Sub-prime, adjustable rate teachers’ contract

(Other Side note: what follows is an essay on the recently approved Brunswick teachers contract.  We hope you’ll bear with us as we set the stage for the heart of the issue.)

Much has been written and said about the great ‘housing crisis’ and/or the bursting of the ‘housing bubble’ in the last year and a half or so.  And it’s eminently arguable that this housing snafu, or more appropriately, the home financing snafu, was the underlying trigger and basis for the ‘great recession’ we now find ourselves in, and are having great trouble escaping from.

The story line in Washington and the mainstream media is that unscrupulous mortgage agents were pushing undesirable financing plans on home buyers who had no idea what they were getting into, and that the loans often involved skyrocketing interest rates and balloon payments.  Given the nature of home financing, where your property is your collateral, the deal is that you either pay up or you lose your house.

In most cases, the ‘loan paper’ was an adjustable rate mortgage, with a ‘teaser rate’ at the front end making for a seemingly painless entry into the glory of home ownership, which was seen as universally desirable.  By definition, the consequence of a very attractive front end with such loans is a far less attractive and predictable back end, with serious vulnerability to economic conditions.  This includes the possibility of rapidly increasing monthly payments, or even worse, the need to make balloon payments and refinance in the not too distant future.

The “firemen first” approach to public budgets

Technorati Tags: budgets,Brunswick,bookies

Anyone who’s watched local and state budgeting cycles over the years knows there’s a pretty standard protocol for scaring the taxpayers into coughing up the extra funds to do whatever it is the “public servants” in charge deem is most “vital” for their well-being.

Recently, The Weekly Standard ran a “Scrapbook” note on the subject, and it articulated the finer points of the strategy, and so I can’t resist passing it along to you.  You can find it here under the heading “Obama’s $50 billion wish list.”

It begins with this passage:

President Obama sent a letter to the House and Senate leaders of both parties last week asking for $50 billion to “address the devastating economic impact of budget cuts at the state and local levels that are leading to massive layoffs of teachers, police and firefighters.”

Here in Brunswick, recent years have shown a preference for using Coffin Pond summer swimming and Curtis Library funding as the strawmen for budget battles, and this year, freshman sports were added to the mix.  Suggesting Library cuts is a sure way to call out at least 50 opponents at a budget hearing.  The “bookies” are nothing if not organized.  And the “schoolies,” especially those engaged in sports, were almost as engaged.

Serious discussion aside, the referenced WS item simply caused this reporter to smirk in knowing agreement as the narrative unfolded.  Take this paragraph:

This is a classic instance of something Charlie Peters, the retired editor of the Washington Monthly, famously labeled the “Firemen First Principle.” As Peters explained, “The basic idea is that, when faced with a budget cut, the bureaucrat translates it into bad news. . . . In other words, he chops where it will hurt constituents the most, not the least. At the local government level, this is most often done by threatening reductions in fire and police protection.”

The article really hit home though, when it got to the discussion of specifics in the author’s Arlington County, Virginia domicile.  Local officials proposed cutting library operating hours.  Sounds familiar, doesn’t it?

Read it and laugh (edited for brevity):

….tax-receipts thanks to the housing bubble were increasing at double digit rates before the crash, and the county government therefore went on a bender. Now it whines about austerity. Our local version of “firemen first”  is a cut-back in public library hours, which the County Board has just announced in the name of fiscal discipline. This will, in fact, inconvenience and tick off a significant number of local taxpayers.

At the same time, believe it or not, the county is advertising a number of job vacancies, none of which inspire confidence in prudent fiscal management.

These include:

• Community Inspector II (Recycling)
• New Media Curator, Artisphere Cultural Center
• Affordable Housing Development Specialist/Trainee

These jobs offer salary ranges well beyond what the average taxpayer earns in the private sector, but I suppose that is to be expected. I’m only surprised that there isn’t a position to study the economy of Greece so that its finer points could be brought home to make Arlington County even more prosperous.

Whopper of the week (month? year?) award goes to….drum roll, please….. Bowdoin College!

Every now and then, you sit down with an adult beverage to casually leaf through the latest print media.  And on occasion, in doing so, you come across an item that puts your happy home at risk.

That’s because you run the risk of reflexively projecting an atomized mouthful of said high octane beverage into the immediate area.  If you’re unfortunate enough to have an open candle flame nearby, you could become a “fire-breathing” side-show star, a career move that is definitely not life-enhancing.

I came across just such an item this week in the Forecaster, and you can find it here under the title “Brunswick historic board questions Bowdoin house demo.”

The fun part of this story, for openers, is that it pits two of Brunswick’s elite forces of nature against each other – the Ivory Tower of Bowdoin College, and the preservationists of the Village Review Board.  The very soul of the community lies in the balance, so the stakes are immense.

The Seaward Inn….a Rockport gem

The Poppycocks spent their recent getaway at a truly unique and wonderful place in Rockport, Massachusetts, in the area known as Cape Ann.  It’s near Gloucester, the famous fishing town, and the broader region includes Beverly, Salem, and other fun places.

Our friends from New Jersey joined us at the Seaward Inn, a classic New England “shingle” bed and breakfast, directly on the water in Rockport.  It’s situated on a lovely road that provides wonderful peace and quiet with a view, and the perfect opportunity for morning and evening walks, in which you will take in superb properties and gardens, most with incredible ocean views.

You can find the info on the Seaward Inn here: http://www.seawardinn.com/.

The character, details, and appointments at the Inn are all first class.  And the breakfast is world class.  They have a great chef and an impressive professional kitchen from which to serve cooked to order morning meals.  We only wished they served dinner as well, but they do not at this point. 

The staff is most helpful, the “common areas” are homey and comfortable, and the amenities include fresh baked cookies each afternoon and complimentary tea and coffee available during the day.  Within a day or two we felt like old friends, even though we had not been there before.  But we plan to be there often in the future.

The Inn has been operating for more than 60 years, and the current owner is the daughter of the family that opened it as a tourist destination.

Rockport has a thriving waterfront village that is strong on art galleries, candy shops, and other classic New England offerings.  It took us a bit to scope out the dining options, but once we did, we had some most enjoyable meals.

The finest of these was at a place known as Duckworth’s Bistrot in East Gloucester.  The odd spelling of ‘bistro,’ we were told, is the original spelling in French.  No matter; this reporter rates the place in the top five places I’ve dined at in my lifetime.

Small, cozy, very well run, extremely appealing menu.  And most items available in either appetizer or entree sized portions, which we wish was more common in fine establishments.  The service was superb, and the desserts were beyond belief.  Check out a typical menu here.  And here’s what it looks like:

       

All in all, if you’re looking for a nearby getaway,  the Seaward Inn should fill the bill, and Duckworth’s will leave you wanting more, and more, and more.

And you can trust me on this; I’m not like all the others.

Technorati Tags: getaways,Rockport,Duckworth's

Maine excels in “moochers”

Maine officials love to tout our “quality of place,” which to this reporter means they would just as soon not talk about “quality of employment,” or “quality of prosperity,” or “quality of future.”

One organization has recently decided to assess the percentage of a state’s population that ‘access’ some form of welfare, and compare it to the percentage of the population that is ‘in poverty.’  To the extent that the former exceeds the latter, a “moocher index” is computed.

Wouldn’t you just know it?  Maine comes out #3 of the 50 states (or is it 57?) in this index.  Only Vermont, #1, and Mississippi beat out Maine.

You can read about it here.

And now you can ponder why Maine’s economy is in the doldrums, even though we have wonderful places to kayak.  Let’s face it; what’s more important – quiet waters with the cry of the loons, or the ability to make a future for your family?

Technorati Tags: maine,the economy,welfare state

Keeping your views on guns to yourself…

Some might find this infuriating, but to this reporter, the sentiment expressed in the sign hits the bull's-eye, so to speak.

 

Technorati Tags: gun control

“Picking” on teachers….

The Poppycock’s just wrapped up a brief vacation, with friends from New Jersey, on the Massachusetts coast line.  The weather could have been far better, but we had a grand time none the less.  We had some top drawer dining experiences, and the Inn we stayed at was marvelous.  More on that in a subsequent post.

The NJ friends are living the Chris Christie ‘revolution.’  And as fate would have it, the wife was a school nurse for years and years, working amidst public school teachers for decades. You might recall this post from a few weeks ago that featured a YouTube video of the governor commenting on the NJ Teachers’ Union.  

As the men’s discussions inevitably drifted to politics, the subject of Christie and his tussle with the teachers came up, and it became clear that my friend, who is as outspoken as this reporter, was ruffling the feathers of many of their friends (or former friends!) who are or were teachers.

That got me to thinking of the ways in which such discussions get shaped by those in the attitude formation business.  In so many words, anytime someone speaks in opposition to teachers’ contracts and/or other aspects of the relationship between teachers and the public schools, out comes the demonization rhetoric. The ‘schoolies,’ as I call them, are masters at pushing back and making the taxpayers the bad guys, as are union officials.  It’s their job, after all.

To whit:

• “Why are you picking on the teachers?  They’re hard working, dedicated, and supremely competent professionals.”
• “Teachers aren’t paid nearly enough for what they do, and they deserve more respect.”
• “Teachers are only in it because it’s for the children.”
• “We moved here because of the superb schools, and every one of our children’s teachers is a saint.”

Which brings us back to the point that Christie makes: it’s not the teachers, it’s the teachers’ unions.

Are you smarter than a fifth grader?

On many occasions speaking before the Brunswick Town Council, I’ve uttered the following in one variation or another:

1) You can govern, or you can spend.

2) The first law of economics is that resources are limited, and there are competing demands for them.  The first law of politics is to ignore the first law of economics.

The situation we find ourselves in today includes the passage of another town budget that fails to confront the harsh realities we face, and an election in which $100 million in bonds is before state voters, and almost guaranteed approval.  Who can resist the temptation of ‘free money,’ especially when you include a 3 to 1 federal match in many cases?  So what….we encumber Maine residents to the tune of $100 million more, and US residents for another $200 million or more.  It’s only MONEY!

The Ostrich, as you might expect, has offered it’s usual clueless belief in the tooth fairy to back up its support for any and all bonds.  And completely ignored the huge unfunded liability in Maine, and massive amounts of debt approved in prior years.

This reporter has long held certain opinions about who informs their positions with facts, logic, economic principles, etc.  And who doesn’t.

As chance would have it, today’s Wall Street Journal contains a column in which the author describes how “self-identified liberals and Democrats do badly on questions of basic economics.”  It certainly confirms suspicions held by this observer.

Here’s the link: Are you smarter than a fifth grader?  A few key passages follow.

Who is better informed about the policy choices facing the country—liberals, conservatives or libertarians? According to a Zogby International survey …. the answer is unequivocal: The left flunks Econ 101.

The author is a Professor of Economics, and bases his findings on a survey of 4,835 American adults.  He concludes:

Governmental power joined with wrongheadedness is something terrible, but all too common. Realizing that many of our leaders and their constituents are economically unenlightened sheds light on the troubles that surround us.

Do Greece and much of the rest of Europe come to mind, anyone?  Perhaps a cliff that America is getting ready to jump off, ably aided by all levels of government?

Sometimes, the most complex problems boil down to the very simplest of truths, and our failure to acknowledge them.  Or even worse, knowingly defy them.

Technorati Tags: Economics,governing,spending

NJ Governor “speaks truth to power”

How often have you heard one political identity group or another talk about the need to “speak truth to power,” most frequently as they seek greater generosity from government (like they have anything we don’t give them first), or bemoan the consequences of liberty and the free enterprise system?

You may have heard about Chris Christie, the new Governor of New Jersey, who upset incumbent John Corzine some months ago.  The guy is truly one of a kind.

I came across this clip of him yesterday.  Watch it to see someone “speak truth to power” in the reverse direction.  And you’ll note the lack of teleprompters or other speechifying aids.

And he does it in less than 5 minutes, the Brunswick town council standard for public comment.  Damn I wish I could do a job this good in front of them!  Actually, I’d settle for 1/10 this good.

This is what you call “cutting through the crap,” to turn a phrase.  And it sure is refreshing.  Especially compared to furious battles over $42 thousand in a $53 million budget.

Technorati Tags: New Jersey,truth to power,Chris Christie

Enjoy.

Barrels of free money…ready to go!

Remember this old song?  I thought it may be from one of the classic Bob Hope & Bing Crosby “road movies,” but apparently not.

Oh, we ain’t got a barrel of money,

Maybe we’re ragged and funny.

But we’ll travel along, singing a song,

Side by Side.

 

Don’t know what’s comin’ tomorrow

Maybe it’s trouble and sorrow………

How much more dated could you get?  Who says we don’t have a barrel of money?

Just look it up in the papers.  If we “ain’t'” got the money we want, just put a bond issue before the people.  Dress it up in “common good” and “vital investment” and '”job creation” tissue paper, and next thing you know, “free money” is rolling in.  Who cares how much debt we build up in a growing iceberg just over the horizon?  Hey…..somebody else will take care of it later.  Just like “somebody else” will pay off your credit card debt.

And besides,  you can trust government to be prudent and responsible in such matters.  They’re more careful with your money than you would be, so just hand it over.

Oh, proponents of government borrowing will tell you it’s just like when you take out a mortgage to buy a house, or to pay for your kid’s college.  No it’s not.  You can sell your house and get out from under your debt.  Government has nothing to sell to get out from under debt except more debt.  Have you ever seen a Capitol building with a “For Sale – Seller Motivated” sign in its front gardens?

Combine this “free money” world view with the high-jinx at the Ostrich, and you get a double dose of mis-informing and un-informing, especially when the Ostrich can’t even be consistent with itself, let alone the facts.

Take yesterday’s edition (Wednesday, June 2, 2010), which carried a front  page article on the Question 4 bond issue, and then an editorial on the same subject.

On the front page, Seth Koenig, named both Maine and New England “Journalist of the Year” in recent months, reports that of the $23.75 million in proposed borrowing:

$4.75 million is slated to help make five buildings on the Brunswick Naval Air Station property handicapped accessible,

Wow!  Those must be some ramps and elevators!  Nearly $1 million a building, or twice what it cost to build the Cooks Corner Fire Station a few years back.

Surely he got it right, award winning journalist that he is.

In the editorial, however, we get this variation on the facts:

$3.25 million for rehabilitating buildings to meet federal Americans with Disabilities Act requirements and fire codes, and making other site improvements needed to attract businesses to the Navy base.

Must be that the language for the proposal is confusing; or maybe, like most legislators, no one took the time to read it.  More important to trump up support for the free money, I suppose.  Especially when you consider this prize in the editorial:

The $8 million in BNAS funding will leverage $32.5 million in additional federal funds — a small investment with a big return, particularly considering that the new SMCC Midcoast campus, if built from scratch, would cost more than $80 million.

Wow, kids!  It’s not only free money, it’s a free money multiplying machine!  The state borrows $8 million and the feds are compelled to borrow $32 million more on our behalf!  How could anyone possibly look this gift horse in the choppers?  Are you nuts? 

It had never dawned on me until now that “freedom of the press” encompassed freedom to mangle, mis-report, or otherwise confuse the plain and simple facts.  And the freedom to contradict yourself in your own pages on the same day.

And they want to be our “guardian of freedom” and “government watchdog?”

Who are they kidding? 

Besides themselves, that is.

Technorati Tags: Ostrich,bond issues,press,Brunswick,Maine

la di da in la la land

I don’t imagine most Side readers follow what goes on in the Ostrich, so for your convenience, I’m posting a letter of ours they ran yesterday.  Kind of a 2 for 1 thing, OK?

Another year, another Brunswick budget cycle. $52 million and counting; officials oblivious to the pitter patter of large elephant feet, and a case study of why nations, states, and cities are in economic crisis destined for bankruptcy.

Hearings full of sound and fury, signifying nothing. Sturm and drang over $42,000 for freshman sports and $50,000 in library funding. Wringing of hands and gnashing of teeth over less than one quarter of one percent of the town’s annual spending.

A school department whose cost per year to educate a student has grown by 40 percent in the last five years with no dispute from responsible officials or the citizenry.

 

The shibboleth of “it’s for the children” disproved by a teacher’s union whose sole purpose is to ensure that “it’s for the adults.” A school board approving an open-ended teachers’ contract, helpless to manage and contain costs, and unwilling or unable to secure performance commitments.

Teachers earning guaranteed generous pay increases regardless of student performance, and steadfastly refusing policy changes that hold them accountable. One third of these teachers earning more for a week’s work than the chief of police or fire chief, and other senior managers of town operations.

 

In other words, belief in a free lunch, no matter how much it costs your friends and neighbors to pay for it. And declaration that while other cities, states and nations may have to face up to the laws of economics, we here in Brunswick do not. Even if we are losing 30 percent of our population and the economic advantage of their presence.

What the heck. Let’s just do what we always do, and what we’ve taught our children and grandchildren to do. Keep on spending, charge things to one account or another and trust that those who come after us will have a workable solution.

Such is life in the town of Brunswick, the home of Bowdoin College. Reality is for others elsewhere who are less fortunate, not for those who live in la-la land.

Bon-bons anyone?

Technorati Tags: Brunswick,budgets