private sector in North Dakota there are, the higher taxes will go.

Now, who can be opposed to that?  The National Education Association based in Washington D.C. which has spent $300,000 to defeat this measure – as well as a couple unions that fail to realize their North Dakota members pay income tax as well.

Politics is a nasty business.  But the last thing we need is elected officials spreading doom and gloom about letting people keep more of their money.  Vote Yes on Measure #2 for tax relief guaranteed to start January 1st, or roll the dice with the legislature.  It really is up to you.

Dear Senators Dorgan, Conrad, and Congressman Earl Pomeroy:

The current Wall Street credit crisis revolves around the fact that banks and brokerages over-extended loans to people that were probably not credit-worthy for those loans.  While the individuals who took those loans out are not blameless, the banks and lenders that gave out the loans had the power to make better decisions.  Now, the market is holding those less than perfect decisions against those banks.  Today, the interest rate that banks are charging each other to borrow money (referred to as the “LIBOR”) is in the high 6% range, it’s simply too expensive for banks to borrow money from other banks.

This situation was created by poor business decisions.  The fact the interest rate that banks are charging each other is so high shows they do not trust each other. 

If the banks do not trust each other, how can taxpayers and their representatives in Congress trust them any more?

This crisis will not be solved by giving Wall Street a wheelbarrow full of freshly printed cash.  This problem requires a “trickle-up” plan to make it easier for consumers to pay their own bills.

The following are a few ways the Federal Government can inject cash into the credit market without spending taxpayer’s money:

•  Tax-Deductible Debt Payoff – Allow the average American to write off their Federal Taxable Income an amount equal to the amount of debt paid during the 2008 and 2009 tax years.  (If a person pays off $20,000 worth of debt – principle and interest combined - they can write that $20,000 off their taxable income.)

•  Restrain Credit Card Interest Rates – Americans are having difficulties paying their credit card bills and mortgages, by restraining credit card interest rates people can start paying down more of their balances, which will allow these banks to re-balance their own finances.  Credit card holders can either reduce their credit card balances faster, or better afford their mortgages.

•  Mortgage Voucher Program – the Federal Government should cover the mortgage interest payments of any homeowner who wishes to continue making minimum payments to stay in their home.  Once the balance of the mortgage is more in line with the real value of the home, the program can cease and people can stay in their homes.

•  Corporate Tax Deferment – Allow corporations a two-year deferment of federal corporate income tax payments.  The corporate income tax rate in America is 35%, to ensure that these corporations are around to pay any tax, Congress should allow them to defer their tax payments for two years while they get their financial houses in order.

Congress and Wall Street are making this situation more complicated than it really is. 

American families deal with debt every month on their own kitchen tables when the bills come in the mail.  Allowing those families to better afford those bills will bring a quicker flow of cash to the struggling credit market without putting the taxpayers on the hook.

Sincerely,
Dustin Gawrylow, Private Citizen

Fed Chair Proposes Anti-Market Measures To Address Mortgage Crisis

Ben Bernanke encouraged the nation’s bankers to write down the principal on millions of mortgage loans. Voluntary loan modifications aren’t doing enough to stop foreclosures, declared the chief steward of the U.S. financial system. “In this environment,” he said, “principal reductions that restore some equity for the homeowner may be a relatively more effective means of avoiding delinquency and foreclosure.”

Only the day before Mr. Bernanke dropped his bomb, Treasury Secretary Hank Paulson disclosed that “since July more than one million struggling homeowners received a workout—either a loan modification or a repayment plan that helped them avoid foreclosure.” In January alone, there were 167,000 such modifications, with the number of borrowers receiving help rising faster than the number of foreclosures.

This banking and mortgage crisis was caused by lenders giving loaning money to people that were not credit-worthy, and those un-credit-worthy people accepting that money.  If blame has to be divvied out, the lenders that made the poor business decisions to lend the money are 75% to blame, and the people that accepted the money are 25% to blame cause they most likely knew they could not afford to pay it back.

But Bernanke’s “solution” will drive investors away from the bond market’s that keep the mortgage business afloat. 

We knew Bernanke was no Greenspan, but who knew he was out to destroy both personal finance responsibility and an entire sector of the economy?

From the Grand Forks Herald:

The University of North Dakota’s law school wants to start a series of steep tuition increases for new students.

For North Dakota residents who enroll in the law school this fall, the plan would raise tuition 15 percent each year for four years. A year’s tuition would increase from about $6,000 to $10,620 during the 2011-12 school year.

Students already in the law school would see their tuition bills go up as well, but the increases would be smaller. Law school officials say UND’s tuition is cheap compared to law schools at comparable universities.

The Board of Higher Education’s budget, audit and finance committee has endorsed the proposal. It goes to the full board later.

Why is is tuition going up?

Not because professor pay is going up.

Not because of high energy costs.

According to “Law school officials” tuition is going up because “UND’s tuition is cheap compared to law schools at comparable universities.”

And what’s the deal with the arbitrary 15% increase for 4-consecutive years?  What dark hole did they pull that figure from?

The role of a publicly financed university is to provide the best education at the lowest cost, right?

At what point did UND Law School become a revenue source for the state?  At what point did the Board of Higher Education start rubber stamping policies that will drive more young people out of the state? (Hint: It started a long time ago)

Driving up the cost of education because it is cheap should tell every North Dakotan that the unelected and unaccountable policy makers in the North Dakota University System are out of touch and actively trying to hurt the state.

“Tax the rich!”

We hear it all the time, but in North Dakota, who are the rich?

97.5% of North Dakota households make less than $150,000 Gross Adjusted Income. 

There simply aren’t not that many “rich” people in North Dakota, so the argument that the state income tax is progressive is false. 

Looks more like we are taxing the poor right out of the state.

Like many Republicans, I think Ron Paul is a bit naive on foreign policy.

But his stances on economics, immigration, limited government, and abortion make him - on balance - truly the most Republican candidate in the race.

For those Conservatives out there that do not like Ron Paul for his perceived isolationist stances keep this in mind -

Fortress America is better than No America.

John McCain’s immigration and open borders policy is far more dangerous to the security of this nation than Ron Paul’s stance that we should disengage from the world.

Mitt Romney is a fraud. A phony. A plastic candidate. He will govern by public opinion and polls. He will govern as the Republican version of Bill Clinton.

Mike Huckabee is a liberal. A Southern Socialist. He would use the power of government to mold America and limit freedoms based on what he sees as “God’s Way.” For all the faults of our secular government, we do not want a theocratic government. Huckabee would bring a Holy War against all of Islam, not just the terrorists. He has said in these words “the constitution must be amended to fit the word of God.” This is not what we need.

For those of you that do not like the choices of McCain, Romney, and Huckabee but are reluctant to vote for Ron Paul, let me finish with this:

If you truly believe that Ron Paul will not be the nominee, and you don’t like the other choices, what will it hurt to vote for Ron Paul?

Let’s send a message to the Republican Party - we’re mad as hell and we aren’t going to take it anymore.

Ron Paul is a vote for None of the Above.

Ron Paul = None of the Above

With all the angst over the National Geographic article “The Emptied Prairie,” you’d think that somehow the people who know better are now living in a different universe.  There weren’t any earth shattering revelations in the article.  We all know the rural parts of the state are withering away.  The reactions to the story are akin to a 5-year old covering his ear and going “la la la” when his parent tells him to do his chores. 

Denying there is a demographics problem in North Dakota will not make it go away.  The population is getting older; this is illustrated by the state’s human service budget - which has been out-of-control for the decade. 

We know young people are leaving, this has been happening for a long time.  But older folks in the prime of their income earning lives are also leaving the state as shown by the studies that quantify the lost income generating potential at $1 billion over the last decade.

Retired folks are also leaving, for better weather and better tax climates taking up residency in Florida, Nevada, or another state with no income tax because they don’t want to lose a dime of their retirement income. 

The danger in ignoring these trends is this: as the population ages and retires, who is going to pick up the slack?  We’re told there aren’t enough workers to man the oil rigs.  We’re told there aren’t enough engineers and grad students to work the research projects at the universities.  When are we going to wake up and stop denying there is a problem?

The fewer people of working age that there are, the higher the taxes will be for those that are working.  These higher taxes will drive people out of the state, further burdening those left to work.  Eventually the economy will stagnate as the population dwindles and North Dakota will bottom out at about 450,000 like Wyoming. 

The first step to recovery is admitting you have a problem.  Attacking a national magazine for holding the mirror up to our face is not going to solve anything.  We need to increase population retention by reducing the tax burden, reducing the role of the state government in the economy, limiting spending, and reducing the tax rates – both income tax and property tax – for the long term.

Republicans

John McCain’s “surge” in New Hampshire will likely be short lived unless he can run within 3 points of Mitt Romney in Michigan. Since Romney’s father George was governor of Michigan, failing to decisively win Michigan would probably represent a death blow to any momentum being created going into his February 5th efforts.

Mike Huckabee, with his 3rd place - beating Rudy Giuliani in his back yard - showed that his strength goes beyond the bible belt. Ron Paul’s tie with Giuliani in independent rich New Hampshire would have to be viewed as a slight disappointment given his stronger than expected showing in Iowa last week.

Michigan will also be big for Fred Thompson whose future in South Carolina may be predicted by McCain’s performance in Michigan. If McCain struggles in Michigan and Romney walks away with the state, the likelihood that McCain will bow out and endorse Thompson before February 5th increases. A strong McCain performance in Michigan will mean that Thompson will have to wiin South Carolina on his own and will require a dismal McCain performance in S.C. to build any momentum at all.

Of course, being the Fusion Candidate allows Fred Thompson to hang back and aim for delegates rather than states and hope for a convention decision.

Democrats

Only time will tell if anything comes out of the mid-day reports of ballot shortages. Speculation of tampering and fraud on the Democrats side started almost as soon as the polls opened.

Hillary Clinton’s surprise attack in New Hampshire will propel her into Nevada. South Carolina is now ‘do or die’ for John Edwards - anything less than a win in S.C. and he might as well go sit on the chair that says V.P. Candidate on the back.

The notion that Barrack Obama is mortally wounded due to New Hampshire is farcical. His showing in the south and the industrial mid-west will be far more important than New Hampshire.

Summary

Overall, New Hampshire really did not change anything, the media will increase it’s fixation on Hillary’s emotional outbursts. Obama is still the man to beat on the Democrats’s side, and Huckabee looks to be more than just a passing fad.

Initial reactions to the Iowa Caucus results seemed to be “well, this is what was expected.”  This is far too simplistic an analysis.  It is apparent that we are seeing a realignment of a 3-wing Republican Party.

First, Mike Huckabee represents not only the evangelical wing of the party, but the lower-income working-class Republicans.  What is referred to as Huckabee’s populism is more accurately defined as pessimism: pessimism of the future, of corporate America, of the average American’s control over his own life.  This is typically a feature of Democratic rhetoric, but it resonates with 3rd generation Dixiecrats who are the grandchildren of the original Dixiecrats that left the Democratic Party in the 1940’s.

Second, Mitt Romney represents the upper-middle class and upper-classes of the GOP.  His ties to wealth and successful business management make him the ideal candidate for the investor class of the party that does not see inherent problems with globalization so long as the bottom-line is improved and the dividends continue.  This is the new incarnation of the Country Club Republican.

Finally, Ron Paul represents the idealistic wing of the party.  While this wing lacks a realistic view of the geo-political situation, it represents the most optimistic view of freedom and the future.  In many ways, this is the core of Reagan Republicanism representing the “morning in America” attitude personified by Ronald Reagan.

In the end, it seems that the eventual nominee will be required to be a “fusion” candidate to bring these three wings of the party together.  The most likely candidate to fulfill this position would be Fred Thompson, who seems to have no real opposition but just lacks cohesive support.  As Huckabee and McCain fade away, this will change.

FredRepublican.com

Accural method would show higher deficit

WASHINGTON - The federal budget deficit would have been 69 percent higher than the $162.8 billion reported two months ago if the government had used the same accounting methods as private companies, the Bush administration reported Monday.

The administration, releasing the “Financial Report of the United States Government” for 2007, said that the deficit under the accrual method of accounting would have totaled $275.5 billion for the fiscal year ending Sept. 30.

Enron did not invent Enron-Accounting.

The Federal Government did.

The steroid scandal has proven that it is time for Congress to strip MLB of it’s anti-trust exemption.

For baseball to be purified, MLB needs to be broken up. Teams and owners that don’t respect and enforce the laws of the country that makes them rich should not have protections from the laws of this nation.

MLB needs to be split up. What will happen is the teams that are known for good prospect development but that tend to be sub-par will join with the top notch AAA teams to form a new league that is clean and only accepts players who what to compete naturally.

Sure, there will be teams that don’t clean up, and they will form their own league that will represent baseball as much as the WWF represents wrestling and the XFL represented football.

By breaking up MLB, there will be no need to asterisk records or re-write history. Most likely the last 12 or so years of the MLB will simply be ignored by historians and the new pure league will carry on the legitimate mantle of pro-baseball.

Conservatives are accused of being stuck in the mud. 

Too often this is true, but in reality the form conservatism that works is the form that seeks to retain what works and discard what doesn’t work.  In this way, the measurement of success for conservatism is not what does not change, but what is changed. 

Ironically, to properly define conservatism, we must first redefine what progress is. 

Progress is not an agenda that only those that want to change the way things have always been can monopolize.  Progress can only be defined by those that seek to improve society in all areas, not just via social agenda.

Because effective conservatism seeks to improve all situations, we must never be satisfied with the status quo.  Just because something is and always has been does not make it best.

Thus the first step to effective conservatism is to define progress as constant improvement; because progress is too important to be left to the left.

Quickly getting to the point, the Property Tax relief scheme approved by the North Dakota State Legislature in the 2007 session is at the very least blatantly discriminatory, and at the worst a violation of the state’s own constitution.

Here is the brief outline of how the tax scheme works as published on the North Dakota Tax Department website:

Property Tax Relief for Individuals

• The 2007 Legislature authorized the property tax relief for two years (based on property taxes for 2006 and 2007, payable in 2007 and 2008). The relief is provided in the form of a credit to be claimed on 2007 and 2008 Individual Income Tax returns or special schedules.

• The credit is equal to ten percent of your residential and agricultural property taxes, up to a maximum credit of $500 ($1,000 for married filing jointly).

• Mobile home taxes due in 2007 and 2008 also qualify.

• The credit is claimed on your Individual Income Tax return (or a special schedule if you are not required to file an Individual Income Tax return).

• The credit is only available if your primary residence is in North Dakota.

• If you rent, the credit is not available to you, unless you also own property in North Dakota (the credit is allowed only for the owned property).

• If your allowable property tax credit exceeds your income tax liability, you can choose to carry forward the unused credit for up to five years.

• As an alternative to the carry forward provisions, you can choose to receive a certificate for the unused portion of your credit. Certificates are issued by the Office of Tax Commissioner and are redeemable with all County Treasurers.

• You make your choice to carry forward or receive a certificate for unused credits on your Individual Income Tax return or special schedule.

• If you own commercial property, you are entitled to a separate credit (see Property Tax Relief for Businesses).

In summary:

If you pay income tax, but own no property, you do not have a right to tax relief under this plan – 40% of state residents fall under this category.

If you pay property tax, but do not pay income tax, you qualify for a certificate redeemable for a cash payment - 30% of state residents fall under this category.

Constitutionality

Article X, Section 1 (North Dakota State Constitution): “The legislative assembly shall be prohibited from raising revenue to defray the expenses of the state through the levying of a tax on the assessed value of real or personal property.”

The plain reading of this section indicates that the state does not levy its own property tax.

Article X, Section 4 (North Dakota State Constitution): “All taxable property except as hereinafter in this section provided, shall be assessed in the county, city, township, village or district in which it is situated, in the manner prescribed by law.”

The plain reading of this section would indicate that not only is the state barred from levying property tax, it cannot interfere with the power of counties, cities, townships, or districts role in assessing property taxes.

If one considers the state’s rebating of a tax it never collected as a judgment of the local taxing authority, and the rebate as a reassessment of the local property tax levy, then one can see where the constitutionality of this tax rebate scheme could be called into question.

W. Edwards Deming is well known for advising the Japanese auto industry in the 50’s on how to build better cars. American manufacturers failed to adopt his suggestions and have since fallen behind the Japanese. While the principles he developed were targeted at production, they can be adapted to all sorts of activity.

One area that has clearly failed to learn from Demming’s work is government; specificly the management of government.

Demming wrote “the prevailing system of management must undergo a transformation. A system cannot understand itself. The transformation requires a view from outside.” This philosophy describes specifically why the American political system is successful. The founders understood that because power corrupts, there must constantly be a group of outsiders showing the public what is going wrong.

Many people look at those who point out what is wrong with government as malcontents. They hear the complaining and they pass it off as people never being satisfied. While this is often a component of dissent, there is generally good reason for the complaints.

When something is going wrong in government, the problem will not be fixed by those in the middle of it. It must be fixed by people without personal agendas in the matter.

While the most clear situation this principle refers to is WSI, we must all remember that people on the inside of any organization are not seeing the forest for the trees. The perspective of outsiders is required to remedy situations where group-think has taken over.

For more on W. Edwards Demming visit http://www.deming.org/.

As a graduate of Dickinson State University I would like to question the policy of artificially keeping education costs high.  Based on the September 19th story by “DSU official upset with UND’s online pricing,” the only conclusion that can be made is that DSU would like the State Board of Higher Ed to practice what can only be described as price fixing. 

The story says that vice president of student affairs, Rich Brauhn, is upset that the University of North Dakota is charging too little for its online courses.  So instead of lowering the price of online courses at DSU to match market trends, the solution is to force UND to raise their prices?

Not only does that defy logic, but it defies the purpose of state subsidized education.  The universities are not businesses.  They are not revenue streams for the state, the board of regents, or the alumni association.  They are a service provided by the taxpayers to educate the next generation, and are the only form of so-called “economic development” proven to work most times it is tried. 

The role of everyone from the governor to the school administrators, all the way down to the janitors, must be to provide the best product at the cheapest price possible.  Universities are not funded by the taxpayers to allow for the maximum tuition possible, they are funded by the taxpayers to minimize the impact on the student’s fiscal future caused by tuition and student loans. 

Until certain people in decision making capacities realize that students are customers and not just revenue producing drones, universities will not be fulfilling their roles.  At that point the taxpayers and voters, who are really shareholders, will be forced to make changes that will clamp down on this sort of price gouging.