Monday, October 30, 2017
Weekly Opinion Editorial
SPEND IN THE GOOD TIMES
TAX IN THE BAD TIMES!
by Steve Fair
How did Oklahoma state government get to the point where there is a $250 million dollar budget hole with seemingly no money to fill it? Was it past legislature’s zeal in cutting the state income tax? Was it the tax credits accorded wind, oil and gas companies? Many think the budget crisis was created when the legislature cut the gross production tax.
The fact is the fundamental problem is Oklahoma state government is far too dependent on the oil and gas industry and gross production tax, so when the price of oil and gas declines, state revenue declines. Every legislative session, there is talk of moving state government to a more stable source of tax revenue, but little is done about it because when revenue bounces back, what the hurry? Remember just four years ago; when the price of oil was near $100 a barrel and state government was flush with money? Oklahoma was praised as having the lowest unemployment in the nation, but then oil dropped to under $30 a barrel and the energy sector started layoffs and suddenly the Sooner state is struggling. Three observations:
First, the long term solution to the budget issue may require some conservatives holding their nose and voting for tax increases, but they should insist on an iron clad written agreement in the revenue bill that funds comprehensive performance audits on every entity that gets a penny of state taxpayer money. The audits should be conducted by the duly elected constitutional official- the State Auditor, not an appointed pseudo state auditor that reports directly to the legislature or Governor. The circumventing of the Auditor’s office and creating shadow state agencies that ‘manage’ elected officials, have huge budgets and report only to the Governor or the legislature is wrong. The state already has a statewide elected official whose duty is to audit government. Use the office. Don’t create one to circumvent it because you don’t like the duly elected official.
Second, the legislature can’t be blamed for the price of oil going down, but they must bear responsibility for not planning for the drop. Oil price fluctuation is not new. Oklahoma government has been doing this for years- spend in the good times- tax in the bad times. When times were good, they should have been searching for and eliminating waste. Rightsizing government should be more than a campaign theme.
Third, the Democrats in the State House must bear some of the responsibility for the current stalemate. It seems bizarre that Democrats are not supporting tax increases, but the reason they aren’t supporting the GOP plan is they want more taxes, not less. Their unwillingness to support the cigarette tax unless gross production tax is raised is ridiculous. Get what you can and move on.
The price of crude oil will come back. It has already risen over $20 a barrel to near $60 in the past year. The important lesson the Oklahoma legislature must learn is another budget crisis looms in the state’s future if waste is not ultimately identified and eliminated.
Monday, October 23, 2017
Weekly Opinion Editorial
TRUMP & NYC!
by Steve Fair
As I walked by Trump Tower on Fifth Avenue in NYC on Monday on my way to a business meeting, I saw two NYC policeman with a police dog stationed outside the building. There were a few tourists taking their picture with Trump Tower in the background, but other than that, little fanfare. President Trump is not popular in his hometown. The day after his inauguration in January, more than 400,000 people marched up Fifth Avenue to protest his election. I saw a few anti-Trump protestors and no pro- Trumpers. I never saw a Make America Great Again baseball cap being worn by anyone (they were for sale for tourists). So why do New Yorkers hate the Donald?
First Trump is a capitalist and much of New York City has become a socialist state. Capitalism is defined as an economic and political system in which a country's trade and industry are controlled by private owners for profit, rather than by the state. Trump believes that capitalism works. He has built several tall buildings in Manhattan and across the world. He has risked his own money to make money and done it quite successfully. Socialism is defined as a political and economic theory of social organization that advocates that the means of production, distribution, and exchange should be owned or regulated by the community as a whole. New York City Mayor Bill de Blasio is an avowed socialist. He recently said, “I think people all over this city, of every background, would like to have the city government be able to determine which building goes where, how high it will be, who gets to live in it, what the rent will be.” The Mayor went on to say: “I think what we have, in this city at least, are people who would love to have the New Deal back, on one level. They’d love to have a very, very powerful government, including a federal government, involved in directly addressing their day-to-day reality.” De Blasio, a Democrat who will face re-election November 7th, is right- many New Yorkers would love to live in a nanny state.
Second, Trump’s brashness mirrors theirs. Often times, we are unaware of traits we have that we don’t like until someone does what we do. That’s the issue with Trump and New Yorkers. New Yorkers are candid, ‘in your face,’ rude, crude and socially unacceptable- and proud of it. They like to brag about it, until one of their own with a different world view does what they do. When New Yorkers see Trump, they see some of themselves and they don’t like the view.President Trump won only one precinct on Manhattan Island. Hillary Clinton won 80% of the vote. New York City is not Trump country because the vast majority of people living here live in an alternate reality. They want a president who will provide something free for them and that is not Trump.
Monday, October 16, 2017
Weekly Opinion Editorial
TRUMP TRUMPS CLINTON!
by Steve Fair
“I was recently asked if Crooked Hillary Clinton is going to run in 2020? My answer was, "I hope so! President Trump tweeted out Monday morning. Later that day at a news conference at the White House, Trump again urged the former Secretary of State to tee it up. “Hillary, please run again,” the president said with Senate Majority Leader Mitch McConnell standing behind him. Trump was responding to Clinton’s recent criticism of his handling of North Korea and talk that she is considering running for POTUS again in 2020.
Last week in London Clinton was asked if she was worried about Trump launching a nuclear attack, she responded: “I’m worried about that now. I had big differences with so many of the other people who have been president during my lifetime, but I never worried about that.” Apparently her husband, former President Bill Clinton was worried about North Korea developing nuclear weapons as has the last three US presidents.
In 1994, Clinton sent former President Carter to offer $4 billion worth of economical and nuclear energy technology in exchange for North Korea to halt the development of a nuclear weapon. North Korea violated the agreement and in 2006 successfully completed a nuclear test. President Bush negotiated an agreement in 2007 in which the US would send North Korea $400 million in food and fuel in exchange for their shutting down their main nuclear reactor. In 2009, shortly after President Obama took office, North Korea conducted another nuclear test. Obama sent diplomats to North Korea and asked Kim Jong II to stop. The talks went on for three years until in 2012, Kim agreed to stop the nuclear tests in exchange for more monetary aid. But he didn’t stop development or testing. Kim has consistently maintained the aggressor is the United States, not North Korea and development of nuclear weapons is essential for his country’s national defense. Never mind that he has vowed to use his nukes on the U.S. Obama convinced the United Nations to impose sanctions on North Korea’s coal exports, but that doesn’t appear to have slowed Kim and his pursuit of a long range nuclear warhead. It is now estimated he has upwards of 60 plus nukes under his control.
It is clear the days of negotiating- aka paying off- North Korea are over. President Trump recently warned Pyongyang they would face ‘fire and fury,’ if they continued testing missiles near US allies and threatening to attack. Secretary of Defense Gen. James "Mad Dog Mattis said, “The DPRK should cease any consideration of actions that would lead to the end of its regime and the destruction of its people.” After that public exchange, Kim appeared to have backed down. He likely realizes that Trump and Mattis aren’t like the three previous POTUS.If Hillary Clinton wants to ‘tee it up’ in 2020, she had better be prepared to address her weak stance on North Korea and how ineffective the Obama administration’s (while she was SOS) strategy was in dealing with their nuclear development. Trump ‘trumps’ Hillary every time on North Korea.
Monday, October 9, 2017
Weekly Opinion Editorial
FREE MARKET DETERMINES
WINNERS & LOSERS!
by Steve Fair
In 2015, President Obama and the EPA put into place his ‘Clean Power Plan.” It placed federal standards on the amount of carbon emissions from power plants. The Supreme Court, in a 5-4 vote, struck down the regulations. Writing for the majority, Justice Antonin Scalia wrote: “It is not rational, never mind ‘appropriate,’ to impose billions of dollars in economic costs in return for a few dollars in health or environmental benefits. Statutory context supports this reading.” Obama, in a parting shot at the coal industry, signed an executive order placing stricter regulations on the coal industry regarding waterways and streams. That regulation was through the Department of Interior. Clearly the former president was no friend to the coal industry, but he never said he was going to bankrupt the coal industry as is widely reported. Hillary Clinton, on the other hand, did say she was going to put coal miners out of work by moving America to renewable energy.
Currently 65% of the electricity generated in the United States is produced from fossil fuels (coal, natural gas, petroleum). Coal is nearly 40% by itself. 20% is produced from nuclear energy. 15% is from renewable energy (wind, solar), both of which fail when policymakers decrease government subsidies. Most wind and solar operations are not economically viable on their own. They have to have taxpayer support to be profitable. Great Britain has pulled their subsidies for renewable energy- and America should!
On Monday, EPA Administrator Scott Pruitt said, ”The war on coal is over,” after declaring he will sign a new rule overriding Obama’s Clean Power Plan. “No federal agency should use their authority to declare war on any sector of our economy,” Pruitt said. Environmental groups immediately said they would challenge the rule change in court. When he was AG of Oklahoma, Scott Pruitt sued the federal government to stop the overreaching EPA regulations.
Pruitt’s action is the fulfillment of a promise then candidate Trump made during the campaign. Appearing with Pruitt in Hazard, KY at the announcement of the rule change, Senate Majority Leader Mitch McConnell, (R-Ky) said "A lot of damage has been done. This doesn't immediately bring everything back, but we think it stops further decline of coal fired plants in the United States and that means there will still be some market here."
The fact is coal, as a generating source for electricity, has been steadily losing annual market share to natural gas and nuclear. But coal is still is the most used source for electric generation. The future for coal fired plants doesn’t appear too bright, but Pruitt is correct- no industry should be targeted by the federal government. Picking winners and losers is not the job of the government.
In a capitalist economic system, the free market dictates the winners and losers, not bureaucrats with a pencil. Pruitt’s rule change puts the free market back in control.
Monday, October 2, 2017
Weekly Opinion Editorial
by Steve Fair
The special session of the Oklahoma legislature is on hold. After it was determined the state House would not have the votes to pass the $1.50 cigarette tax by a 75% majority, Speaker of the House Charles McCall, (R-Atoka) said the session would be halted. "We have our members lined up to support this measure on the floor vote. However, we do not have a commitment or confirmation from the minority Democratic Party of the House that they will deliver 75 percent of their caucus to pass this measure," McCall told The Oklahoman. Seventy-six votes are needed to satisfy the constitutional requirement of a revenue bill passing both chambers with a 75% margin. There are currently 72 Republicans and 28 Democrats in the House. There is one vacant House seat that will be filled in a special election on November 14th, most likely with a Republican. So instead of taking a vote he knew would fail, McCall suspended the special session
If McCall was able to get the entire GOP caucus to support the tax increases (and he can’t), he would still fall four votes short of a supermajority. Some Democrats must join the Rs to get over the ¾ line and Minority leader Rep. Scott Inman, (D-Midwest City) is using that leverage. Inman said, "They told us for weeks that they (House Republicans) had a plan. And we asked for it; it was never presented to us. And finally, today, when they had their opportunity to roll out their plan to balance to budget, increase funding for core services, they punted.” Inman is an announced candidate for the Democrat nomination for governor.
The special session is there to consider how to fill the $215 budget hole created when the Supreme Court said the cigarette tax was a new tax and had to clear the ¾ majority threshold. Inman and his caucus have vowed to not vote for the cigarette tax without the Rs supporting raising the gross production tax and giving raises to Oklahoma teachers. Three observations:
First, Democrats stick together better than Republicans. Perhaps it’s just the nature of the beast, but Republicans don’t work and play well with each other. McCall has to keep the libertarians, conservatives and the moderates pulling on the same end of the rope at the same time and not wrapping it around each other’s necks.
Second, the D’s solidarity illustrates how wrong people are when they say: “I vote for the man, not the Party.” Business in a legislative body is conducted via the Party caucus system. In reality, they are voting for a Party, not just the man.Third, this illustrates the importance of effective infrastructure within the Republican Party. In the past year, Oklahoma Democrats have flipped three state legislative seats from R to D. In every one of those races, GOP voter turnout has been dismal. Without grassroots infrastructure, Republicans can expect to continue to lose elections.