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Limited, Fiscally Responsible, Transparent Government
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Volume 2 Number 2 9 November 2010
US Fed Printing Money Causes Problems Overseas
The Federal Reserve policy of purchasing Federal debt while maintaining interest rates at record lows is causing substantial difficulties elsewhere in the world. In this worldwide economy all that happens is that the money newly minted by the Federal Reserve migrates to other, smaller economies where interest rates are higher. These smaller economies are not capable of absorbing the massive amounts of money being printed by the Federal Reserve. What is happening is that the United States is deliberately exporting its economic problems of low interest rates, low growth rates and inflation to the rest of the world. The rest of the world is not appreciative.
Federal Reserve Pursues Policy of Deliberate Inflation
The Federal Reserve Open Market Committee announced after its meeting on 3 November 2010 that it is pursuing additional inflation as national policy . The Fed plans to purchase $600 Billion in Federal Bonds over the next eight months. At the same time, the New York Fed, charged with implementing this policy, announced that it will reinvest the proceeds received from repayment of Federal obligations received over the next eight months in new Federal bonds, expected to be about $350 billion. Combined, this represents an increase of $950 billion in the nation's money supply, an increase of at least 13%. This will increase prices over the next year in addition to the current estimated 10% annual increase in the costs of food, energy and medicine. Social Security recipients have already absorbed these increases over the last year and are being asked to absorb them again next year. For many Social Security recipients food, energy and medicine represent most of the budget; these people will be having to choose which necessities to do without next year.
The cause of this situation is the enormous increase in the national debt over the last two years. The Federal government has borrowed money and given it away, and now seeks to repay the debt with cheaper dollars, dumping the burden on those least able to absorb it.
Steve Rattner Near SEC Settlement
Steve Rattner, better known as the Auto Czar, is near a settlement with the SEC according to Bloomberg News. Rattner is accused of paying a bribe to a New York State official to assure an investment of New York State Retirement System funds with his Wall Street firm. The settlement reportedly involves a substantial fine and banning Rattner from the securities industry for a period of time. A separate suit by the New York State Attorney General has already been settled with the payment of a substantial fine. Rattner is a long time Democratic fundraiser.
These are the qualifications that led President Obama to appoint Rattner to take charge of the automobile industry, put Chrysler and General Motors through bankruptcy, destroy a large number of automobile dealers, etc.
Why Are Businesses Not Hiring?
The short answer is that it is cheaper to pay overtime than it is to deal with the costs associated with new hires, especially in this time of uncertainty. When a business uses overtime the cost is limited to 50% of base pay plus the 6.2% employer portion of Social Security for employees earning less than the Social Security maximum wage, currently $106,000/year. There is no training cost, health and life insurance do not increase, nor generally do unemployment insurance and retirement benefit costs increase, no additional vacation time is earned, etc.J.R. Wilt
For a new employee, in addition to the salary there are the costs of health, life and unemployment insurance, the employer portion of social security, vacation time and retirement benefits all increase. A substantial training cost will be incurred and there is the risk that the new employee will not "work out" and have to be terminated or laid off. There is a substantial risk of lawsuit due to aany number of issues in terminating a new employee. The Federal Government has just passed the Health Care Reform Act, which substantially increased the health care cost burden born by businesses, and the atmosphere in Washington is such that it is likely that business will be required to pick up additional costs for social programs dictated by the Federal government.
Thus the answer to the question "Why are Businesses Not Hiring?" is that it is cheaper and far less risky to pay overtime than it is to hire new employees. As the Federal government transfers more and more life style cost from employee to employer, overtime becomes more and more attractive as opposed to new employees.
The Federal Government is mandating particular lifestyles on its citizens and enforcing these mandates by requiring employers to provide and pay for these mandates whether employees want them or not. Employees are so used to seeing their paychecks equal to only 60% or so of their nominal salary that they do not object, and employers do not generally provide employees with complete statements of the cost of employment, so the cost of government is effectively concealed. One cure for this situation would be for employers to include a complete statement of all the costs of employment, including those paid by the employer, with each paycheck.
From the Editor
SC TEA Party News has two way connections to every known TEA Party organization in South Carolina. We are in a position to keep you up to date with news and analysis across the state.
This newsletter is published as events warrant. Subscribers receive and email when updates are published. The email is very brief and contaoins a link to the new edition. If you have news, pictures. links or comment, or wish to subscribe, please let me know. Note that the link on the Resources page now includes a way to check out the voting records of members of the SC legislature.
J.R. Wilt, Editor and Publisher
the Process, Stupid
Much is being said by the talking heads about how the recent election results are a referendum on jobs, the economy, the unemployment rate the healthcare bill and President Obama's management style. Little is being said about the principles of limited, fiscally responsible, transparent government. We all remember "You have to pass this (healthcare) bill in order to find out what is in it." We need no more of that nonsense.Congress Reorganizes
This country faces intractable problems mostly related to the vast unfunded expansion of the Federal Government into areas where it has no Constitutional mandate. We need good ideas about how to solve these problems. It matters little whether these ideas come from the right or the left, Democrats or Republicans. They need to be presented transparently, discussed in the open in terms of the guiding principles above and the Basic Ideas above and to the left.
There are four leadership positions in the Republican side of the US House of Representatives. These are Speaker, Majority Leader, Whip and Chair of the Republican Conference. Running for Speaker is John Bohner (R-Ohio) for Majority leader is Eric Cantor (R-Virginia), for Whip is Kevin McCarthy (R-CA). Boehner, Cantor and McCarthy are all Republican Establishment types, although Boehner talks in a responsible manner. For Conference Chair the Establishment candidate is Jeb Hensarling (R-Texas) is opposed by TEA Party Caucus leader Michele Bachman (R-Minn). More than 30 newly elected Congressman are TEA Party endorsed and even more were supported by TEA Party organizatoins that do not endorse candidates. Combined with 51 members who joined the TEA Party Caucus last summer, the TEA Party Caucus will number more than 1/3 of the total Republican membership. A group that size deserves a place at the leadership table. If you agree, email your Congressman and tell him/her so. The organizational election for the new House of Representatives is likely to take place 17 November 2010, so don't delay.
The Republican Establishment is making a strong effort to marginalize the TEA Party and go back to business as usual. We have worked too hard to allow that to happen.
Speaker of the
Speaker of the House is one of the most influential positions in SC government. The Speaker appoints all the committees of the House and many positions in the executive branch. The Speaker controls the flow of legislation through the House, and is in a position to block anything with which he does not agree. The Speaker is elected by a simple majority of the House at its organizational meeting, planned for 18 November 2010.
It seems clear that the Speaker is in a position to hamstring the Governor if the Speaker and the Governor do not agree on the role of government. As TEA Party activists, it does us little good to go to a lot of trouble to elect a Governor worthy of our support and then stand by while someone unworthy of our support is elected Speaker.
The incumbent Speaker, Bobby Harrell (R, Dist 114 - North Charleston), is running for re-election as Speaker. He is opposed by Ralph Norman (R, Dist.48 - York County). Mr. Harrell was the subject of an interesting article in the Rock Hill Herald on 4 Dec 2008. The article describes a conflict between Mr. Harrell and Nikki Haley regarding the use of voice votes rather than recorded votes. Nikki Haley is quoted in the article as follows:
Rep. Ralph Norman Runs for Speaker of the SC House
The SC House plans to meet on 18 November for its organizational meeting and to elect its Speaker for the next two years. Speaker of the House is one of the most powerful positions in SC government, equaling or perhaps exceeding that of the Governor. We worked hard to get Nikki Haley elected Governor and gave her a TEA Party mandate. We need to work hard now to make sure that she has an environment in which she can get something done. Rep. Norman has written to each SC House member concerning his candidacy; you can read his comments here. Rep. Norman is a good conservative, carries TEA Party endorsement and has put forward a very positive view of the way the Office of the Speaker should work. His candidacy is worthy of support and your representative needs to know that you think that if you agree.
Related stories on the Speaker of the House and the Budget and Control Board appear to the left. Related story from the Spartenburg and Anderson County TEA Parties here. An audio recording of a press conference 26 October in Columbia appears here. Speaker after speaker representing conservative and TEA Party organizations all across South Carolina advocate for Ralph Norman for Speaker of the SC House.
We Have Work To Do!
The co-opting of the TEA Party effort by the Republican Establishment continues. Election eve comments were heard along the lines of "Sarah Palin cost us control of the Senate by supporting Christine O'Donnell." We sweated out Nikki Haley's victory until the end. The cause of both these phenomena, and many others, was not Sarah Palin, it was the refusal of the Republican Establishment to get behind the TEA Party candidate after the TEA Party candidate won the primary. Republican loss of the Senate was caused by the refusal of the Republican Establishment to get behind TEA Party candidates in Alaska, Delaware and Nevada. In Alaska the Republican Establishment actually ran their candidate as a write in candidate after their defeat in the primary.
We saw Karl Rove and Newt Gingrich, Establishment mavens of the past, claiming credit for the victory on election night. This was not a Republican Establishment victory, it was a victory for TEA Party candidates and TEA Party principles. We need to make sure that our former TEA Party Candidates, now our TEA Party Officeholders, do not forget their duty to take TEA Party principles to the Republican Establishment, not to be co-opted by it.
Senator Jim DeMint has written to newly elected officeholders along these lines. You can read his comments here.
We need to make sure that all our office holders remember the TEA Party principles that got them elected. There will be a big push for Republican unity and the Democrats will actively try to exploit any split in the Republican Party. All of this must be resisted; there is no reason at all that the Republican Establishment should not adopt TEA Party principles as its own. If it fails to do so, 2012 is coming.
Harvard's Plan for the Supreme Court
One of President Obama's mentors at Harvard Law School, Professor Laurence Tribe, wrote a letter to the President on 9 May 2009 detailing a long range plan to move the Supreme Court to the left. This plan involved putting Sonja Sotemeyer and Elena Kagan on the Supreme Court. For the record, every justice on the Supreme Court is a graduate of either Harvard of Yale Law School. The letter has been leaked to the press, you can read it here.
Cameras in the
5 Nov 2010 - The Republican Chair of the Congressional Rules Committee, Rep. David Dreier (R-CA) has requested that cameras be installed in the Rules Committee hearing room. The Rules Committee controls the path of legislation through the House floor, determining such things as the time allotted for debate and the number of amendments permitted. It is not yet clear how the public will be able to access the cameras.
Key Dates for the New (112th) Congress