Financial Foundations Exposed

Posted on 2008-10-13 by David

News reports related to the fluxuations of the stock market are not surprising or inconsistent, but when I stop to consider what they say I find that they are either disturbing or based on faulty assumptions. This holds true whether we are talking about reports of falling or rising stocks and the report on today’s rally is a good example:

U.S. stocks staged the biggest rally in seven decades on a government plan to buy stakes in banks and a Federal Reserve-led push to flood the global financial system with dollars. . . the Dow Jones Industrial Average climbed more than 936 points.

The stocks and stock markets are supposed to give an indication of the value of the companies and economies they relate to. What is it about the plan by the Federal Reserve that makes any company better managed or more successful enough to warrant an 11% increase in value over one day?

The underlying assumption is that the government action is at the root of the deciding factors leading to the investment decisions of professionals and thus it is the hand controlling the puppet of economic production and has the right to interfere in the market as it sees fit. That assumption scares me because if we ever fully accept that premise we open ourselves to more overt government action in the markets. The more blatant the interference we will accept the more arbitrary those actions can safely be until we can find ourselves in an economic 1984 where the government can decide one day that it will give $700 Billion away and buy equity stakes in our financial sector and then the next day it can declare that it has no business interfering with corporate mismanagement and it can’t spare the $700 Billion anyway.

If that assumption is faulty – that government is the driving economic force and the basis for the decisions of investment professionals – then the news reports are misrepresenting the reasons for the rise and fall of stock prices so that we never begin to deal with the real causes of those economic swings, large or small. If professional investors are really deciding that stocks are worth more at the end of the day than they were at the beginning for reasons other than the government intervention then we should be told what indicators are being used to determine that the companies are worth more today than they were yesterday.

Posted in culture, National | Tagged , | 4 Comments

Like Sheep . . .

Posted on 2008-10-12 by David

I have been noticing the various political yard signs popping up as we approach the general election and based on what I have seen I am beginning to think that in Utah, the most politically active non-candidates are almost universally leaning Democratic. Considering that Utah is still expected to heavily favor the Republican tickets at all levels I thought of the phrase from Isaiah to describe Utah politics:

All we like sheep have gone astray; we have turned every one to his own way. ( Isaiah 53:6)

So many people here will not take the time to be civically active and informed, but a small portion of them (50% in a good year) will go to the polls and perform their civic duty of selecting anyone with an R next to their name.

Posted in culture, State | Tagged , , , | 6 Comments

Rejecting Amendment E

Posted on 2008-10-10 by David

While amendment D looks to close a loophole in the Constitution, Constitutional Amendment E appears to be opening a loophole. I admit that there is potential to increase the funds available for public education if we allow some of those funds to be invested in private company stocks or bonds. The problem is that this amendment provides no guidelines or safeguards to such a practice and therefore the only guarantee that we have from this amendment is that we increase the risk attached to the funds available for public education.

If the legislature wants to take public money and make use of stocks and bonds to increase the value of our tax revenues I could be pursuaded to accept that, but they had better put some safeguards on the ways our public funds are invested in the Constitution, rather than relying on future statutes to define any protective measures – the original prohibition serves to safeguard public money, when making such a large exception we should be sure that there are some limitations in place.

Posted in State | Tagged , , , , , | 14 Comments

Supporting Amendment D

Posted on 2008-10-09 by David

With the insertion of only 12 words Constitutional Amendment D would close a technicality which could be used by some enterprising politicians to wreak havoc on the necessary and often too-political process of redistricting. Now is a good time to do it too because, while redistricting is usually little more than adjusting existing district boundaries, our next redistricting will include the creation of a new district (barring some major surprises). Without this amendment, redistricting could be declared invalid if a special session became necessary on a different subject between the time of the census and the next general session. Also, it could be challenged in the event of the U.S. Census Bureau taking longer than expected to process the census results.

This amendment helps to protect the state from adding any more political maneuvering in this important and often partisan process.

Posted in State | Tagged , , , , , | Leave a comment

Rejecting Amendment C

Posted on 2008-10-08 by David

My position on Constitutional Amendment C is much like my position on Amendment A – it is unnecessary tinkering with the constitution. I don’t see any advantage to starting the session a week later than we do currently.

I don’t buy his argument that citizens would "more appropriately honor the late Reverend Dr. Martin Luther King, Jr., President George Washington, and President Abraham Lincoln" if the legislature were not in session on those two holidays.

I also expect that budget negotiations function just like any other project – they will fill every bit of time available no matter how much time we allow. Giving them an extra 8 days after the final tax revenue amounts are available will only mean that the Legislators will feel rushed in considering the budget adjustments for 22 days instead of feeling rushed about the final numbers for 14 days.

Finally, if the session were set for the first week of January I might see an advantage to moving the session back a week, but starting the third week does not seem any worse than starting the fourth week. I understand the arguments given by Sen. Valentine in favor of the time change but, like the budget adjustments, the draft legislation, budget analysis, and other technical work will fill whatever time is allotted. If our legislature needs more time they could try not considering 5 minor Constitutional amendments in a single session. (How much time was spent crafting, holding hearings, debating, and voting on those?)

Posted in State | Tagged , , , , , | 3 Comments

Get Ready to Vote

Posted on 2008-10-07 by David

One of the things I hear about in the news are the stories of people being turned away from polling places for not being properly registered to vote or for showing up at the wrong location. In Utah we have a chance to vote with a provisional ballot where there is confusion, but we also have the chance to minimize the confusion. At the website of the Lieutenant Governor you can find out if you are registered to vote and see where your poling place is located. Go there now and confirm your status as a registered voter by entering some basic information about yourself (name, DOB, county, & house number). If you are registered to vote where you currently live you will see your polling place displayed as well as your party affiliation, otherwise you will be instructed to contact your county clerk.

The great advantage of going now is that if you are not properly registered you still have two weeks to get to the county clerk’s office and get registered in time to vote in the general election. If you are registered you will be able to view a sample ballot for your precinct. The sample ballot contains links to information on many of the candidates and issues (such as the amendments I have been writing about). This gives you one month to get informed before casting your vote if you have not already started to do so.

Posted in State | Tagged , | 2 Comments

Supporting Amendment B

Posted on 2008-10-07 by David

I was pleased to find that Constitutional Amendment B was absolutely as straightforward in its proposed wording as the description suggested. It simply inserts one line into the Constitution allowing for more flexibility in adding funds to the existing state trust fund without making it easier for the Legislature to remove money from the fund. Believing that the fund is a positive tool funding our government services I am happy to support a no-nonsense change that can make it easier to augment the trust fund when resources are avaiable to do so.

At first I worried that making it easier to add to the trust fund would encourage the Legislature to keep surpluses of revenue, but then I realized that 1) they already do keep portions of any surplus fund one-time contributions to pet projects, and 2) they still have the same incentive to give tax-refunds when possible to fuel their re-election popularity. The difference now is that they have the option when there are surplusses to put some of the surplus in the trust fund so that it can increase funding for services in perpetuity rather than being limited to large, one-time gifts to specific projects.

Posted in State | Tagged , , , , | Leave a comment

Rejecting Amendment A

Posted on 2008-10-06 by David

Let me start off by saying that Constitutional Amendment A does not have anything sinister or devious in it. In fact, there is very little in it to raise objections about. My primary objection is rooted in my position on constitutionally based governments in which I prefer to reject any amendment to the established law unless I see good reason for the change – in other words, I default to opposition where constitutional amendments are concerned.

This amendment would clarify the specifics of succession in the office of Governor and Lieutenant Governor. The specifics themselves are fairly mundane, but the situation being addressed is one that hopefully and probably will never occur. (Davis Didjeridu reminds me that a vacancy can happen for less than tragic reasons – such as federal appointment – making this situation more common than I had been thinking.) In the event that one of those vacancies did occur, common sense should allow the succession to happen seamlessly even without these specified specifics being added to the State Constitution.

There is one place where I have a specific objection to the amendment. In the section dealing with the succession of the Lieutenant Governor, it specifies that the Governor must receive the consent of the Senate for the person they would appoint to fill the vacancy. This appears to violate the separation of powers considering that the Governor, when running for office, needs no consent from the Senate when picking a running mate. I see no reason that selecting a replacement should have tighter safeguards than the original selection.

In summary, there is little to recommend this change, and more to discourage it. I won’t be overly concerned if it does pass, but I believe that not making such a change is the better choice.

Posted in meta, State | Tagged , , , , , | 6 Comments

Test the Candidates

Posted on 2008-10-03 by David

When I talked to Kyle Roberts the other night I discussed how important communication was for me when I look at candidates and elected officials. It has been very exciting to see as Kyle has begun to implement some of my suggestions to open more channels of communication for the residents of House District 20. He is making more use of his blog (which he had before we talked) and he has added the option for residents to get his blog updates by email (or a variety of other means). As I have seen him implementing things I had suggested I realized that one of the things that voters can do in choosing a candidate to support is to test the candidates.

Go beyond reading what the candidates say and treat them like elected officials. If you like to ask questions or make suggestions to your representatives you should be doing that with the candidates. The key to representative government is citizen involvement – early and often. If we just vote and then stay out of the political process until the next election cycle the end result will be a government that is out of touch and out of control. It becomes dysfunctional like Washington D.C.

I like this discovery and I plan to make use of it in all races of interest to me in the future. I also like being able to follow the efforts of other people who are proactive in contacting candidates. Thad Van Ry provides a good example of that as he sent questions to the candidates for Senate District 23 (my senate district) and then posted their answers. (That is his intro to the series of answer posts.)

Posted in Local | Tagged , , , | Leave a comment

Politics Goes Local

Posted on 2008-10-02 by David

The Senate passed the bailout bill (that they had no business voting on) and with an added 315 pages of pork they might be exposing the real reason that the House did not pass it on Monday. All that extra sugar coating is likely to make the bitter pill go down easier. This reminds me why watching Washington politics is so depressing.

On a happier note, I met with Kyle Roberts last night and really enjoyed getting to know him better. I look forward to helping him to become my representative in the Utah Legislature.

I’m sure I will have some things to rant about on the national level, but I am going to focus on state and local issues for a while (like the proposed amendments to the Utah Constitution) and quit paying attention – as much as possible – to the coming Obama administration and the continued shenanigans that will remain rampant inside the beltway.

Posted in National, State | Tagged , , , | 2 Comments