Friday, February 16, 2018

Gov. Has Difficulty Getting Needed Votes Once Criminals Removed From Senate

I was amused to read this article from Arktimes talking about the need for a targeted special session to address specific issues, including possibly the re-authorization of funding for Medicaid expansion. The latter takes a 3/4ths majority, and at times over the past six years the margin has been close in the senate. This may be in part because Arkansas' version of Medicaid expansion has operated very much like a giant welfare scam.

There are three empty seats in the senate this special session. At least part of the reason is scandal. You might not be surprised to learn that the missing votes- including those driven from office because they got caught committing crimes, are people who would have voted for the scam program. Those missing voters from criminals who have been caught will hurt the Governor's chances. For some reason, the criminal vote supported his program! He may have to put the vote off until after special elections fill those seats with votes for his program- if it goes down that way.

The federal courts? The legislature continues to blow them off whenever they want. Judge Moody declared Arkansas' ballot access laws requiring independents to file their petition signatures unreasonably early to be unconstitutional. So filing period is about to start and our laws as they stand are unconstitutional. Yet there has been zero talk of adding bills for ballot access laws to the proposed special session. The courts are trying to defer to the legislature and give them every chance to do the right thing, but they don't seem interested.

Is Big River Steel Losing Money?

As some of you may remember, a few years back Governor Mike Beebe, with overwhelming support from our "pro-free market" Republican legislators, voted to shovel an incredible amount of money to a private business for them to start a steel mill in Northeast Arkansas. They even risked the teacher's pension fund by directing it to buy $50 million dollars worth of stock in this start-up. In 2013 I described that deal in an article entitled "Beebe Overbids the Most."

Obviously, I was against the anti-free market, crony-capitalist proposal but I don't count because I am just a regular person like you. The only difference is you complain about these things on Facebook and I write them down in a blog before I complain about them on Facebook.  The people who matter right now are officials of the Republican and Democratic parties.  This is because people like you keep voting for them, and participating in their primaries. Please stop doing that. They are destroying our state by your permission. But I digress.

The leadership of both political parties, in their superior wisdom, were united in deciding to blow us peasants off and do it anyway. Well, by the time the plant got operational in 2015 steel prices had collapsed due to massive oversupply as I documented here. This was perfectly predictable because taxpayers consistently get ripped off in these "pubic-private partnerships".

Now its 2018 and there is still a massive oversupply of steel globally. The U.S. is considering draconian steel tariffs that experts assure us will initiate a costly global trade-war. It is a risky and desperate move but it may be necessary to save what is left of our steel industry.

So does anyone know if "Big River Steel" is making a profit? A real profit, not a number pumped up by all those wheel-barrows of your tax dollars that they dumped into it? If they are not making a profit what is the value of the $50 million dollars in stock now? Bear in mind that last August they borrowed $1.255 Billion which was secured by their assets. At least some of that was for "working capital." If you are not expanding, and they are not, then why do you need to borrow money for "working capital" if you are making a profit? The answers may be hard to find because the mill seems to be owned by a private LLC that Bloomberg financial can't even find an address or phone number for.

This has all the classic signs of the instances where the insiders get a huge amount of capital raise, use it to buy stuff and then borrow against that stuff, and then give themselves large salaries and bonuses until it becomes clear that the operation was never really making a profit and was operating on borrowed money, a significant portion of which was skimmed by those operating it before it collapsed and left shareholders with nothing. Not say that is what is happening here, but if it was, this is what it would look like at this point.






Saturday, February 03, 2018

A Welcome Change in Tone After Lawsuit

As some of you know, I recently won a long and arduous law suit with the state over a ballot access law which unfairly discriminated against independents by moving the date they were required to submit ballot access petitions up to an unnecessarily early date. This date had been ruled unconstitutional several times before yet it still took four years of battling to get it thrown out.

Technically, the ruling just applied to me. I am permitted to file my petitions after the legal deadline and the law is declared unconstitutional- meaning the legislature should change it. Of course if it is wrong to hold me to that early date, it should be wrong to hold anyone else to it also. Initially the Secretary of State's office was a bit cagey, and frankly snarky, about the issue of how they would handle it if anyone else wanted to file petition signatures on the later, and constitutional, deadline.

It is my thinking that the Secretary has had a talk with the more partisan members of his staff because a follow-up article by Steve Brawner quoted them as saying "the new deadline is May 1st" for everyone. The difference in tone is pronounced. I invite you to read their original response in this link and compare it to the one in the Brawner article linked to above.

Taxing Americans to Pay Chinese Communists to Hire Some of Us

Government cannot, on the net, "create jobs". At its best it can only provide optimal conditions for those in the private sector to create jobs secure in the knowledge that no one, including the state itself, will loot the wealth that they generate by doing so. The other thing government can do is take capital from a large area and dump it in a small one, then loudly point to the jobs created where the capital was dumped while ignoring the job loss and economic drag produced in the larger area which was robbed of the capital. This happens a lot. The politicians who go around talking about what they will do to "create jobs" are either ignorant of basic economics or disingenuous. Many are both.

I was against corporate welfare when Mike Beebe did it with Big River "Steal" and the Windstream Fiasco. I was against it when Barack Obama did it with the Solyndra Scam, and I am also against it when Governor Asa Hutchinson does it on behalf of Chinese Communists/Cronies. If these projects were compelling ideas, someone in the private sector would do them with private capital and without looting the taxpayers. The taxpayer costs of the Shandong Sun paper mill proposed in Clark County are outrageous. These global companies get states to bid against each other and the politician who gets the project is the one who overbid the most. And believe me there is a lot of over-bidding going on because they are not using their own money, they are using taxpayer money to buy themselves publicity for "creating jobs".

There is no net economic sense, and less justice, in taxing the owner of your local hardware store so that the state can spend millions to lure Lowe's in to open a store that puts him out of business. Our economy is being grossly distorted towards giant corporations and away from small business by these practices. All the existing small businesses are taxed so that a few high-profile giants can get subsidized. If you were thinking of starting a small business, would you choose Arkansas? With these misguided policies businesses will not want to come here unless they are among the privileged few with taxpayer subsidies. Everyone else pays the subsidies. You are either feasting at the table or you are on the menu. It is sick, it is immoral, and it is destructive.