Rebane's Ruminations

More Problems from Government Solutions

Mike McDaniel

As long as we look to the government for solutions there will always be a problem.

I would be a hypocrite to be a financial advisor and not believe in free market capitalism.  Anyone invested in the markets must believe in free market capitalism.  A characteristic of our free market system is the fact that there will be good times and bad times.  An investor must learn to take the good with the bad. No one faults the markets when they are rocketing higher. But, when it comes time to revert to the mean we look for bailouts.  So the main stream media calls on our politicians in Washington to relieve the free market participants of the bad times inherent in free markets.

[The “fat cat” bankers are not free from blame even though the government did not catch their hands in the cookie jar. Their punishments have been handed to them by the markets (see the demise of Bear Stern, Lehman Brothers, and others).  The market continues to levy justice to the executives that engineered, concealed and pawned off the toxic debt to investors.]

It has been reported that the recent $700,000,000,000 bailout sparked a 99-1 ratio of constituents against the bailout to those who favored it. Could it be that Americans don’t think our politicians are capable of solving this crisis? Could it be that our politicians (both past and present) helped create the financial crisis of today?  Yes and Yes.

In my opinion, the current crisis was generated and has frustrated investors due to the following:

 The socialist dream of housing for every American mandated by our politicians (regardless of the homeowner’s ability to pay back the mortgage) was a catalyst for the crisis.  Each of the State of the Union addresses going back to 1994 that I can remember showed a president (Clinton and Bush) touting their administrations ability to get the uneducated, less financially fortunate Americans into homes of their own.  This “accomplishment” comes at a price.

 The Federal Reserve (under Alan Greenspan) kept key interest rates too low for too long.  The over supply of funds to our nations bankers encouraged our bankers to design unconventional loans as a means of getting funds into circulation.  Once qualified homeowners refinanced 2-3 times in 3-5 years, bankers designed plans to expand the definition of “qualified.”

 Bankers looked to a laundry list of government regulatory agencies (SEC, OST, FDIC, HUD, US Treasury, and Federal Reserve to name a few) for acceptance, oversight and approval of the newly designed loans.  The banker’s new “unconventional loans” passed EVERY government agency's litmus test.

 Investors and credit rating agencies relied on and made investments based on the perceived oversight by the SEC, OST, FDIC, US Treasury, and Federal Reserve that was non existent.   Supervision was entrusted to various government agencies at the peril of investors around the world.

 The corruption, mismanagement, and inabilities of management at Freddie Mac and Fannie Mae (both are Government Sponsored Enterprises) produced, concealed and then exacerbated the problem.

 Lastly, investors that flocked to “safe haven” investments such as gold/silver, energy, agriculture, foreign currencies have not been rewarded for their beliefs/actions due to our government’s heavy handed intervention.  Our government’s bailout inclinations have stepped in to manipulate the world markets.  The market will return to a “free market” when the government returns to its typical role. 

The overall trend is clear. Systems put into place by politicians to aid the free market system have and will continue to fail taxpayers and investors.  As long as we look to our politicians for solutions there will always be problems. 

Mike McDaniel is a Financial Advisor and principal of McDaniel Wealth Management. He can be reached at (530) 478-0326. 

Building a Stronger Sierra College: The Profound Choice in this Election

Aaron Klein, Trustee

It is a great privilege and a high honor to have represented you as your Sierra College Trustee for the last four years. We’ve accomplished a lot, but we’ve still got more to do, and that’s why I’m running for re-election.

Thomas Jefferson summed up why I’m so passionate about public education, when he wrote, “perhaps the most important bill in our code is that for the diffusion of knowledge among the people…there is no greater foundation for the preservation of freedom and happiness.” The opportunities that we have in this community are built on education, and particularly, Sierra College.

Four years ago, that opportunity was at risk. Three straight years of deficits totaling $850,000. Courses cut, library hours slashed, student tutoring and labs decimated. I looked at that and said, we need change. And 90,000 people stood up, and change is exactly what we delivered to Sierra College.

Four years later, Sierra College is on the move. We brought fresh new leadership to the table. Balanced the budget four years in a row. Built $2 million in new surpluses. Grew our reserves from $6 million to $8.1 million dollars. And through all of that, we have steadily increased access to college. More students than ever before are being equipped with the skills they need to thrive in a four year university, or secure a real-world, high-paying job.

As much as we’ve turned the ship, we still have more to do. When I came into office, we had no strategic plan. No way to link our priorities to our budgeting. And no plan to pay for the retiree benefit promises made by trustees many, many years ago.

I’m very proud that the state accreditation commission came in, endorsed the course we are on, commended the college on a variety of fronts, and gave our staff a sense of urgency about getting them accomplished. And we all ought to be proud of the incredible work our faculty and staff have done in response. They are faithful public servants who deserve our thanks.

Now, our opponents are grasping at straws, desperate for some way to make the last four years of balanced budgets look worse than the years of deficits before them. That’s a tough job, and I don’t envy their task!

They’ve tried to do this by redefining the words “balanced budget” as “spend however much you want, as long as you can borrow the money to make up the difference,” and their argument for this is that the rest of the State of California does it that way. I think our taxpayers deserve better than that.

So we have a profound choice in this election: we can either return to the policies of the past that gave us runaway spending, massive deficits, cut courses, lost opportunity, and proposals for mountains of new taxes.

Or, we can continue the agenda for change that we started four years ago. Continue balancing the budget, continue increasing access to college, and continue building a more prosperous future for all of our citizens.

For those who believe in a stronger Sierra College, I ask for your vote. You can learn more about our cause for change at www.AaronKlein.com, or give me a call at 530-323-2607.

Aaron Klein is a Sierra College Trustee, and has made his career in entrepreneurial business. He resides with his wife and son in Colfax.

[gjr – Aaron Klein is a friend and colleague whose campaign Jo Ann and I have supported financially.]

The Bailout Bungle

George Rebane

The Community Reinvestment Act will turn out to be one of the IEDs (improvised economy destroyers) that Congress buried long ago in the financial fabric of our country.  Now what it spawned has gone off.

Throughout the history (since 1977) of this great piece of social engineering, people of goodwill from both sides of the aisle have warned about the ways which implementing the CRA has mangled the finance of housing markets.  Now the monster has come to life and threatens to interrupt all credit channels in the country, and perhaps in most of the world.

Having run three companies, I am shocked - see Captain Renault (Claude Rains) scene in the Bogart/Berman film ‘Casablanca’ - at the fraction of American businesses that use debt capital to finance operations instead of or in addition to financing expansion.  Financing operations with debt means that you borrow money for everything from paying salaries to the light bill.  And if you can no longer borrow, your business quickly comes to a grinding halt.  Depending on your size, this is an event that will ripple through your suppliers and your customers, in addition to throwing your employees out of work.

Liberal Tenets – Take 2

George Rebane

My belief tenets of the Educated Liberal (EL) received a thorough comment by an educated liberal friend and correspondent.  The 39 listed tenets were in two groups – the first 29 were derived from my own experience and people of a similar outlook, and the last ten were from G. Stone, a liberal law professor at the University of Chicago.  The latter were assessed as “factual” and my 29 were labeled as “pejorative caricatures” of the EL mind.  My friend is not a loner inhabiting some ideological extremum, but holds views shared by many (most?) ELs.  In the sequel I will assign him to that group.

First, I want to make sure that we all understand that liberals, libertarians, and conservatives do hold certain tenets of social philosophy in common – from the sound of the subject comment, one could presume that this intersection was empty.  Most certainly, all ideological camps seem to strive for the same objectives of a society blessed with health and well-being in an environment that serves to develop individual potential.  Given this understanding, I take Stone’s tenets to task as being, perhaps, necessary to characterize the EL, but by no means sufficient as grist for an understanding of, let alone for a debate on, the distinguishing differences between the three points – liberal, libertarian, conservative - on the political spectrum. 

For the non-technical reader I introduce the term ‘discriminant’ (from the field of pattern recognition) as an added requirement for a worthy ideological tenet.  A discriminant is a specific attribute shared by two sets of things.  We wish to separate or identify the members of each set by using some value of a useful discriminant as a threshold.  For instance to predict whether a randomly selected male is a member of an NBA team, one could use height as a simple discriminant to cleave the population of males.  Short guys – say, under six feet - don’t usually play in the NBA.  Another discriminant to cleave the then surviving set of tall men could be race – ‘white guys can’t jump’ and all that.  You get the idea how such discriminants can be used to pare down the survivors to a group of men most of whom would be on a NBA team.   We note that discriminants don’t have to  be perfect to be useful – every man with a PSA reading for prostate cancer has been told that by his physician.  I would not be surprised if ‘discriminant’ also finds its way into our everyday non-technical conversation.  Recall that terms like ‘feedback’ (control theory), ‘in the loop’ (control theory), ‘short circuit’ (circuit theory) and ‘on line’ or ‘online’ (network theory) are no longer just the jargon of engineers.

The Educated Liberal

George Rebane

In the heat of this election season I recently finished a lengthy exchange with a long-time, much younger, and well educated friend.  He sees himself as a left-leaning libertarian, who wondered again how anyone with two brain cells to pound together could be an intellectual and Christian at the same time – well, actually a libertarian Christian.  In my attempt to persuade him that the feat was nowhere near as complicated as walking while chewing gum, I began ruminating once more on the exact opposite question: how can an educated person be a liberal?  The reality of it stares us in the face daily.  Besides the usual screed screamers that inhabit both sides of the political spectrum, there really are people of learning and goodwill who are of the collectivist bent.

More musings on this drove me to the starting point whereon was inscribed another more seminal question – what are the belief tenets of an educated liberal?  Since I have come to know many liberals over the decades, most of whom are still close friends, I started scribbling down some of these tenets revealed from the many long and detailed conversations with these educated liberals.

Few people decide and act according to a known belief system comprised of tenets which may or not be coherent and consistent.  Most people seem to act according to a jumble of heuristics or rules-of-thumb that life has added to their kit.  Sometimes a consistent subset of these are glued together during moments of reflection and become shared wisdom.  I first realized this about myself when I reached the half century mark during a year that was also my annus horribilis.  As a result I produced the first edition of my belief system or credo that ran to about eleven pages and contained over seventy tenets.  For me it was an eye-opener, and, as more water passed under the bridge, its succeeding editions continue to be valuable signposts of my growth, or to some, my decay.

Since then I have often fantasized about a world where people of good will hand each other their credo when they first meet (even before they embark on the “principled negotiations” taught by Fisher, Patton, and Ury).  In my fantasy such deep and immediate knowledge of the other abets a society of harmonious efficiency and stimulating discourse as friends, colleagues, perhaps even voters who debate certain tenets of the other in the spirit of understanding and improvement.  And then my reverie ends.

Bouncing Toward ‘Why?’

George Rebane

The ancient Vedic philosophers taught that the universe was cyclic and very old.  Its age is measured in kalpas for which the Vedantic derivatives of Hinduism and Buddhism have a variety of spectacular definitions.  From my late teen years, my own favorite is the length of time it takes a granite cube, 25 kilometers on a side, to be worn away by an angel who brushes it with a feather every millennium.  In one such tradition, the age of the universe is a single ‘great kalpa’ or about 1.25 trillion years.  And then what?

Since about fifty years ago we have been told by cosmologists that our universe started with the Big Bang some 13.7 billion years ago from an infinitesimally small singularity of matter/energy/information?, and is now expanding at an accelerating rate.  The theory was then expanded to include a Big Crunch that would be the terminal event of our universe when it all collapsed under enormous gravitational pressure into a similar kind of singularity (not to be confused with The Singularity).  All this was still one big cycle or perhaps no cycle at all, it could keep expanding forever as one cold, lifeless, and unbelievably large volume of sub-elemental particles (proton decay) - but still be one long event.

When I studied about this during my years as a physics undergraduate, I was deeply disturbed about such a collection of one-shot universe theories.  It was simply unsatisfying; in my gut I wanted the universe to be cyclic as taught by the ancients – everything we perceive has its oscillations of birth-death-birth-death-…, why not also the biggest thing we know about?  My hopes were partially satisfied when cosmologists began seeing in their equations the possibility of multiple universes existing in the cosmos.  Ours was just one of a countless number of these which would pop into existence and then either end in a crunch or dissipate like a puff of smoke.

Sarah Goes Hunting

George Rebane

Sarah, the most recent addition to our little family, has now become the Great Black Hunter – well almost.  She arrived from the Animal Shelter with a case of the sniffles which was going around in the facility.  But a couple of trips to the vet took care of that with daily doses of antibiotic.  Then she became 200% kitten and you could hear Jo Ann and me regularly exclaim, ‘I forgot that they did that …’.  You see, our old black cat Leo turned 14 about three weeks ago, and his life has for some time passed at a more dignified and deliberate pace.

Sarah was shown the great outdoors about a week ago and immediately climbed to the highest reaches of the bird-feeder ladened dogwood next to our porch.  In her enthusiasm she overshot the branches where the feeders are and had to discover how to come down backwards and then get off at the proper branch.  The birds were, of course, gone and Leo, looking on, could be heard to mumble something like, ‘You dummy, what’d you expect?.’

Well, if you can’t get the small fast ones, thought Sarah, maybe I can nail a big one, a really big one.  Her opportunity came last night during the puu-puus and wine hour as we had some friends over for a little dinner party.  It seems that a flock of turkeys had landed in the yard opposite the porch and were busy making their usual mess scratching for seeds.  Little Sarah, assuming her best ground hugging stalk, was going to get one of those flying ‘heavies’. 

As we all watched, she made it across the driveway thinking that no one had seen her.  Of course, all of them (about eight birds) had seen the little pipsqueak, and no one cared.  Even the two big toms in their normal guard positions looking down at this little bag of black fur didn’t so much as twitch a muscle as Sarah finally crawled quietly into the middle of the flock.  Have you ever seen a turkey gaze with disdain?

Being literally a couple of feet from several birds, Sarah finally began to understand the scope of her undertaking.  Her plan was executed perfectly, but the intended target turned out to be, well, large.  She was clearly outclassed along every dimension, and worse, completely ignored by these dignified giants.  To save face, I guess, little Sarah then decided to just assume a more comfortable posture and lay there surrounded by turkeys going about their business.  We all know what she was thinking as she now calmly watched all the scratching and feeding going on around her, ‘The ones in the tree are small and fast, and these guys are big and scary, there must be something in the middle that I’ll be able manage after I grow a little; you just wait.’   

Ruminations - 20sep08

George Rebane

Bush lied about Saddam’s nuclear program?  Well, according to the Associated Press, reported by no less liberal medium than MSNBC on 5 July 2008, Bush didn’t lie.  It turns out that 550 metric tons of uranium bearing ‘yellowcake’ – you know, the stuff that Iran is now spinning the bejeezus out of to get weapons grade uranium – was confiscated by US troops in 2003 and subsequently shipped secretly to Canada.  It seems that it was Joe Wilson who lied about what he learned in Niger about Iraq’s interest in purchasing more yellowcake.  You can see the original post here.  But the point now is that this should have resulted in published media confessions of error here and in Europe – nothing.  This reminds me of Hillary’s Rose law firm billing records that mysteriously disappeared when needed by the special prosecutor working on the Clintons Arkansas sleaze case.  Then after the statute of limitation had run, the records mysteriously reappeared – according to Hillary – on a table in the middle of the presidential quarters in the White House.  Again, the ‘fair and balanced’ mainstream media noted it and dropped it.  My liberal friends have seen nothing special about such goings on and continue to maintain that ‘on the whole’ the MSM drives pretty much down the center of the road.

The birthdays of Danny Pearl and Samar Kuntar reflect two sides of the human condition in the near and mid east.  Danny was murdered by Islamists for the crime of being a Jew while attempting to bring understanding to peoples separated by decades of hate and war.  Samar Kuntar is the unrepentant Arab psychopath and child-killer recently released by the Israelis whose gala birthday celebration in Lebanon was applauded and broadcast by Al-Jazeera.  Kuntar publicly stated that he intends to get back to his bloody business as soon as possible.  In the meanwhile Danny Pearl’s birthday has been celebrated by music festivals bringing together Arab and Jew to seek an alternative to the last six decades of conflict.  My friend Judea Pearl (Danny’s father and president of the Daniel Pearl Foundation pictured here) recently pointed out to me that Al-Jazeera is also unrepentant in its celebration of the murderer’s methods and message.  Such broadcasts go out daily to 50 million Arabs who in the large wholly agree with and abet the anti-Israeli and anti-western efforts of the Muslim terrorists.  And worse, they are picked up and reinforced by our own resident anti-Americans.  For more detail about both of these birthdays please read here and here.

Toxic debt digested by taxpayers.  And finally, an email from friend, investor, and correspondent Tony Medler who sent me the following which I append with his permission.  "The current outrage over short sales and the concept that they must be banned to protect failing companies reminds of the history laid out in the Government's management of Yellowstone Park.  They decided to eradicate all the wolves to protect the moose.  The moose population grew to extinction and, as a side benefit, all the beavers disappeared.  There should be a cartoon showing Bush and his cohorts gathered around making all these new regulations to "fix" the current problems.  On the horizon is a huge bank of black clouds with the title "unintended consequences".  Free markets may cause pain at some times as excesses are corrected, but the Soviet Union showed what happens with total regulation."

      

Ruminations - 18sep08

George Rebane

The turmoil in the financial sector has resulted in insane markets that swing +/- 5% in a day.  Today’s massive sigh of relief was the result of the US Govt indicating that it will put in place an oversight institution (remember the Resolution Trust Corporation) to make sure that more big financial companies don’t go the way of Lehman, Bear Stearns, AIG … .  I have no idea why this was good news to the markets.  No pundit yet seems to have realized that what this will create is an entire sector of tens (hundreds?) of Fannie Maes and Freddie Macs that promise private profits and public (taxpayer) risk.  And if that will not be the case, then the regulatory machinery constructed by the government will be a de facto nationalization of our credit markets, making them as responsive as arthritic mammoths to the dynamic needs of global credit.  The prescient in Dubai who are now building the world’s tallest buildings as the centerpieces of their new international financial center will grab the golden ring.  The pulse of the planet will then be driven from where sand dunes were recently decorated with camel dung.

The California Air Resources Board is about to put the last nail into the coffin of the late great commercial state of California – with added bonus that its example will spread across the rest of the land.  CARB has published its draft Scope Plan to implement the greenhouse emissions restrictions passed into law under AB32.  My fellow blogger Russ Steele and I have been tracking the growth of this economic monster that promises to become the final arbiter of ALL land-use in the state.  We are now in the gnashing of teeth and rending of garment stage for this is how the rubber of the climate change hysteria will hit your Main Street.  I have read the operative pieces of the Scope Plan and it has left me limp.  It claims that the plan’s implementation will actually do everything from stimulating California’s sagging economy, while creating more jobs for those without saleable skills, to curing toenail fungus.  The document itself was written for people with long-departed or congenitally absent critical thinking skills.  Its reasoning climbs a rickety scaffold firmly anchored, at best, to tenuous or absolutely unfounded "scientific" bases that are presented as revealed and received truth.  Its first target audience is the gaggle of functional idiots in the California legislature who will be charged with explaining it to their flocks when they return to their home districts.  I remind you, dear Reader, that no matter where you live in this yet bountiful land, the evil twin of AB32 will rise up in your state unless a stake is driven through its heart here in La-La-Land.  Given an ample supply of Dramamine, we will have more detail on the ludicrous errors of the Scope Plan in future postings.  You may here edify yourself from its original text.
   

 

Tax and Bribe Programs

George Rebane

California is trying to come up with a budget that will fill a $15 billion budget shortfall.  The battle lines are the same ol' same ol' ones we have witnessed so many times before.  The voters are of little help in this mess since we stopped teaching civics in high school at least a generation or so ago.  Everyone now believes that state and federal economies react instantly to the whims of the person in the Governor's Mansion or the White House.  Legislatures are therefore dominated by the same high-sounding scoundrels as always.

In Sacramento the Left wants to pay for its vote-buying programs by again increasing the share of taxes paid by the well-to-do minority.  This means not growing the pie, but just squeezing more out of their traditional class enemies.  The Right wants to pay for its vote-buying programs by growing the pie with lower tax rates which, history shows, do generate more government revenues.  But what to do now that less than half the population pays taxes on any kind of productive activity?

The Left are the dominant vote buyers in states such as New York and California.  They do it by using the tax and bribe programs of the populist kind that follow the Peter-Paul Principle.  This means that they take government revenues to fashion social programs and 'worker benefit' laws that overwhelmingly don't work, yet can be easily sold to the sheep who get dumber with each shearing.

The Right fights for lower taxes for the individuals, but somehow still manages to work in corporate welfare programs.  In fact, this and pork (i.e. 'earmarks') are the ONLY areas of legislation in which the Left and Right are seen to reliably reach across the aisle year after year.  The Right has a harder job of convincing the voter in these dust-ups because it has to attempt using reason which is an early casualty in any election season.  The Left, unencumbered by such rigors, goes directly for the class warfare arguments - 'Those sumbiches already have too much and are making too much which they take right out of your pockets, and, if you vote for me, I aim to get some of it back for you.'  What's not to like?

The Crash of Vallejo

George Rebane

“Will your "leaders" simply shrug or will they learn from the crash of Vallejo?”  So starts the latest of a series of timely posts on unfunded and unreported liabilities by Mike McDaniel on the SESF blog.  Mike has been uncovering such unfunded and unreported liabilities currently burdening the Nevada County jurisdictions for retirement and health benefits due their staffs.  With the impending release of the most recent CalPERS data, a number of ‘other shoes’ are about to drop that will shed more light on the fiscal viability of California’s cities and counties including our own.

I recently had lunch with a local public finance maven, and we talked about the history of shenanigans that have gone down, most completely out of the public eye.  There appears to be a situation in place across the state which is best characterized by what Garrett Hardin taught us as the ‘Tragedy of the Commons’ (see Numeracy Nugget #2 ).  And when the pools of public employee benefits – which are a type of ‘commons’ - start unraveling, it will not be a pretty sight.

We will see that the denials - coming right down to the declarations of municipal and county bankruptcies - will sound a lot like the denials we have heard (and continue to hear) from the subprime disasters now cascading through the financial institutions.  A good place to stick your ear to the ground is right here in Nevada County, and we’re not even in the worst shape when you look up and down the state.  To be fair, a lot of the denials have been and will continue to be professed in all sincerity, because the individual situations are complex tangles of cross-purposed funds, arcane state regulations, and budget accounting (or lack thereof).

I urge you to continue reading Mike’s posts in the coming weeks, and ask your own questions of our electeds.

Yes, the BOS Meeting was Bizarre and Illogical

[gjr - Lauren Lund submitted this piece in response to my report on yesterday's BoS meeting.  While I constrained my remarks to process and format, Lauren expands her scope to also include the content of the newly adopted Safety Element of county's General Plan.]

Lauren Lund

George, you are not alone in thinking the 9/9/08 Board of Supervisors (BOS) meeting was bizarre.  It was more than bizarre.  CABPRO plus others thought it illogical, maybe even a flip-flop in attitude by the BOS.

Bizarre:  1- Extreme confusion of language throughout the updated Safety Element (SE) was left as is with only a glossary suggested as a remedy. 

2- The BOS approving the SE, which is a recognized policy document, but allowing it to remain loaded with wording like “guidelines” and “recommendations” for extreme environmentalist elements that they formerly said should be removed to an educational document. 

3- Also bizarre, how our "conservative" BOS would default to attitudes such as "this is the best we can expect for now," or "let’s just get on with this," and therein approve a document that any liberal environmentalist would be pleased to set their name to.

Illogical:  1- The BOS were on record at two different BOS meetings in the Spring of 2008, saying they wanted clarity between what are mandated/regulatory fire safety standards versus what are environmentalist recommendations.  Then, illogically, they chose to breeze past the fact that no such clarifications were made or documented in the updated SE. Was there some flip-flop? 

2- Illogically, one Supervisor tried to spin the clarification issue as a matter of property rights versus following mandated clearing regulations. Huh?  What did that have to do with anything?  Nobody at this meeting was quibbling over known state and county mandates.  Of course we care about fire safety and obeying safety laws that are truly laws. 

3- However, one County staff person did offer a minimal table separating County mandates from State mandates, but illogically, this table still did not provide the repeatedly requested clarification between mandates and recommendations. 

4- Also, illogically, the BOS determined that staff's table of County versus State mandated regulations should go into the yet unwritten educational document, but not into the SE policy document.  And thanks George. I am aware that your own excellent work of clarifying the mandated regulations from environmentalist recommendations in your professionally done, clearly labeled, and easily understood table, helped the BOS and staff to finally included something along this line.  Now, if they would only put your table in the policy document, then citizens and staff looking for policy would find these distinctions clearly spelled out.

New County Fire Plan?

George Rebane

I witnessed a bizarre Board of Supervisors meeting this afternoon to consider and adopt the new Safety Element of the county’s General Plan that may be passed off as the county's new fire plan.  But then, I was the only one who thought it was bizarre.  Not to string you along, the Supes wound up approving the draft Safety Element as wordsmithed during the meeting (more here).  The whole gathering demonstrated again that, even with well-meaning people in charge, government is an institution whose involvement in your life you want to minimize.  And the most effective method of doing that is to give them as little money as possible, because it takes money for them to mess with you.

To understand the current go-around about wildfire safety, you have to go back a couple of years when we had what can now be labeled as the ‘Old NC Fire Plan’.  BTW, it was confirmed again today that government, at the levels of the electeds and staff, are not big fans of clarity.  Some wags explain this by saying that clearing up confusions is one of the few things that gives purpose and meaning to what goes on under these mighty “domes of knowledge” (inappropriately borrowed from Supervisor Ted Owens since the Rood Center has no dome).  No one in government seems to understand or want to give definite labels to specific notions, documents, processes, etc so that they can be talked about without confusion.  Going to law school also removes the clarification gene from your body, and replaces it with the billable hours gene.

So the Old NC Fire Plan (Old NCFP) gave up most of its provisions (things you had to do) to the current revision of the Safety Element of the General Plan (SEGP).  And our Supes made sure that the old NCFP had its teeth pulled and claws trimmed before becoming part of the SEGP.  So far so good.  Then it turned out that no one really understood what was going to replace the old NCFP, if anything.  The situation is confusing enough to point out the need for, of all things, an “Educational Document” wherein staff would attempt to clarify what was in the adopted SEGP.  This itself was cause for a little humor because some in the Rood Center had maintained that the SEGP documents were already clear enough and needed no clarification.  So the next thing coming out of Steve DeCamp’s CDA shop will be the unneeded Educational Document to clarify the already clear.  My hand scrawled figure tries to make a picture of this sequence of paperwork.

The question that now remains is ‘Is there going to be a new Nevada County Fire Plan (New NCFP) to replace the old NCFP?’   This is not an idle question because insurance companies keep a sharp eye out for such documents when deciding on the insurability of property owners, and there already exist other special fire safe plans for certain regions of our county that refer to a NCFP.  And finally, the Supes themselves want to avoid the vacuum created by removing the old NCFP and replacing it with nothing.

Fate of American Real Estate?

Mike McDaniel

What is the long term fate of American Real Estate?

Today's announcement that the US government has seized both Freddie Mac and Fannie Mae from the brink of disaster was immediately met with more questions than answers.  Perhaps the most interesting question for discussion purposes is... what does Real Estate in the USA look like 5, 10, 20 years from now?   Will we be applying for mortgage loans at the Social Security department or will the Feds delegate this activity to each state's DMV office?  Will Freddie and Fannie be publicly traded ever again?  Will mortgage rates be manipulated for each general election from here 'til eternity?   

The USA is currently being squashed by debt (sorry to state the obvious).  We borrow from "saver countries" like Japan and China (they buy our treasuries).  One solution that was mentioned to the Freddie/Fannie fiasco was the piecemeal sale of each company's assets.  The risk of this "solution" is the fact that the only buyers are, you guessed it, "saver countries."  Should the USA let the majority of our country's mortgage loans be bought by foreign investors and sovereign wealth funds? Selling off 2 government sponsored enterprises in broad daylight is not a viable political option.

The federal prescription/bailout of Freddie/Fannie is the most politically viable option, which allows the USA to sell the assets to foreign countries under the cover of night (the USA prints money and sells the treasuries to foreign investors and sovereign wealth funds).  Perhaps most importantly, the USA lives to leverage another day without taxpayers giving it another thought.

[gjr]  Mike McDaniel is the principal of McDaniel Wealth Management.  His timely senitments are expanded by markets analyst Jim Willie whose writings over the recent years have been prescient.  Willie's 8sep08 contribution can be found here.   

Some Things to Ponder while Deciding

George Rebane

Here are a couple of links worth a peek.  The first one is a well done adaptation of Thomas Paine speaking to a few of the more outrageous viewpoints some in this country hold on the make-up, values, and governance of American society.  You can view it here.

The second one is a collection of dated video clips of statements leading up to and the start of the Iraq war made by various nationally known Democratic politicians.  We all know what they are saying now, but the past can get a little hazy.  You can view it here.

A while ago I was asked what’s on the mind of business owners in Nevada County.  I said, first ‘How do I meet my next payroll?’, and second ‘How can I get my business out of Nevada County?’  This went over like the proverbial bout of flatulence in church.  But in reality the problem is even worse than that.  Our socialist electeds in Sacramento have made the entire state a pariah for business.  Here’s the latest ranking of business climate polled from thousands of CEOs – you know, the guys/gals actually responsible for making a business work – by the Development Counselors International who have been doing this for ten years now.  And the abbreviated list from best to absolute worst - the envelope please ...

County ‘Fire Plan’ Season Drawing to Close (5sep08, 6sep08 updates)

George Rebane

Next Tuesday, 9sep08, our Supervisors are planning on having the last discussion and public input for the current revision of the Safety Element of the Nevada County General Plan (also known to many as the ‘Fire Plan’ or ‘Fire Safe Plan’. But do not be confused, this is NOT the Nevada County Fire Plan).  If the Board accepts the staff’s revision, then the “policy side” of fire planning will be concluded.  We remember that the policy side is what dictates the ultimate regulations that we citizens of the unincorporated areas must abide by.  The meeting will also be the last scheduled opportunity for public input on this important element of the General Plan.

It has been a long process to get to this point which does not need rehashing here.  My own assessment is that the Board of Supervisors did a good job in keeping things safe and sane on the regulatory impact.  For those of you who have not kept up to date with this sometimes convoluted series of events, I do want to provide some ‘cut to the chase’ materials so that you’ll be up to date whether or not you attend next Tuesday’s BoS meeting.

Thirty Years with the Hensleys at Lakeside

George Rebane

 

John and Sandra Hensley again invited all of their friends to join them lakeside at Scotts Flat Lake to celebrate Labor Day.  John started these Memorial and Labor Day gatherings thirty years ago, and for many of us locals they mark the beginning and end of summer.

Tonight the tradition continued and all felt privileged to be included in the congenial group of eaters and drinkers that usually number somewhere north of one hundred.  People come with food and drink and kids and dogs and chairs and … , you get the picture.  Everything is laid out on picnic tables for everyone to pile their plates high.  In addition to boating, swimming, and volleyball, there is usually at least one band that provides entertainment adding to the spontaneous guitar or two popping up here and there with a singer or two joining in.  Tonight we had two fine local bands that kept the spirits up and flowing until well after dark.

Thank you John and Sandra for making this mountain hideaway that much more special year after year.  You truly are the gold of our Gold Country.

Obamessiah Strikes

George Rebane

The word has come down from the mountain – ‘Destroy her, and do it quickly!’  Obamessiah knows that he will be facing a blizzard of blasphemous video clips from that Democratic trifecta of Hillary, Billary, and Biden. Each of them, with serious and sincere mien, will deconstruct his carefully camouflaged canton of leadership experience and expertise.  In short, the recorded campaign trail statements of these three will make a mockery of their own recent convention floor conversions – hallelujah!

To counter this tsunami of embarrassing assessments and contradictions from his now-allies, the Obama team has launched an email campaign to divert and diminish the damage from the Hillary, Billary, Biden videos.  A correspondent forwarded an email that has been sent to the alumni of the Citadel.  Presumably alumni from other schools are getting similarly composed exposes of ‘Sarah the Redneck’ to begin her political destruction.  Reading this “lengthy and emotional” Alaskan screed pretty much spells out what we will be hearing about McCain’s running mate until election day.