Free Markets, Free People

Daily Archives: August 12, 2011

The shape of things to come

The US Postal service has a financial problem.  That’s not a surprise, especially is a time when the entire US government has a financial problem.  Unlike the rest of the US government, the USPS is relatively limited in the amount of government money it can receive, and is more or less—and often less, granted—supposed to rely on postage to fund its operations. It still manages to get nice subsidies from the government, but even then it’s supposed to pay those back. Eventually.

In other respects, though, it operates like the rest of the government. Nice federal workers’ and union bennies, heavy bureaucracy, a monopoly on the service it provides, etc., etc. So, that makes it sort of a canary in the coal mine when it comes to government financing. Which makes this interesting:

The U.S. Postal Service would eliminate about 220,000 full-time jobs and shutter about 300 processing facilities by 2015 under a proposal to bring its finances in order, a postal official said on Friday.

The Postal Service needs to cut payrolls to about 425,000 employees and take over its retirement and health benefits instead of participating in federal programs, Postmaster General Patrick Donahoe told Reuters.

This will require abrogating union contracts on layoffs on retirements and health care, and restructuring its employment and benefit rules, close about 3,000 post offices, and contract out mail services to private organizations.

Naturally the unions are already screaming, as are some Democratic lawmakers.


Cry me a river. This is what financial reality looks like.  This is the reality that’s coming to the rest of the Federal government in the not-too-distant future. Get used to it.

Dale Franks
Google+ Profile
Twitter Feed

11th Circuit rules ObamaCare individual mandate "unconstitutional"

Fox news is reporting that the 11th Circuit Court of Appeals has ruled that a provision of the recently passed health care law is unconstitutional.  The court held that Congress exceeded its constitutional authority when it mandated the requirement.

"This economic mandate represents a wholly novel and potentially unbounded assertion of congressional authority," the panel said in the majority opinion.

The suit was brought by 26 states and one private group – the National Federation of Independent Businesses, who were pleased with the ruling:

"Small-business owners across the country have been vindicated by the 11th Circuit’s ruling that the individual mandate in the health-care law is unconstitutional," said Karen Harned, executive director of the group’s legal center. "The court reaffirmed what small businesses already knew – there are limits to Congress’ power. And the individual mandate, which compels every American to buy health insurance or pay a fine, is a bridge too far," she said.

The ruling is obviously a set back for the administration and will most likely ensure the Supreme Court will take the case soon.


Twitter: @McQandO

China launches first aircraft carrier

While all the drama of the debt ceiling negotiations and downgrade were happening, China quietly launched their first aircraft carrier.

So what does that mean in the big scheme of things?  Well IBD lays out the big point as clearly as anyone can:

It is not yet a full-fledged fighting ship. Its mission is to gain experience in carrier operations, particularly for pilots unaccustomed to taking off from and landing on a carrier’s moving deck.

Yet it represents a sea change in potential capability and something that Congress’ bipartisan fiscal supercommittee should ponder as draconian defense cuts remain on the table.

The first is no mean trick.  Learning carrier operations and training carrier pilots takes a while.  But the second point – about the supercommittee and defense cuts – should be lost on no one.  One of the critical points about cuts to spending is the differentiation between good cuts, that is cuts that trim away fat and waste, and bad cuts, cuts that remove muscle and bone.

But back to the carrier and China’s intentions.  First a few facts:

A few weeks ago Chinese Su-27 fighters intercepted a U-2 reconnaissance aircraft that had taken off from Kadena Air Base in Okinawa as part of a routine surveillance program of China. And Beijing issued a warning that such surveillance near its shores will not long be tolerated.

China’s capabilities have taken a quantum leap since a Chinese J-8 jet collided with a U.S. EP-3 surveillance jet in April 2001 off Hainan, the island that now has a base for Chinese ballistic missile and attack submarines.

China in recent years has laid claims to Japan’s Senkaku Islands, the Spratly Islands in the South China Sea, and has conducted at least nine incursions into Philippines-claimed territory.

China is flexing.   No question in anyone’s mind that it is feeling its oats and will be challenging the status quo in the South China Sea.  It consider that to be China’s “blue soil”.   Add to the facts above that China has been reported to have developed an aircraft carrier killer missile and is in the beginning phases of developing a 5th generation fighter, and you have to begin to wonder if all of that points to benign intent.

Beijing’s goal is to secure the waters from Japan’s home islands, along the Ryukyu chain, through Taiwan and to the Strait of Malacca, encompassing the South China Sea.

Chinese government writings refer to the waters surrounding China as blue soil. Where governments used to draw a line in the sand, Beijing is preparing to draw a line in what other governments view as international waters.

Last week, the state newspaper People’s Daily warned of "dire consequences" if Beijing is challenged in the South China Sea.

The People’s Daily is, of course, an organ of the ruling Communist Party in China and nothing hits its pages unless approved at the highest level.

Aircraft carriers are offensive weapons, not defensive weapons.  Their purpose for existence is to project power.  The carrier China just launched will not be their last or only carrier.   The question is, what does China intend to do with it? 

IBD concludes with the current situation and the future worry:

We will be hard-pressed to meet the emerging Chinese threat when our Navy has only 286 ships (down 45% from 1991, when it had 529) and continues to shrink.

We’ve closed the F-22 Raptor production lines, and even some in the Tea Party are insisting on defense cuts to make up for our spending follies.

Defense is a constitutional imperative, not an optional budget item. We’d better pay attention to that Chinese carrier.


Twitter: @McQandO

The GOP debate–the aftermath

The GOP held a debate in Iowa last night, and it was, as Ezra Klein said, a field that, for the most part, didn’t really disagree over policy, but “they disagreed over fealty to policy.”  Who was the most super-conservative.

The main criticism?  The usual.  Stephen Hayes says:

"What was missing from the debate, and what is missing from the Republican field, is a candidate who can explain and inspire. But there were no Ronald Reagans on the stage tonight. And, in fairness, there never are.”

The question, then, is will the entrance of Rick Perry change that?  That was sort of the pregnant elephant in the room last night.

Michelle Bachman and Tim Pawlenty got into a bit of a heated exchange.   But as Steve Kornaki points out, that’s not the fight he should have picked:

"Pawlenty’s strategy, if that’s what this reflected, was completely backward. The fight he picked with Bachmann was virtually guaranteed to be a losing one. … A much riper target for Pawlenty would have been — and always has been — Romney. … By aggressively pressing Romney on his (many) vulnerabilities, Pawlenty would have stood to (a) weaken the front-runner, a man whose role (consensus establishment choice, at least for now) he wants for himself; (b) establish his own purist bona fides with the base; and (c) shake off the boring/lifeless image."

Chris Cilliza is less critical of the Pawlenty performance but still found it wanting:

"First Hour Tim Pawlenty … was forceful in taking the fight to Bachmann … Pawlenty’s nice guy persona allows him to attack without seeming over the top. He was a major player in the first 60 minutes – a place he needed to be if he wanted to shake things up before the Saturday straw poll. … Pawlenty disappeared in the second 60 minutes – largely because he didn’t get many questions. But when you need to find ways to change the dynamic of the race, you have to find ways to inject yourself into the conversations and create your own opportunities. And Pawlenty didn’t do that."

The Pawlenty/Bachman spat left Romney pretty much alone during the debate as Alexander Burns points out

"[W]ith Pawlenty and Bachmann focused on each other, … Romney took little heat from his fellow Republicans. Indeed, virtually all of the candidates helped confirm – in one form or another – that Romney will likely face a tougher political challenge from a late-announcing candidate like Texas Gov. Rick Perry than from any of his currently declared rivals."

All in all, pretty much as expected.  Ron Paul was Ron Paul – nothing new there.  And Jon Huntsman tried to set himself apart a bit.  Rick Santorum may as well go home along with Newt Gingrich.  Herman Cain is an attractive candidate but just doesn’t have the experience or the following to push him through.

The battle seems to be settling down between Romney, Bachman and Pawlenty.   The entry of Rick Perry will most likely relegate both Bachman and Pawlenty to the second tier.

How it will eventually turn out is anyone’s guess at this point, but Rick Perry stands to make the race much more interesting.  If it is “the economy, stupid” as the driving issue for the next election, Perry’s record in Texas vs. Obama’s nationally, is going to be a very interesting and telling comparison. 


Twitter: @McQandO