Archive for the ‘Tony Larson’ Category

Good news and warning signs

Thursday, May 27th, 2010

At first glance, it appears that our region’s labor market has finally turned a corner and begun to recover. According to the Washington State Employment Security Department Whatcom County’s unemployment rate fell from 9.5 percent in March to 8 percent in April. In Skagit County, the rate fell from 11.5 percent to 9.8 percent during the same period.

The state unemployment rate fell for the first time in more than three years from 9.5 percent in March to 9.2 percent in April. However, in Whatcom and Skagit counties, much of the job growth resulted from seasonal work in agriculture and, in Whatcom County, the lower rate in April can be explained in part because approximately 16 percent of the labor force seeking employment in March dropped out of the labor force in April. In addition, these numbers don’t account for the underemployed people who are working in jobs they are over qualified for. We have an extraordinary talented labor pool in our area that is operating substantially below it’s potential. Unfortunately, that’s the good news.

The challenge we now face is avoiding higher unemployment as the new norm. This won’t be easy if the political class at all levels of government can’t control the severe problem of too much government spending and debt. As I write this column the national debt has exceeded $13 trillion. That equals $117,975 per tax-payer and amounts to a 90 percent debt-to-gross-domestic-product ratio and doesn’t include the debt associated with unfunded entitlement programs and the losses from Fannie and Freddie that total $145 billion and rising.

The political class has dug an enormous economic hole for us and their current policy seems to be to keep digging. The private sector is heavily burdened and concerned about future tax increases and increased cost of doing business associated with a complex 2,700 page health-care reform bill, a financial reform bill expected to be more than 2,000 pages (which does not address Fannie or Freddie), and other initiatives like cap and trade and talks about a European-style value-added tax.

In addition, in mid-May USA Today reported that paychecks from private business shrank to their smallest share of personal income in U.S. history during the first quarter of this year. In the same time frame, government-provided benefits rose to a record high. This trend is unsustainable. The government depends on the taxes from the private sector to pay for these expanding programs. With private incomes shrinking and government spending increasing, the math just doesn’t work.

Why is this particularly important to those of us living in Whatcom and Skagit counties? In our region, government is our largest employer. In the past, this has been a great benefit and to a certain degree, it’s why we’ve never really experienced the economic high of the highs or low of the lows. However, the lack of fiscal discipline at the federal and state levels and the down trend in private incomes will have a clear negative impact on local governments and our regional economy. Western Washington University is in the process of managing approximately $13 million in budget cuts as are most other state institutions and virtually every local government agency is dealing with similar challenges.

So, what is the solution? First, we must send a clear message to Washington D.C. and Washington state that we’ve had enough. We must demand fiscal discipline. We’ll have that opportunity in November.

Second, we must refocus local efforts on economic development and job creation in the private sector. A number of groups including the Economic Development Association of Skagit County and the Northwest Economic Council of Whatcom County have been at the heart of these efforts. In the past, the focus has been on touting the quality of life and strong labor force in an effort to attract companies to relocate to our region. In order to make these efforts successful, it requires strong cooperation from local governments in making us a business-friendly region. Skagit County has been successful in that regard. Whatcom County has not. In the current economic environment, if we’re going to create jobs, it’s going to require our government officials backing up their rhetoric with action and it will require focusing on existing small and early-stage companies, which is where most of the jobs are likely to come from.

And third, local governments are going to be required to discipline themselves financially and understand they will be facing challenges that will be trickling down from the federal and state levels. Raising taxes and imposing costly regulations on businesses and productive individuals in this environment is typically the first reaction. Instead, officials should re-examine their priorities and be prepared to make some tough choices.

Why no reform for Fannie and Freddie?

Tuesday, May 11th, 2010

How can we take those in Washington D.C. in charge of financial reform seriously when they don’t include Fannie Mae and Freddie Mac in their discussions? When the dust settles, we will have dumped $145 billion in taxpayer money into these two government-sponsored enterprises with no end in sight.

Fannie Mae just asked the government for another $8.4 billion in aid after posting an $11.5 billion first quarter loss. This comes just a week after Freddie announced its own request for another $10.6 billion. Both companies warned of additional future losses requiring more government bailout dollars, which will be unlimited after the Obama administration raised the $400 billion debt limit late last year. With the promise of apparently endless bailout dollars, what incentive do Fannie and Freddie have to reform themselves? None!

Government subsidies for failing business practices will only promote additional failing practices. It provides incentive for companies to take their focus off improving their products and fixing problems and places it on to lobbying Congress for more money. The original justification for bailing out these giants was the American dream of home ownership for every American. We should keep in mind that the American dream is not about home ownership alone. It’s about the values associated with reaping what you sow in a just world.

Fannie and Freddie have created a positive perception of themselves as a homeowner’s friend and they have generated substantial political clout with strong contributions to political campaigns, but they are potentially the most dangerous type of enterprise. They allow private banks and mortgage companies to take substantial risks, pocket any profits for themselves, then dump the investments to Fannie and Freddie and count on taxpayers to take care of the losses.

Fannie and Freddie need to be broken into smaller private mortgage entities in order to eliminate the market distortions they create. There are many other reasonable ideas to consider, but one thing is for sure… it is disingenuous and irresponsible to leave them out of financial reform discussions.

Tony Larson, Publisher

Be careful what you wish for

Thursday, January 28th, 2010

Look out Washington State, you might be next.  The Kool-Aid drinkers in Oregon have proven that some of the people can be fooled all of the time.
I was very surprised, particularly in the current economic environment, to see that 54% of Oregonians recently voted for $700 million in higher taxes on businesses and what they called the state’s wealthy.
Their highest state income tax rate will rise to 11%, toward the highest in the country, which is New York at 12.6%.
Why is it that Oregonians would duplicate the self-destructive behavior of states like California, New York and New Jersey, who are seeing productive people and businesses leave their state in droves to find more friendly tax and regulatory environments? Phil Knight of Nike called the tax initiative Oregon’s “assisted suicide for business.”
As it turns out, even though the initiative lost in most of the state, it won 71% of the vote in liberal precincts in Portland, bankrolled by a deluge of money from national and local public employees unions. They ran class-warfare ads that suggested that the taxes would be paid by Wall Street bankers, out-of state credit card companies and CEOs. In reality, job creators will be hit most. Or correct that, more affluent people have the resources to move themselves and their businesses out of state if they want to. It’s private employees, left without job opportunities, who will be hit hardest.
Who are the winners of this tax increase? The average pay and benefits package in Oregon for unionized state employees in 2009 was more than $83,000. That’s more than 30% higher than private employees. While private unions have decreased in membership over the past 10 years, public employee unions have grown. Now they are promoting class warfare in order to convince people they are the modern day Robin Hood. Apparently many feel comfortable voting for tax increases they think only apply to others.
In 1787, a Scottish history professor named Alexander Tyler commented on the fall of the Athenian Republic, saying, “A democracy is always temporary in nature; it simply cannot exist as a permanent form of government. A democracy will continue to exist up until 
the time that voters discover they can vote themselves generous gifts from 
the public treasury. From that moment on, the majority always votes for 
the candidates who promise the most benefits from the public treasury, 
with the result that every democracy will finally collapse due to loose 
fiscal policy.”
Now, in addition to politicians, we need to be concerned about the influence of public employee unions.  They are generating more and more political influence.  Most don’t understand we are not a democracy. We are a Republic and are supposed to be directed by our Constitution, which limits the role of government and protects individuals against intrusive government power. As long as we don’t forget that, our Republic is safe. When we expect and ask our government to solve our problems, we are in trouble. So, be careful what you wish for.

Tony Larson, Publisher

America is waking up to common sense!

Saturday, January 23rd, 2010

How refreshing is it when what you’re thinking manifests itself into the national spotlight? That’s what happened when Scott Brown of Massachusetts was elected as the 41st Republican in the United States Senate, potentially slowing down what was looking like a steamroller Congress, rolling over the American people.
Politics are often local, but people I know of all political stripes have been extraordinarily concerned about the philosophy that is driving policy in Washington, D.C. and the impact this philosophy and policy is having on their lives. The best we can hope for is that President Obama got the message last Tuesday. Wasn’t the message from Massachusetts that Republicans, Independents and even many Democrats think the federal government is getting too involved in their lives? And isn’t the public’s highest priority economic revival and job creation? One thing is clear. We won’t know if Obama received this message by his words. He’s expected to pivot to the economy in his upcoming State of the Union address, but if we’ve learned anything over the past year it’s that we have to focus on his deeds.
So far it doesn’t look promising. The polls must be telling the White House that demonizing Wall Street and bankers still plays well politically, even if the nationalization of health care does not. Obama immediately went on offense, promising strong financial regulation against banks and Wall Street. This initiative is purely political. That’s why it came from the White House and not from the Treasury. How will this improve business and consumer confidence, improve the economy and put people back to work? It won’t. A recent poll showed that 77% of investors believe the Obama administration is anti-business and 80% are not confident in his ability to handle a financial emergency.
Going after Wall Street and banks might have short-term political benefit, but it makes me feel like either they just don’t get what’s most important or they’re back on there quest to take control of as much of the private economy as they can. Just for the record, Wall Street didn’t cause the financial collapse we experienced — government did. What undermined the financial system more than anything else was a fanatical application of rules aimed at getting banks to lend as much money as possible to facilitate homeownership among minorities. An admirable thought, but disastrous policy. Remember the Community Reinvestment Act? The government created the subprime market by compelling banks to make bad loans and urging Fannie Mae and Freddie Mac to cash out the banks by putting more and more of the toxic mortgages on their balance sheets. Despite the huge executive bonuses given out at Fannie and Freddie, I’ve heard nothing about limiting or blocking the proposed expansion of these programs. No mention of reform or regulation.
How is taxing and bullying business supposed to promote jobs in the private sector? Who in his right mind would be hiring in an environment like this, with the government taking control or clamping down on one industry after another and submitting proposal after proposal that will certainly require higher taxes in the future?
People with common sense understand the concept of rewarding what you want more of and penalizing that which you want less of. Either the President and Democrats in congress don’t understand this fundamental truth, which is scary, or they do, which is scarier.
We all need to stay engaged and demand that our elected officials get back to the fundamental common sense approaches that create a strong economy. We must encourage and promote those who believe in the dreams and aspirations of the American People. It is individuals, pursuing their passions and personal interests who will spark economic revival and be responsible for innovative solutions to problems we face. We need less, not more government intrusion. Let’s continue to send that message at the ballot box.

More government is bad for us

Tuesday, January 5th, 2010

Europe is a good example of what we can expect with more government. It’s not just higher taxes, rationed healthcare and a lower standard of living. We get all kinds of wonderful intrusions. Later this year, married or co-habiting couples who resort to ‘psychological violence’ during arguments could end up with a criminal record under a new French law. The new law, introduced by French Prime Minister Francois Fillon would see people getting criminal records for insulting their loved ones during domestic arguments. Mr. Fillon said, “it’s an important step forward as the creation of this offense will allow us to deal with situations that leave no visible scars, but which leave victims torn up inside.” That’s just the beginning when you buy into the failed philosophy that government’s role is to solve your problems.
We seem to be moving rapidly in that direction in America. People believe and expect something for nothing from government. In reality, our government is reaching more into our lives and taking away our God given liberties. Recently, a couple from Alabama who home schooled their four kid’s, were arrested on child endangerment charges for failing to register their children with the school district. Many people who own their property cannot do with it what they want without paying fees and gaining approval from government.
Over the past year, we’ve witnessed massive government interventions into the insurance industry, financial industry, auto industry and pending involvement in the energy industry. We’re now awaiting reconciliation by congress of the so called healthcare reform bill that would give our government control and a foot in the door to every aspect of our lives, and for the first time ever (because it’s unconstitutional) they will require every American citizen to purchase healthcare in order to be in good standing as an American citizen.
The Democratic leadership is so confident in getting their bill through reconciliation they are expected to bypass the traditional conference committee process, in which lawmakers from both parties and chambers meet to reconcile differences between the House and Senate versions of a bill. The Associated Press reported that top Democrats in the House, Senate and White House would hash out the final product in three-way talks before sending it back to both chambers for a final vote. This process will be completed by a selected few in complete privacy. Their hope appears to be that the nearly 70% of Americans who oppose the bill won’t be paying attention, or maybe they don’t care. Maybe the stakes are so high for them that it no longer matters what the people want.
Brian Lamb, the CEO of the C-SPAN network wrote the Democratic leaders in the House and Senate in December requesting they open negotiations, including any conference committee meetings, to televised coverage on his network. Despite Barack Obama’s promise to do so, it doesn’t look like it’s going to happen. At the Los Angeles debate against Hillary Clinton last year, Obama said, “that’s what I will do in bringing all parties together, not negotiating behind closed doors, but bringing all parties together, and broadcasting those negotiations on C-SPAN so that the American people can see what the choices are.” Instead, they are even locking out members of their own party who disagree with portions of the bills. Newsflash to fair-minded Democrats… your party has been taken over.
We all need to wake up, pay attention and take action by waking up our neighbors and getting involved. We have allowed corruption in politics to become acceptable. The bigger government gets, the more corruption we get. Now is time to make an important choice. Do we want future prosperity and freedom or do we want to rely on a bigger, inefficient, corrupt and intrusive government to make our choices for us. Now is the time to engage. If you want to get involved, but are not sure where to start, begin by bringing family and friends to the Mount Baker Theatre in Bellingham on February 20th to celebrate the “Defense of Liberty”.  It’s a program that will be uplifting and informative and leave you with the unquestionable understanding that many feel the same way you do.  Go to http://bhamteaparty.blogspot.com to find out more about the event. You’ll be joining me and about 1500 others who believe we can make a difference.

“All tyranny needs to gain a foothold is for people of good conscience to remain silent.”
—Thomas Jefferson

Positively,

Tony Larson

What a generous Christmas in Washington D.C.

Wednesday, December 23rd, 2009

In a raw exercise of political power, on Christmas Eve, while many of us will be with our families, celebrating the birth of our Savior, preparing to tuck in our children who will be cuddled up in their beds, awaiting a wonderful Christmas morning, the Democrats in the United States Senate will likely have rammed through a secretive, unpopular healthcare bill with the single purpose of permanently expanding the American entitlement state.
The Democratic Senators who faked opposition to the bill will be receiving the largest gifts on Christmas morning. According to the Senate Finance Committee, Senator Chris Dodd will unwrap higher reimbursements for certain hospitals under Medicare in his state and $100 million for the University of Connecticut medical center. Of course Louisiana Senator Mary Landrieu gets $300 million in Medicaid subsidies as part of the “Louisiana purchase, while Bill Nelson of Florida gets an estimated $3 billion to $5 billion in exemptions from Medicare Advantage benefits, presumably because of their large retiree population. However, Arizona, also the home to many retirees didn’t qualify because it’s two Senators are Republicans. Massachusetts and Vermont get $500 million and $600 million respectively in higher Medicaid reimbursements and Vermont gets another $10 million for community health-care centers. Michigan gets an exemption from the insurance fee for Blue Cross/Blue Shield and higher Medicare reimbursements for certain hospitals. North and South Dakota, Wyoming and Montana get higher Medicare payments to “frontier” hospitals and doctors and Montana gets Medicare coverage for individuals exposed to environmental health hazards in or around Libby, an asbestos superfund site. And the final holdout, Ben Nelson of Nebraska will be unwrapping an exemption from the insurance fee for Blue Cross/Blue Shield and Mutual of Omaha and 100% federal payment for new Medicaid coverage for life. WOW! What a Merry Christmas it is for Democrats without principle.
For those Democrats who weren’t shrewd enough to receive their bribe from Harry Reid, he said, “If they don’t have something in it (this bill) for them, it doesn’t speak well of them.”
If that’s not enough of a Christmas Eve gift for all of us, the Democrats in the Senate will also be voting to approve an increase in the federal debt limit by $290 billion. All the Republicans are expected to vote against it. This is important say the Democrats because it is expected that the debt limit will be reached by December 31, potentially putting the United States at risk of default. Keep in mind they wanted to increase the debt limit by at least $1.8 trillion so they wouldn’t have to come back and ask for more before the 2010 elections. The $290 billion will only get them by for two months.
Are we experiencing the kind of change you can believe in? If they were proud of this legislation, would they be ramming it through with zero bipartisan support on Christmas Eve? Is it Constitutional to REQUIRE an American citizen to purchase something he or she may not want in order to be in good standing as an American citizen? Is it appropriate for a one-sided White House and Congress to ram through legislation that 2/3 of the population disagree with? If you answered no to these questions it’s time for you to seriously think about your role in creating the change we can believe in. Please check my blog regularly. I’ll be commenting on issues I believe are important to all of us. Your comments are appreciated.

Tony Larson

Healthcare reform is a VERY urgent matter

Thursday, December 17th, 2009

Welcome to Northwest Business Monthly magazine Online (nwbmonline.com).  One of the many upgrades on our New website is our ability to share ideas more frequently than in our monthly magazine.

I’m excited about this blogging feature because I know how challenging it is to put the necessary time and focus on your family, health, relationships, business, finances and other priorities in your life.  After that, you don’t have much time to keep up on economic and political issues that impact your life.

I intend to blog regularly regarding issues that I’m passionate about and that I feel are important for all of us to be informed about.

My hope is that nwbmonline.com will become a place for you to visit, not only to gather insights and a fresh perspective, but to provide your own, whether you agree or disagree with mine.  So please log in and join the conversation.

That being said, I’m writing this note with much urgency.  Congress is in the middle of creating an enormous debacle before Christmas.  I wrote a column in the December issue of Northwest Business Monthly regarding what I see as the healthcare reform disaster.  Please pick up a copy of Northwest Business Monthly and read it if you are so inclined.  In the future, if you log in for no fee, you’ll have access to everything in the magazine and online.

I couldn’t be any more concerned about how bad I believe the proposed healthcare reform bill will be for our economy and country.   And as it turns out, most Americans feel the same way.  According to a recent Rasmussen poll, 56% of voters oppose the plan while only 40% approve.  46% strongly oppose it while only 19% strongly favor it.  And it appears that as more people pay attention to the details, the more they oppose it.  Perhaps that’s why the only people who’ve actually seen the senate bill are those who have been personally invited into Harry Reid’s meeting room.  Zero of them were Republicans.  So much for the transparency and bipartisanship we were promised.  Remember when we were told that the debates would be bipartisan and televised on C-SPAN?  Perhaps this is also why the democratic leadership is trying to pass this bill at record speed.  They want a vote before Christmas, that is, before democrats in moderate districts go home on holiday to hear from their constituents.

While the massive taxes from this new bill will start in 2010, the so-called benefits won’t kick in until 2013.  Anyone who pays attention and is not completely blinded by partisan politics understands this bill will have a devastating long-term impact on our economy and particularly on the small businesses that used to make our country the envy of the world.  This bill is particularly bad for seniors, bad for young people, bad for small businesses and absolutely a nightmare for our national economy and country.  PLEASE call or write your legislator (www.sos.wa.gov/elections/elected_officials.aspx) and let them know how you feel.  Also, please log in and post your comments.  Your opinions are very important.

Positively,

Tony Larson, Publisher
Northwest Business Monthly Magazine

Healthcare reform is more about politics than solving problems

Tuesday, December 15th, 2009

The newest version of the proposed healthcare legislation, which will either fail or be rammed through by a filibuster-proof Congress, isn’t about solving real healthcare insurance problems.
Let’s be honest, if this were about political representatives, working in good faith to improve the quality, delivery and cost of healthcare in America, the debate would be very different. All good ideas, especially those that would improve our current system without resulting in excessive costs and burdens on the economy would be considered.
John Mackey, CEO of Whole Foods, became controversial for offering creative healthcare solutions in a Wall Street Journal editorial in August. His alternative ideas were seen as a rebuttal to what he saw as the costly, business-killing and ineffective legislation being proposed by the president and Congress. He suggested eight common sense and affordable actions to take to lower healthcare costs for everyone:
1. Remove the legal obstacles that slow the creation of high-deductible health insurance plans and Health Savings Accounts.
2. Change the tax laws so that employer-provided health insurance and individually owned health insurance have exactly the same tax benefits.
3. Repeal all state laws that prevent insurance companies from competing across state lines.
4. Repeal all government mandates regarding what insurance companies must cover.
5. Enact tort reform to end the ruinous lawsuits that force doctors into paying insurance costs of hundreds of thousands of dollars per year.
6. Make health care costs transparent so that consumers will understand what health care treatments cost.
7. Enact Medicare reform: We need to face up to the actuarial fact that Medicare is heading toward bankruptcy, and move toward greater patient empowerment and responsibility.
8. Permit individuals to make voluntary tax-deductible donations on their IRS tax forms to help the millions of people who have no insurance and aren’t covered by Medicare, Medicaid, SCHIP or any other government program.
Although these ideas received great attention and support none are even being considered in the current legislation. Instead, we have a partisan Congress, seemingly determined to create a new, costly and open-ended government-run entitlement program at a time when our economy, our businesses and our people are struggling. We don’t have the money to pay for it.
The political class in Washington, D.C., is digging a financial hole for us and future generations. We are now literally buried. We have $12 trillion in debt and it doesn’t even occur to them to stop digging. The debt is projected to be more than $13.8 trillion by the end of next year.
Just to provide some perspective, if our $1.8 trillion expected deficit this year was a stand-alone economy, it would be the eighth largest in the world. Or put another way, our deficit this year could finance the entire economies of Russia, Spain, Brazil, Canada or India. We already have a serious spending problem in Washington, D.C., with no serious debate on how to solve it, and now we’re going to put it on steroids by creating a trillion-plus dollar healthcare entitlement program.
Recently, the Congressional Budget Office reminded Congress that if spending grew as projected and taxes were raised in tandem, tax rates would have to reach levels never before seen in the United States, which would create an additional negative impact on the economy and small businesses that account for 60 percent of the nation’s jobs. This, at a time when the unemployment rate is already the highest it’s been since 1983.
Why is it that we trust the government to run anything effectively? The long-term cost estimates of government-run health programs give us a glimpse of what we can expect. When Medicare was created, Congress predicted it would cost $12 billion in 1990. It cost $110 billion in 1990. Medicaid now costs 37 times what it did when it was launched in 1965; Medicare 16 times more (both adjusted for inflation).
By a 2-to-1 margin, Americans continue to believe that Congress should address the extraordinary fiscal problems we face before they spend money on healthcare reform.
With considerable opposition and virtually no bipartisan support in Congress, it is fairly simple to understand why this legislation is being pushed so hard and so quickly. Most say this proposal, which will represent more than one-sixth of our economy, is flawed and many say it will not accomplish what the advocates say it will. Proponents clearly believe this is their best and possibly last chance to socialize American healthcare.
In an article in the Nov. 18 issue of the Wall Street Journal, Dr. Jeffrey Flier, dean of the Harvard Medical School, gives the legislation a failing grade. “The various bills deal with access by mandating subsidized insurance at substantial cost,” he said. “However, there are no provisions to substantively control the growth of costs or raise the quality of care. In discussions with dozens of health-care leaders and economists, I find near unanimity of opinion that, whatever its shape, the final legislation that will emerge from Congress will markedly accelerate national health-care spending rather than restrain it. It appears that the people who favor the legislation are engaged in collective denial.”
With a projected $1.8 trillion deficit this year, several trillions more in deficits projected over the next decade, and with both Medicare and Social Security entitlement spending about to ratchet up several notches over the next 15 years as baby boomers become eligible for both, we have created a system that is unsustainable. With more and more businesses and individuals struggling, increasing taxes to pay for new programs will only make things worse. As Margaret Thatcher once said, “The problem with socialism is that eventually you run out of other people’s money.”

by Tony Larson
From the December issue of Northwest Business Monthly Magazine