This Week:

The Battle of Chile to Screen Soon

The Governor’s Vetoes

Presidential Election Just 14 Short Months Away!

Welfare Reform Working Just Like It’s Supposed To

Poor People? Oh, Yeah, I Forgot

Quotes from Nygaard Notes Readers
Budget Cutting: If Not To Save Money, Then...?

Greetings,

Welcome to the new subscribers this week. Hope you enjoy the notes.

I have set a self-imposed publication day of Friday each week. I’m just squeaking in under the wire this week. There really are a tremendous number of interesting things to talk about these days, making it hard to fit it all in on a weekly deadline. But, heck, I’ve still got 5 or 6 minutes to go, so...

This week there are several shorter pieces, since the last few weeks have brought some longer ones. Variety is the spice of life, etc.

Keep those cards and letters coming (a.k.a. E-mails). I really appreciate them.

‘Til next week,

Nygaard

The Battle of Chile to Screen Soon

An excellent FREE movie will soon be showing for those of you who live anywhere near the Twin Cities campus of the University of Minnesota. “The Battle of Chile” is a documentary filmed around the time of the overthrow by the military of the democratically-elected government of Salvador Allende in Chile in September 1973. (This coup was heavily supported by the United States, as many readers probably know.)

The movie will be shown in three parts, on the Friday nights of September 10th, 17th, and 24th. All shows are at 7:30 pm at the Coffman Union Theater at 300 Washington Ave. SE, on the East Bank of the U of MN Minneapolis Campus.

The movies - or, as the college crowd calls them, “films” - are sponsored and organized by La Raza Student Cultural Center. For further information and/or special accommodations, call (612) 625-2995.

I haven’t seen this movie, but it’s been on my list for a long time. And, again, there is no admission charge. (Although I wouldn’t be surprised if they ask for a small donation to support La Raza.) All showings in Spanish with English subtitles.

Presidential Election Just 14 Short Months Away!

The Star Tribune (Newspaper of the Twin Cities!) reported on Sunday August 29th on the priorities of presidential hopeful George W. Bush. It’s really too early to even think about this, but I want to mention one thing that caught my eye.

In a table entitled “Bush on Key Issues,” the Star Trib noted that “tort reform” was “one of his top priorities in his first campaign for governor” of Texas. What a joke. For those who don’t know what this means, “tort reform” has to do with changing the laws about what citizens can when companies knowingly endanger public health and/or safety. Like, for example, when Ford makes an exploding car like the Pinto, or when Dow Chemical makes toxic breast implants for women, and so on and so on. Has everyone heard of the woman who sued McDonald’s for millions of dollars when she spilled hot coffee on herself? Well, you don’t know the half of that story. I’ll tell you about it sometime, but in the meantime, suffice it to say that the fact that this is one of Bush’s “top priorities” goes a long way to cement his position as an incorrigible apologist for the worst in corporate America. That’s not quite how the Star Trib put it. I’ll have more to say about tort reform, including McDonald’s coffee, in the near future.

Welfare Reform Working Just Like It’s Supposed To

On August 23rd, the NY Times reported (page 12), on a study by the Center on Budget and Policy Priorities which documented that the “welfare reform” of 1996 has “driven the poorest families deeper into poverty.” If you read the article closely, you can figure out that “the poorest” means the bottom 20 percent of families on welfare. If you read real closely, you learn that the next poorest 20 percent of families “came out ahead” under the new welfare law, having increased their average annual income by $110 per year, to $15,857. If you get out a calculator, you can figure out that this amounts to an income increase of about one-half of one percent. Factor in the likelihood that many parents have to spend much more time away from their children in order to earn that extra hundred bucks, and you start to get the picture. “The poorest” who are working harder in order to make the same amount of income - or less - turn out to be about 40% of all welfare recipients.

Is this a problem? Maybe not, according to Ron Haskins who, as staff director for the welfare panel of the House Ways and Means Committee, “helped to write the welfare law.” Near the end of the article Mr. Haskins points out that “The system is working exactly the way [we] drew it up on the chalkboard.”

Poor People? Oh, Yeah, I Forgot

On August 17th I turned on my car radio and heard the dulcet tones of Minnesota Public Radio personality Gary Eichten, speaking as follows (the part in quotes is the part I remember exactly as he said it):

Tune in tomorrow at noon, when we present a special Mid-day presentation from National Public Radio, “‘The Forgotten 14 Million,’ about the 14 million children who are not sharing in the nation’s bounty.”

My question for Mr. Eichten, and the folks in Washington, would be: How can you forget about 14 million poor kids, many of whom you probably drive past on your way to work? I certainly never forget about them, and anybody who reads Nygaard Notes hasn’t forgotten them.

I didn’t listen to the special. But, if it is true that many listeners to National Public Radio have “forgotten” about these kids, then that fact probably tells us more about the state of public broadcasting in America than any “special broadcast” could ever tell us about poverty.

Quotes from Nygaard Notes Readers

Here are two recent notes from readers that I think should be passed on. The first is from reader Richard LaFortune, commenting on my citing last week of the saying by Jim Hightower “Everyone’s better off when everyone’s better off.” Mr. LaFortune said:

“An African (I think) proverb says something to the effect, 'I am only as rich as my neighbor.' Where I read that quote is lost somewhere in my stacks of papers and books, although the writer who quotes this saying elucidated on its meaning, which essentially referred to the fact that prosperity is relative; and that the true nature of wealth has more to do with the ability to share (everything), than with a talent to accumulate (anything).”

And another quote from reader J.D. Walker, in response to NN #42, concerning the Star Trib headline that I cited, ““Minnesotans are receiving largest tax cuts in nation; Despite relief, state remains among highest taxed.” Mr. Walker pointed out that this headline

“illustrated nicely the way that word choice is used, consciously or not, in journalism to skew the perception that readers take away from stories. Tax reduction is almost always called tax "relief" - relief being something one needs to escape an onerous "burden" - a burden being an unpleasant load to bear, which inhibits one's freedom.”

Well said, lads.

Budget Cutting: If Not To Save Money, Then...?

In what could be a regular feature of Nygaard Notes, I will pass on yet another example of program cutting in the Age of Government Surplus, this time as it affects the Securities and Exchange Commission. Few readers of Nygaard Notes dabble in the stock market, I imagine, so why would you care about cuts in the budget of the S.E.C., which regulates the stock and bond markets?

Well, first of all, lots of people you know likely have money in stocks and bonds, and more are diving in all the time. Since the S.E.C. enforces the laws on full disclosure and fraud in the markets, your neighbors want a strong S.E.C.. Also, many people who are not directly involved in the stock markets are indirectly involved through their pension funds, insurance companies, and so on. The government’s role in policing the markets can also help to prevent the sorts of gigantic frauds that have cost (and are costing) all of us money, such as the multibillion-dollar bailout of the hedge fund Long-Term Capital Management in 1998.

I read with interest, therefore, the fine report on the front page of the Business Section of the New York Times of August 3rd, entitled “House Cuts Could Force S.E.C. Layoffs; Agency Fears Increase In Internet Stock Fraud.” The article reports that, although record numbers of individuals are investing in the stock and bond markets, “a House panel has recommended a budget for the nation’s top securities regulator that would require it to cut its work force by 10 percent.” Here is a perfect example of the phenomenon in which Balanced Budget Mania is causing cuts in a government service even as the need for the service is increasing.

“A diminished S.E.C. budget is the result of stringent caps placed on discretionary Congressional spending in the 1997 budget agreement,” the article says, a curiosity which I discussed in NN #42 (“Taxes and Budget Surpluses: Myth and Reality”)

At first glance this may seem like a form of lunacy, but it is much more than that. The detail that gives the lie to the claim that “budget-balancing” is the motivation for spending cuts is can be found in a note in the second-to-the-last paragraph of the article. I think it is worth quoting that paragraph in full:

“The S.E.C. more than pays its freight through fees that it levies on issuers of securities and on market participants. Thanks to the robust stock market, the Congressional Budget Office projects that next year the commission will collect $501 million in fees that will then go into the so-called appropriations pot from which Congress finances the S.E.C. and other agencies. Those fees would exceed the House’s financing level for the S.E.C. by $177 million.”

Yes, that’s right, the S.E.C. actually earns money for the government, so the cutting of it’s budget is obviously not a “cost- cutting” measure. In fact, this budget cutting is actually increasing the cost of government. This appears to be stupid, but there’s not much that legislators can do about it as long as they are praying to the god of balanced budgets. To paraphrase the old saying, “It’s not just a bad idea; it’s the law.”

On the bright side, these cuts in the government’s capacity to protect investors may cause some powerful people to look askance at the entire legislative mandate to “balance the budget” at all costs. Since this is a bad mandate to have, the displeasure of investors can only be good.

The S.E.C. is hardly alone in its budget woes. The article quotes the communications director for the House Appropriations Committee as follows: “Every bill that we have with the exception of defense is at or below last year’s levels. It’s not a question of whether we wanted to fund them. It’s a question of not having enough funds to go around.”

So there you have this week’s Nygaard Notes Alternative Headline: “Despite Booming Economy, Federal Government Starving For Funds.” And I wouldn’t put it in the Business section. I’d put that on the front page.