Tag Archives: spending

Bank Bailout, Italian Style

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Italy has nationalized Monte dei Paschi di Siena, a major bank that otherwise would have gone into bankruptcy. In the process, the bank’s €26.8 billion ($32.5 billion) “nonperforming loans” will be “disposed of,” and the Italian government taxpayers will feed the bank €5.4 billion and get a 70% stake in the failing bank.

Under the bad loan disposal plan, €26.1 billion will be bundled and sold at 21% of gross book value, the vast majority to the government-organized Atlante II fund, while the bank retains 5%.

This is the third time Monte dei Paschi had gotten capital injections, and for some reason, the men of the Italian government thinks this third time will be the charm.  Of course, that’s an easy choice for them to make; it’s not their money being used in this risk.  It’s the Italian taxpayers’ money being cavalierly gambled.

No, instead the bank’s creditors and other investors should be the only ones on the hook; they’re the ones whose money is at stake, and they’re the ones whose management oversight was…absent.

General Reform

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25% of us don’t see doctors because that costs too much.

32% of older millennials (is there such a thing?  Gad) skip the doctor.  13% of Americans don’t have any health coverage plan at all—paying the penalty is more valuable to them.  Half of us don’t think we’ll have affordable health insurance much less Obamacare’s health coverage welfare.

This, together with today’s other post, just illustrates the fact that no single part of our economy—or of our Federal government—can effectively be treated in isolation: not Obamacare alone, not Federal spending alone (especially not by “cutting” through reducing the rate of growth in spending), not taxing alone, not debt handling alone.

They’re a system, and the system as a whole must be reformed, not convenient parts of it.  That’s Systems Management 101.

Budget Cuts and Bribery

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…or budget cuts and coercion, depending on your perspective.

The president’s budget, due for release Tuesday, will spare the two largest drivers of future spending—Medicare and Social Security—leaving trillions in cuts from other programs. That includes discretionary spending cuts to education, housing, environment programs, and foreign aid already laid out by the administration, in addition to new proposed reductions to nondiscretionary spending like food stamps, Medicaid, and federal employee-benefit programs.

What’s going to be ignored in the inevitable hoo-raw over these allegedly terrible cuts to various aspects of our nation’s “safety” net is the truly terrible downside of those aspects.

The Federal monies being sent to the States for education, housing, environment programs, food stamps, Medicaid, and on and on in the seemingly endless, yet growing, list is in large part those States’ own money.  Its income and other taxes collected from each State’s citizens and businesses (which is to say each State’s citizens), with a fraction of those collections then returned to each State (the rest is sent to other States, which does the collected-from State’s citizens no good at all), but with a cynically attached value-add: Federal strings.  Use this money the way we tell you to use it, or we’ll reduce the amount of your money we return to you.

With the proposed cuts to these programs, the States actually will be gaining: the cuts will facilitate associated tax rate cuts, leaving more money in those States—those States’ citizens’—hands.  Just as importantly, though, the strings attached to the Federal funds transfers will be greatly weakened in favor of the States’ own decision-making.

We’ll find out, too and in short order, how sincere the Republican-controlled Congress, whose members ran on and were elected to effect fiscal discipline, really are, whether they’re more interested in maintaining Federal control over States’ individual and varied economic decisions, or whether we need to just keep doing what we’ve been doing the last several Congressional election cycles: firing those who fail to perform, and replacing them.

Congressman Mark Sanford (R, SC) had such a thought:

For a budget to have any meaning, it’s essential we have realistic assumptions in terms of economic growth and in terms of spending reductions.

True enough.  It’s more essential, though, that our representatives not use such excuses to block meaningful tax reform and actual spending cuts and with that continue to exercise too much control over the 50 States.

As an aside, this brings up two elephants in the safety net herd: Social Security and Medicare.  The foregoing—all of it—applies to these two things, also.  In spades.

Is Satire

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…a proper style for what’s claimed to be a serious, scholarly journal?  Here, via The Wall Street Journal, is the abstract of Teresa Lloro-Bidart’s When ‘Angelino’ squirrels don’t eat nuts: a feminist posthumanist politics of consumption across southern California [sic] in the journal Gender, Place & Culture: A Journal of Feminist Geography [also sic]:

Eastern fox squirrels (Sciurus niger), reddish-brown tree squirrels native to the eastern and southeastern United States, were introduced to and now thrive in suburban/urban California. As a result, many residents in the greater Los Angeles region are grappling with living amongst tree squirrels, particularly because the state’s native western gray squirrel (Sciurus griseus) is less tolerant of human beings and, as a result, has historically been absent from most sections of the greater Los Angeles area. ‘Easties,’ as they are colloquially referred to in the popular press, are willing to feed on trash and have an ‘appetite for everything.’ Given that the shift in tree squirrel demographics is a relatively recent phenomenon, this case presents a unique opportunity to question and re-theorize the ontological given of ‘otherness’ that manifests, in part, through a politics whereby animal food choices ‘[come] to stand in for both compliance and resistance to the dominant forces in [human] culture’. I, therefore, juxtapose feminist posthumanist theories and feminist food studies scholarship to demonstrate how eastern fox squirrels are subjected to gendered, racialized, and speciesist thinking in the popular news media as a result of their feeding/eating practices, their unique and unfixed spatial arrangements in the greater Los Angeles region, and the western, modernist human frame through which humans interpret these actions. I conclude by drawing out the implications of this research for the fields of animal geography and feminist geography.

Unfortunately, the full article is behind a paywall, but the abstract is sufficient unto the day.  And it raises a question: how much of the…research…behind this piece was done with the proceeds of a Federal grant to California State Polytechnic University, Pomona, where Lloro-Bidart is an Assistant Professor in the Liberal Studies Department?  Is our tax money funding satire, now?  If so, Congress does need, indeed, need to revisit funding for the NSF and similar entities.

It’s a Start

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The Secretary of State wants to cut 2,300 jobs at State.  That might seem like a lot, until you recall that State has 13,000 Foreign Service employees, 11,000 Civil Service employees, and 45,000 Foreign Service local employees.  That’s 69,000 folks on the payroll (some estimates put the number higher, to 75,000); Tillerson wants to cut all of 3% of the employees.

Contra The Wall Street Journal‘s subheadline (The plan underscores the Trump administration’s preference for military spending over diplomacy), this is a good start on the true priority—downsizing the Federal government physically as well as fiscally.  Here’s hoping Secretary of State Rex Tillerson can follow through, and Congress and the other Cabinets and Agencies join the party.

It’ll be even better if the ones cut by Tillerson (et al., I hope) aren’t merely reallocated elsewhere on the government’s payroll but are instead returned to the private sector.

Naturally, politicians are all in a tizzy at the thought of actual downsizing—including an embarrassing number of politicians who caucus with the Republican Party.

…43 Republican and Democratic senators signed onto a letter to congressional appropriators arguing for “robust funding” for foreign aid and diplomacy.

“At a time when we face multiple national-security challenges around the world, deep cuts in this area would be short-sighted, counter-productive and even dangerous,” the letter said.

It is, though, entirely possible to do the same amount of work with fewer folks and less money—just using them both more efficiently.  In fact, it’s entirely possible to do more work with fewer folks—the lesser number won’t get in each other’s way so much.