Before the Republican takeover of state government, the leaders of the Wisconsin Education Association Council were very influential people who wielded a great deal of political power.

They were extremely well funded by a system that forced schools to deduct union dues from individual teachers, whether they wanted to be members or not. And they used a big chunk of that wealth to pressure state lawmakers into passing union-friendly policies.

Notice we didn’t say “education friendly policies.” Education has very little to do with the teachers union’s agenda. Its main function is to constantly angle for a bigger piece of the taxpayer pie, and WEAC did that very effectively prior to 2011.

All of that became clearer this week when the Wisconsin Government Accountability Board released a report showing that WEAC spent more than any other organization on lobbying state government in 2009-10.

The union spent a total of $2.5 million in those years to wine, dine and twist arms in Madison, according to the Associated Press. That amount was on top of the millions of dollars in campaign contributions WEAC hands out to friendly legislative candidates.

All of that money will buy a lot of influence, particularly when union-friendly Democrats are in power.

What did the union use its influence for? More money to spend on student books, computers and learning programs? Nope.

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Over a year ago, the president of the United Auto Workers, Bob King, announced a campaign to ’shame’ foreign automakers with plants here in the U.S. into allowing his union to unionize them–the details of which would be released at a later point in time.

Earlier this year, when King finally released his new manifesto on what he expected the automakers to agree to, it was met with well-deserved derision.

The union was silent, though, when in June Bloomberg ran this headline: Hyundai Teaches UAW Best Factory Job Doesn’t Need a Union.

However, in early August, knowing that his union’s future is looking bleak, King stated that the union was in “confidential” talks with the foreign automakers.

“The vast majority of the assemblers here in the United States have at least agreed to confidential discussions,” UAW President Bob King said at an industry conference in Traverse City, Michigan. “We’ve had productive discussions. The last thing we want is confrontation.”

This seemed to confirm the buzz that was created in July when it was reported that the UAW was talking to the Volkswagen AG’s works council and the German union IG Metal to launch an attempt at unionizing the employees at VW’s new Tennessee plant. (more…)

Another American company has decided to expatriate for tax reasons. This process has been going on for decades, with companies giving up their U.S. charters (a form of business citizenship) and redomiciling in low-tax jurisdictions such as Bermuda, Ireland, Switzerland, Panama, Hong Kong, and the Cayman Islands.

The companies that choose to expatriate usually fit a certain profile (this applies to individuals as well). They earn a substantial share of their income in other countries and they are put at a competitive disadvantage because of America’s “worldwide” tax system.

More specifically, worldwide taxation requires firms to not only pay tax to foreign governments on their foreign-source income, but they are also supposed to pay additional tax on this income to the IRS – even though the money was not earned in America and even though their foreign-based competitors rarely are subject to this type of double taxation.

In this most recent example, an energy company with substantial operations in Asia moved its charter to the Cayman Islands, as reported by digitaljournal.com.

Greenfields Petroleum Corporation…, an independent exploration and production company with assets in Azerbaijan, is pleased to announce that the previously announced corporate redomestication…from Delaware to the Cayman Islands has been successfully completed.

Because it is a small firm, the move by GPC probably won’t attract much attention from the politicians. But “corporate expatriation” has generated considerable controversy in recent years when involving big companies such as Ingersoll-Rand, Transocean, and Stanley Works (now Stanley Black & Decker).

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Today, in Martha’s Vineyard, it will be partly cloudy with a high of 81 degrees. Lovely.

From The Associated Press:

Liberals argue that he caved on the debt ceiling. Unions are upset over his handling of unemployment and labor issues. Hispanics brought the immigration debate directly to his campaign doorstep.

President Barack Obama’s summer of discontent has been marked by rumblings within his Democratic political base over his willingness to fight congressional Republicans and his approach to fixing the economy.

Liberals disappointed with Obama for compromising with the GOP during the debt-ceiling showdown now are calling on him to hold firm against Republicans this fall. They want him to push a bold jobs agenda while drawing a strong line on taxes and protecting Medicare and Social Security.

In recent weeks, the gripes have become so loud that the president himself acknowledged them during his Midwest bus tour this week.

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“I do believe that the issue of global warming has been politicized. I think there are a substantial number of scientists who have manipulated data so that they will have dollars rolling into their projects. I think we’re seeing it almost weekly or even daily, scientists who are coming forward and questioning the original idea that man-made global warming is what is causing the climate to change. Yes, our climates change. They’ve been changing ever since the earth was formed. But I do not buy into, that a group of scientists, who in some cases were found to be manipulating this data.”

Not much to quibble with Texas Governor Rick Perry about there. Except if you’re the Washington Post which, like Politico, cannot countenance Perry’s refusal to bow at the altar of what has been decided. So for his apostasy WaPo gives Perry a whopping “four Pinocchios” in a sneering, nasty and intellectually dishonest piece, “Rick Perry’s made-up ‘facts’ about climate change”, rife with straw men, heavy on double standards, and otherwise mixing and matching errors of omission and commission.”

First, an editorial note. WaPo reveals its delirium on the issue by citing polls as its apparent evidence for man-made climate change, concluding with “After all, it was first established in 1896 that carbon dioxide in the atmosphere could help create a ‘greenhouse effect.’” Apple, meet orange.

This non-sequitor misreads WaPo’s own cited source and is more confused than the ritual confusion of climate change with man-made climate change, then conflated with the alleged catastrophic climate change (which WaPo also then offers). So, Mr. Kessler, the greenhouse effect, in existence somewhat longer than man, enables life on earth. Man does not help create it. It’s here with us, or without us. On WaPo’s relative scale, this scolding of another for supposed ignorance, clueless about that of which it scolds, merits at least five Pinocchios.

Perry’s camp referred ’something called’ the Washington Post to “something called the Petition Project, which claims to have collected the signatures of 31,487 ‘American scientists’ on a petition that says there is ‘no convincing scientific evidence’ that human release of greenhouse gasses will ’cause catastrophic heating of the Earth’s atmosphere and disruption of the earth’s climate.’ The petition is a bit old, having been started in opposition to the 1997 Kyoto agreement on global warming.”

WaPo, using a week’s worth of sneer quotes if still citing ‘no convincing evidence’ of catastrophic heating, just polls of other people not addressing ‘catastrophic climate change’, didn’t like that.

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Tea Party Babies!

I want to talk economics with you.  In the annals of the American Economy there was a golden age where we did not face a choice between Big Government and Big Business.

Back before FDR, there was a real economic theory that has died and we need to resurrect it, pat it on the back, and cheer for it like we cheer for Rick Perry.

It was called Distributism.  Yes, yes, I know it sounds like something a commie would cough up while we were waterboarding him.  It is an “ISM.”

Fear not.  It really is an old fashioned good idea.  And it is old.  Any given spell checker says, “distributism,”  it isn’t even a word.

Defintion:  ”According to distributism, the ownership of the means of production should be spread as widely as possible among the general populace, rather than being centralized under the control of the state (state socialism) or a few large businesses or wealthy private individuals (plutarchic capitalism). A summary of distributism is found in Chesterton’s statement: “Too much capitalism does not mean too many capitalists, but too few capitalists.”

This looks exactly like a progression to our Modern Internet.

In my last post I argued that what matters is that we cut the taxes of the Tea Party.  Tea Partiers tend to be Small Business Owners.  Small businesses create all the new jobs.  So, when the GOP negotiates Tax Reform, what we should really mean is:

1. The bottom half of America must pay at least as much as they pay now.
2. The Wall Street investor class and the Fortune 1000 management can pay more.
3. The owners of small businesses across the US, the savers, the scrimpers, the Tea Party faithful pay MUCH LESS.

There is a real economic thought behind this approach.

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Brian Hall made an insightful observation about the growth and power of Google – one that is worth discussing.  Hall notes that Google has stopped innovating and is using its power to copy, emulate, bully, threaten and manipulate.  The news that Google was purchasing Motorola seems to bolster Hall’s analysis.

Hall wrote:

• Yelp gets popular? Copy their info; shove Yelp to the bottom of the page and put Google Places and reviews at the top.
• Groupon won’t sell? Spend billions from other businesses to destroy them.
• Twitter and Facebook innovate on search? Take their content, whine when they try and stop you then spend billions to prevent their growth and hopefully destroy them.
• Apple working on a touchscreen smartphone? Spend billions from another business and copy everything you can, down to swipes and apps.
• Need a smartphone operating system with Java. Take Java and use it for your own ends.
• Need a location mapping technology and Skyhook won’t sell? Spend billions from your monopoly profits and strongarm your partners and drive Skyhook out of business.
• Buy up the big travel search sites.
• Claim you are open source but share nothing related to what your business claims to be about — search, and nothing related to how you make your money — advertising
• Claim you are open and standards based but control who gets access to your smartphone operating system

Like all rich monopolists, they spend millions hiring high priced lobbyists and public relations teams inside the Beltway — for their direct benefit.

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They spent well in excess of $15 million and did not win the majority in the State Senate.  Here’s the updated Money Matrix Graphic we produced at the MacIver Institute, which tracked Big Labor’s fund transfers.

As I write in today’s Washington Examiner:

Wisconsin Democrats’ inability to defeat three Republican incumbent state senators in the recent recall elections here in Wisconsin is a devastating loss for Big Labor. These recalls were Big Labor’s last stand and will have national ramifications for years to come…

…The early results have been staggering. Ninety-three school districts have restructured benefit costs, saving taxpayers more than $150 million. If each of Wisconsin’s school districts achieve this level of savings, statewide savings would cross the $500 million mark.

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On today’s edition of Coffee and Markets, Francis Cianfrocca and Ben Domenech talk about the Eurozone in crisis and why computer makers want to get out of the computer making business and into the software/services business.

We’re brought to you as always by BigGovernment and Stephen Clouse and Associates. If you’d like to email us, you can do so at coffee[at]newledger.com. We hope you enjoy the show.

Related Links:

HP Plans to Spin Off PC Business
The European Crisis Deepens
France Eases Short Selling Ban
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Remember the line in Apollo 13?  NASA flight director, played by Ed Harris, showed how little his patience was with those who accepted anything less than success. When faced with a doubter, Harris boasted:“With respect sir, I think this will be our finest hour.” That line was awesome! NASA was on the brink of disaster and the Apollo astronauts were facing the prospects of being entombed in the Odyssey forever. However, NASA pulled it together. Disaster was avoided and the astronauts returned back to earth safely. It was dubbed a “successful failure.” Their objective – the moon – wasn’t reached; however, the space program was saved from a devastating setback by a little grit, determination, and luck. Not to mention, with pennies compared to what the NASA budget is today.

Today, NASA has no objective and no shuttle program. And just like with any other entity heavily subsidized by the government, overtime it loses its effectiveness, becomes bloated, and is subject to political control. The latter obviously can only be explained by its Muslim outreach program and other positions recently taken under the guide of the Obama administration.

According to Obama it’s time to modernize NASA’s space program. And by space program, he means telling Muslims how smart and wonderful they are and how the world has a debt of gratitude from all their accomplishments. Had there been no Muslim scientists there never would have been a NASA. It should all be another giant leap for mankind.

Michael Griffin, who headed NASA during the last four years of the Bush administration, says the space agency’s new goal to improve relations with the Islamic world and boost Muslim self-esteem is a “perversion” of NASA’s original mission to explore space. “NASA was chartered by the 1958 Space Act to develop the arts and sciences of flight in the atmosphere and in space and to go where those technologies will allow us to go,” Griffin said in an interview Tuesday. “That’s what NASA does for the country. It is a perversion of NASA’s purpose to conduct activities in order to make the Muslim world feel good about its contributions to science and mathematics.” (Washington Examiner)

While Muslim scientists and Muslim contributions to space exploration may not be as wild and speculative as global warming and concerned aliens, NASA goes undeterred.

Watching from afar, extraterrestrial beings might view changes in Earth’s atmosphere as symptomatic of a civilisation growing out of control – and take drastic action to keep us from becoming a more serious threat, the researchers explain.

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In a hat tip to Jeff Foxworthy’s “You Might be a Redneck” shtick, the Department of Homeland Security has instituted a “You Might be a Terrorist” campaign. It goes something like this: “If you are white, male (maybe female), and middle-aged…you might be a terrorist!”

The DHS has released yet another public service announcement-style video to push its If You See Something, Say Something campaign to encourage public vigilance in the War on Terror. The problem is, like previous PSA videos, the only way DHS can portray terrorists is as white men or women.

Now, I’m not saying it’s impossible for white, middle-aged American men and women to be terrorists, but the odds suggest otherwise. Over the last two years, 126 people have been indicted on terrorism-related charges, and all have been Muslim. According to Attorney General Eric Holder, only 50 of the 126 were Americans, but how many of these Americans were white men or white women has not been released.

This latest Janet Napolitano “Big Sis” production comes on the heels of a July 2011 PSA video which also characterized white Americans as likely terrorists.

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On July 30, 2011 a few thousand teacher union activists descended upon Washington D.C. for a “Save Our Schools” rally. The keynote speaker that day was actor Matt Damon, who took the occasion to bash standardized testing.  You know, virtually the only thing used to assess student achievement and a tool for teacher accountability.

“I said before that I had incredible teachers,” Damon told the crowd. “And that’s true. But it’s more than that. My teachers were EMPOWERED to teach me. Their time wasn’t taken up with a bunch of test prep — this silly drill and kill nonsense that any serious person knows doesn’t promote real learning.”

He added that teachers should help kids fall “in love with the process of learning” rather than worrying that students are filling “in the right bubble on a test.” Damon, a proud leftist, was repeating an oft-heard criticism from the left that standardized testing harms student learning. They argue that “teaching to the test” creates student automatons who are only capable of regurgitating factoids deemed important by the government.

Many Americans reason that if the test covers the essential things kids need to know, then “teaching to the test” makes sense and wonder what all the fuss is about.

Frankly, I wondered that myself – until I came across “Teaching About Global Warming in Truck Country” by Jana Dean, an eighth grade science and social studies teacher in Washington state. Dean’s article is included in “Rethinking Our Classrooms: Teaching for Equity and Justice, Volume 1.”

In the article, Dean recounts the difficulty she had in selling students on the dangers of man-made global warming. Dean teaches in a rural community where most families still use trucks in their everyday activities. Early on in the global warming unit, one student asked if Dean was telling him he could never drive a truck like his father does.

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Finally, some much deserved ‘me’ time for the Commander-in-Chief. The GOP should send every independent voter an Obama postcard from Martha’s Vineyard.

Democratic and Working Families Party Governor Dannel Malloy of Connecticut dusted off the speech he had planned to make at the end of June, when state employee unions rejected a $1.6 billion concession package that would close a hole in the state’s budget. Embarrassed that their rank and file members rejected the plan that they agreed to with the first Democratic governor of the state in 20 years, the State Employees Bargaining Agent Coalition (SEBAC) agreed to a new vote after changing the bylaws to allow a simple majority of state employees, rather than 80%, to be the required threshold for ratification of contracts. The old bylaws also did not allow for revotes.

Following the governor’s threats of thousands of layoffs, the concession package, as anticipated, was overwhelmingly approved on the second vote on Thursday by 14 of the 15 unions. Ironically, the union representing corrections officers, AFSCME, which had rejected the package originally, approved it wholeheartedly this time, despite the fact that corrections workers have solicited membership in the National Correctional Employees Union (NCEU), charging that they were misrepresented by the vote to change the bylaws.

Upon ratification of the contract, the governor released the following statement:

“We have achieved something the skeptics said was unachievable: we’ve made the relationship between the state and its workforce sustainable. And, unlike in most other states, we did it without going to war with public employees. We’ve shown what’s possible when management and labor work together in a respectful fashion. Sure, this agreement took a few extra months to achieve – but so what? Those extra months are a small price to pay for the billions of dollars that extra time will save taxpayers, the critical services that time will preserve, and the peace of mind that comes from understanding the state now has a sustainable relationship with its employee base…”

The agreement calls for a two-year wage freeze and some changes to pension benefits and healthcare, such as required annual visits to a physician. In exchange, the unions obtained no layoffs for four-years and a pledge they would not be required to take unpaid furlough days. According to Mr. Malloy, the changes will save the state an estimated $1.6 billion over the next two years and $21.5 billion over the next two decades. As of July 1st, the governor’s budget plan called for “shared sacrifice” from taxpayers, who have consequently experienced the largest tax increase in the history of the state, including a hike in the income tax, retroactive to January 1st.

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Amidst the financial flight-wave to safety, with stocks plunging, gold soaring, and Treasury bond rates collapsing — and all the European banking fears which go with that — there’s an important sub-theme developing: An almost-forgotten monetary indicator, M2, which is mostly cash, demand-deposit checking accounts, savings deposits, and retail money-market funds, has been soaring.

According to the St. Louis Fed, M2 is up 24.2 percent at an annual rate over the past two months. Almost out of the blue, that comes to a near $500 billion increase. In rough terms, the M2 explosion breaks down to $165 billion in demand deposits and $335 billion in savings deposits.

What’s going on here? There’s a flight to government-guaranteed accounts. Some people believe Europeans are withdrawing from their own banking system and parking their money in the U.S. banking system, guaranteed by Uncle Sam. Kelly Evans reports in her Wall Street Journal column of a $30 billion outflow from equity mutual funds that has probably gone into cash.

This is a very disconcerting development. Normally, big M2 growth would signal a faster economy, and maybe even higher inflation. But as economist Michael Darda points out, the velocity, or turnover, of money seems to be plunging.

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This week, the 99th annual Wyoming State Fair hosted a swine show, a performance pork contest and even a “pig ‘n mud” wrestling championship. But the biggest hog of all? The fair itself.

The fair has become a pricey pork barrel project that uses Wyoming state tax dollars to subsidize more than three-quarters of the cost of operating the event each year.

In fact, state lawmakers snatched more than $1.4 million from taxpayers to bankroll this year’s fair, which ends its eight-day run on Saturday.

If the attendance figures hold steady this year, every time someone pays the fair’s $3 admission fee, taxpayers will spend $32.29 to subsidize the rest of the cost of the attendees’ visit to the fair.

So why is the Wyoming State Fair such a budgetary burden?

Part of the problem is that Douglas, where the Wyoming State Fair is held, is just this side of East Jesus. The town has a population of only 6,120 and sits 50 miles from Casper and 125 miles from Cheyenne, the only two cities in the state with a population over 50,000.

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