Search This Blog

Loading...

2.9.06

Another chance, another disappointment for Louisiana?

Budgetary estimates continue to trend in positive directions, meaning Louisiana has yet another lucky chance to make up for prior mistakes in its fiscal management. But because those who have made those mistakes continue to hold power in the state and given the timing, whether this actually happens remains questionable.

Early indications predict a budgetary surplus of around a half billion dollars. Despite the 2005 hurricane disasters, Louisiana has gotten lucky because the price of oil has remained high and construction workers (among others) have taken a disproportionate part of their share of federal rebuilding dollars and gambled it away (which I guess why many are construction workers). The state takes a cut of both, and added to all of the temporary recovery funding flowing in, has created this desirable situation.

The problem is, the state has been down this road before with its Democrat Gov. Kathleen Blanco and Democrat-controlled Legislature. After the disasters when prudence dictated cuts, they responded but missed the opportunity to cut permanently the truly unnecessary, low-priority and/or inefficiently done items, settling on blanket cuts (as well as using chicanery in computing what could be spent). Then much of that got restored instead of allocating it to reduce long-term, growing, unresolved and underappreciated problem areas such as underfunded pension plans and road needs.

Unfortunately, the Blanco administration talked about but didn’t deliver optimal use of “extra” funds. The Legislature was little better: it brushed aside efforts to tackle the $12 billion-plus pension deficit, didn’t do anything out of the ordinary to reduce the road backlog, and was unable to use some of the money to offset insurance hikes that every citizen, directly or indirectly, will have to pay as a result of the disasters. The same forces that caused no positive change continue in power into 2007.

Worse, that is an election year. Blanco well may succumb to her liberal instincts and spend money blindly to pay off constituencies that will get her votes but to the detriment of the entire state. With Public Service Commissioner Foster Campbell almost sure to enter the race against her thus pressuring her from the left, the temptation will be greater to for her to co-opt that agenda and thereby behave irresponsibly. Democrats in the Legislature, whether running for their same jobs or others in the other chamber, likely will do the same.

The refrain is old: Louisiana looks to have yet another chance to progress and start pulling itself out of the last-place ranking morass its liberal/populist history has produced. Let’s hope the usual result, missing that chance, won’t happen again.

30.8.06

Faulty ruling requires LA Supreme Court intervention

Faulty jurisprudence has kept Joe Shyne’s Shreveport City Council campaign alive for the moment, but it appears likely that the Louisiana Supreme Court will have to take up this matter to resolve it fully.

Reversing the lower court decision by Judge Jeanette Garrett, the Louisiana Second Circuit Court of Appeals ruled that a pardon issued by former Gov. Mike Foster, which restored all rights except gun ownership to Shyne after his conviction on federal corruption charges, did in fact apply to a federal crime and thereby got around Art. I Sec. 10 of the Louisiana Constitution’s prohibition against convicted felons running for office until after 15 years have passed since sentence completed. Since Shyne’s sentence ran out (including probation) in 1998, he otherwise is ineligible to run for office.

But in a decision that has the hallmarks of washing, wringing, folding, spindling, and mutilating the Constitution to achieve a desired effect, the Court argued that the literal wording of the relevant section, an amendment added in 1998, didn’t actual mean what it says:

A person who has been convicted within this state of a felony and who has exhausted all legal remedies, or who has been convicted under the laws of any other state or of the United States or of any foreign government or country of a crime which, if committed in this state, would be a felony and who has exhausted all legal remedies and has not afterwards been pardoned either by the governor of this state or by the officer of the state, nation, government or country having such authority to pardon in the place where the person was convicted and sentenced. (emphasis added).

The majority argued that imprecision in the wording of the amendment and that by a stretch it could be viewed in conjunction with other parts of the Constitution as slightly confusing gave the Court permission to substitute its own interpretation of what that part of the Constitution actually meant. A dissent written by Judge D. Milton Moore III correctly noted that the decision was “littered with fallacies” beginning with the entire notion that the amendment left the incredible amount of latitude the majority needed to stake its claim and the Constitution allows for this. He also turned the majority’s assertion of inconsistency and confusion that allowed it to make free-wheeling interpretations against itself by showing how the majority selectively used prior jurisprudence and interpretations to buttress its claim.

Moore also pointed out that the decision even entirely misconstrued arguments made by Garrett. This powerful demonstration should be more than enough to interest the Louisiana Supreme Court into accepting the case on an expedited basis, and rendering a judgment once and for all reaffirming the amendment – serving as a reminder that, ultimately, the Constitution is what Louisianans, through the proper procedures, say it is, not what some judges think it ought to say.

28.8.06

State, local politicians helped cause, made worse disaster

Hurricane Katrina roared ashore a year ago, landing but a glancing blow on the New Orleans metropolitan area, but that was enough to overtop and to cave in levees, flooding 80 percent of the city (and practically all of St. Bernard Parish). And what have we learned in this past year about who or what was most responsible for the destruction visited and lives lost, and how to move forward? In order of culpability:

#1: Inseparably, the U.S. Army Corps of Engineers and the Orleans Levee District. The ACE did as well as could be expected in the implementation phase, with whatever shortcomings appearing there because of difficult circumstances to foresee (for example, designs and technology from a half century ago being made to work in the present). But it fell down dramatically in the supervisory phase, letting flaws creep in, allowing some contractors to do substandard work and not keeping a close eye on the OLD which paid scant attention to flood protection. In recent years, the OLD has been more interested in building marinas and bringing in gambling facilities while reducing levee responsibility to ridiculous drive-by inspections that smacked more of an excuse to entertain than perform any serious maintenance. Had the ACE kept a tight watch on contractors and a secure leash on the OLD, or the OLD had actually done what it should have, the breaches and overtopping may not have happened at all.

#2: Gov. Kathleen Blanco and her predecessors. Among other things, Blanco delayed federal troop assistance out of fear she would not receive proper political credit, remained paralyzed in leadership in the first couple of days of the tragedy, and even could not perform the proper procedures as governor to facilitate the recovery effort – even though only a year earlier an exercise was run simulating such a catastrophe and real-life Hurricane Ivan had presented the same threat. Since then, she has been incredibly slow to respond (Mississippi, by contrast, had its basic procedures by the beginning of October, before Blanco even had put together a group to coordinate any recovery effort), in part because of her lack of awareness and of her desire to put political expediency ahead of practical effect. Blanco bears some of the blame for the OLD’s underperformance, since she appoints some of its members, as did her predecessors.

#3: New Orleans Mayor Ray Nagin, city government officials, and their predecessors. New Orleans had a totally inadequate plan for dealing with this kind of emergency, something which should have been addressed by Nagin in his three years in office prior to the storm. His predecessors, however, should have done the same. In the initial days of the crisis, he joined Blanco with indecisive leadership. Further, the city kept putting people on the OLD unserious about flood protection. And they still keep flailing around in their inability to create easily-understood standards for people trying to make decisions about whether to rebuild on flooded property.

#4: Sen. Mary Landrieu, Rep. William Jefferson, and those before them. Landrieu, as did the recently-departed John Breaux, never took flood protection seriously in her nearly ten years in office prior to the disaster. Instead, she steered money that could have been used for flood protection to dubious projects more on the basis of politics than need. Jefferson was pretty much AWOL throughout his 15 years prior on the issue, spending the days before the storm apparently setting up a politically corrupt deal, and immediately afterwards wasting rescuer resources trying to retrieve evidence before legal authorities could.

#5 Political liberalism. Liberalism carries as an article of faith that it is the anointed in government, not individual people themselves, who best know what is good for each individual. It counsels that so long as the “winners” of “life’s lottery,” as they conceptualize the free market can be forced to redistribute their ill-gotten gains in a “fair” manner, that government will take care of the vast majority, victimized as it is by all sorts of ills institutionalized into society by those “winners.” This sheer nonsense unfortunately gained huge currency in New Orleans and enough in Louisiana and Washington that it created a mentality among many before and after the storm hit that individuals were not really responsible for their own fates and safety, but that government would take care of them. Such an attitude caused needless suffering.

#6 Government in general. This suffering was compounded because people do not understand that government, at all levels, is an extremely inefficient enterprise usually more concerned with trying to create equity where inequality is deemed to exist and effective rather than efficient service. This makes it particularly ill-equipped to respond to disasters, which require very quick action that rips away the security blanket of bureaucratic rules and regulations that, in times of crisis, only slow things down. The natural wastefulness of government becomes even more compounded under these conditions. (Particularly lamentable has been some of the above-named entities trying to foist blame on the federal government for exactly this inherent characteristic of government in general, which means its performance in general can be improved only at the margins, rather than their accepting responsibility for their own shortcomings which produced far more devastating effects than did an inefficient federal response.)

Reviewing this list, it becomes clear where we need to go to reduce the chances of a catastrophe like this from reoccurring: clean house of these kinds of politicians, concentrate on better oversight, and, most simply, learn the lessons of not what to do or to expect from the above.

Hightower fails to meet needs, creates more burdens

All the Bob Odom-built sugar mills in Louisiana cannot produce enough of the white sweetener to sugarcoat the colossal drain on the city of Shreveport caused by its new convention center and, worse, soon-to-be-opened publicly-owned hotel.

Mayor Keith Hightower, whose political fortunes will be tied with his bringing the center about to fruition and any appearance of success of it, along with the city-paid managers of it, have done their best to spin some favorable news out of it by announcing it had exceeded initial expectations in a number of categories. Of course, they neglected to mention a couple of things, one being that it takes years to judge the performance of such a structure, so any conclusions rendered now mean nothing.

The other they downplayed is far more troubling: will the revenue, both direct and indirect, the facility is anticipated to bring in pay for the operating costs? The managers answered that concerning direct revenues: no, not ever. They predict the best case scenario of losing only $900,000 annually (so far it’s twice that), but then city officials incredibly optimistically argue that the remainder will be made up by the hotel and money pumped into the local economy by out-of-town visitors.

Oh, really? Leaving aside for the moment that the hotel is predicted to lose even more money than the center, let’s just investigate this claim that sales and occupancy taxes will make up the difference. To begin, assume the loss per year is only $980,000 (a figure this low essentially sneered at by perhaps the most preeminent researcher in this area, the Heritage Foundation’s Ron Utt, who thinks the loss will be much higher in the face of declining convention demand and increasing supply). Let’s also assume that for every dollar spent that otherwise would not have been spent on Shreveport hotels and restaurants as a result of the center, the city sees 7 percent of that.

Doing the math, it shows that convention attendees and exhibitors would have to spend $14 million a year. Assuming the typical person in these categories spends $350 in Shreveport for their trip. This means the center would have to books events that total per years 40,000 people visiting Shreveport, or about an 800-(non-local-)person convention a week! Also keep in mind that the vast majority of events, as admitted by the managers, so far booked are local in nature. Even if it can achieve half of this level, that’s still a $490,000 loss a year.

But the news gets much worse. When all is said and done, including the interest paid on the bonds to build it, the city will have forked over in the neighborhood of $200 million for the center. That’s $1,000 for every resident in Shreveport at current population levels, for the privilege of something that will lose them about another half million dollars a year. And just how many police officers could the city hire at half a million a year to keep city councilmen from being shot at and small businessmen from being murdered?

And again, there’s the hotel to consider. The only independent study ever done to assess its profitability concluded it would lose hundreds of thousands of dollars a year. Throw in the roughly $75 million in principal and interest it will take to finance the hotel and with the center’s cost, just think how much of the infrastructure problems facing Shreveport, totaling in the hundreds of million of dollars, could have been solved in the near future. Instead, taxes and fees will go up to reverse the crumbling – one reason being the city’s bonding capacity has been stretched beyond recognition by these facilities.

The sheer folly of it all was stated no better than by Utt, whose remarks deserve to be quoted here in full: “What your folks are doing is deplorable. It's an awful waste of money. Are there no unmet needs in Shreveport? Of course not. If you want to benefit the city, you might want to think first about what are truly the public needs that only government can provide.”

As Hightower closes out his mayoral reign and after, look for him and his pals to try to distract the public as much as they can from these facts, that inescapably lead to the conclusion that Democrat Hightower – and a City Council Democrat majority – cared more about building monuments to themselves as part of an economic development strategy that preferred to boost egos and deliver business to cronies rather than to empower the peoples’ ability to grow the economy, through preserving the city’s assets and reducing the monetary burdens (taxes, fees, regulations, and the like) on the citizenry.

27.8.06

Blanco will continue to politicize disasters for campaign

Some observers have speculated that Gov. Kathleen Blanco has, in some way, deliberately delayed disbursements of recovery monies from the 2005 hurricane disasters in order to have them appear closer to next year’s election day to assist her reelection efforts. That explanation seems unlikely – Blanco has been the main reason why it has taken so long for these funds to get out but because it’s probably a function of her ineptitude and unshakeable faith in pursuing blank check, big government solutions controlled by her, which the federal government had to take time to moderate and to allow federalism to play out.

Still, in the upcoming 13 months one can expect Blanco to run a campaign having it both ways. On this issue, she will try to deflect the public’s attention away from her lack of leadership and ideology at cross-interests with Louisiana’s majority by blaming the federal government (or New Orleans’ which does deserve approbation but does not excuse Blanco for her mistakes) while at the same time publicizing heavily that she is (inaccurately) largely responsible for the money that does come dribbling out.

The fact that her main opponent is very likely to be Rep. Bobby Jindal makes even more expected this strategy. With no real positive record to run out, Blanco’s only chance of winning is to emphasize the redistribution aspect of her term, in the hopes that a majority of voters will feel that, in classic Louisiana style, that they have gotten enough goodies doled out to them, while simultaneously attacking Jindal by linking him to the mythology she and others have tried to create that the problems of preparation and response to the disasters were not primarily Louisiana’s and hers, but the federal government’s – and Jindal is part of that organization.

For his part, to counteract this, Jindal must point out how Blanco’s unsuitable actions caused needless harm, emphasizing how the federal government in general and he in particular, steadfastly corrected for Blanco’s dithering and excesses. He must know he cannot out-liberal Democrat a liberal Democrat on the check-cutting part, but must make clear his intervention was helpful in getting the ultimate solution in place, despite Blanco, in a way that provides good stewardship and wise use of taxpayers’ dollars.

Jindal can really negate this Blanco ploy should he be successful on a related issue, getting the federal government to bump up Louisiana’s offshore extraction royalties to levels commensurate with other coastal states to be used to combat coastal erosion. This he should contrast to Blanco’s flailing efforts entailing a wasteful, nuisance suit.

It’s unfortunate that the disaster issue took on political overtones, but from its first hours of it already Blanco was making decisions based upon political considerations. That genie has long left the bottle, and so Blanco’s opponents to win will have to accept that template and use it against her.