Memorial Day: Remembering those who died in our nation's service

A history of the day.

A tribute.



Changing of the guard at Arlington National Cemetery. Video after the jump.

Clark County teachers only getting one pay increase next year

They usually get two (plus COLAs), but after Clark County teachers approved a new contract, this year they're only receiving one.

Freezing pay hikes normally given to teachers with every additional year of work is expected to save the district about $15 million. With teachers and other licensed personnel represented by the union — 18,000 in all — accounting for 67 percent of the district’s personnel costs, the tentative deal helps to clear a major hurdle to presenting a balanced budget for approval when the School Board meets May 19.

Ruben Murillo, president of the Clark County Education Association, said the proposed deal with the district would preserve teacher jobs with no loss of benefits or pay. Under the terms of the tentative agreement, teachers will continue to earn salary increases based on educational attainment, such as completing master’s degrees. [Emphasis added]

I guess this is what they mean by "shared sacrifice." You, the taxpayer, sacrifice and they, the government union members, share in the pay increases.

“Our members supported the concept of shared sacrifice,” Murillo said.

Funny how sacrifice for a public employee means getting a pay increase, and sacrifice for a private employee means 14.2 percent unemployment.

What's really sad is that we're going to be paying teachers for something — advanced degrees — that has no correlation to improving student achievement (p. 11).

Perhaps most remarkable is the finding that a master’s degree has no systematic relationship to teacher quality as measured by student outcomes. This immediately raises a number of issues for policy, because advanced degrees invariably lead to higher teacher salaries and because advanced degrees are required for full certification in a number of states. Indeed, over half of current teachers in the US have a master’s degree or more.

It's policy decisions like this that have led to Nevada nearly tripling inflation-adjusted, per-pupil funding over the last 50 years, but remaining stagnant in student achievement.



It doesn’t have to be this way. NPRI has put forward a proposal that would save Nevada $1 billion over the next 10 years and increase educational freedom, school competition and student achievement. Or we could emulate Florida's educational reforms from 1998. The results speak for themselves.

Daily Show: Marines in Berkeley

Alternative title: The Daily Show destroys Code Pink.

This is old, but also hilarious. I'll have a more fitting Memorial Day post up later this weekend, but with the military on my mind, I wanted you to enjoy this.

The Daily Show With Jon Stewart	Mon - Thurs 11p / 10c
Marines in Berkeley
www.thedailyshow.com
Daily Show Full Episodes Political Humor Tea Party

Cutting the budget

Despite the Great Recession - which has resulted in 27 months of continually increasing unemployment - the Nevada Legislature has decided to continue increasing education spending. The spending increases have been so great over the last three years that the recent round of budget cuts to education still leaves K-12 schools with more money this biennium than in the last.

Starting in FY 2008, the legislature increased the level of basic support per pupil and overestimated the number of students that would enroll in Nevada's public schools. This resulted in an appropriation of far more money than was necessary for public schools to operate adequately.

If the Nevada Legislature rolls back basic support per pupil to 2007 levels and adjusts for inflation, the state could see around $250 million in savings.

This figure is estimated by taking the current Distributive School Account figures and simply replacing the FY 2010 and FY 2011 basic support figures with inflation-adjusted 2007 figures. For FY 2010, this would be about $5,000 instead of $5,251. This estimate is, of course, based on the current 2009-11 biennium, and actual savings for the 2011-13 biennium would vary depending on the level of local school support taxes.

Since the quality of education in Nevada has not improved in any statistically significant way since 2007 (or in the last decade) we can reasonably assume the reductions will not harm students. Furthermore, a $250 million reduction would amount to a mere 3.8 percent reduction to K-12 operating budgets for the biennium.

In a state where the private sector wages decreased 12.6 percent and unemployment tripled, a 3.8 percent cut cannot be considered devastating.

U.S. unemployment

Milton Friedman, like many other economists, argued that raising the minimum wage increases unemployment for low-skill workers. Low-skill workers are most likely to be young adults and minorities (who are more likely to be exposed to a poor system of public education and, therefore, are provided a poor foundation for gaining marketable skills).

So how do the unemployment figures look for young adults and minorities?

According to the Bureau of Labor Statistics, unemployment among adults in April averaged 9.9 percent nationally but was 25.4 percent among teenagers. White teenagers averaged an unemployment rate of 23.5 percent, while 37.3 percent of African-American teenagers were estimated to be unemployed. There is no data on teenage unemployment for Hispanics or Asians.

There is also a large disparity in unemployment among adults age 20 and older:

White: 9 percent
Black: 16.5 percent
Hispanic: 12.5 percent
Asian: 6.8 percent

Nevada already has the second-worst unemployment rate in the nation - at 13.7 percent. It may increase as the minimum wage in Nevada will increase to $8.25 for wage earners without insurance - $1 higher than the federal minimum. Expect more teenagers and minorities to be unemployed as a result.

Just Say NO to bailouts for public education

*Public education should be about educating children and improving results, not about creating jobs for adults.


The end of the world ... for public education ... is near!

We hear that refrain all the time. In Nevada we've heard it for the last three years, yet there have been almost no real cuts to public education funding. K-12 education in Nevada is spending about as much as, if not more than, it was three years ago.

In his doomsday warnings, U.S. Education Secretary Arne Duncan claims that without a $23 billion K-12 education bailout, 100,000-300,000 K-12 workers could lose their jobs.

There is just one problem. According to Neal McCluskey of the Cato Institute,

The federal Digest of Education Statistics tells us that in the 2007-08 school year (the latest with available data), US public schools employed more than 6.2 million teachers and other staff. Losing 300,000 of those jobs would only be a 4.8 percent cut — unfortunate, perhaps, but hardly catastrophic.

And 300,000 is the worst-case scenario. The AASA figure of 275,000 would be just a 4.4 percent cut. The low end of Duncan's prediction, 100,000 positions, would constitute only a 1.6 percent trim. That's less than one out of every 60 public-school jobs.

As with most doomsday warnings dealing with public education, the reality is considerably less catastrophic than advertised. More importantly, far more than 5 percent of private-sector workers have lost their jobs.

Bailouts are intended to keep poorly functioning entities alive just a little longer, and public education is no exception. Keeping bad schools open and bad teachers teaching is not a good idea - it is a waste of scarce resources. Robert Enlow, president and CEO of the Foundation for Educational Choice, has a better idea - give the money to the parents.

If this president and Congress really wanted to help children and benefit teachers, it would emancipate students so their parents could use their own tax dollars to obtain educational services wherever they wanted — at charter schools, virtual schools or with a voucher to transfer to the private school of their choice. But that's not really what they want. Instead, they want to maintain a status quo that is designed to benefit the adults rather than brighten the future of children.

Maintaining the status quo is the express purpose of a school bailout. The problem is, we may not need all these expensive teachers in the first place. In fact, while the number of teachers has grown, student achievement has not. McCluskey states,

Between the 1970-71 school year and 2006-07, inflation-adjusted US public-school spending more than doubled, from $5,593 to $12,463 per pupil. The number of staff per pupil ballooned about 70 percent.

This might have been a fine investment — had it produced anything approaching commensurate improvements in achievement. But it didn't, according to scores on the National Assessment of Educational Progress — the so-called Nation's Report Card.

The U.S. economy will continue to struggle if we keep taking money out of the productive parts of the economy to fund programs that produce little to no benefit for society. Spending excessively on additional teachers when doing so has not produced results has been a waste of money – a $290 million waste of money in Nevada.

Will New York's high income tax rate hurt the Knicks' chances of signing LeBron James?

Will we witness state taxes influencing where LeBron James plays basketball?

Forgive the intersection of sports and politics, but this is an interesting case study for how taxes influence decisions.

For those of you who don't read ESPN everyday, LeBron James is the biggest free agent on the NBA market, and where he decides to sign will significantly affect the league for the next few years. He's so good that for the last two years, the New York Knicks traded the majority of their team (and lost a lot of games) in order to clear cap space to sign LeBron and another big-name free agent this summer. Chicago, Miami and Cleveland are also considered to be "in the running" to sign him.

One factor (of many) in his decision is going to be money. Because of the NBA salary cap, he's either going to be making $95 million over five years or $125 million over six years (if he signs with his current team, the Cleveland Cavaliers, or signs with the Cavs and is traded). LeBron also makes about $25 million a year in endorsements, which is likely to increase.

But while the amount LeBron is paid would be the same in each of his potential destinations, the amount he will receive will vary greatly. Why? Because while Florida doesn't have an income tax, New York's personal income tax is 8.97 percent and the rate in New York City is 12.62 percent (include the state income tax). And now, New York politicians want to raise the rate even further.

New York Assembly Speaker Sheldon Silver is reportedly pitching a plan for an increased "millionaire's tax" aimed at 75-85 thousand New Yorkers making $1 million or more a year…

The plan would jack up a current millionaires tax another 11-percent. The current "millionaire's tax" actually starts affecting people who have incomes over $200,000. High income tax earners would pay more than 13-percent of their salary in local taxes.

Let's do the math. At 13 percent, LeBron James would pay over $35 million in state income taxes alone over the next six years (with current endorsement amounts). Add to that a 35 percent federal tax rate and 6.2 percent tax for social security, and if LeBron goes to New York, after taxes he'll end up with less than half of what he earns.

Now, influencing Lebron's decision will undoubtedly be many factors — basketball, winning, loyalty, branding — but one factor that no one's talking about is the tax burden that would come with his potential destinations. And since LeBron wants to build himself into a billion-dollar brand, losing 13 percent of his income that he wouldn't be losing in Florida is something he and his financial advisors will likely consider.

LeBron isn't the only businessman who's influenced by taxes. Millionaires have been leaving New York and other high-tax states for years.

CEI sues NASA over FOIA requests

The Competitive Enterprise Institute in Washington, DC has filed suit against NASA because the agency has stonewalled public records requests filed under the Freedom of Information Act for more than three years. Moreover, CEI analyst Chris Horner writes that NASA's supposedly independent temperature record is actually just the same record used by the Climate Research Unit at East Anglia University - the record that was at the heart of the ClimateGate scandal because it had been forged or manipulated.

Massachusetts shows what Obamacare will lead to

A great op-ed by Sally Pipes of the Pacific Research Institute:

The future of US medicine under ObamaCare is already on display in Massachusetts. The top four health insurers there just posted first-quarter losses of more than $150 million. Most of them blamed the state's decision to keep premiums at last year's levels for individual and small-business policies, when they'd proposed double-digit hikes to match the soaring costs they've seen under the state's universal-coverage law.

The companies have gone to court to challenge the state's action -- it apparently had no basis for its ruling beyond the political needs of Gov. Deval Patrick. If they win, Bay State health premiums will continue their rapid rise; if they lose, they'll eventually have to stop doing business in Massachusetts -- and the state will be that much closer to a "single payer" system of socialized medicine.

The Massachusetts "health reform" disease means more than just bureaucrats setting prices. It also includes rising government spending and taxes; politicians demonizing doctors, hospitals and insurers -- and patients getting lectured that the restrictions of managed care are good medicine.

It's what's in store for all of America. The Bay State's structure provided the base for ObamaCare. "Basically, it's the same thing," says MIT economist Jonathan Gruber, who was a health adviser to GOP Gov. Mitt Romney and President Obama.

What's going to happen in Massachusetts and its Romneycare sytem? Either insurance costs are going to explode or private insurers will be driven out of business. And what happens once Massachusetts moves closer to a single-payer system? Rationing.

[T]he inevitable next step is rationing at the point of consumption. Massachusetts state Senate President Therese Murray has proposed putting an end to "fee for service" medicine in the next five years and moving to a system of capitated managed care, where doctors receive a flat fee for each assigned patient.

This "HMOs for all" approach is designed to lead to soft rationing -- which, in medical terms, means people will have a hard time finding doctors or seeing the ones they have. It's already started. In Massachusetts, one doctor in two is not accepting new patients. Waits for treatment in Boston are the highest in the nation.

Read the whole thing.

This shouldn't come as a surprise to the rest of the country, though. Canada's and Britain's socialized medicine systems have been rationing for a long time.

If you’re interested in hearing more from Sally Pipes, check out her speech at an NPRI luncheon from earlier this year.

Nevadans and the federal income tax

According to the latest state fiscal fact by the Tax Foundation, 35 percent of tax filers in Nevada do not pay a federal income tax. This includes individuals that have zero net liability as well as those that receive transfer payments such as the Earned Income Tax Credit. (A family of four with income up to $52,000 may have no federal income tax liability at all.) Individuals who do not file income tax returns are not calculated into this percentage. According to the Tax Policy Center, 47 percent of all American households pay no federal income tax.

At 35 percent, Nevada has the 25th highest percentage of filers that do not pay federal income taxes.

California Democrats seek to extend 'temporary' taxes

From the AP:

Democrats in the state Senate on Monday countered Gov. Arnold Schwarzenegger's proposed budget cuts with a plan to raise taxes by nearly $5 billion, largely by extending temporary taxes and delaying corporate tax breaks for two years.

During a Senate subcommittee hearing, Democrats said they want to delay the start of corporate tax credits demanded by Schwarzenegger and Republicans last year to secure enough budget votes. Their plan also would extend by two years the temporary increases in the income tax and vehicle license fee that were approved last year.

Democrats proposed raising the tax on alcohol but would allow a temporary 1 cent increase in the state sales tax to expire at the end of the year. [Emphasis added]

Hmmm, now what neighboring state of California passed "temporary" taxes in its last legislative session?

The taxes [raised during Nevada's 2009 Legislative session] included a $220 million increase in hotel room taxes enacted early in the session with Gibbons' blessing and the $781 million package of temporary increases to four existing taxes enacted by veto override Friday.

As election season approaches, Nevadans deserve to know candidates' response to this question: "Would you raise taxes by extending or making permanent the 2009 temporary tax increases?"

This is an important question to ask, because all around the country — and even in Nevada — "temporary" taxes usually aren't.

For more information on how your legislators voted, check out NPRI's 2009 Legislative Review and Report Card. The Report Card is on pages 18 and 19.

Unemployment for Nevada's young workers hits 21.8 percent

What results when you combine an epic failure of a stimulus with Nevada's minimum-wage law? High unemployment that disproportionally affects Nevada's youngest and most unskilled workers.

The Nevada Department of Employment, Training and Rehabilitation, which tracks the jobless rate, says March data show 21.8 percent of 16 to 24-year-olds were unemployed. The rate, calculated over a 12-month moving average, is almost twice that of older age groups…

And for many people this year, the stakes are higher. Jobs are needed not simply to stay busy or earn spending money but to help pay the family bills.

"We're seeing more turmoil, family stress and teens competing with older people for fewer jobs," said Erik Schoen of Community Chest Inc., a Virginia City-based nonprofit resource center for rural counties in northwestern Nevada.

"For teens, there are no magic bullets. They are at a disadvantage with not a lot of experience." [Emphasis added]

Are the failed stimulus and Nevada's well-intentioned but misguided minimum-wage laws the only factors affecting young-worker unemployment? Of course not — the economy is enormously complex. But the minimum-wage law is a factor that is depressing youth employment.


Young workers (in Nevada, the state minimum wage doesn't apply to those under 18) have little to no experience and little to no skills, because they are just starting their careers. In essence, they are not able to provide the same level of value as someone who's proven himself or has greater skills (older workers).

In a free market, this leads to younger workers being paid less, because they provide less value to their employers. As their experience and skills increase, however, they become more valuable and worthy of a higher salary. If their current employers don't increase their pay, they can work for another employer who will pay them more, or they can start their own businesses.

While it'd be nice to pay every employee more regardless of his abilities, this would lead to businesses or (governments!) going bankrupt. What happens instead is that younger and unskilled workers just aren't able to find work, which can stunt their earning potential for up to 10 years.

Unfortunately, the news isn't getting better. I called the Nevada Department of Employment, Training and Rehabilitation this morning, and they told me the unemployment rate for young workers jumped to 24.1 percent in April.

For anyone not familiar with Nevada's minimum-wage law, the RJ had a good description this morning.

Since then, the state's minimum wage has jumped more than 40 percent -- and will go up again on July 1 to $7.25 for those who have worker-paid health insurance. The minimum wage for those who have no such insurance will be $8.25. (The difference is a result of Big Labor's push to punish employers that don't provide health insurance.)

To be fair, the federal minimum wage also has increased — so the problem isn't just with Nevada. But our state law has exacerbated the problem.

Nevada's jobless rate jumps to 13.7 percent

So, how's that stimulus working out?

Unemployment in Las Vegas in April shot to a record high of 14.2 percent with an estimated 140,900 residents out of work.

The state Department of Employment, Training and Rehabilitation also said the Nevada jobless rate hit a record high of 13.7 percent for the month.

Just another reminder that President Obama's stimulus was and is an epic failure.

I wonder if Sen. Harry Reid still thinks rising unemployment is good news? Video after the jump.

What the Sun gets right about education

From today's editorial:

One of the problems with education today is that it too often has a one-size-fits-all quality. The reality is that not all kids learn at the same pace or have the same academic interests. That is why on one hand it is encouraging to see the district do what it can to better tailor education to the needs of each child.

Exactly — the one-size-fits-all public education system has been and is a disaster. Taking away choice and forcing children into a government-run, union monopoly of a school system has led to Nevada having one of the worst educational systems in the country. It's encouraging to see the Sun recognize the need for more variety in education and wanting unique educational choices for Nevada's unique children.

Unfortunately, while its goal is laudable, the editors at the Sun have no idea how to make it a reality.

Still, until we provide the schools with a better level of funding to accomplish this, students in Nevada won’t receive the education they deserve.

Fact: In the last 50 years, Nevada's inflation-adjusted, per-pupil spending has nearly tripled. Educational achievement has been and remains stagnant.

*Per-pupil spending, adjusted for inflation. 1959-2007

But there is a better way. Just over 12 years ago, Florida enacted a series of free-market education reforms that changed its one-size-fits-all system. These changes included online schools, over 350 charter schools, corporate tuition tax credits and scholarships for students to leave failing schools. And Florida did this while increasing inflation-adjusted, per-pupil funding by less than 70 percent of the national average and only $152 more than Nevada has since 1997. The results of reform speak for themselves.



And for those who are looking for alternatives to the one-size-fits-all education system we currently have, Patrick R. Gibbons, NPRI's education policy analyst, has a new study out on Virtual Schools and how online education can — and already is beginning to — change Nevada education.

Has sovereign debt reached the point of no return?

That's the question asked, and answered, by Philipp Bagus in his Mises Institute column today. I highly recommend this piece. Although Bagus is primarily concerned with how the Greek bailout is likely to exacerbate sovereign debt crises within the EU, many of the lessons are equally applicable to US states (California comes instantly to mind).

Nevada Vision Stakeholder Group: Recap and where does it go from here?

Nevada Vision Stakeholder Group Chairman Robert Lang

If you've followed any of the coverage of the Nevada Vision Stakeholder Group's Friday meeting or Write on Nevada's live blog, then you know that the NVSG rejected its and Moody's Preliminary Executive Summary and is going to meet at least once more to confirm a new document.

For those who aren't familiar with the NVSG, it's a group comprised mainly of government officials, government employees (or union officials) and those receiving government handouts. The Nevada Legislature's Interim Finance Committee created the NVSG to set five-, 10- and 20-year quality-of-life goals for Nevada that would require greater government spending. The legislature, led by Sen. Steven Horsford, would, in turn, use these calls for more government spending as political cover for its attempt to pass a tax increase, specifically a broad-based business tax, during the 2011 Legislative Session.

The Nevada Vision Stakeholder Group's decision to meet again and demand that Moody's (the NVSG's consultant, which is writing the report) rewrite the report was unexpected.

From the NVSG's first meeting in January 2010 (incidentally, the same month NVSG Chairman Robert Lang moved to Nevada from Virginia), its last meeting was going to be the May 14 meeting. Moody's Analytics, the stakeholders, Chairman Lang and the public all expected this. So when Moody's and the NVSG released the Preliminary Executive Summary early last week, I expected Chairman Lang to push it through.

A funny thing happened, though — thanks to good reporting by the RJ, stakeholder Doug Busselman's comments, talk radio coverage from KDWN and KXNT and the Nevada Policy Research Institute's commentary, the public found out about the report and wasn't impressed at all.

This caused Chairman Lang to back away from the Executive Summary at the very beginning of the meeting. He even claimed it never called for tax increases (although it did call for government "investment" well over a dozen times). Lang then threw Moody's under the bus: "All we have is an executive summary of a report that doesn't exist." Reflecting the consensus of the other members, he then demanded that Moody's redo everything and produce a full report for the NVSG to vote on.

Chairman Lang and other big-government advocates retreated rhetorically at Friday's meeting, but they retreated only in their words. The purpose and intent of the NVSG — providing political cover for tax increases in 2011 — still remains the same. I expect to see this at the NVSG's next meeting. They have not scheduled it yet, but when they do, I will let you know.

Advocates of freedom and limited government should take heart that exposing the NVSG's agenda has forced the NVSG into a temporary regrouping, but we shouldn't be naïve and think we have won the battle over tax increases in 2011 yet.

The (political) fight's only just begun.

How the Clark County Democratic Party platform "promotes" capitalism

The Clark County Democratic Party has just released its 2010 platform. The good news is that it claims to support capitalism and small businesses.

It is the government's responsibility to promote capitalism … Since the backbone of the American economy is small business, responsible for up to 75% of all employment, supports effective government policies to foster small business development and success.

The bad news is that aside from a couple of platitudes, the rest of the platform is full of job-killing ideas and regulations. For instance:

2. Supports legislation that requires firms receiving favored tax status to meet fair economic standards for wages, benefits and work conditions for employees and to satisfy all Federal and State standards of environmental and social responsibility…

4. Encourages public policies that level the playing field for all Nevada businesses by providing affordable health care for employees and their families; equitable taxes and regulation; fair access to capital; and support for business innovation and technology.

Core services must not be privatized…

Efficient and fair tax structure that meets the legitimate needs of its citizens by employing progressive tax policies that share the cost and meet the needs of core services across the broadest spectrum of participants that is linked with their ability to pay.

1. Supports examining all possible tax options to ensure a stable, long term tax base.

2. Supports efforts to change the Nevada State Constitution so that the mining industry is taxed on “gross revenues” instead of “net revenues.” …

8. Supports taxes based on wealth, not just work.



9. Tax policy needs to ensure that businesses cover the true social and environmental costs of their products and services instead of shifting the costs to the community of future generations.

Unfortunately, that's just the warm-up. Check out the party’s job-killing and economy-depressing labor platform.

Urges the state and federal government adopt the Workers Bill of Rights:
WORKER’S BILL OF RIGHTS

In the workplace, every individual is entitled to all of the basic rights and protections of the United States Constitution and The Constitution of the State Of Nevada.

Every worker is entitled to health care disability benefits, unemployment benefits and retirement Benefits.

Every worker and every Public Employee is entitled to organize for the benefit of Collective Bargaining and an absolute right to Binding Arbitration.

Every worker is entitled to a living wage and fair compensation and benefits for their labor including the opportunity for affordable healthcare for themselves and their family.

Every worker is entitled to a safe and healthful work environment.

Every worker is entitled to protection from unfair business practices or work rules or the exporting of jobs for the purpose of denying or evading The Worker's Bill Of Rights.

Every worker is entitled to a work place environment that promotes a positive Worker-Business Partnership for the benefit of all.

Prohibits business from utilizing unfair business practices and exporting jobs to evade the basic Worker’s Bill of Rights.

Supports the right to organize with collective bargaining and binding arbitration including all public workers

1. Protect public employee collective bargaining and don’t roll back NRS 288.

2. Calls on employers to acknowledge the rights of employees to organize, and to support those employees who organize a union by recognizing that union by simple card check recognition only. Additionally, calls on employers to negotiate fairly with those workers.

3. Supports legislation that prevents, and opposes the permanent replacement of workers engaged in a legal strike.

4. Opposes the anti-worker so-called “paycheck protection” initiative which destroys the political viability of unions…

Supports a living wage and fair compensation and benefits for all workers

1. Supports efforts to eliminate poverty by increasing the minimum wage, increasing salary as cost of living increases, and repealing withholding taxes on unemployment compensation.

2. Urges the use of project labor agreements on government projects.

If you like the sound of these ideas, please move to Venezuela, Greece or California. Those places have implemented policies based on the ideas outlined above and are now enjoying the inevitable results of government getting in the business of redistributing wealth.

If Nevada wants to avoid the long-term disasters facing Venezuela, Greece and California, it must confine state government to its proper role — ensuring public safety and individual freedom and providing basic services, like education and roads, through the most effective means.

(h/t Ralston)

Government shouldn't pick the winners and losers: Las Vegas arena edition

Yesterday the Clark County Commission heard proposals for three new sports arenas in Las Vegas. Now, while I'm all for sports and for businesses expanding, there's a problem with each of the proposals — they all want government handouts.

Three rivals have detailed plans for developing state-of-the-art arenas that would cost half a billion dollars or more, seat 20,000-plus people and require some public funding.

Last month, commissioners resisted the idea of subsidizing an arena when the county is grappling with a budget crunch. A couple of commissioners said last week that they would not rule out offering public aid but that they were unsure about the timing.

"I just don't know if it's the right time," Commissioner Steve Sisolak said. "I have a lot of questions. I'm still concerned with record unemployment and a huge shortfall."

Proponents estimate that an arena would create 3,000 to 4,000 construction jobs while it was being built, and thousands of support jobs after it opens.

Well-paying construction jobs that last 18 months or more would be welcome in this economy, Sisolak said. But he questioned how much taxpayers would be on the hook for financially and whether it was worth generating short-term construction work and low-paying service jobs.

Sisolak and other commissioners are right to resist subsidizing an arena (or any business) during a recession, but they shouldn't stop there. Taxpayers have no business subsidizing an arena (or any business) when times are good, either.

One of the problems conservatives/libertarians have with welfare and other handouts is that they reward poverty. You receive "free" money for not working. This changes the recipient's mindset and makes him or her less likely to work. Also, it encourages other people who are working, but only earning a low level of income, to quit working and get just as much or just a little less from the government.

The same problem emerges when government gives subsidies or redevelopment money or special tax breaks to businesses. Instead of consumers rewarding a business for meeting customer demand, a business is now rewarded for its ability to lobby and impress politicians. In turn, this leads other businesses to shift their focus from satisfying customers to satisfying politicians, which means scarce resources will be used to justify political, not consumer, demand. And in a world with limited resources, this leads to less employment and wealth creation, because political dollars and tax breaks come at the expense of the private sector and become entrenched in businesses that are only profitable because of government subsidies.

And if an arena were to go through, it's easy to see who the loser would be — the MGM Mirage, which already owns five arenas in the Vegas area.

MGM Mirage Chief Marketing Officer Bill Hornbuckle said the company is not opposed to having more arenas in the area, but giving one group public financing would be an unfair competitive advantage.

That's exactly right. Let the marketplace, not the politicians, determine the winners and losers in the economy.

And as election session gears up, be cautious when politicians start talking about "creating jobs," as they're usually referring to special tax breaks or subsidies for favored businesses. Low taxes are a good thing, but only if the rate is uniformly low. Politicians shouldn't be picking the winners and losers in the economy, even if they're using tax breaks.

People, not politicians, create jobs.

Public vs. charter schools

From New York. The case for school choice in six paragraphs.

A building on 118th Street is one reason that the parents who are Perkins’s constituents know that charters can work. On one side there’s the Harlem Success Academy, a kindergarten-through-fourth-grade charter with 508 students. On the other side, there’s a regular public school, P.S. 149, with 438 pre-K to 8th-grade students. They are separated only by a fire door in the middle; they share a gym and cafeteria. School reformers would argue that the difference between the two demonstrates what happens when you remove three ingredients from public education — the union, big-system bureaucracy and low expectations for disadvantaged children.

On the charter side, the children are quiet, dressed in uniforms, hard at work — and typically performing at or above grade level. Their progress in a variety of areas is tracked every six weeks, and teachers are held accountable for it. They are paid about 5 to 10 percent more than union teachers with their levels of experience. The teachers work longer than those represented by the union: school starts at 7:45 a.m., ends at 4:30 to 5:30 and begins in August. The teachers have three periods for lesson preparation, and they must be available by cellphone (supplied by the school) for parent consultations, as must the principal. They are reimbursed for taking a car service home if they stay late into the evening to work with students. There are special instruction sessions on Saturday mornings. The assumption that every child will succeed is so ingrained that (in a flourish borrowed from the Knowledge Is Power Program, or KIPP, a national charter network) each classroom is labeled with the college name of its teacher and the year these children are expected to graduate (as in “Yale 2026” for one kindergarten class I recently visited). The charter side of the building spends $18,378 per student per year. This includes actual cash outlays for everything from salaries to the car service, plus what the city says (and the charter disputes) are the value of services that the city contributes to the charter for utilities, building maintenance and even “debt service” for its share of the building.

On the other side of the fire door, I encounter about a hundred children at 9:00 a.m. watching a video in an auditorium, having begun their school day at about 8:30. Others wander the halls. Instead of the matching pension contributions paid to the charter teachers that cost the school $193 per student on the public-school side, the union contract provides a pension plan that is now costing the city $2,605 per year per pupil. All fringe benefits, including pensions and health insurance, cost $1,341 per student on the charter side, but $5,316 on this side. For the public-school teachers to attend a group meeting after hours with the principal (as happens at least once a week on the charter side) would cost $41.98 extra per hour for each attendee, and attendance would still be voluntary. Teachers are not obligated to receive phone calls from students or parents at home. Although the city’s records on spending per student generally and in any particular school are difficult to pin down because of all of the accounting intricacies, the best estimate is that it costs at least $19,358 per year to educate each student on the public side of the building, or $980 more than on the charter side.

But while the public side spends more, it produces less. P.S. 149 is rated by the city as doing comparatively well in terms of student achievement and has improved since Mayor Michael Bloomberg took over the city’s schools in 2002 and appointed Joel Klein as chancellor. Nonetheless, its students are performing significantly behind the charter kids on the other side of the wall. To take one representative example, 51 percent of the third-grade students in the public school last year were reading at grade level, 49 percent were reading below grade level and none were reading above. In the charter, 72 percent were at grade level, 5 percent were reading below level and 23 percent were reading above level. In math, the charter third graders tied for top performing school in the state, surpassing such high-end public school districts as Scarsdale.

Same building. Same community. Sometimes even the same parents. And the classrooms have almost exactly the same number of students. In fact, the charter school averages a student or two more per class. This calculus challenges the teachers unions’ and Perkins’s “resources” argument — that hiring more teachers so that classrooms will be smaller makes the most difference. (That’s also the bedrock of the union refrain that what’s good for teachers — hiring more of them — is always what’s good for the children.) Indeed, the core of the reformers’ argument, and the essence of the Obama approach to the Race to the Top, is that a slew of research over the last decade has discovered that what makes the most difference is the quality of the teachers and the principals who supervise them. Dan Goldhaber, an education researcher at the University of Washington, reported, “The effect of increases in teacher quality swamps the impact of any other educational investment, such as reductions in class size.”

This building on 118th Street could be Exhibit A for that conclusion.

Threats to free speech on campus

"New Threats to Freedom," a book about free speech, campus censorship and political correctness run amok, hits bookstores this week. One chapter, written by Freedom for Individual Rights in Education (FIRE) President Greg Lukianoff' and titled "Students Against Liberty," highlights the censorship of Chris Lee, an African-American student at Washington State University.

Lee wrote a musical parody of Mel Gibson's "The Passion of the Christ" titled "The Passion of the Musical," which offended a wide array of students and professors at the university, including Mormons, Catholics, Methodists, gay and lesbian students, Latinos, feminists, the university's professors and even the local police. Ironically, the university not only defended the actions of the hecklers as free speech (some of whom shouted threats to Mr. Lee and his actors), but it even paid for 40 students and professors to attend, protest and heckle the play. According to Lee, the local police even refused to defend the actors if the crowd got physically violent.

Yes, this happens frequently in America - mostly in our institutions of alleged higher learning.

The university system is full of authoritarians who are teaching students that it’s perfectly OK to threaten, shout down and heckle in order to silence your political foes. It’s a good thing FIRE is around to put a damper on campus censorship and hypocrisy (click the link to see Washington State University's hypocritical stance on what plays are acceptable and what plays offend).

SEIU underfunds worker pensions, overfunds officer pensions

To paraphrase Orwell, in the SEIU, some are more equal than others.

Both of SEIU's two national pension plans, the SEIU National Industry Pension Fund and the Pension Plan for Employees of the SEIU, issued critical-status letters last year. The Pension Protection Act requires any pension fund that is funded below 65 percent of what it needs to pay its obligations to inform its beneficiaries of the deficit…

An underfunded pension plan does not have enough assets to meet its obligations to retirees in the future. Recovery is difficult if plans are significantly underfunded, as is the case with the SEIU plans. The Pension Benefit Guarantee Corp. (PBGC) insures only a portion of promised benefits to retirees in union multiemployer pension plans. If one of those plans goes bankrupt, the PBGC will guarantee only up to $12,870 in benefits.

Do not worry about Mr. Stern and other high-ranking SEIU officials, though. At age 59, he has 37 years of service in the SEIU and is entitled to a full pension and lifetime health benefits. Unlike SEIU's pension plans for rank-and-file members and union employees, SEIU's officer pension plan, the SEIU Affiliates Officers and Employees Pension Plan, was funded at 102 percent in 2007. (Emphasis added)

So what has the SEIU been doing to take care of its own members — whom, in theory at least, it should be looking out for? Spent over $85 million electing President Obama and the Democratic congressional majority. As a result of this spending, the "SEIU is $85 million in debt, down from its 2008 high of $102 million, and has been forced to lay off employees." So much for the SEIU's claim of being "dedicated to improving the lives of workers and their families."

Unfortunately, the SEIU isn't the only organization with underfunded pensions (or spending problems). As NPRI's Geoff Lawrence wrote recently, Nevada's pension system is in a similar situation.

[Andrew] Biggs [of the Competitive Enterprise Institute] determined that a market valuation of Nevada PERS assets using an economically sound "options pricing" method of accounting for risk reveals a total unfunded liability of $33.5 billion. At current levels, that would amount to roughly 10 years' worth of state General Fund spending! To put it another way, market-priced unfunded pension liabilities amount to 32 percent of state Gross Domestic Product.

According to Biggs' analysis, the probability that PERS' assets will be sufficient to cover accrued liabilities is only 6 percent for police and firefighters and 10 percent for regular employees.

Defined-benefit pensions don't work for government, unions or private companies. Nevada needs to switch to a defined-contribution pension system immediately.

Pro-school-choice Democrat

Pennsylvania state Senator Anthony Williams is running for Governor. Not only does he claim to be against raising taxes, but he also favors parental choice by making the public funding follow the student to whatever school his or her parents choose. To Williams, a public education doesn’t mean public school – it means the public helping kids get the best education possible, whether it is from a charter school, virtual school, magnet school, public school, parochial school or private school.

Ending teacher seniority

On Wednesday, I had the opportunity to discuss two dozen education-reform proposals at a meeting of the Legislative Committee on Education. One in particular dealt with the issue of teacher seniority. I suggested prohibiting the use of teacher seniority in determining teacher termination, job transfers and promotions – meaning: no special preferences given to teachers just because they've taught for more years than other teachers.

Nevada, like so many other states, practices “last hired, first fired,” which protects senior teachers over younger, less experienced and cheaper teachers. It is true that teachers continue to improve their skills over the first three to five years, but seniority also protects some older, more expensive but bad teachers from being fired.

Worse still, senior teachers are more likely to teach in higher-income schools. This means lower-income kids are more likely to be exposed to inexperienced teachers. Ironically, because of this system, low-income kids not only have the least experienced teachers, but they end up subsidizing the costs of higher-priced teachers at the schools for the wealthier kids (individual schools are "charged" for the average salary rather than the actual salary). Progressive public education, indeed.

Arizona banned the use of seniority in determining teacher terminations this month. But Nevada’s Legislative Committee on Education didn’t want to discuss the issue further. Meanwhile, civil rights groups in California successfully litigated a case where the judge ruled that firing teachers based on seniority violated low-income children’s right to a public education.

Seniority rules in California naturally resulted in younger teachers being fired instead of the older teachers. Consistent with the data from around the country, the younger teachers were far more likely to teach at the low-income schools. In L.A., a third of the teachers at the low-income schools had been dismissed. At the wealthier schools? Hardly a dent.

Maybe the Nevada ACLU will be brave enough to bring a suit against their friends in the Nevada Department of Education?

We shouldn’t wait around. If the Nevada Legislature truly cares about improving the quality of education – especially for low-income kids – it will eliminate the concept of teacher seniority.

Live blogging the final Nevada Vision Stakeholder Group meeting

Here we go. The final meeting of the Nevada Vision Stakeholder Group.

Watch live here. Geoff's thoughts are here.

9:05 Lang starts it off. Clarifies that he's from New York, not Virginia. "I picked this place [Nevada]."

Well, welcome Chairman Lang and I hope you enjoy Nevada, but don't think that living here for 5 months or 50 years gives you the right to tell others what determines their "quality of life." It's just especially ironic for someone who just moved here (in January, 2010!) to tell Nevadans what determines their quality of life.

Lang: I don't want to bring big government.

Ummm...have you seen your Preliminary Executive Summary? Although to be fair the NVSG hasn't approved it yet. Which Geoff notes, by the way.

9:09 Lang says universities should get to keep their own tuition. Not a bad idea.

9:12 Lang wonders what the NVSG would be voting on. Looks like there could be another meeting. Says committee members have ACCESS to Moody's. That's a change from before when I've been told that only Lang had direct access to Moody's.

9:14 Moody's is backing away from its Preliminary Executive Summary. "Doesn't represent consensus."

9:15 Again this is a total change. This was "supposed" to be the final meeting.

9:16 Don Snyder: "Not a political process." Wants discussion away from the public forum. "Selectively" add revenue.

Again this was and is a political process, because it was set up by the Interim Finance Committee in order to try and justify raising taxes in 2011. That was the whole point of this process and report.

9:21 Lang continues to back away from the report. "All we have is an executive summary of a report that doesn't exist."

9:23 Snyder: Quality of life promises hollow without a more stable business environment.

Just a reminder to the NVSG, you don't need government to "invest" in order to grow the economy or produce jobs. In fact, government investment hinders new economic growth.

9:27 Katy Simon: "We're just a glorified focus group." Wants to use 4th grade NAEP scores instead of 8th grade. Note: NPRI already uses fourth grade scores, because by 8th grade it's too late for the students.

Couldn't agree more with the focus group comment. Definitely a focus group of those who benefit from larger government.

9:34 Unidentified member of the NVSG is glad Dr. Lang isn't from Nevada. Brought a new perspective.

I wouldn't care where he's from except that the whole point of this group is to determine "quality of life" goals for Nevada. I don't think anyone should determine someone else's quality of life through government, but for someone who just moved here to tell Nevadans what will determine their quality of life is especially distasteful.

9:40 At the moment they are going around the room and each member is giving their thoughts. Will post anything that's particular interesting, but the take away is that this is going to be a long meeting. Nothing will be decided or voted on at this meeting, which is a change.

9:44 Unidentified member talking about innovation in education.

Innovation is going to be key, because nearly tripling inflation-adjusted, per-pupil education spending in the last 50 years hasn't improved student achievement.

9:59 Lang: No part of this document called for tax increases. Guide posts for assuming budget restraint. Cut but give an opportunity to reform. What's the third way?

This I don't disagree with rhetoric-wise. I just don't trust these words after watching four months of this meetings. But I'm willing to trust (but verify). If Chairman Lang or others are looking for ideas on how to increase results while saving money, we'd be more than happy to help. But I'm still skeptical of his intentions.

10:07 Susan Rhodes: This was a draft.

Again this is a big change from before, because today was supposed to be the final meeting (for instance see the title of this blog or check out the NVSG website).

10:14 After listening to about a dozen members talk about the Preliminary Executive Summary, it's clear that the group is no where never consensus. Which isn't surprising, because 19 different people have 19 different ideas of what quality of life looks like. Just like Nevada's 2.7 million people have 2.7 million different ideas about what determines quality of life. That's why it's so ridiculous to think that these 19 people can determine quality of life for 2.7 million people.

That's the beauty of freedom. As long as you don't infringe on someone else's rights, you can do what you think leads to the best quality of life for yourself.

If this was a private group that was going to use private money (and without the force of government) to try and implement these goals, I wouldn't have any objections. The problem is when government tries to determine quality of life goals for individuals.

10:19 Snyder echoes many others grateful to Chairman Lang for his outside perspective and elevating the dialogue. Bonus joke from Snyder that's funny, because it's true! "He's been here three times as long as when we started."

10:29 Busselman objects to the idea in the report that there was ever a consensus. Lang says they've been held back on doing that, because the open meeting laws have prevented free-flowing networking that leads to consensus. Says it would have been different in the private sector.

Yes it would be different in the private sector, because no one in the private sector has the ability to take my money or your money or require us to do certain things. Leave these "qualify of life" ideas in the private sector.

10:34 Busselman mentions that the Brookings Institute says Nevada's local and tax burden is 22nd in the country. Awesome.

Moody's tries to brush it aside.

10:37 Robert Potter wants the NVSG to protect state worker benefits.

Umm ... what happens when Nevada runs out of money, because our pension system is underfunded?

10:43 Potter doesn't remember when the group decided they supported high-speed rail (although it's in the report).

Neither do I.

10:46 Paul Dugan says UNR President isn't happy with graduation rate at UNR! Wants more specific goals for K-12 education.

10:57 Almost done with the first round of comments. Not only is the NVSG not in agreement on the recommendations, they aren't even in agreement in on the structure of the report.

Terry Reynolds says he's for a smaller government in Nevada.

11:05 Lang asks the important question: How should we vote on this? What does the group expect?

In the short term though good news -- we might be out before lunch time.

11:13 Lang: Why need language to defend why. Because we're going to forward it to the legislature.

But wait ... I thought this wasn't a political process? Nope, this is a political document that's going to be used for a political purpose.

11:15 Lang: Wants to vote at the next meeting. Wants a full report, not just an executive summary. There's a hesitancy to vote on this, because we don't have the background info. Lang doesn't want a "hippie" report. Says the report feels too ambiguous.

And for all the grammar nerds out there, Lang wants the report in the active voice. Finally something we agree on.

11:24 Lang wonders if drafts of the report have to be released to the public. Worried the "public" will latch unto an unapproved version of the report. Wonders how to make the process look more like it would look in the private sector.

Easy answer: Do this in the private sector instead of in the political legislative process?

11:31 Rob Potter (public employee) on wanting to keep interim versions of report secret: "It's better to ask for forgiveness than permission."

Wow. And just think, you pay his salary.

11:41 Good point from Keith Smith. Is consensus a majority or unanimity?

11:47 Okay, they're going to vote on each category (education, business climate, etc...) individually and then they are going to vote (up or down) on the whole report.

Lang wants an "efficient" final meeting.

11:52 Voting method approved.

11:53 Date of the next meeting isn't set. Will let you know when it is as soon as I find out.

12:01 Meeting adjourned.

As this is a live blog, please forgive any spelling or grammatical errors.

Read more:

The stakeholder two step
Four problems with the Nevada Vision Stakeholder Group
Puppetmasters on the throne
Nevada’s future is at stake
A ‘vision’ of extortion and control
IFC to hide behind unelected stakeholders
Nevadans deserve honesty from IFC
Tax eaters host a dinner

Nevada's new educational solution: Fewer school days!

Educational achievement in Nevada is dismal. Our high school dropout rate is the worst in the nation. "Nevada's 4th and 8th graders placed no higher than 43rd in math or reading on any of the most recent National Assessment of Educational Progress (NAEP) exams."

This poor performance exists despite nearly tripling inflation-adjusted, per-pupil spending over the last 50 years.

So naturally, the Legislative Committee on Education decided yesterday to move forward on a proposal to eliminate up to 10 school days a year. Not. A. Joke.

The committee did decide to recommend that the 2011 Legislature change state laws to give school districts the flexibility to shorten their school years.

The state now mandates a school year of 180 days.

The proposal would allow the state superintendent of public instruction to allow schools to cut as many as 10 days in times of "economic hardship."

Joyce Haldeman, associate superintendent of community and government relations for the Clark County School District, said the proposal could save jobs for teachers and other personnel.

If unions do not agree to "shared sacrifices," or reducing pay, school personnel would have to be laid off, Haldeman said. But the Clark County district can secure $9 million for each day it cuts from the year, and those funds could be used to avoid layoffs.

Please remind me again why we fund schools: Is it to educate children or to fund jobs for adults? This story makes me think some Nevada legislators believe it's the latter.

There are proven alternatives as well. At that hearing, NPRI's Patrick Gibbons presented 28 different recommendations for reform. And reforms like the ones he presented have a proven track record of success. Look no further than Florida, which implemented a host of free-market education reforms in 1998.


More charts after the jump.

Swedish economist explains Swedish economy

Capitalism, not socialism, is what has allowed Sweden to develop and grow wealth. Sweden has lowered taxes, deregulated its economy, embraced free trade and, oh yeah, implemented school choice. That's right: no school zones in Sweden. Tuition money follows the student to whatever school - public or private - his parents choose.

Randal O'Toole on reducing congestion, why high-speed rail fails, and the viability of driverless cars

Last week the Nevada Policy Research Institute hosted Cato transportation expert Randal O'Toole.

Randal gave a really interesting presentation on a wide range of transportation issues, including how to reduce traffic congestion, why high-speed rail is expensive and attracts minimal ridership and … the viability of driverless cars within the next 10 years.

Yes, you read that last part right — the technological viability of driverless cars in the next 10 years. If you think that sounds like science fiction, read the RJ's Adrienne Packer's review of O'Toole's presentation.

If O'Toole's prediction is correct, those of us who shudder and wince at the thought of leaving behind our convenient and comfortable vehicles can rest easy.

He firmly believes driverless vehicles will lead the way in transportation revolution.

Goofy science fiction, right? Admittedly, I rolled my eyes too. But O'Toole's presentation was intriguing.

Intrigued? Then watch for yourself.



For more information on O'Toole's work, check out his blog, The AntiPlanner.

Doug Busselman's take on the Nevada Vision Stakeholder Group's Preliminary Report

Doug Busselman of the Nevada Farm Bureau has an absolutely must-read blog post on the NVSG's initial report. Doug has the unique perspective of being both a voting member of the NVSG and a supporter of the free market and limited government.

Some highlights:

Although the Vision Stakeholders group is given credit for being the source of the document -- it really represents the Moody’s consultant’s perspective of what they consider the input we gave along the way. This was done in a process and timeframe which didn’t actually string together in a way where “the consensus” that is attributed to us could have been achieved. At this point, the words being put into our mouth don’t really represent anything more than what might be something a majority of participants could agree to adopt…

At this point, the quality of “vision” is very questionable to at least one member of the group who I have the ability to speak for (myself). My view is that this document (at this point) is an extremely disjointed set of politically-correct concepts thrown at the wall in hopes that something might stick and be included in a government-centric outcome. Its scope and assorted variety of ideas don’t constitute a substantive vision which most Nevada citizens can either buy-in on or even be capable of understanding.

Read the whole thing.

For more, read the RJ's article on the report or Tom Mitchell's blog post, “What do you get for a quarter of a million dollars worth of visioning?”

Moms should become MAD

That's MAD as in Mothers Against Debt, by the way. Although once you understand how debt is going to burden American kids you'll probably be just plain mad as well.



I know it's a little late, but Happy Mother's Day to all the moms out there. Hope you had a wonderful and special day.

Reason interviews Oscar Goodman

Reason Magazine, a publication of the libertarian Reason Foundation, our sister think tank in Los Angeles, interviews Las Vegas Mayor Oscar Goodman in their newest issue. The interview is titled, "Gin, Girls, and Governance." Check it out.

Nevada Vision Stakeholder Group releases Preliminary Report

For months, we at NPRI have predicted that the Nevada Vision Stakeholder Group (comprised mainly of government officials, government employees (or union officials) and those receiving government handouts) would determine that Nevada needs more government.

And after skimming through its Preliminary Executive Summary, it turns out we were right.

The primary task of the Nevada Vision Stakeholder’s Group was to take a broad look at the most important goals for Nevada’s future and to identify the key investments and structural changes needed to get there. Although the group included several policy experts, detailed policy analysis was not its aim. But nothing was off limits for discus­sion, from the structure of the economy and government finances to systems of education, healthcare, transportation and public safety. (Emphasis added)

“Key investments” is just another way of saying “tax increases,” as the rest of the Executive Summary makes clear.

Geoff and I will be writing much more on this, but I just wanted you to have a chance to read the Preliminary Report yourself.

The final meeting of the NVSG is this Friday, May 14, 2010. Details are here, and yes, I will be live blogging it.

More information on the Nevada Vision Stakeholder Group:

Four problems with the Nevada Vision Stakeholder Group
Puppetmasters on the throne
Nevada’s future is at stake
A ‘vision’ of extortion and control
IFC to hide behind unelected stakeholders
Nevadans deserve honesty from IFC
Tax eaters host a dinner

More of the same from DC

Government officials in Washington, DC are obviously lost at the helm. Even though Treasury secretary Tim Geithner acknowledges that government-sponsored mortgage giants Fannie Mae and Freddie Mac were "a core part of what went wrong in our system," the Obama Administration has pledged to "cover unlimited losses through 2012 for Fannie and Freddie," according to the New York Times.

Now, after the administration lifted a $400 billion limit on bailouts specifically for Fannie Mae and Freddie Mac (that's right - the limit was $400 billion and it had to be removed), Fannie is asking for an additional $8.4 billion and Freddie is asking for $10.6 billion more. At the same time, the "financial regulation" package being sought by congressional Democrats would include a further strengthening of the Community Reinvestment Act which requires Fannie and Freddie to buy up unsound, subprime loans. From all indications, it looks like the Obama Administration and congressional Democrats are intentionally trying to engineer the next major recession by doubling down on all of the policies that are responsible for the real estate bubble and ensuing collapse.

Meanwhile, the administration is also trying to facilitate governmental moral hazard across the globe by contributing $6.8 billion in US taxpayer dollars to the bailout package for Greece. A nation that spent itself into fiscal catastrophe by promising unaffordable pension plans and social services to workers retiring in their 50s is now being rewarded for that irresponsibility with US tax dollars. Gee, I wonder if that precedent will compel other nations with shaky finances to undertake needed reform of their labor markets and government entitlement programs. Why would they, when they can be assured of an American-financed bailout?

And how will this affect the individual American states that have large unfunded liabilities in their pension systems for public sector retirees? Nevada's unfunded liability now sits at $33.5 billion on a market-priced basis. Is there now an assurance of federal bailouts for state pension plans as well? Will the federal government shift the burden of some states' fiscal irresponsibility onto federal taxpayers for the next several generations? Will relatively low-income families in Alabama be forced to pay for the exorbitant benefits promised to public-sector workers in California?

Certainly, that will be the desire of public sector workers who believe they are entitled to the benefits they were promised, regardless of whether the states can afford them. In Greece, fears over cuts to public worker benefits prompted riots by those workers.

In one instance, rioting public sector workers killed three private sector workers and lit policemen on fire.

Thankfully, Nevada has not gotten to that point but, clearly, there is a feeling of entitlement among the well-paid public sector workers in the Silver State. Let's hope that things do not escalate to the point that we have seen in Greece.

Hepatitis C case shows why health care is so expensive

If there is one thing we should all be able to agree about health care it's this — health care is an enormously complicated issue. (One of many reasons that I think the government needs to stay far away from health care, by the way).

Rising health care costs is also a complicated issue, but that doesn't mean you can't identify some of the main drivers of increased health care costs.

Right now in Las Vegas, you can see for yourself one of those drivers — out of control liability lawsuits.

A lawyer for a Henderson man infected with hepatitis C suggested Thursday that two drug companies should pay more than $1 billion for failing to take steps that could have prevented Southern Nevada's hepatitis C outbreak.

During the punitive damages stage of the first outbreak-related civil trial, Robert Eglet told the jury that Teva Parenteral Medicine and Baxter Healthcare Services should pay for continuing to make and sell large vials of the sedative propofol to endoscopy centers despite previous outbreaks being linked to the drug.

And where would that $1 billion come from? Anyone who would ever buy one of Teva's or Baxter's (the drug companies being sued) future products. Also from Teva's and Baxter's employees and investors.

This verdict and the scores of similiar ones over the past few decades have also increase health care costs. Insurance costs will increase for everyone. Companies will have to jump through additional hurdles to try and shield themselves from future lawsuits. (Not necessarily a bad thing if Teva or Baxter had done something wrong, but that's not the case here as I'll discuss below.)

Also verdicts like this will lead to less investment in current and new drugs. Here's why: In the free market system profits and costs send important signals to investors and companies. If profits are high, both will move some of their limited resources into the profitable areas. This spurs innovation and competition, which in the long run lowers drug prices for the consumer. Investors and businesses will then move into more profitable areas, but the lower drug prices will remain.

What's happening here is exactly the opposite. These companies will be losing money, which will lower their profits. Lower profits send the signal that demand is already being met and discourage investment from investors and businesses. But in this case the signal is distorted. Profits are lowered, not because that's not demand, but by lawsuits that arbitrarily take away profits. The end result is the same though — decreased investment.

Now everyone feels terrible for the hepatitis victims, but you shouldn't help the victims by punishing someone or something successful who didn't harm the victims.

In case you haven't been following the details of this case, the drug companies' crime was to not know that doctor they sold their medicine to was grossly negligent. Chuck Muth sums it up well.

A licensed, highly-trained professional doctor in Las Vegas reportedly told his licensed, highly-trained professional nurses to reuse syringes to save money, ultimately and not surprisingly resulting in patients who were injected with the dirty needles becoming infected with Hepatitis C.

The victims, naturally and rightfully, sued. And as per the industry’s standard operating procedure, the lawyers involved decided to include in their lawsuit two of the manufacturers of the drug which was injected into the patients using the dirty needles by the dirty nurses doing the bidding of the dirty doctor because….well, for the same reason Willie Sutton robbed banks:

That’s where the money is.

The mind-boggling claim by the victims’ lawyers is that the drug companies failed to sufficiently warn highly-trained professional doctors and highly-trained professional nurses that they shouldn’t inject drugs into patients using syringes which had previously been used. Duh.

Even more amazingly, the Las Vegas Review-Journal reports that the judge in the case, Jessie Walsh, ruled at the start of the trial “that the drug companies were not allowed to use the ‘dirty doctor’ defense and blame the infection on doctors and nurses misusing the drug.”

What the….? This is like suing General Motors because someone drove their Chevy to the levy drunk and hit someone.

Exit question: Using this standard couldn't someone sue the public school system (aka the taxpayers), the next time someone commits accounting fraud? After all if they hadn't learned math…