Thursday, December 30, 2010

Wanted: rare earth metals

From the 03 January 2010 Greater Niagara Newspapers

By Bob Confer

The history of mankind has been filled with numerous wars, of both the military and trade sort, over elements that come from the Earth. Gold and silver have long been at the epicenter of such struggles, many a civilization driven to destruction over their greed - or other peoples’ desires - for the metals.

There are other precious elements now taking their place as resources hungered by all and they are ready to test the balance of power in global trade. Rare earth elements (REE) are a collection of 17 members of the periodic table. All of them are not as well known as metals like copper and zinc yet they are just as important. REE like yttrium (cancer treatments), lanthanum (hybrid car batteries), cerium (catalytic converters), neodymium (magnets) and gadolinium (nuclear reactors) are crucial to our modern society and, truthfully, we could not live without them.

We’re going to have to find ways to make do with less very soon. China currently mines 93% of the world’s REE and the nation’s leaders have announced that they will be cutting exports of the metals by at least 40% before the end of 2011. That cut may not even be large enough: Some manufacturing experts believe that China’s growing industrial sector will consume all of the REE it produces by 2012.

Needless to say, having all of our eggs in one basket – especially one held by China - is dangerous for national security. Just ask Japan.

Back in September Chinese officials temporarily unleashed a trade embargo that prevented shipments of REE to Japan, scaring the dickens out of Japanese manufacturers. It was believed that China did this as a bargaining chip to secure the release of a Chinese captain detained by Japanese officials.

In the whole scheme of things, a political impasse like that is nothing in comparison to the potential for conflict that exists between China and the US. China controls nearly $900 billion in US debt and we’ve had strained relations of late as China criticizes our ever-weakened dollar and our escalation of the Great Recession while we accuse them of manipulating their currency to undermine our economy. It wouldn’t take much for an agitated China to impose REE restrictions.

China has so dominated the REE marketplace because of their less-stringent environmental standards. Most of the 17 elements are not rare as the name supplies. They are widely available throughout the world (China has only 36% of global reserves), yet are rare in finished, usable form because the excavation and processing of them can be toxic to the environment if not properly controlled. Recklessness with REE development has fit perfectly with China’s unfettered assault on nature, one that has seen Beijing and other cities overcome by vast clouds of pollutants.

America has basically been out of the REE business for years, most all of our mines shuttered because of warranted environmental concerns. The environmentalists in the Department of Energy and the Environmental Protection Agency now see merit in the development of REE projects because they know that, ironically, their clean energy technologies (like wind turbines and new-age automobiles) require rare earths. It’s a catch-22: One set of resources (REE) must be capitalized at cost to the environment to prevent other resources (oil, coal) from harming the environment.

Recently a company named Molycorp was finally given the okay to tap into a vast REE reserve in the Mojave Desert after an 8-year suspension of operations by the federal government. This mine offers the single largest deposit of REE outside of China. The forward progress of this project was brought on by a public-private partnership that saw the government and the corporation working hand in hand to develop guidelines and processes necessary for a relatively clean and safe realization of the mine’s potential.

It is hoped that other projects follow suit and quickly at that. We’re probably too little too late as it is. 2012 could mark the beginning of a new national crisis, one where we will suffer in the health, energy, and defense industries until we can get back on track in REE capture.

Wednesday, December 22, 2010

The fiscal nightmares of Generation X, Y

From the 27 December 2010 Greater Niagara Newspapers


By Bob Confer

Generations X and Y will have a rough go of it. They may be the first generation of Americans to have a quality of life that is unimproved over – and probably less than - that of their parents.

Their personal finances and the job market they must survive in represent just the tip of the iceberg. They have considerable fiscal situations to address that will put even greater pressure on the advancement of their generation. Two social welfare programs will be hitting crisis mode at various points in the lives of today’s young adults.

The oldest of the programs, Social Security, is quickly nearing bad territory. By 2015 it will be in the red for the long haul (due to the Baby Boomers all hitting retirement age) and by 2037 its trust fund will be completely wiped out; that is, if the federal government ever returns the $2.5 trillion that it “borrowed” from the fund.

The people of the United States do not have the backbone to overhaul Social Security. Just look at the ire faced by George W Bush when he tried. So, Generations X and Y will be forced into retiring at a later age (it’s already legally bound to be 67 by 2022) or increasing their rate of contribution (it will have to rise by 25% as we near 2037 just to keep up with promised payments).

Americans also lack the wherewithal to remodel Medicare. Its trust fund could be in the red as soon as 2017. Those who penned Health Care Reform said that legislation has pushed Medicare’s Doomsday to 2029. But, politicians will say anything to sell the citizenry on government growth. Remember, Lyndon Johnson deliberately lied about the cost of Medicare in order to get it passed.

Medicare’s woes far dwarf those of Social Security. We currently have $37.8 trillion in unfunded obligations, which is more than 2.5 times the size of the US economy. By 2050, 10 cents of every dollar spent in the country – and 50 cents of every dollar spent by the government - will be on Medicare. In order to satisfy those growing demands, its payroll tax (which is 2.9% split between employer and employee) will have to grow as well. Health Care Reform has already pegged high-income individuals for that duty starting in 2013, but, as their ranks decrease as a result of slow or stagnant growth of the economy, everyone will have to foot the bill. By 2020 one can assume that the payroll tax for all workers will rise by a third. It has to if all else remains the same.

There’s also the national debt that Generation X and Y must contend with. Washington recently voted to temporarily cut the Social Security tax for 2011. That sounds good at first, but as you dive deeper into the bill you’ll find that the $112 billion lost by the cut will be picked up through borrowing. That keeps with America’s recent methods of managing and/or hoping to excite the economy with debt. The total debt load is now $13.8 trillion, just a tad under America’s total economy of $14.3 trillion. That national debt is growing quickly (its growth has exceeded $1 trillion in each of the past 3 years) while our economy is not (it grew at a 1.8% clip over the past decade).

Imagine a company the output of which will soon be outstripped by what it owes the bank. It will die. Since, once again, Americans lack the gumption to change the way things are done in government, the only method by which the US can overcome a similar fate is by further taxing its people (which, by the way, will have the simultaneous effect of shrinking our economy, making matters worse for the long term). What will that do to the income taxes paid by Generations X and Y as various portions of the debt come due in the coming years? I shudder to think of the possibilities.

For these 3 issues alone, which do not include the numerous fiscal crises to be faced at the local and state levels, Generation X and Y will have to make some significant sacrifices to keep the country afloat. The question is: Do they have what it takes to save America? They might, but the cards are really stacked against them.

Thursday, December 16, 2010

The financial nightmare of Generations X, Y

From the 20 December 2010 Greater Niagara Newspapers


By Bob Confer

One of the more endearing aspects of the American Dream is selflessness. Each generation has been driven to give their children a better life than they had. For all of American history such efforts have paid off, the standard of living improving dramatically from generation to generation.

But, there are signs indicating that portion of the American Dream may not be realized by the Baby Boomers. Their descendants - Generations X and Y - could be making a living barely better than and, in most cases, considerably lower than that of their parents.

A 2007 study showed that Generation X was earning 12 percent less than their parents had been at the same stage of their lives (the incomes were adjusted for inflation). That drop in salaries could be attributed to any number of things, none more damning than the lack of high paying manufacturing jobs that once ruled the land. Competitive cost factors have either driven those jobs to low-cost foreign countries (the US has lost 8 million manufacturing jobs since 1980) or caused domestic manufacturers to lower their wages paid (look at Delphi where traditional rates were cut by a third to a half in recent years). Even the service and high-tech jobs that replaced them are in peril; it’s estimated that 3.5 million white-collar jobs will be shipped overseas by 2015.

Therefore, today’s workers have to be willing to work for wages well below historical standards. If they don’t, Corporate America will seek a region possessed of the lowest cost – domestically or internationally - that can produce similar output.

As an outcome of attempts to overcome that and make themselves marketable for the now rare upper-middle-class job, young adults are being held back by debt in the form of college loans, something that is, in volume, unique to their generation. Back in 1973 when many Baby Boomers were coming of age, 47 percent of high school graduates went to college. 35 years later, 70 percent of their children had gone on to some college studies. About one-half of them graduate from college and, of those who do, two-thirds have debt approaching $28,000. Nationally, the accumulated college debt (across all age groups) is a staggering $830 billion.

Those obligations will ultimately affect more than 65 million members of Generations X and Y, delaying or preventing them from assuming other forms of debt (specifically mortgages), investing, and purchasing discretionary and durable goods because they’ll have spent most of their first decade in the workplace paying off student loans while, at the same time, addressing traditional financial burdens like car payments and their first years out on their own.

Once they finally want to pursue a home or bigger purchases, their ability to do so will be somewhat constricted as they come of child bearing age (at least by today’s standards). Due to college, lower incomes and the accompanying need for dual-income households, more and more first-time parents are taking on that task in their 30s and the number of first-time mothers over the age of 35 has grown eightfold since 1970.

In essence, Generations X and Y are a decade behind their predecessors when it comes to the fulfillment of their American Dream; a decade behind in their ability to spend, raise a family and invest in their future. It’s a lost decade they’ll never be able to overcome later in life, forcing them to be a decade behind in retirement, too: Today’s younger generations can plan on working well into their 70s. Then, thanks to lower earning potential, their nest eggs will be smaller and, therefore, the quality of life in their golden years will be nothing like that experienced by current retirees.

This is all a little disconcerting. It makes one wonder if America’s expansion has finally hit a wall and we’re settling into a long period of slow growth, if not stagnancy. Generations X and Y will have to figure that out and hopefully turn things around. But, as you’ll read next week, other factors are in play that will place significant obstacles in their path.

Thursday, December 9, 2010

Outsourcing to Africa: Part Two

From the 13 December 2010 Greater Niagara Newspapers


By Bob Confer

Over the next two decades it will be increasingly difficult to keep the store shelves stocked at price levels frugal shoppers appreciate. As mentioned in last week’s column, the cost of doing business is quickly rising in China and India and by 2030 they won’t be as attractive for outsourcing as they have been since the push for offshore manufacturing really hit its stride in the late-1970s.

That doesn’t mean the jobs are coming back. The reality of today’s world is that, globalization is and will be the way to do business. As much as Americans savor the thought of goods being produced on US soil, the chances of that happening in appreciable volume again are slim to none. Many consumers demand cheaply-priced (if not cheaply-made) goods and corporations are more than happy to oblige. Companies truly committed to domestic manufacturing (like Confer Plastics) are now rarities when once they were a dime a dozen.

Most of the world, from agricultural South America to the industrial Far East, has already been pressured by traders from the richest nations to meet their demands and in many cases the well is dry from a potential price savings standpoint. The African continent, on the other hand, has remained relatively unmolested by Westerners since the days of the slave trade. But now, Africans are primed to join the ranks of the modern slave, the “sweatshop” laborer, so common in the Far East, who earns a few dollars a day (or week).

As bad as that sounds, it’s better than what they have now. Africans are still enslaved, but by Mother Nature, despotic political regimes, and even Western charity. The continent’s population recently topped 1 billion, but a quarter of them are undernourished. 250 million people are basically starving. To put that number into perspective, the entire US population is 307 million. In the short-term (the next 3 decades), globalization will help Africa rise from a poverty that, truthfully, makes America’s impoverished look like kings. Following the quality of life trends that we saw in industrial Europe, US, and Japan, the long-term future (by 2100) is economically bright and socially responsible for Africans.

Naysayers might comment on the lack of political morality and infrastructure on the continent that would prevent development. That was the case for China. Look what’s become.

Americans are more than happy to either overlook or work in conjunction with one of the most horrid communist systems in the world, one that still - even 21 years after Tiananmen Square massacre - squashes freedom and criticism. Many African leaders are just as oppressive. But whereas China’s political system is old and deeply entrenched, most African nations have fragile systems, so newly employed Africans who will have something that only the few possess now (money) will ultimately become a financially and politically empowered people who can turn away decades of evil rule.

China was a backwards nation until only recently (by historical standards) in regard to infrastructure. Now they have quality roads galore, impressive electrical generation and vast cities that seem to pop up overnight. Whereas that’s been a public-private venture to bring them into the 21st century, Africa’s nations are lacking in wealth so it will be an entirely private investment led by Western firms. But, as capitalism goes, if the need (and reward) is there for electricity, water, ports, and roads, the necessary investments will be made. 1 billion potential workers is a very attractive number for capitalists, especially for as cheaply as they can be had at this time.

Even Sir Richard Branson, one of the richest and brightest men on the planet, acknowledges that Africa will see significant gains in the coming years. In a recent appearance on CNN he addressed America’s need to embrace the global economy as a way to overcome our recent woes. Listing some of our largest trade partners and those we should do business with, he slyly slipped in the comment, “Africa is about to boom”.

I promise you, they are. By 2025 many of the “Made in China” labels you see on items now will be replaced by “Made in” labels from far-flung locales like Kenya, Tanzania, and Mali.

It’s a wild, ever-changing – and ever-shrinking - world we live in.

Thursday, December 2, 2010

Outsourcing to Africa: Part One

From the 06 December 2010 Greater Niagara Newspapers


By Bob Confer

Remember when many Americans perceived Japan’s manufacturing economy as a threat? Just a few decades ago we worried about that nation taking all of our production jobs through their (and our) efforts to make goods cheaply to satisfy our insatiable consumers. They did take some of our jobs, mostly in the electronics department. For a while they manufactured a good number of our cars, but oddly enough, Japan-branded cars are now being manufactured in the United States.

The reason the automotive jobs came back and Japan never really destroyed our economy is that they became one of us. Manufacturing created opportunity in Japan, spawning a huge middle class that, through the same economic progression that America had in the late-1800s and early-1900’s, created higher wages and more discretionary income that allowed it to purchase – and demand more of – the very goods it produced. Japan became the second largest economy in the world behind the United States and according to the World Bank it possesses a gross domestic product per capita of $39,727, not too far behind our $46,436.

Because of that, it gradually became too expensive to further develop outsourcing in Japan, so America looked elsewhere, mainly the most-populous country in the world, China. It has become our business partner of choice. In 2000, China’s annual exports to the United States were $100 billion. By the end of 2009 that number had grown to $296.4 billion.

That can’t keep up forever. China will become another Japan relatively soon. There is a push by Chinese officials and business leaders to bring 40% of the Chinese population into the middle class by 2020; that’s about 550 million people who will have newfound access to capital to buy durable and discretionary goods, creating a substantial domestic economy out of China’s export economy.

At the same time that occurs, our temperamental trade relations with the Asian giant will become even more so. Chinese officials are vocal, and justifiably so, about the poor choices of Corporate America and our debt-averse citizens that led to the global recession. They are even more critical of what the American government is and will be doing to right the ship. You can’t blame them, they hold just under $900 billion in US debt. As our dollar continues to tank in value so does their investment.

Our elected officials insist on adding insult to injury by continuously calling-out China for manipulation of its currency, saying the value of the Yuan is tied directly to the American dollar, which keeps Chinese goods artificially low-priced. That’s the pot calling the kettle black: Through the private-public partnership that is the Federal Reserve, America has been manipulating the value of its currency since 1913. Our dollar is dying on the vine because the Reserve and Washington are so intent on addressing the latter’s problems through the issuance of fiat currency. Every time a dollar is created all other dollars in the marketplace lose their value. It’s simple economics.

We have the perfect storm brewing. China’s growing middle class will drive up the cost of doing business at the same time it will take more of our devalued dollars to buy the same basket of goods. Add to that the chance that the Chinese Yuan will have to be strengthened and you’re guaranteed that Chinese exports will become dramatically pricier over the next decade.

American consumers won’t be able to stomach the increased costs at the grocery and department stores. We always want cheaper. Based on how tenuous our economy has become (and how tenuous it will be with upcoming crises in Social Security and Medicare) we will need cheaper.

American businesses overseeing outsourcing activities will have to look elsewhere. India is certainly not at the top of the list. They, too, show very limited long-term potential as their middle class has tripled in size over the past 20 years and it is projected that half of their population will be a part of that category before 2030.

Then where does outsourcing next occur? There’s only one place left on this planet that will be able to satisfy the needs of consumers in America, Europe, and ultimately China and India….the African continent.

Wednesday, November 24, 2010

Niagara skies affected by light pollution

From the 29 November 2010 Greater Niagara Newspapers

By Bob Confer

If, like me and thousands of other readers of this newspaper, you live in the rural parts of the Niagara Frontier, you’re accustomed to some spectacular nighttime views, especially this time of the year when the cold, clear nights seem to amplify that stars. It’s invigorating (some folks even say it’s akin to a religious experience) to marvel at the cosmos, something that so few Americans have the chance to do. Only 20 percent of our population lives in rural areas, meaning 8 of every 10 people rarely if ever see the stars, especially in the volume that we do.

But, alas, even the magnificence that we see is not close to perfect. It doesn’t matter if you live in the most remote locales of Niagara and Orleans Counties, you’re still missing out on thousands of stars for the same reason that the city folk do: light pollution.

Look off in the horizon and you may see a glow from a nearby village or city that obscures that portion of the sky. Now, imagine countless cities and towns around us, all pouring that much light and then some into the skies. This accumulated visual noise spreads into the night, creating a glow that extends far beyond its sources. The ability to see the faintest of stars, including the dense Milky Way, is affected and what we think is a true nighttime sky really isn’t close to that at all.

That’s a result of being surrounded by numerous cities small (Lockport), medium (Buffalo) and large (Toronto). We’re within 500 miles of 46 percent of the US population and 57 percent of the Canadian population. Imagine all of the lights used to illuminate their homes, the roads they drive on, and the businesses that serve them. Rarely are the lights off even in the wee hours, meaning the sky glow over populated areas is relentless. In essence, a mammoth light umbrella covers us in Western New York.

To see how we compare against the few dark parts of the US and Canada (specifically some areas of the Great Plains, the Rockies, and the Far North) refer to the awesome Dark Sky Finder that can be found online at The website has an interactive map that you can drag around the US and zoom in to specific communities. It shows in a varying range of colors how intense the light pollution is.

Looking at the map, you’d probably be surprised to find out that the Lake Ontario shoreline of Orleans County still can’t escape the lights emitted by Rochester and the Greater Toronto Area. The whole Northeast suffers from that same fate, we’re an absolute mess. The closest that we can get to perfection is in desolate areas located within the Adirondacks and Appalachia. Stargazers can find true dark skies within the NY’s Moose River Plains and PA’s Susquehannock State Forest, the latter of which is renowned for its celestial views facilitated by a quarter million acres of near-wilderness.

Even if you can’t trek into those areas, you can still revel in more accessible sites that have incredibly vivid displays. Vast areas in Northern Pennsylvania, the Adirondacks and the Catskill Mountains possess only trace amounts of manmade illumination (look for the blue and purples hues on the map) and, therefore, nighttime skies that truthfully put ours to shame. In them, the stars seem endless and tightly packed while the Milky Way is actually, well, milky. I’ve been fortunate enough to experience those sights on clear nights while camping and I compare the difference between them and rural Gasport’s skies to the difference between Gasport’s and retail Amherst’s skies; it’s really that significant.

So, if your family vacations ever take you to the aforementioned wilds, do yourself a favor and duck out to the Great Outdoors every cloudless night that you can. You’ll be amazed at the sights and you’ll get as near as possible to seeing the stars as they were when man first set foot on this continent.

Friday, November 19, 2010

Cheaper Medicaid through equality

From the 22 November 2010 Greater Niagara Newspapers


By Bob Confer

In New York, more so than most states, Medicaid takes more from society than it puts back into it. It’s a drain on the economy and the overall quality of life. If you’re a homeowner you know that too well. More than half of your Niagara County property tax bill goes towards Medicaid, costing you hundreds of dollars every year. Combine that with what else you put into the Medicaid coffers (state and federal income taxes and 1 full percentage point from sales taxes) and you discover that each Medicaid recipient in New York costs taxpayers $16,000 per year while the average family of four on Medicaid places a burden of $64,000 per annum on our economy.

If you and/or your employer pay for your health care you know those numbers seem unreasonable. They are. A single-subscriber plan through an HMO is slightly more than $4,000 per year while a family plan is just under $12,000. That’s 75 percent and 81 percent less than their respective Medicaid counterparts. From the standpoint of equality, that’s a major source of frustration for any reasonable taxpayer. He or she must cut coupons, corners and family budgets in order to pay for increasingly painful health insurance and property tax bills, while others are receiving, with minimal effort, Cadillac coverage at Cadillac prices.

But above and beyond the concept of fairness, there’s the issue of fiscal responsibility. How can that same penny-wise New Yorker and the elected officials he or she puts into office take seriously the extravagance – if not waste – of our Medicaid program? Should it really be 4 or 5 times more expensive than private insurance? The answer is “no”.

Albany politicians have been talking about Medicaid reform for years, all of them to a man knowing that the system is broken. Yet, the talk has been nothing more than that. If anything, reform has been in the wrong direction, actually lessening strict eligibility requirements and adding even more pricy gimmicks. Not surprisingly, the cowardice to initiate appropriate change wasn’t eliminated by the Great Recession and our dire fiscal situation.

So, just how do we change Medicaid and New York State for the better? There is a very simple means to do so, one that would be a win-win for both sides of the aisle (those who demand cost cutting and those fearful of “hurting” Medicaid recipients): Dissolve New York’s corrupt Medicaid system and redirect Medicaid funding to the purchase of private, not public, medical insurance.

The savings would be astronomical. The state’s Medicaid budget for 2010-2011 is approximately $52 billion. If HMO coverage were purchased, the state would save $39 billion per year and it would totally eliminate the burden that is placed on the counties; gone would be the sales and property taxes specifically set aside for Medicaid.

Residents and businesses would have $39 billion of their own money made available to them every year, allowing them to spend and save and do as they wish with it, pumping it into more-productive sectors of the economy which in turn would increase personal wealth and employ more people (taking them off the Medicaid rolls in the process), making New York a place that’s attractive to live and work. Economic development and good government can really be that simple and moral: You actually can dramatically cut costs in entitlement programs without adversely affecting those deemed to be in need.

To make such an idea come to fruition you’d need a buy-in from Albany. They would have to be willing to totally remodel state government and eliminate layers of bureaucracy. If Andrew Cuomo is any bit the reformer he claims to be, it would be the perfect task for him. If the voters are as angry as they say they are, he’s got the backing.

One obstacle might be the federal government. Medicaid clearly defines minimum expectations and requirements, all of which are met by HMO. The feds might not see it that way, but any attorney-general worth his salt can make a very compelling claim to Washington. Look at how many attorneys-general have raised a stink against Obamacare, something that has far less of an impact on the health care landscape than Medicaid. If only one of them - ours, I hope - could take the risk and take on Lyndon Johnson’s ever-lasting Medicaid nightmare, our state – no, our country - would be a much better place.

Friday, November 12, 2010

High school sports need a boost

From the 15 November 2010 Greater Niagara Newspapers

By Bob Confer

Rick DeWaters and his friends in the Royalton-Hartland Sports Boosters Club did something this year that could be considered miraculous. They saved the school district’s athletics program by securing the funding necessary to keep alive football and fall and winter modified sports, programs that had been victims of budget cuts last spring.

That’s an accomplishment once thought impossible. Roy-Hart is the third smallest school district in Niagara County with an enrollment of around 1,530 students. It’s also one of the poorest: the town of Royalton has a median household income that’s $230 lower than the county median while Hartland’s is $5,270 lower. With those factors in play - as well as the community having already been so maxed out in its investment in the district that it was forced to cut those sports - it was unknown if district residents could dig deep enough to give the school what it needed to keep the kids engaged in competitive endeavors. One sport (football) was certain to be saved, but modified sports, too?

In the end, the community pulled together. They participated in Booster-led fundraisers and fund drives, they donated goods and services to raffles, and they donated their time to Booster activities. They’ve kept Roy-Hart sports alive. With the leadership and experience the Boosters have in place, they’ll be able to save the day again next year when called upon to do so. Goodness knows they’ll have to; Roy-Hart’s financial straits aren’t unique to this school year.

Nor are they unique to Roy-Hart. We live in some tenuous economic times and taxpayers who have seen their incomes cut or their jobs lost by the recession are unable to support ever-growing school expenses, especially with the loss of state and federal funding that was once taken for granted. School districts everywhere will be forced to follow Roy-Hart’s lead and cut sports (among other things).

It’s a very unpopular decision to make, but it’s truly a wise and necessary one. What’s the alternative, cut teaching positions and academic programs? You can’t, for schools are, first and foremost, learning institutions. As harsh as it sounds, athletic pursuits rank lowly among a school district’s best interests because there is minimal bang for the buck when looking at the student body as a whole. In a small district like Roy-Hart far less than half of a given class might participate in school sports. In a larger district, like the Lockports of the world, much less than a fifth of a class is active in sports. When faced with an economic crisis, you certainly cannot sacrifice the enrichment of many pupils’ minds for the advancement of the athletic affairs of a select few. Even in good times it’s a questionable investment: Why should townsfolk direct their taxes towards one boy’s football adventures while not doing so for another lad’s participation in the Boy Scout program? Both activities are hobbies and are as equally important to the development of those boys.

But, that does not discount its value. Just as necessary as a book-driven education is to the students, so is the experience-driven education that comes with sports. A sport may be “just a game”, but there is so much more that comes from it if properly channeled. High school athletes can learn any number of life skills ranging from personal fitness and work ethic to teamwork and sacrifice to preparedness and adaptability, things you just can’t get in a classroom. The fields and gymnasiums give the perfect outlet for achieving all of those, while at the same time, developing a powerful sense of community pride, not just for the players but also for the district residents at large.

School sports serve a great purpose, one which cannot be ignored. But, athletes and their parents can no longer consider them to be freely supported by the taxpayers. We live in a new day, one where parents must take an active role in ensuring that the sports are there for their kids. They need to put in some extra hours outside of practice and games, working with donors throughout the area to put money in the athletic department coffers. It’s a difficult task, but not an insurmountable one, and the Roy-Hart Boosters have shown – far better than most – that working together we can all guarantee that today’s children have the same chance to compete that previous generations had.

Saturday, November 6, 2010

Fighting poverty creates poverty

From the 08 November 2010 Greater Niagara Newspapers

By Bob Confer

The federal government considers one to be living in poverty if income is $10,830 or less, or $22,050 for a family of four. The number of Americans within those categories grew last year by nearly a full percentage point to 14.2 percent, or 43.6 million people — a 3.8 million increase. The poverty rate is at its highest since 1994, while the actual number of those living in poverty is the greatest in 51 years.

To put that in perspective, the poverty crisis 51 years ago is what inspired Lyndon B. Johnson to initiate his War on Poverty. To combat our socio-economic problems he ushered in the Social Security Act of 1965, which introduced Medicare and Medicaid. They have become an indelible part of American life, used by the poor and - especially in the case of Medicare - the not-so-poor. But despite their abundant patronage, these massive, unconstitutional programs have neither eliminated poverty nor become even remotely efficient or affordable.

Medicare, which provides health “insurance” to 45 million Americans 65 and over, is funded through a payroll tax of 2.9 percent split between the employee and the employer. Despite stripping the economy of more than 3 percent of its value annually, the program is still unable to adequately fund itself: Since 2008 the Medicare trust fund has been paying out more than it brings in.

Like any Ponzi scheme, this unsustainable economic model is destined to come crashing down. Medicare has unfunded obligations of $37.8 trillion (2.5 times the size of the U.S. economy) a great deal of which is coming due soon. As the Baby Boomers age, they will put incredible pressure upon the system, ultimately bankrupting Medicare. Economists, as well as Medicare trustees, believe the fund will be in the red by 2017. Upon its collapse, what will the federal government do? It has done nothing yet to prepare for Doomsday, although it’s only 7 years away. So, a financial crisis and tax tsunami are looming for American taxpayers and Medicare beneficiaries, as well as those who must be paid to provide for their care.

The crisis continues with Medicaid which provides medical and health-related services and funding to the poor. Even though it’s a federal edict, it uses a combination of federal/state/local taxes and state management of Medicaid recipients. In 2007, there were an average 49.1 million Americans receiving Medicaid. The federal outlay that year was $190.6 billion, while the states pumped in another $142.6 billion for a total of $333.2 billion. That number is expected to reach $673.7 billion by 2017, the very same year Medicare comes to its crossroads. It should be noted that the program is notoriously abused, with some states - like New York - providing recipients with products and services that those on private health insurance would never receive without considerable out-of-pocket expense. In the Empire State the accumulated cost to taxpayers is a whopping $16,000 per Medicaid recipient.

These incredible burdens placed on productive sectors of the economy make it painfully obvious to the reasonable mind that Medicare and Medicaid have created poverty rather than alleviated it. In its effort to combat the very poverty it had previously created through taxation and regulation of a productive private sector, the federal government managed to create even more poverty by adding to the cost of doing business (which inhibits job growth, stunts wages, and sends jobs overseas) and living (which prevents people from spending as much as they could in the free market, which would then encourage economic development and squash poverty).

Whenever money — hundreds of billions annually for the War on Poverty — is forcibly removed from the private sector, the private sector is unable to do what it should. Thus, the average worker, because of diminished employment opportunities, becomes impoverished by the invisible hand of the government. That individual then relies on government subsidies, further stressing the system of dependence unleashed by our government, which will then, again, take away more jobs and opportunity further down the road. It’s truly a vicious cycle.

The taxman in the sky

From the 01 November 2010 Greater Niagara Newspapers

By Bob Confer

Many look at websites that share aerial imaging technology as a fun way to see what their home and community look like from the air. Little do they know that various governments around the world are using it for less amusing purposes. Sites like Google Earth and Bing Maps are being used as tools to find so-called "tax cheats" and individuals that willingly or unwillingly sneaked past the building permit process.

The nation of Greece has used the technology to enforce its wealth tax by scanning suburbs in an effort to find pools, villas, and vehicles that, according to Greek officials, certainly couldn’t be afforded or maintained by recorded income levels. In its initial round of searches for swimming pools, Greece found 17,000 pools when only 324 had been claimed by taxpayers. Enforcing the tax code through such investigative measures netted the country 1.8 billion Euros in back taxes and fines during the first 6 months of 2010.

Here in the States, many municipalities are following Greece’s lead. In Riverhead on Long Island, Google Earth is also being used to find swimming pools, specifically those that were erected without town notice or do not meet the town’s building code. In that town of 27,000 people, about 250 unregistered pools were discovered. The homeowners were forced to make their pools compliant and, of course, pay Riverhead mightily for their permits.

With nations like Greece (whose financial descent is being mirrored by the United States of America) and communities like Riverhead (the size of which is similar to many communities across the country) seeing great success with aerial surveillance, many more government entities are following suit, playing around on the computer and subsequently playing financial hardball with property owners as a way to increase revenues.

To see how pompous they are in this matter, refer to Pennsylvania’s springtime television ad campaign (it can be found on YouTube) which played the Big Brother card. In that commercial, satellite imagery zoomed-in on a typical Pennsylvania home and a robotic narrative voice cited the homeowner for tax evasion, noting they know where he lives and that he has a “nice car” and a “nice house." The ad ended with a threat to Pennsylvania taxpayers that read “find us before we find you.” It was meant to scare commonwealth residents; no doubt it did.

With these developments in technology and the abuse thereof, even the most law-abiding and straight-laced Americans must worry that the government could be watching our every move or analyzing the details of our last bastion of personal liberty, our homes and lands, places once rightly thought to be private and free of government intrusion. Under normal circumstances the government needs just cause to enter a domain, some sort of belief that a crime has been or may be committed. With Google Earth, that has been thrown aside: Tax collectors and building inspectors don’t have any inkling whether a supposed crime is being committed or not, yet they are allowed to search a property unabated in hopes of finding a broken law. Basically, everyone is now guilty until proven innocent.

It’s obvious that by using aerial imagery our government is exceeding the limits imposed upon it. Unlike socialist Greece - which is a poor example for America to be following in the first place - our natural rights are recognized and protected by a Constitution that should be preventing such an invasion of our privacy because aerial intrusion is, without a doubt, an unreasonable search. So, until someone takes a government entity to the courts contesting it, we will continue to be spied on from above. Nowhere is safe from prying eyes anymore.

Thursday, October 21, 2010

Parents must support education

From the 25 October 2010 Greater Niagara Newspapers

By Bob Confer

California’s Pleasanton Unified School District conducted a survey last year that found 72 percent of parents in the 17,000-pupil district either seldom or never helped their children with homework. The students who responded to the same survey put the lack of parental participation even higher, at 81 percent.

This situation is not unique to Pleasanton. A few years ago Microsoft ran a study that showed similarly unpleasant attention to school work across the United States. According to their survey, 51 percent of parents claim homework is a source of tension in their household. Other studies estimate that slightly more than half of all parents help with studies.

These numbers are all over the place, but they still say the same thing: A majority of parents aren’t regularly involved with their children’s educations.

Contrast that with the number of parents who support extra-curricular activities. According to Families Worldwide 83 percent of kids ages 6 to 17 participate in at least one regularly scheduled sport, lesson or club. A survey of 50,000 Minnesota students done earlier this century produced nearly-identical results, 80.9 percent for boys and 87.4 percent for girls.

That begs the question: If parents are dedicated enough to devote time and energy to their sons’ and daughters’ sporting events, dance recitals and concerts, then why can they not find the time to help them with their scholastic pursuits, which should be paramount in their young lives?

Could it be that they don’t have the time? That’s the most common complaint heard from parents, even though the average worker in America spent 38.1 hours on the job last year, which was down from 39 before the recession started and below the 40 hour average that was the norm in the late 1960s. Today’s parents are no busier than their parents, let alone their grandparents and great grandparents who lived in a more agrarian society where farming was a demanding lifestyle, not just a job, and technological advances (like washing machines, microwaves and ready-to-eat foods) were nowhere to be found. If hours worked have continued to drop and modern amenities have made the tasks of life so much easier, where did all the time go?

It comes down to priorities. If the average American can, after pushing their kids through after-school activities, somehow find the time to watch 4 hours of TV a day (according to Nielsen), he or she can certainly find the time - even one hour a day - to help the kids with math or science, which are among our worst subjects. Our nation is ranked 25th and 21st in those studies respectively.

Today’s parents don’t see it that way. Whereas the first of the baby boomers and their parents emphasized the importance of education and held their children to high expectations (a result of the lingering taste of the Great Depression and first generation American struggles), Generations X has, until this Recession, seen nothing but prosperity and ongoing change throughout their lives, which kind of taints the prospects for pushing oneself and one’s offspring to be better by masking the reasons to do so. With America so readily meeting and exceeding its potential in recent decades, inane personal, leisure and material pursuits have taken much of our adults’ attention. Because of that, the little things (like education, which should definitely not be considered a “little thing”) get lost in the shuffle, just like our continued prosperity will.

This has occurred at the same time local control - and therefore local interest – in education has been taken from us. With the Department of Education coming to be in the 70s and bringing with it greater federal oversight over the day-to-day operations of our schools (standardized testing, funding, No Child Left Behind, etc.) many people wrongly assume young minds are in capable hands and are solely the responsibility of the schools. This was never the case and now, more than ever, it cannot be. Many teachers are overwhelmed by and ill equipped to deal with onerous federal and state standards (which don’t have the best interest of the students in mind), thus making kids who are the same.

It takes a team effort – a village, as Hillary Clinton once said - to raise a child. Teachers, administrators and, above all, parents need to take the appropriate measures to give students the very best education they can get. Remember, children mimic the example set by adults: If they don’t care about schooling, neither will the kids.

Friday, October 15, 2010

The President divides a nation

From the 18 October 2010 Greater Niagara Newspapers

By Bob Confer

President Obama has been on the road a lot over the past few weeks. He’s not out and about trying to reassure Americans about the future of our economy. Nor is he trying to calm our nation’s concerns over the ongoing Afghan occupation or the terror thereat that has enveloped Europe. Instead, he’s stumping for his Democratic brethren, trying to drum up support – financially and in the voting booth – for their efforts to keep control of the House and Senate in the November elections. He has been a cash cow, raking in millions for the Democrats.

Doing so while in office is not new to the presidency. Take our previous president for example: In just one 2006 fundraising event alone George W Bush brought in $23 million for the GOP. Millions more were had from his cross-country road trips. Many presidents of the past have campaigned for their party and it has been almost routine since the 1800s when presidents slowly devolved from being true statesmen to political operatives.

But, as the old adage goes, two wrongs do not make a right. From a purely philosophical standpoint, sitting presidents should not campaign for their parties.

The President of the United States is a unique position in federal rule. Like the role of governor at the state level, he is not supposed to, like a legislator would, represent a defined, ideologically-limited and geographically-limited constituency. As an executive his sphere of influence is larger and his constituency is all-inclusive. Whereas governors need to look out for the best interests of all residents of their state, the president is supposed to be concerned with the best interests of all Americans. The president is supposed to bridge the gap between a divided America. He is not to be a bridge burner who divides us even more.

In his struggles to save his party, Obama has done the latter like others before him. Not a day goes by that there isn’t a newsy sound bite where he derides the intelligence and ideals of the Republicans, blaming them for all that ails us. His tone is typically nasty, divisive and arrogant. His predecessor used a different style, combining humor with a matter-of-fact indifference, bordering on total ignorance, to opposing views.

When our de facto leader so openly and aggressively discounts the validity and beliefs of the opposing party he is in essence doing the same for half of the nation. Depending on what polls one looks at, our nation is almost equally split between the Right and Left, so the partisan bickering and name calling of one who should be above such a fray puts millions of Americans in the crosshairs. How can one respect a president when he himself does not respect his people?

Presidents should be held to a higher standard. The executive branch should be leading by example as it once did. Think back to some of the darkest days of our history. Amidst world wars and civil wars and depressions and economic slowdowns, previous generations could count on the president to be a calming force who gave Americans hope and looked past differences to orchestrate a combined effort by all parties and all people to affect positive change that took into consideration the wants and needs of all citizens.

Things are so markedly different nowadays. Even though we are in some dark times – this young century has been fraught with terror attacks, wars, and economic crises – our two leaders chose to divide us rather than bring us together to overcome a shared adversity. More so than most men before them, Bush and Obama are guilty of fracturing a nation. You cannot find two successive presidencies as hotly controversial and stubbornly partisan as theirs. Such behavior from the top is not healthy for America: Sadly, it too often seems we are only the “States of America”…the “United” bit was thrown out long ago.

Friday, October 8, 2010

Government to guess your next move

From the 11 October 2010 Greater Niagara Newspapers

By Bob Confer

There’s no doubt that many times over the past 10 years you’ve complained at length about President Bush or President Obama. With all the chaos taking place in our lives (wars, economic crises, etc.) there are plenty of things to gripe about regarding their job performance.

If you’re a reasonable human being you probably didn’t wish them dead or severely injured by an assassin’s bullet.

At least that’s what you think.

The government, on the other hand, doesn’t think you think what you thought.

In something that seems straight out of a science fiction movie set in some oppressive futuristic landscape, the government is getting closer to utilizing technology that will analyze your thoughts and actions, guess your next move, label you as a threat for it and ultimately ensure prosecution, whether you deserve it or not.

That’s what’s in the works at the Mind Machine Project at the Massachusetts Institute of Technology. Scientists there have developed a computer program that will scan phone calls for perceived threats by tracking resentment in voice and the talkers’ affixation on certain topics. It will do the same with emails, noting similar behaviors that could, in their eyes, put government officials or the public in danger. According to MIT scientists, the system is being built to analyze 100,000 conversations per hour.

A computer of such magnitude (one of many) isn’t being made to look over correspondence collected from a handful of suspected terrorists. No, the goal that is being strived-for will allow Big Brother to look through endless reams of data, including the emails and phone calls that you - as a law-abiding citizen - share on a daily basis.

It’s bad enough that such technology will require expansion of the Patriot Act and the further destruction of our Fourth Amendment rights all in the name of national security. This technology will take it one step further and put words in your mouth and make assumptions about your motives for criticizing those in power.

Think about how often you’ve had phone conversations in which you’ve complained about the Obama Administration’s poor efforts in jump-starting the economy. Think about how many emails you’ve sent chastising the Bush Administration. Think about how many columns I’ve written about the federal government’s misguided ways. In all such cases, we’re creating extensive portfolios about ourselves, the trends of which show that we have a fascination with a certain subject, one that would be deemed uncomfortable and inherently evil by the Mind Machine and those who use it.

It’s not a stretch to think it will be used in such a manner. As a matter of fact, there’s plenty of proof that it will be.

A couple of weeks ago Hilbert College held their First Responder – Military Symposium at which one of MIT’s professors, Mathieu Guidere, spoke at length about the Mind Machine Project and how it will be used to ascertain potential threats against the President’s life or determine if someone possesses the same obsessive traits that lone bombers do.

This is old hat to Guidere and the federal and local agencies that fawn over him. He was instrumental in the development of the Radicalization Watch Project which also used behavioral analysis to stereotype government critics as radicals and he was a keynote speaker at a component of the International Law Enforcement Symposium held in Florida this part February that focused on post-deployment soldiers as a threat to law enforcement. Under both circumstances, those with patriotic tendencies (be they individuals who are concerned about our country’s future or fought for our country’s future) are perceived to be dangerous to society, just like they are in a variety of state and federal documents such as those produced by MIAC, a derivative of Homeland Security (refer to “Bob Confer: Terrorist”, published here in April 2009).

Information is deadly in the hands of a government that thinks that way. Because of that, someday soon - maybe even now – it won’t be safe to talk with your friends or share emails with them unless you’re all about rainbows and butterflies. It’s scary to think we can’t say one bit of negativity about the ruling class without a computer assuming we’re criminals. Whatever happened to the freedoms of speech, privacy and thought?

Thursday, September 30, 2010

1099 reasons to hate Obamacare

From the 04 October 2010 Greater Niagara Newspapers

By Bob Confer

When Congress and the Obama Administration unleashed health care reform earlier this year they knew they were looking at substantial budget shortfalls over the long haul, so they developed a series of revenue-generation projects.

Among them is a new law that, once it goes into effect in 2012, will demand that businesses file 1099 forms for every company from which they purchase more than $600 in goods and services in a given year. The Administration believes that tax cheats are everywhere and this new law will help the IRS to collect over $17 billion in new revenues during its first 10 years.

$17 billion is a stretch to say the least. The actual number is no doubt just a fraction of that wild guesstimate and the cost of compliance to the economy will far outweigh the taxes that could supposedly be collected.

That’s because businesses – both small and large – will have to devote an incredible amount of time and money to the new standard. It doesn’t take much to spend $600 in one shot with another company. But, then, when one adds up the multitude of smaller transactions that occur over the course of 12 months they’ll find that most vendors they work with fall under the 1099 umbrella. So, for each and every one of their vendors, business will have to compile and track data, fill out forms, send them to vendors at the close of the fiscal year, collect those forms and then send the 1099s to the IRS.

Those tasks can add up in a hurry. In total it will take at least 25 minutes of a worker’s time on a per-vendor basis. Most small businesses have a supplier base that numbers in the tens if not hundreds while larger corporations will have thousands of partners to account for. Using Confer Plastics as an example, we had 360 vendors in 2009 that met the $600 minimum. Based on the 25-minute factor, it will take 9,000 minutes – or 150 hours – to satisfy the new recordkeeping standards. Therefore, someone in our office will have to waste nearly 4 weeks of her time on Obamacare’s new chore each and every year which prevents her from doing something that’s actually productive and would be a wise investment of her time and the company’s money.

Looking at the economy as a whole, there are 26 million businesses - some larger, some smaller than mine - that have to invest in similar efforts. The US Chamber of Commerce and the National Federation of Independent Businesses have both come out in full force against the 1099 rule and they say the cost to businesses will be the tune of billions of dollars per year.

Their numbers don’t tell the whole story, though. There will be another cost to businesses and individuals alike in the form of taxes needed by Washington to fund the bureaucracy created at the IRS by the new standard. Many new IRS clerks will be needed to collect, collate, analyze and act on the millions of 1099 forms set to come their way. How many new agents will it take? 5,000? 10,000? The new wages, benefits, equipment and facilities won’t come cheaply.

A few weeks ago Congress attempted to take care of the situation by holding a vote on one amendment that would have repealed the requirement and another that would have exempted businesses with less than 25 employees. Neither garnered the 60 votes necessary to advance, so the 1099 rule still stands and will continue to haunt businesses until it is resolved – if it ever is.

Even if you’re not a businessperson you should be concerned. Foolish regulations like these only serve to drive up the cost of doing business. Such costs can only be recouped with higher selling prices which in turn mean you’re paying more at the department store or repair shop.

Aren’t you paying enough as it is for government-run health care?

Saturday, September 25, 2010

Poverty created by and for Big Government

From the 20 September 2010 The New American at:

By Bob Confer

The Census Bureau recently shook up the nation with its report that the poverty rate for 2009 had increased dramatically over that of the previous year. The federal government considers one to be impoverished if one’s income is $10,830 or less, or $22,050 for a family of four.

The number of Americans within those categories grew in 2009 by nearly a full percentage point to 14.2 percent, or 43.6 million people — a 3.8 million increase over 2008. The poverty rate now stands at its highest level since 1994, while the actual number of those living in poverty is the greatest in 51 years.

To put that in perspective, the poverty crisis suffered by America 51 years ago is exactly what inspired Lyndon B. Johnson to initiate the War on Poverty in his first State of the Union address in 1964. Among the federal programs created to combat this socio-economic problem were the Job Corps and the Social Security Act of 1965, the latter of which introduced the father of all entitlement programs: Medicare/Medicaid.

Since then, these agencies have become an indelible part of American life, used by the poor and, especially in the case of Medicare, the not-so-poor. But despite their abundant patronage, these massive, unconstitutional programs have neither eliminated poverty nor become even remotely efficient or affordable.

Every year, the Job Corps provides 60,000 young Americans, ages 16-24, with vocational, on-the-job and life training to prepare them for the workplace. The cost to taxpayers is approximately $1.5 billion per year, or $25,000 per participant. Such a price tag is excessive, rivaling the cost of either a community college vocational-training education or the wages for a participant’s first year in the economic sector. Not surprisingly, as with most federal programs, the Job Corps is redundant, as the specific learning experiences it offers are already available in public schools (also funded by taxes), the private sector (which typically assumes responsibility for on-the-job training), and the home (where it is the parents’ role to nourish the child’s physical/emotional/spiritual/intellectual development). That said, the Job Corps also strips the economy of $1.5 billion of productive money on an annual basis.

Of course, the impact of the Job Corps pales in comparison to that of Medicare and Medicaid, the inherent fiscal weaknesses of both of which have been well documented.

Medicare, which provides health “insurance” to 45 million Americans 65 and over, is funded through a payroll tax of 2.9 percent split between the employee and the employer. Despite stripping the economy of more than 3 percent of its value annually, the program is still unable to adequately fund itself: Since 2008 the Medicare trust fund has been paying out more than it brings in. Like any Ponzi scheme, this unsustainable economic model is destined to come crashing down. Medicare has unfunded obligations of $37.8 trillion — roughly 2.5 times the size of the U.S. economy — a great deal of which is coming due soon. As the massive Baby Boomer population ages, they will put incredible pressure upon the system, ultimately bankrupting Medicare. Most economists, as well as the Medicare trustees, believe the fund will be in the red by 2017. Upon its collapse, what will the federal government do? It has done nothing yet to prepare for Doomsday, though it may be only seven years away. So a financial crisis — and tax tsunami — are looming for American taxpayers and Medicare beneficiaries, as well as those who must be paid to provide for their care.

Medicaid, another onerous drain on the economy, provides medical and health-related services and funding to the poor. Even though it’s a federal edict, it uses a combination of federal/state/local funding and state management of Medicaid recipients. In 2007, there were an average 49.1 million Americans receiving Medicaid. The federal outlay that year was $190.6 billion, while the states pumped in another $142.6 billion for a total of $333.2 billion. That number is expected to reach $673.7 billion by 2017, the very same year Medicare comes to a crossroad. It should be noted that the program is notoriously abused, with some states such as New York providing recipients with products and services that those on private health insurance would never receive without considerable out-of-pocket expense. In the Empire State the cost to local/state/federal taxpayers is a staggering $16,000 per Medicaid recipient. Outlandish, to say the least.

These incredible burdens placed on productive sectors of the economy make it painfully obvious to the reasonable mind that the Job Corps, Medicare, and Medicaid have created poverty rather than alleviated it. In its effort to combat the very poverty it had created through taxation and regulation of a productive private sector, the federal government — through Medicare and Medicaid — managed to create even more poverty by adding to the cost of doing business (which inhibits job growth, stunts wages, and sends jobs overseas) and living (which prevents people from spendng as much as they could in the free market, which would then encourage economic development and squash poverty). Whenever monies — hundreds of billions annually for Johnson’s long-running War on Poverty — are forcibly removed from the private sector, then the private sector is unable to use that money to make products, provide services, employ people, and increase the standard of living. Thus, the average worker, because of diminished employment opportunities, is impoverished by the invisible hand of the government. That individual then relies on government subsidies, further stressing the system of dependence unleashed by our rulers, which will then again take away even more jobs and opportunity further down the road. Truly a vicious cycle.

Yet most Americans, not understanding this mechanism, submit to big government’s supposedly well-intentioned programs. The government is then empowered to strengthen its paternalistic ways, introducing more policies and therefore, more control.

In light of the horrific news that poverty in the United States is spiraling out of control, it wouldn’t be surprising if the Obama administration introduced a new War on Poverty with more entitlements in the coming years (or months), further providing for the needs of lower-income Americans with an expansion of the health, food, cellphone, housing and home-heating benefits already being provided, taking the very same from everyone else.

These are dangerous waters the government is leading us into. And if that government is left unchecked, we will drown in a sea of debt and lost liberty, as it washes away everything that America once was and could be again.

Thursday, September 23, 2010

The Bank of Eminent Domain

From the 27 September 2010 Greater Niagara Newspapers

By Bob Confer

Eminent domain is a power of the government that is tacitly recognized in the Fifth Amendment of the US Constitution which reads, “…nor shall private property be taken for public use without just compensation.” Over the course of our nation’s history that ability to force the sale of land for common good has been abused. It’s not uncommon to hear horror stories of municipalities basically stealing homes for corporate, not public, benefit, and the federal government taking away precious ranchland and transforming it into an idled preserve.

Sometimes, the only thing that prevents the government from further abusing this power is money. If it doesn’t have it the supposed fair trade for land cannot take place. Congress, though, is trying to change that by creating a perpetually well-funded Land and Water Conservation Fund (LWCF).

The LWCF was created in 1964 and is the primary source of funding for federal land acquisition for the purpose of conservation and/or recreation. It also provides grants to state and local governments for the same. Using a variety of funding methods (taxes on fuels, for example) its annual authorization has been set at $900 million since 1977. But, that cap has been met only twice during the program’s history because it’s not a true trust fund in the sense that the $900 million in taxes collected do not have to be given to LWCF. The funds are typically diverted by Congress for other purposes. Over the past decade LWCF has received an average of $313 million per year.

Congress is looking is looking to overcome that budgetary obstacle with, of course, new means of taxation. In July the House of Representatives passed HR.3534, the CLEAR Act (an acronym for the Consolidated Land, Energy and Aquatic Resources Act), which was in response to the British Petroleum oil leak and places all sorts of new taxes on onshore and offshore drilling alike, forces federal takeover of states’ waters, and creates new regulatory functions. Among the new revenue streams is a $2 per barrel surcharge on oil drilling that will be used to, as the Act demands, fully-fund LWCF every single year. That means the government will have nearly-limitless reserves to buy up land that it sees as being necessary to the betterment of the environment or the advancement of outdoor pursuits.

It should be noted, though, that government is already the primary stakeholder of land in our country. The federal government owns in excess of 700 million acres while state and local governments own another 197 million acres, equating in total to about 40 percent of the nation’s landmass.

Despite such earthly possessions, the government wants more. That’s because the control of the masses is most-easily attained through public ownership of property. Think about your frustrations as a homeowner whose property rights have been tempered with onerous building codes and property taxes. Now, imagine that heartache and stress magnified a thousandfold by being a one-time property owner who was forced out of possession of land through eminent domain. Just ask anyone who has lost land in such a manner to the government; the monetary “rewards” of the mandatory sale (which are often below market value) never make you whole.

With the green movement as mainstream as it is and a good percentage of the population willing to abandon human progress for the perceived benefit of Mother Nature, environmental concerns, rather than the ages-old reasons for eminent domain (like roads, municipal complexes, urban renewal), will dominate the reasoning for federal and state land grabs. That said, rural landowners will now be in the crosshairs as it is they who have the lands and habitats (forests, grasslands, waterways) that are so prized by the environmentalists. This will have a major impact on economic activities like logging, farming, and ranching, just as it will on folks who want to enjoy personal liberty on their own lands.

There is still some time, though, to stop LWCF from growing out of control. The Senate has yet to take up their version of the CLEAR Act which is S.3663, the Clean Energy and Oil Company Accountability Act of 2010. Make an effort to write your Senator and ask that he or she vote against the Act entirely or at least push for the dismissal of the LWCF component. If not, you’re putting your land rights and those of the productive sectors of our economy at risk.

Thursday, September 16, 2010

Reagan was not a Conservative

From the 20 September 2010 Greater Niagara Newspapers

By Bob Confer

Ronald Reagan is widely regarded as one of the best of the American Presidents. To many, he was a great communicator who made Americans appreciate the American Way, motivating them to aspire for a better self and a better country. His fans say that his economic policies eliminated obstacles to business and investing that helped to spur private sector growth. Republican talking heads (like Sean Hannity and Rush Limbaugh) put him on a pedestal and not a day goes by that they don’t paint him as the pinnacle of Conservatism, someone whose policies and philosophies hearken to our nation’s founding principles and are much needed in today’s world.

Despite all of his perceived positives, Reagan was far from the perfect President. As a matter of fact, he was a proponent of very large government. His policies were dangerous and you might even say that some of them are actually being used today.

Barack Obama has been highly criticized by Republicans for the growth of federal spending under his watch. In times much more trying than those faced in 1980s, the Obama Administration’s spending as a portion of Gross Domestic Product (GDP) has been much like Reagan’s. According to the Congressional Budget Office (CBO), government spending averaged 22.4 percent of GDP during Reagan’s 2 terms. Based on estimations of federal spending during the final years of his first, maybe only, term, the CBO figures that Obama’s fiscal legacy will average 24.6 percent of GDP, not too far off from what Reagan accomplished. It should be noted that Reagan’s 22.4 percent stands as the all-time record amongst US Presidents. If the CBO’s calculations hold true, Obama will break that record but the fact that the Conservative torchbearer holds the record now (and he didn’t have wars like other presidents to blame it on) really puts everything into perspective.

In a related topic, Obama’s ability to “create jobs” (an outcome of government expansion/contraction) is never considered as being at par with Reagan’s. Yet, it is eerily similar. During the first year and a half of his presidency, Reagan saw the unemployment rate increase from 7.5 to 9.8 percent. When Obama came into office, unemployment stood at 7.2 percent and 18 months later it was at 9.5 percent. Reagan’s growth for that period was 2.3 percentage points. Obama’s? 2.3 points, too.

The Reagan myth also has the man pegged as the greatest tax cutting president ever. Yes, in 1981 he forced through Congress some major tax cuts but, in other years of his presidency (specifically ’83 through ‘87) he introduced a multitude of tax increases and new taxes that pulled in revenues from other bases. Historians look at 1982 and 1984 as featuring the highest tax increases in peacetime America. While in power, he also increased funding for America’s two behemoth entitlement programs: Social Security grew by 50 percent from 1981 to 1987 while Medicare grew by a startling 84 percent over that same period.

If you step back and look past the rhetoric and hero worship that surrounds the Republican Insiders’ Reagan myth, you’ll realize that he was anything but a Conservative (based upon the most factual definition of the political belief) and - like most people who count themselves as Conservatives nowadays - he is more appropriately identified as a Neoconservative, someone who, like George W. Bush, is socially conservative yet quite liberal in the application of government powers and military might. His approach to governance was, quite frankly, no different than Obama’s. So, if you count yourself as a true Conservative and a believer in small government and free markets, it’s high time you found yourself a new hero.

Friday, September 10, 2010

New York's pension crisis

From the 13 September 2010 Greater Niagara Newspapers

By Bob Confer

If you work or have worked in the private sector you know retirement income, even retiring itself, is not a sure thing. As a result of the recession many retirees have seen their pensions slashed considerably (or, in some cases, eliminated altogether) or their 401(k) accounts downsized by 25 to 35 percent. Baby Boomers who are still working have felt those same pains and many have suspended their plans to retire by 5 to 10 years, maybe more, sadly realizing they’ll have to work well into their 70s due to the economic uncertainty of what was to be their Golden Years.

In stark contrast to that harsh reality is an alternate universe known as New York. Here, in the Empire State, decades of injudicious political rule have granted government workers special privilege, a retirement that is guaranteed, no matter the economic conditions. Unlike retirees from the private sector, they receive a set post-labor income. They can actually retire and comfortably – some of them extravagantly - enjoy the twilight of their lives.

In order to ensure that happens, others have to assume their risk, namely the taxpayers. In trying financial times like these when the return on the stock market just isn’t there, thus yielding lower returns for the state’s pension fund, our assumption of risk becomes even greater.

State Comptroller Thomas DiNapoli delivered such a sobering message recently when he told New Yorkers that the pension cost for state and local governments will escalate by 37 percent in 2012. That’s because municipalities will be forced to contribute to the state pension fund a value equal to 16.3 percent of total salary. Mind you, that 37 percent increase is based on a 2011 versus 2012 comparison. Earlier this year the input rate was “only” 7.4 percent of payroll (it’s set to be 11.9 percent in early 2011), meaning that come 2012 taxpayers at the local level will dedicate more than twice what they had been for pensions just 7 months ago.

Considering that labor is the number one expense for municipalities, DiNapoli’s new requirement will pose a significant budgetary hurdle for towns and cities across the state. Early calculations from DiNapoli’s office say that, in total, municipalities will be on the hook for $3.5 billion in pension funds for 2011 alone. That works out to be $200 from every man, woman and child living in New York.

Budget-conscious mayors and supervisors and tax-stung taxpayers thought 2010 was bad, but it will be a walk in the park compared to the coming years. Rochester officials believe pension mandates will bankrupt the city by 2015. Many other governing bodies speak the same (although behind closed doors) for they see that the economy is not set to grow quickly anytime soon and the federal government has overextended itself to the point that it will be unable to provide emergency funding to the states (it was the only thing that kept many afloat). That means there are some truly creative and gut-wrenching choices to be made. Services will have to be cut and public workers will have to be let go, or so goes the logic. But, we aren’t talking about logical, reasonable people here. This is New York State, where logic is cast aside and things like gigantic guaranteed pensions are considered good government.

That said, it’s certain that cuts will be minimal and property owners will see disgustingly larger tax bills in 2011 and 2012 and possibly well beyond the decade’s half-way point if the economy continues to move along at a snail’s pace or falls into a double-dip recession. Considering that New York’s property taxes are already among the highest in the nation and in part responsible for our state’s long-running economic malaise and the mass exodus of residents from our borders, it’s frightening to think of what might be.

Friday, September 3, 2010

Learning about our Constitution

From the 06 September 2010 Greater Niagara Newspapers

By Bob Confer

In a recent column for the Greater Niagara Newspapers in which he addressed Constitutional amendments that he’d like to do away with, Scott Leffler began a paragraph with this thought: “For those of you without a pocket Constitution (in other words, everyone but Bob Confer)…”

Being that Scott can sometimes be a kidder, most readers probably thought he was joking at my expense.

Actually, he wasn’t.

I really do have a pocket Constitution on me at all times. It’s been a habit of mine for years. That may seem somewhat over the top in regard to patriotism and perhaps a little nerdy, but the Constitution is my Bible. That simple yet powerful document is the guiding light to what is the greatest experiment in self-government - and, from that, the greatest society - that Mankind has ever known and will ever know, the United States of America. I strongly believe it’s our founding principles that made our nation great by allowing and inspiring Americans to be the very best that we can be. America is unique in that our natural rights were officially recognized and deemed inalienable by the Constitution, allowing liberty, self-rule and free markets to flourish.

Over the course of our history, though, the Constitution has seen some rough spots. Presidencies such as Lincoln’s, FDR’s, the younger Bush’s, and Obama’s have trampled over our nation’s legal and philosophical foundation with zeal. Sometimes we need a reminder that the morality and virtuous free environment recognized and provided for by the Constitution is what’s best for whatever ails us. Can it put an end to what seem like never-ending wars? Yes. Can it heal our sickened economy? Yes. Can it kill the numerous and creative ways being used to invade our privacy? Yes. The Constitution can be - or will lead us to - the answers for all of today’s problems.

Most people have forgotten that. To them the Constitution has become an afterthought, maybe even an antiquity or novelty. Some even forget that it exists.

Enter “Constitution and Citizenship Day”.

Introduced as an amendment to an appropriations bill in 2004, Public Law 108-447 requires that any public school that receives federal funding educate its students on the Constitution on September 17 of every year in observance of its signing in 1787. It’s interesting to note that the law was penned by none other than the since-deceased Democratic Senator Robert Byrd who was never really known to be a Constitution enthusiast and it should also be noted that the Constitution in proper practice should prohibit the federal government from funding and dictating to public schools. But, nonetheless, it is the law and even without its edict it’s good citizenship to revisit and be reeducated about the document on its birthday. It’s a day just as important to America as July 4.

On the evening of September 17 make it a point to ask your children or grandchildren if they received an education about the Constitution over the course of the school day. It’s not necessarily guaranteed that they will. An obscure law like this can be easily overlooked and, as history shows, even if it were followed our schools aren’t necessarily the best for civics (some teachers are more versed in and focused on other subjects while others are overburdened teaching to meaningless standardized tests).

Plus, although many modern parents may not agree, it’s your responsibility to educate your kids as much it is the school’s; education shouldn’t end when the school bell rings. Take the time to discuss the Constitution with them. It doesn’t have to be a dry subject. The Boy Scouts and Girl Scouts have shown that teaching about government can be exciting and character-building. Start young and they’ll better understand their duties as citizens and, as they age, what their government can and cannot do to and for them.

If your understanding of the Constitution is a little limited itself take the time to make it a shared learning experience with your family. There is plenty of great material on the web and among the very best is the John Birch Society’s “Overview of America” video which can be watched in its entirety on YouTube. You’ll come away enlightened.

Regardless of your knowledge, it’s imperative that you take the time to reacquaint yourself and your children with the Constitution. If more people did, it’s guaranteed that America would be in a better place than it is now during these trying times. Sometimes, the old fashioned ways are the best ways…our Founding Fathers were really onto something.

Friday, August 27, 2010

Hunting puts meat on the table

From the 30 August 2010 Greater Niagara Newspapers

By Bob Confer

In days gone by we were a more self-sufficient people, able to feed our families even in the face of adverse economic conditions. It’s common to hear stories from those who lived during the Great Depression that cite their having never gone hungry. Even the poorest families were able to eat, not like kings mind you, but well enough. Extended families worked together to tend farms and raise animals, every household that had the space sported a garden and practiced canning, and men hunted at length, filling their loved ones’ dinner plates with wild game like deer, rabbits, and waterfowl.

Our society has changed a great deal since. Our population has gone from being 90 percent self-sufficient to 10 percent, the result of a more industrialized and so-called “advanced” way of life and the abandonment of rural living for the confines of suburbia and the big city. Because of that, when an economic collapse of great magnitude like the current one does occur, we are hurt more than we were in past national crises. Many people do go hungry, or at least wanting, from a combination of escalating commodity prices and a lack of income opportunity (the current unemployment and underemployment rate is at 16 percent).

But, it doesn’t have to be that way. Most Americans are limited in their ability to independently feed their families from an agricultural standpoint due to the limitations of altered society. But, every American still has the potential to put meat – and lots of it – on the table. Hunting remains a viable option, even in today’s world.

It’s obvious some folks believe in that. Nationally, sales of sporting licenses rose by 3.5 percent in 2009, the greatest growth in 20 years. That was, with a doubt, due to the recession which began in earnest a year earlier. Many money-conscious families re-discovered the financial value and health rewards of feeding themselves naturally.

Hunting saves households considerable amounts of money. Beef is not cheap. It never really was and it’s becoming more expensive, just as pork, chicken and turkey are. All have and are seeing ongoing long-term price hikes mostly due to higher input costs (thanks to ethanol’s utilization of corn). If you have 4 mouths to feed an inordinate amount of your weekly income or subsidies are going towards meats. Hunted meat, on the other hand, is cheap. Beyond the initial investment of a gun and gear, there’s the annual cost of a license at about $50 (unless you wisely invest in a lifetime license) and, in the case of a deer, $50 for processing if you’re not handy with butchers’ tools. For that small investment you could take 3 maybe 4 deer a year which would more than provide for a family’s need for ground meat and steaks. Plus, you could harvest a few turkeys and an almost unlimited supply of geese.

If you haven’t had wild game you don’t know what you’re missing. I never buy beef. Venison provides all of my red meat needs. Usually 6 days a week I ingest deer in one form or another. It’s as versatile as beef and can be prepared in any way that you or your kids will eat it (tacos, meatballs, steaks, burgers, you name it).

It’s also a whole lot healthier than beef. Low in fat and high in protein and healthy Omega 3s, it’s just what the doctor ordered. Even though I eat meat like it’s going out of style, my cholesterol has ranged from 110 to 140 over the past decade, a testament to venison’s benefit. You’re guaranteed that it’s safe, too: You won’t be getting any recalls because the creature wasn’t raised on an industrial farm or slaughtered and processed in a disease-ridden plant.

If you’ve never hunted before and want to partake in the harvest, now is the time to do it. There are plenty of hunting courses being held across the state next month, just in time for the fall seasons. Visit to find a class near you.

If taking game isn’t your cup of tea, but you’d still like the benefits, ask a friend to fill your freezer. Many recreational hunters never fill their doe permits and would gladly do so for you as it gives them more time in the woods.

There’s not much more that you could ask for from hunting: It gives you the peace of mind that you can feed your family, do it affordably and do it healthily. Get out in the woods and enjoy!

Friday, August 20, 2010

Why do I stay in New York?

From the 23 August 2010 Greater Niagara Newspapers

By Bob Confer

Longtime readers probably wonder what keeps me in the Empire State. You can’t blame them for being quizzical, for a good many of my columns focus on what’s wrong with New York. Usually, it’s a government run amok that creates ever-growing taxes, prevents prosperity and sends long-time residents away.

Despite NY’s glaring weaknesses, there are numerous things that keep me and my company here. If I had to narrow it down to just a few we could call them the “Three Ps”. They are placement, patriotism, and people.

Western New York, like a good piece of real estate, benefits from location. There’s a big reason that some large companies have selected the region as a permanent place to manufacture or distribute from: The Niagara-Buffalo region is within 500 miles of 46 percent of the US population and 57 percent of the Canadian population. That’s a pretty significant customer base from which to choose. No other area on Earth can claim such nearness to important international trade routes and multi-faceted communities abounding with discretionary income, especially when you consider that among those within reach are two of the most-prosperous economic regions in the world: The Toronto-Hamilton Golden Horseshoe and the greater New York City area. Although upstate is tired and worn, it’s a real asset to have those two regions - and other powerful markets like Boston and Chicago - so close to home.

As important as placement is it requires that you make it a place where you want to be and where you would like your friends and family to be. That demands the second “P”, patriotism, the love of the community. Any businessman can leave the state for greener pastures or keep his mouth shut and just go with the flow. Both of those are the easy way out. But, if this really is your home, you must make it as much. I see the politically controlled economic climate as a business cost (and, just as importantly, a social cost) that we must - like all costs – aggressively control. The only way to do that is to educate others and get them engaged in reforming our wildly messed-up government. Some folks may find my brand of activism to be harsh and maybe a little arrogant. But, do you know why I do it? I demand that this country and this state – the same ones that you and I both claim as our own – be the very best they can be and give you, me, and our loved ones a chance at the good life and, ultimately, a better life for our descendants. Call us gluttons for punishment, but it’s rewarding to make a business work – and do what we can to help other’s businesses work – right here in NY…our home.

To do that it takes the most important part of Western New York’s attractiveness: The people. Every year Confer Plastics loses hundreds of thousands of dollars to the cost of doing business in New York. The only way to overcome that is by operating soundly and creatively and by surrounding yourself with good people, something that WNY is very much blessed with. Travel the US and you’ll find no better people than Upstaters…they possess a kindness and sense of selflessness and sacrifice you won’t find in most Americans and they have a work ethic that is unmatched in North America and maybe the world. You have an awesome labor pool to choose from (blue-collar and white-collar alike) and once you do chose them, they quickly become a part of your company’s tradition and culture, like a part of the family. At first glance it’s the machinery and facilities that separate WNY companies like mine and the local auto and defense manufacturers from out-of-state competitors, but a closer look will show that it’s the people that really make the difference. I’m proud to work with the people I do.

There are many more reasons why New York is a great place to do business despite its myriad flaws. Some reasons are entirely personal in nature, yet influence the desire to stay (like the unmatched natural splendor and amazing variety of activities found across the state), but, nonetheless, NY has that special something that keeps a lot of businesses and people here. Look around you and you might find your own reasons to stay.

Sunday, August 15, 2010

The real unemployment rate

From the 16 August 2010 Greater Niagara Newspapers

by Bob Confer

The July jobs report recently issued by the Labor Department noted that total employment was down by 131,000 jobs for the month. Despite the significant drop in employment, the unemployment rate stayed at 9.5 percent.

That illogical statistical anomaly is attributed to the Labor Department’s current means of recordkeeping which discounts so-called discouraged workers. A discouraged worker is someone who has given up looking for work, at least for the time being, because of a lack of prospects. Despite those workers being willing and able to work, government economists do not account for them in the general unemployment statistic, making the dangerous assumption that they have dropped out of the workforce entirely. If they were taken into consideration they would add 1.2 million to the ranks of the unemployed.

The generally-accepted unemployment rate also excludes another group of what the Labor Department considers marginally-attached to the workforce. Currently, there are another 1.4 million able-bodied and un-retired Americans who had worked at one time yet have not looked for work for a variety of reasons that, according to the Labor Department, supposedly include scholastic and family responsibilities. Basically, the government considers them disinterested in the workforce.

Accounting for both sets of marginally attached workers there are 2.6 million people who are left out of economic concern. Were their numbers to be added to the general population of job seekers, as they should, total unemployment would rise to 17.2 million, pushing the rate to 11.1 percent.

The undercalculation does not end there. A good many non-government economists and those who take an active role in the analysis of private sector trends (financiers, entrepreneurs, business managers, and the like) believe that those who are underemployed should be accounted for. An underemployed individual is someone who, due to economic conditions, is working part-time at was once a full-time job or, in some cases, is working at a job that’s a considerable step down in terms of income and/or responsibilities than what was once had as a means to hold him or her over until a better job can be found. There were 8.8 million Americans who fit this bill in July.

Add the underemployed to the unemployed and the total workforce available or active that is not meeting its full potential is 26 million. The resultant underemployment/unemployment rate is a frightening 17 percent.

That number, although still likely underreported due to the Labor Department’s suspect methods of data collection, is closer to what businesses and families are feeling as they try to make ends meet. It’s painful enough having what the government says is “only” 9.5 percent of the workforce unable to actively participate in the marketplace through the production and delivery of goods and services, the exchange of wages and the application of those wages to the economy. But, it has seemed throughout the entire recession that the job losses and lack of job growth were even worse off than what was advertised. It has been, based upon the extended analysis of what should constitute labor statistics. Having 26 million Americans (and their families) either possessing very little discretionary income or none at all is a real downer on the further development of the private sector and, as some would argue, the public sector as well (through lower tax revenues).

The federal government knows that the job market’s health is more hazardous than it lets on. Yet, it openly manipulates the data in its message to the masses to paint a prettier picture. This deliberate act isn’t something new and is entirely political in nature, a means of saving face for, one, the unconstitutionally oversized and unaccountable executive branch and its myriad agencies and departments that infringe on the free markets and, two, the elected officials who choose to inappropriately meddle in economic affairs through the creation and application of legislation that inhibits capitalism. They know full well that everything they do constricts employment growth more than any private-sector issue ever could. They don’t want it known that this century’s gimmicks in federal and global governance (like altruistic real estate financing, Medicare expansion, two unconstitutional wars, bailouts, financial reform, the green movement and Obamacare, to name a few) have created - and will maintain - a double-digit unemployment rate.