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December
29, 2005
Vol. 1, No.
39
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Also in
this issue:
Experts forecast
Nevada's economic future
High-rise demise
no surprise to experts
The
Richard Rainwater prophecy
Forced unionization? No, say Washington state
workers
Federal government funds green groups that fight
it
Monorail: Double or Nothing
Commentary:
Hold the line on spending for public employee
salaries
Minimum wage:
minimum sense
Whistling past graveyards
The high cost of
tunnel vision |
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Recent NPRI Commentaries
Fake Friends
of the Republic
Why the 'direct democracy' charge against TASC
is, ultimately, fatuous.
Who
gets to
put you in hock?
The
pols have a new scheme to circumvent Nevada's
constitutional debt limit.
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Predation
Hold the line on spending for public employee
salaries
By Lyle Brennan
Nevada Business
Journal
In November 2004, Clark County voters
passed Question 9, a measure to increase the
sales tax a quarter of a percent to pay for
hiring more police officers. The sales tax was
raised to 7.75 percent effective October 1st of
this year, and it will be raised another quarter
percent in 2009. When this ballot question was
being debated, it was estimated the money raised
by increasing the tax would pay for
approximately 1,278 cops in the first 10 years.
[continued]
The road to Hell
Minimum wage: Minimum sense
By Hans Sennholz
Ludwig von
Mises Institute
Good intentions, when guided by error and ignorance, may have
undesirable consequences.
There is no better example than minimum wage
legislation. It means to raise the wages and
improve the living conditions of poor workers
but actually condemns many to chronic
unemployment. It forcefully raises the costs of
unskilled and inexperienced labor and thereby
lifts it right out of the labor market. Yet,
many politicians who neither own nor manage a
business and do not employ such labor never tire
of lamenting and deploring low wages and
promising to raise the wage minimum by law and
regulation.
The official Federal minimum presently stands at
$5.15 an hour; the actual minimum is much
higher. No employer can overlook the mandated
fringe benefits which he is forced to pay above
the minimum. There are employer Social Security
taxes, unemployment and workers’ compensation
levies, and paid holidays.
[continued]
Crunch time
Whistling past graveyards
By
Peter Schiff
Euro
Pacific Capital
To their credit,
Wall Street pundits have noted the proliferation
of signs warning financial danger; to their
peril most have chosen to ignore them. Four
examples of such cognitive dissonance relate to
General Motors, gold, pensions, and the housing
bubble.
Shares of General Motors, once the world’s
largest company, the icon of America’s
industrial might, at one time close to being
declared a monopoly by a 1950’s Congressional
investigation, this week plunged to a new 80
year low. Years ago, my prediction that the
company would ultimately face bankruptcy seemed
radical. Today that assertion no longer seems so
far-fetched. The truth is that GM sold too many
gas guzzling SUV’s to too many people without
making any profits, saturating its market and
piling up debt and pension liabilities in the
process. The fact that Wall Street can shrug-off
the possibility of a General Motors bankruptcy
is mind-boggling. It is not as if automobiles
are buggy whips. How can the demise of this
industry, once the envy of the world and the
driving force behind Roosevelt’s “arsenal of
democracy,” be dismissed so easily? Could a
warning bell possibly sound any louder?
[continued]
Pension crisis
The
high cost
of tunnel vision
Editorial
Wall Street Journal
Last week's transit strike in New York
City is likely to prove a watershed for the
nation. This isn't about next year's wages; it's
about pensions, whose obligations in the future
for state and local governments are going to be
massive and crushing. Some local leaders may
conclude that retiree benefits are a "third
rail" too dangerous to touch, while others
should recognize a problem their citizens can no
longer afford to ignore. Either way, the Big
Apple's awful Christmas-week strike and the
negotiations that surrounded it have placed this
question on the nation's agenda. With luck, the
strike will be remembered as the moment state
and local governments started to get serious
about their long-term promises to their
employees.
[continued]
This article will
be available to non-subscribers of the Online
Journal for up to seven days after it is
e-mailed.
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WHY
BusinessNevada
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Education
Politicians Pretend
The heart of Nevada’s public-school problem stands
revealed
By Steven Miller
BusinessNevada
If Nevada’s
teacher union ran an NFL franchise for the Silver State,
coaches wouldn’t be allowed to evaluate running-back
prospects by looking at their rushing stats.
Moreover, if pure chance nevertheless provided some faster, sharper, more talented
players who showed real
ability on the field, those stars, by union rule,
couldn’t be paid more than any unmotivated mediocrities.
Instead, all team players—stars and doofuses alike—would
have to be paid by seniority.
Given the pathetic roster that would result, pretty soon
even many of the talented few would depart. Aghast at
the institutionalized indifference to excellence, their
self-respect and aspirations would take them elsewhere.
When the team remnants ended their first season with the
lowest rating in the entire nation—amazingly parallel to
Nevada’s K-12 government schools—the teacher union would
publicly “explain” that the franchise’s real problem was
selfish Nevada taxpayers who refused to compensate
players at “the National Average.” Whereupon Dina Titus,
Barbara Buckley and Kenny Guinn would all rush to
propose various taxpayer-bleeding schemes that
studiously evaded the real structural problems.
These musings arise after learning how the Nevada
Legislature knowingly sabotaged its own self-proclaimed
educational “accountability” legislation in 2003. Needed
to qualify for federal dollars under No Child Left
Behind legislation, Senate Bill 1 of the 19th Special
Session had been in the works for over two years.
Nevertheless, because of the demands of a flock of
teacher-union lobbyists, the legislation at the last
minute was crippled to nullify its single most important
accountability provision.
[continued]
Nevada 2006
Experts forecast Nevada’s economic future
By Jennifer Rachel Baumer
Nevada Business Journal
Nevada’s economy enjoyed a banner year in 2005. Most industry sectors reported their
strongest year yet, and predictions for the future are
very positive. Most of the experts interviewed expect
bright futures in their industries as population and job
growth continue to expand. Rural counties are
experiencing healthy economies. Mining and tourism both
look good. Nevada’s economy looks healthy across the
board.
[continued]
Vegas growth
High-rise demise no surprise to experts
By Tony Illia
LV Business Press
Financing,
developer equity, and hard contracts have resulted in
some recent high-rise cancellations. Banks, as a result,
will likely scrutinize future projects more closely
before providing a construction loan.
Australian developer Victor Altomare, for instance,
recently placed his planned $700 million, 80-story Ivana
condo tower for sale at the northeast corner of Sahara
Avenue and Las Vegas Boulevard South. The asking price
is $49 million.
[continued]
Investments
The
Rainwater Prophecy
Richard Rainwater made billions by knowing how to profit
from a crisis. Now he foresees the biggest one yet.
By Oliver Ryan
Fortune
Richard Rainwater is doesn’t want to sound like a
kook. But he’s about as worried as a happily married guy
with more than $2 billion and a home in Pebble Beach can
get. Americans are “in the kind of trouble people
shouldn’t find themselves in,” he says. He’s just wary
about being the one to sound the alarm.
Rainwater is something of a behind-the-scenes type—at
least as far as alpha-male billionaires go. He counts
President Bush as a personal friend but dislikes
politics, and frankly, when he gets worked up, he says
some pretty far-out things that could easily be taken
out of context. Such as: An economic tsunami is about to
hit the global economy as the world runs out of oil. Or
a coalition of communist and Islamic states may decide
to stop selling their precious crude to Americans any
day now. Or food shortages may soon hit the U.S. Or he
read on a blog last night that there’s this one
gargantuan chunk of ice sitting on a precipice in
Antarctica that, if it falls off, will raise sea levels
worldwide by two feet—and it’s getting closer to the
edge.... And then he’ll interrupt himself: “Look, I’m
not predicting anything,” he’ll say. “That’s when you
get a little kooky-sounding.”
[continued]
Government unions
Forced unionization? No, say Washington state workers
Eighty-four percent don't believe the union represents
them in its political activities
By Ryan Bedford
Evergreen Freedom Foundation
Between
Friday morning, December 9, and Tuesday morning,
December 13, more than 1,750 state workers responded to
an informal survey by the Evergreen Freedom Foundation.
Ninety percent of these respondents said they should
have the choice whether to join a union or not. How
ironic. During the same exact period, the state
initiated termination proceedings against more than 300
state workers simply because they refused to join their
union.
[continued]
Incoherence
Federal
government funds
green groups that fight it By Rita Beamish
Associated Press
Environmental groups that frequently spar with
the Bush administration over protecting the air, water,
and human health also have collected millions of dollars
in government grants, failing in one recent case to
properly account for the money.
[continued]
Public bonds
Monorail: Double or Nothing
Failing project's execs talking up
new line on west side of Strip
By Richard N. Velotta
InBusiness Las Vegas
Executives with the Las Vegas Monorail Co. admit they’ve
done a poor job of selling tickets to the thousands of
conventioneers who attended meetings and trade shows in
the city this year. “We really didn’t go after it as
well as we could have or should have,” said Las Vegas
Monorail President Curtis Myles. “But that’s one of the
things we’ll be doing in 2006, putting together a
concerted plan to reach conventioneers.”
[continued]
Tax burdens
Gaming
tax increase sought
By Sean Whaley
LV Review-Journal Capital Bureau
CARSON CITY -- A Clark County activist attempted to file an
initiative petition Tuesday that would significantly
raise the gaming tax on Nevada’s largest casinos and use
the money to fully pay single-family homeowner property
tax bills. But activist Tony Dane, who said he has
$100,000 in the bank to get the measure on the ballot,
found out he was a week early.
[continued]
Canadian
drugs
Buckley
drug law a no-go
FDA rules within legislation sink program, says AG
By Sean Whaley
LV Review-Journal Capital Bureau
CARSON CITY -- A legal opinion issued by the attorney
general’s office Tuesday said legislation allowing
Nevada residents to buy less expensive prescription
drugs from Canada via the Internet is unworkable. The
opinion brings to a halt the move to provide access to
government-subsidized drugs from Canadian pharmacies.
[continued]
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