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
Read moreMore 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.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.
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.
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.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...
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.
US has highest effective corporate tax rate in developed world
A new report from the Cato Institute shows that the average effective corporate tax rate in the United States is now 35.0 percent. That is the highest rate in the OECD and nearly double the OECD average of 19.5 percent. Effective corporate tax rates are important because US firms must compete for capital on an open, global market. Higher effective corporate tax rates place the US at a disadvantage because it damages the profitability of investment in the US relative to other nations.
What's more, state Senate Majority Leader Steven Horsford has placed new corporate tax levies on the table for the 2011 legislative session here in Nevada. Given that any new state levies will only compound already existing federal levies, this initiative would certainly deter future investment in the Silver State as private firms in Nevada must also compete for capital on a global marketplace.
Lawmakers need to thoroughly consider the long-term economic implications of creating an even more punitive tax environment in Nevada before they convene in Carson City next year. They should probably all get a copy of this book and read it from cover to cover.
Then, when they wonder how the state can meet its fiscal challenges without resorting to corporate tax increases that would divert long-term investment away from the Silver State, we've got a tutorial on where to begin.
Al Sharpton: We won't have true social justice until everything is "equal in everybody's house"
In case you ever wondered why tea partiers are so worried about socialism, watch this.
Although if Sharpton is really worried about equalizing everybody's houses, he should start with Al Gore.
(h/t Drudge)
Grading schools
Indiana will now grade schools A-F based on student achievement on the state's exams. Tennessee and Florida also grade schools A-F.
Supporters of the status-quo hate this concept because there is no way to fudge what "F" means - it means you FAIL. Opponents of meaningful grading scales prefer vague terms like "Needs Improvement" to hide the fact that the school might actually stink.
NPRI has suggested to the state legislature that a grading scale of A-F based on student achievement (particularly value-added assessment) can provide a more accurate accounting of how well, or poorly, our schools actually perform. Parents and students deserve to know the quality of their local public school.
Illinois fails low-income students
Senator James Meeks (D - Chicago) and Rep Kevin Joyce (D - Chicago) couldn't muster enough votes in the Illinois House to pass a parental choice bill that would have given low-income kids scholarships worth up to $3,700 to attend a private school (the state spends about $11,500 per pupil on the public schools). The program would have made 30,000 low-income kids in Chicago eligible for the program.
Rallying behind their union bosses, a majority of the house voted against the bill, effectively denying low income children a better life.
Naturally, the math challenged opponents of parental choice charge that vouchers take resources out of public schools leaving the students who remain behind with less. But for every student that takes a $3,700 voucher and enrolls in a private school, about $7,800 remains behind to be divided up among the remaining public school students. This means there are more resources per student, not less.
Fortunately for everyone, the unions have lost the moral high ground and that is why 24 Democrats in the Illinois House (and 13 Democrats in the Senate) voted to support parental choice. Senator James Meeks even returned his union campaign contributions in defiance of the purveyors of the status quo.
Meeks and Joyce may have lost the battle, but the unions and the status quo will lose the war.
Al Gore's so worried about global warming...
He just bought himself a ginormous house. Or rather his fourth luxury home.The couple [Al and Tipper Gore] spent $8,875,000 on an ocean-view villa on 1.5 acres with a swimming pool, spa and fountains, a real estate source familiar with the deal confirms. The Italian-style house has six fireplaces, five bedrooms and nine bathrooms.It's a gorgeous home too.
The next time someone tells you to go green, just let them know you're trying to follow in Al Gore's (carbon) footsteps.
(h/t Michelle Malkin)
Government Motors
California - the state for squares
The sunny state that was once known for having fun is now known for banning everything under the sun - including fun.
Apparently a Santa Clara ordinance now bans toys in kids meals. The reason? Toys allow fast food corporations to "prey" on little kids and make them want unhealthy foods.
What nonsense.
Once Californians were known for rebelling against their parents and the establishment, but now they are the establishment...and they want to be everyone's parent.
