TCR Comment: A recent editor of The Economist went into details about the public pension crisis facing our states and local governments, including Texas. The bird's nest on the ground for public employee unions are increasingly being discovered. In many wealthy countries wages are on average higher in the state sector, pensions better and job security paramount. Regardless of the jobs workers do, their unions have blocked reform at every opportunity.
The Economist Observes:
"Politicians have repeatedly given in, usually sneakily - by swelling pensions, adding yet more holidays or dropping reforms, rather than by increasing pay. This time they have to fight because they are so short of money. For amid all the pain ahead sits a huge opportunity - to redesign government. That means focusing on productivity and improving services, not just cutting costs. (Indeed, in some cases it may entail paying good people more; one reason why Singapore has arguably the best civil service in the world is that it pays some of them more than $2m a year!)
"The immediate battle will be over benefits, not pay. Here the issue is parity. Holidays are often absurdly generous, but the real issue is pensions. Too many state workers can retire in their mid-50s on close to full pay. America's states have as much as $5 trillion in unfunded pension liabilities. Sixty-five should be a minimum age for retirement for people who spend their lives in classrooms and offices; and new civil servants should be switched to defined-contribution pensions.
"Private-sector productivity has soared in the West over the past quarter-century, even in old industries such as steel and car-making. Companies have achieved this because they have the freedom to manage - to experiment, to expand successful innovations, to close down bad ones, to promote talented people. Across the public sector, unions have fought all this, most cruelly in education. It can be harder to restructure government than business, but even small productivity gains can bring big savings.
"The coming battle should be delivering better services, not about cutting resources. Focusing on productivity should help politicians redefine the debate. The imminent retirement of the baby-boomers is a chance to hire a new generation of workers with different contracts. Politicians face a choice: push ahead, reform and create jobs in the long term; or give in again, and cut more services and raise more taxes."
RIP - Great Conservative Republican Leader Clymer Lewis Wright Jr.
Clymer Lewis Wright, Jr., who helped define our area for decades first as a crusading journalist and later as conservative activist, passed away recently at the age of 79. Clymer had an infectious personality, strong laugh and his enthusiasm and zest for ideas and issues would leave you passionate one way or another.
Clymer was a Texas conservative leader who was important in convincing Ronald Reagan to run for President in 1968, 1976 and 1980. He was a leader of Texans for Reagan in 1968 and served as the Texas Finance Chairman for Reagan's 1980 victory for the Presidency.
Clymer was also the architect and leader for Citizens for Term Limitations, an election initiative that limited the number of terms in office for Houston elected officials, which is still in effect. He will be missed.
What China Wants?
By Richard Russell
TCR Comment: Richard Russell is an 89 year old investment advisor that is considered one of the bright and informative writers in the U.S. TCR takes what he says seriously.
"Does anyone know what China really wants and in which direction China is going? The Russell answer: China wants to be the most powerful financial power on the planet. Note that I said China wants to be a "financial power" not a military power. Militarily, China simply wants to neutralize the US, and be on a military level with the US. China knows that nobody can win the next major war between super-powers (both sides would be utterly destroyed).
"China's initial financial strategy - to make the yuan (renminbi) the world's leading currency. China wants the yuan to take the place of the US dollar in world trade and they want the yuan to be the world's reserve currency. China is going about this in slow, deliberate steps.
"First, China is making strategic alliances with the long list of nations. This means that they will trade, using currency swaps in China's currency, the yuan. This will result in eliminating trade in US dollars. The Chinese alliances include Malaysia, Belarus, Hong Kong, Indonesia and more recently Brazil and Argentina.
"China is also moving to create currency swaps with the Arab nations. More ominously, this means that China ideally wants oil quoted and traded in yuan rather than as it's currently quoted and traded - in dollars.
"What's behind China's new strategies? The fact is that China has been smarting under many decades of bad-mouthing and disrespect. China is a nation of 1.3 million hard-working people, a nation pulling itself out of deadening poverty and fast becoming the leading economy of the world. Today, no trend or major deal is transacted without considering its affect on China or China's affect on the transaction.
"It's obvious that China wants the yuan to be the world's new reserve currency. Ask yourself this - if you are dealing with a currency, would you rather deal with the currency of a nation with a huge hard-working population, a nation with the largest reserves on the planet - or would you rather deal with the currency of a nation drowning in debt, a nation who's currency is in a multi-decade decline, and a nation which is steadily losing its productive and manufacturing capabilities?
"The next step in the progression is for China to make its yuan convertible. China wants the yuan to take the place of the dollar. It wants the yuan to be the world's leading trading and safe-haven currency. More than that, China is in a headlong rush to build its reserves of gold. Recently, China asked the IMF to create a new reserve currency, a mix of three or four leading currencies with the yuan and gold as two of its components."
"China quietly has become the world's largest producer of gold. Furthermore, China's leaders have been urging their people to accumulate gold.
"Unlike the US, China sees gold as a symbol of power and prestige. I believe that China is thinking that in due time, it will back the yuan with part-gold, thereby making the yuan far preferable to the US dollar, which is backed by nothing tangible. Today, the dollar is backed only by the "full faith and credit" of the US government.
"So it's interesting and rather frightening, while the US creates billions (trillions) of dollars out of computer transactions, all in an effort to save its banking system, China is spending part of its giant dollar hoard to buy up the resources of the earth. China already has a near-monopoly in rare earths. China is buying mining companies wherever it's feasible. China is buying arable land in South America and Africa. If it's a valuable resource, if it's for sale, China wants to buy it."
A Story About Who Really Works
TCR Comment: TCR came across this story from a letter to the editor. The author is known as Shelly W. and it is just fascinating. It sounds crazy but could be close to true.
"The population of this country is 300 million. 160 million are retired. That leaves 140 million to do the work. There are 85 million in school. Which leaves 55 million to do the work. Of this there are 35 million employed by the federal government. Leaving 20 million to do the work. 2.8 million are in the armed forces preoccupied with killing Osama Bin Laden. Which leaves 17.2 million to do the work. Take from that total the 15.8 million people who work for state and city governments. And that leaves 1.4 million to do the work. At any given time there are 188,000 people in hospitals. Leaving 1,212,000 to do the work. Now, there are 1,211,998 people in prisons. That leaves just two people to do the work. You and me."
TCR on the Air
Red, White & Blue featuring TCR Editor Gary Polland and liberal commentator David Jones, Fridays at 7:30 p.m. and replaying Sundays at 5:00 p.m. on PBS Houston Channel 8 and on the web at www.houstonpbs.org.
2/04/11: Judicial Reform – Should Partisan Judicial Elections Continue? With Judges Jeff Shadwick (R) and Dion Ramos (D).
2/11/11: City of Houston in Crisis? With Councilmembers Anne Clutterbuck, Oliver Pennington and James Rodriguez.
2/18/11: City of Houston Mayor Annise Parker.
2/25/11: Harris County Public Defender Alex Bunin.
For a fun feature go to www.houstonpbs.org and under Red White and Blue, you can see commentary about the show and its guests by Gary and David each week. The current show as well as past shows are also available on YouTube.
About Your Editor
Gary Polland is a long-time conservative and Republican spokesman, fund-raiser, and leader who completed three terms as the Harris County Republican Chairman. During his three terms, Gary was described as the most successful county Chairman in America by Human Events - The National Conservative Weekly. He is in his thirteenth year of editing a newsletter dealing with key conservative and Republican issues. The last nine years he has edited Texas Conservative Review. Gary is a practicing attorney and strategic consultant. He can be reached at (713) 621-6335.