The News Journal Dutifully Defends Fisker

The News Journal has a story yesterday on Fisker Automotive's survivability.  In it they defend the start-up against every question and call any comment that questions the ideas of the company and the  government "politically motivated".  I'm sorry News Journal, but what's politically motivated, is your fish wrap paper.  This is the longest government propaganda piece I have ever read.  When the Caesar Rodney Institute looked at the Fisker business model, it questioned whether or not the company could meet rather lofty sales goals.  Since then, Fisker has twice drastically revised their sales goals as production delays, cash flow problems and problems with the vehicles battery system.  I wouldn't call that "politically motivated" questioning.  I'd call it looking at the facts and asking questions that make sense instead of blindly buying whatever line of bull that the government throws at you.  Let's tackle some of the problems with the News Journal's defenses of Fisker (why a NEWS organization can't just report the facts and call a spade a spade, I'll never understand).

Fisker's Funding

One of the knocks against Fisker is that it has drawn more support from the government than from private capital.  The News Journal claims in their piece that Fisker has raised $850 million in private capital compared with $528 million in Federal loans, $21.5 million in Delaware direct aid (grants that will not be paid back), a sweetheart no bid land deal on the old GM Boxwood Road plant (saving them tens of millions of dollars on property costs) and untold amounts in California state aid to the start-up company.  USA Today however, gathered different information from the Department of Energy who reviews the funding of companies to whom they give grant and loan money.  They say that Fisker has only brought in $650 million in private equity compared to at least $550 million in government promised aid.  That's a 54% private funding ratio which no other industry could survive under.  That means 46% of the company is subsidized by government funding.

Talking Points

As is typical from the News Journal, they sought out as many left wing sources as they could.  Not hard in Delaware where the far left has bought up every office they can find.  In fact, the only alternative voice they found was Delaware GOP Chairman John Sigler and they took his quotes out of context.  Let's cover some of the more ridiculous statements:
Josh Freed - The Third Way (Progressive Soros funded group)

“Frankly, it would be the equivalent of the Internet sector finding themselves under political attack in the early ’90s as they emerged or automobile companies coming under attack in the early 1900s as they were becoming competitive with horse-drawn carriages and trains as a mode of transportation,” said Josh Freed, vice president for clean energy at Third Way, a centrist Washington, D.C., think tank.

Now this sounds incredibly thought provoking but it's not the first time we've heard it...Obama's Delaware bred messaging czar David Plouffe said this:

“Well, let’s step back for a minute. We have to win this race, you know, we–if we don’t win the clean energy race in terms of technology, innovation, and jobs, and cede it to other countries, we’re not going to have the century–we need this. It’d be like us ceding the automotive industry race or the Internet and computer race.”

Similar points, same problems.  Here they are.

1. Auto companies - The automobile industry wasn't subsidized by the government in the 1900's.  Henry Ford didn't get government help to develop the assembly line and even the oil and gas industry didn't receive government tax breaks until 50 years after it launched.  So if we want to treat the green energy industry like the auto companies, we should remove all funding.
2. Internet - The internet's backbone was indeed created by the government but that was in the 50's and 60's when the government was using it as a defense network.  By the 1990's, the backbone existed and there was little to no government funding for private internet companies.  In fact, the 90's internet boom was such a boom because the government WASN'T pocketing profits.  The money was changing hands in the private sector.

Senator Anthony DeLuca

Senator DeLuca was quoted as saying that "tax incentives and government backed loans are not new" concepts.  Well Senator DeLuca is right but that doesn't mean that tax incentives and government backed loans are right and proper simply because we've been doing them for a while.  Holding individuals as slaves wasn't any more right in 1860 than it was in 1776 simply because it wasn't a new idea.  It was wrong all along the way because it's wrong.  The government picking winners and losers is simply a losing proposition and Delaware has proven that first with Blue Water Wind and now with Fisker.  Both are government supported programs and both have or are failing.

Alan Levin

Alan Levin, DEDO Chief and resident Markell Administration "Republican" whose very presence on the staff deflects most criticism of the Markell Administration's failed economic policy from Republicans, said that the "shortest way to fail is to not try".  An awesome bumper sticker for sure but light on substance.  In this case, you don't have people saying do nothing.  You have people saying that what you're doing doesn't make sense and that you should look to solid, tried and true methods to lift us out of the depression we are in.  You have people who understand that when the chips are down, every dollar counts.  You don't spend your last dollar on a lottery ticket.  Mr. Levin is known locally for creating "Happy Harry's" a discount drug store that was eventually bought for millions of dollars by Walgreens.  Mr. Levin knows better than anyone, how businesses should work.  It's curious then, that someone so steeped in business acumen would not understand the simple fact that a start-up company with no name recognition, no long term reputation and little to no advertising who plans to immediately leap frog two well funded, long established rivals and capture 20% of  the market within 2 years is a little far-fetched.  Either Mr. Levin isn't as smart as we think he is (unlikely) or he's schilling for the Governor to score political points.

The above points are just a few examples of truth over the fiction of the News Journal puff piece.  Folks, we're dealing with a lack of responsibility here.  From the top of our government to the media who props them up we have a machine that just keeps wasting more and more money, time and prosperity on their friends and campaign donors.  We've got to wake up.  Here's an exercise for you, read the News Journal piece and see if you can find the inconsistencies with reality then post them here.

Fisker's Aptly Named Car Shows the Folly of Government

For the last 6 years, Delawareans have been barraged with promises from so-called "Green companies", most of which promised lofty job numbers and economic booms.  Blue Water Wind came to town with a plan to provide wind energy that would be clean and green and could even eliminate the need for dirty coal fired plants.  Their scheme turned out to be one that would produce far less energy than expected, one that required the government to enforce a mandate on Delmarva Power which forced them to pay more, one that required the federal government to give the company a non-compete contract for the off-shore wind farm location and one that ultimately failed just days ago when the project did not receive MORE government assistance in the form of more direct subsides.  Despite receiving awards of more than $800 million (although we can't be sure how much of it was spent on the project, how much went into the pockets of government cronies or how much the government still has, if Solyndra is any example, that money is long gone) of which we know that enough was used to pay at least 6 executives making 6 figures plus their assistants for 6 years (likely around $4 million) plus the cost of lobbyists, legislators (this is not a typo), architects, lawyers and surveyors for the ramp up to production (which likely cost Delmarva ratepayers millions more), Blue Water Wind needed MORE government funding just to begin production on a surveying tower to see if their idea would ever generate a single kilowatt of power!  After Solyndra, the government realized that green energy problems (like those that plagued Spain, the nation whose green jobs plan bankrupted their nation and after whom Obama's green jobs plan is modeled) would cause more scrutiny and so they decided to cut funding to this off shore wind disaster.  Subsequently, Blue Water Wind folded because they were unable to secure private backing (despite the assurances of company leaders who promised that it would be able to function without government support) for their venture.  Their contract with Delmarva ended 2 days ago at the stroke of midnight and along with it, any chance that we'd see a dime from the investment returned.

More recently, the buzz has been about the Obama crony run car company, Fisker.  You might remember Fisker (or more likely not) as the start-up company who out muscled Tesla as the Obama Administrations favorite in the Plug-in electric car market.  It bought (on the cheap) the Boxwood Road site formerly owned by GM and has been rehabbing it in preparation to begin production on the "cheaper" of its two offerings, the Nina (the more expensive Karma is made in Finland because Fisker says that no one in America can do the job...) in 2013.  The Karma is offered for sale at Union Park's family of dealerships in Wilmington.  A friend of mine recently tried to secure a test drive of one of the Fisker Karma's at Union Park only to find each time that he came by, that the vehicle was "in the shop" for some kind of software upgrade or maintenance issue (odd for a showroom car that is never driven).  Now, this friend may or may not have the means to purchase the vehicle, I don't get into that kind of thing but if I had to guess, I would say his credit record and history would warrant at least a test drive of almost any vehicle ever built.  The Karma retails for more than $102,000 and less than 300 have yet been sold.  Now remember, the Fisker business model actually called for them to own a significant portion of the hybrid/electric car market in just the first couple of years of production.  They would have to beat to market shares of GM, Toyota (who owns the largest share with the Prius), Nissan and Honda to name a few.  Delaware's Caesar Rodney Institute highlighted the bold plan years ago:

Competition in the hybrid market is fierce. All the major automobile producers are moving into the hybrid market. By 2015 GM plans for 26 out of 33 models to be some form of hybrid. Chrysler plans to have 8 hybrid or electric vehicles by that year. The current U.S. hybrid market averages across the business cycle 25,000 cars per month (300,000 per year). Three quarters of the sales are Toyota's Prius or Lexus, with Prius accounting for 55% of the total hybrid market. Ford and Mercury (Fusion, Milan) currently have a 9% market share, with Honda at 8% and GM at 5%. Sales have dipped during the recession and are directly influenced by the price of gas.

 

Will the market support Fisker's 2014 sales projection? U.S. car sales should top 8 million by 2014. If the hybrids share of cars rises from its current 1% and climbs to 5%, hybrid sales in 2014 will be around 400,000. This means that Fisker, with a limited retail and service network and no established reputation, will capture 19% to 25% of the U.S. hybrid market. Should 50% of Fisker's cars be sold as exports, the highest proportion of exports for any current American company, Fisker is assuming a U.S. hybrid market share of 9% to 13%, greater than the current shares of Honda and GM.

 

The likelihood of such a plan working was also a subject of the Institute and it found that the plan left far more questions on the table than it answered.  Fisker has had to hike the prices of the Karma to keep the company afloat, pushed back production and start-up plans, has sought more taxpayer funding and still has only delivered a relative handful of vehicles.  It's certainly not competitive in the market with companies like Toyota, Honda and Nissan.  Which bring us now to the news of today which is also a blow to sales of the start-up car makers most expensive model.  It turns out that the battery packs inside the Fisker Karma's can catch fire (much like the Chevy Volt which was recalled earlier this year) and cause explosions.  Battery fires have plagued the electric car industry largely due to government's force behind the implementation of the unproven and untested technology to save face in its quest for green energy goals.  The bottom line is, do we want to pin our hopes to another Pinto or Yugo?  Fisker is already north of $600 million in government subsidies, some have said it's closing in on $1 billion and now with these setbacks, business will suffer.  There can be no doubt that the $50,000 Nina, which is planned to be built in Delaware will suffer from these setbacks if it comes online in 2013 as promised and many good folks, like the people at Union Park and the many contractors who embraced this green energy plan will be affected by these pains.  The fact is that electric cars aren't ready for prime time and no amount of government force will make it so.  In fact, I say, when the private market venture capitalists start investing THAT is when you will see the rise of the electric car.  

Government picks for winners and losers, Solyndra, Blue Water Wind and Fisker are proving what conservatives have been saying for a long time, that private markets should be dictating the products in the market place.  Government wastes untold billions of dollars every year that could be used to pay down or deficit on misguided attempts to solve every problem when the reality is that it just can't do it.  Government solutions rely on mandates, cash subsidies and risky gambles with other people's money that more often than not lead to disaster.  Look at the latest deal with Bloom energy.  Delmarva Power ratepayers are now venture capitalists (don't get excited, you get no return on this investment) in a company that markets unproven emergency backups to major corporations.  Better still, not only did the government have to force Delmarva Ratepayers to subsidize Bloom but it also forced subsequent governments to have to stick with the plan.  That's right, future General Assemblies MUST remain in the agreement with Bloom for 21 years.  TWENTY ONE YEARS!  No matter how much it costs, how effective it is or how many jobs it produces.  Further, they had to compromise their own leftist principles to do it!  In 2011, the General Assembly passed a bill that redefined the term "Renewable Energy" to include Natural Gas (a fossil fuel considered dirty by the left) because the Bloom boxes need natural gas to operate and because anything not classified as renewable under Delaware's Renewable Energy Portfolio costs Delmarva more money to use.  UNREAL!  We've got to stop this madness.  We need someone with an ounce of common sense to make some changes.

Capital One replaces lost HSBC jobs

Governor Jack Markell’s office announced today that Capital One is bringing 500 jobs to Delaware. This comes as Capital One acquires both HSBC’s credit card business and ING Direct. While Markell, DEDO and the Democrat leadership in Delaware is hyping the news, a look at the actual numbers offers a sobering view of reality.

Jobs lost or planned to be lost:
Wilmington Trust (M&T Bank) – 700 jobs lost
HSBC – 500 jobs lost
AIG/MetLife – 150 jobs lost
CIGNA – 500 jobs planned to be lost in Delaware
Bank of America – 30,000 nationwide layoffs, potentially 3,000 in Delaware alone

Mass layoffs by month (these #’s do not reflect smaller layoffs):
Apr 2011 – 8,000 jobs lost
May 2011 – 5,000 jobs lost
Jun 2011 – 6,000 jobs lost
Jul 2011 – 3,000 jobs lost
Total 4 mths – 22,000 jobs lost

http://www.bls.gov/eag/eag.de.htm

In just 4 months we have lost 44 times as many jobs as Capital One plans to add by the end of 2013 (more than 24 months away). Rich Heffron, VP of the Delaware State Chamber of Commerce says we are “ahead” in the jobs race now. Really Rich? Really? With business leaders who add like this, is it a wonder we are so far BEHIND in job creation

http://www.prweb.com/releases/2011/9/prweb8827004.htm - DEDO & Markell release on Capital One jobs

Deconstructing the Delaware Liberal Myth

So I heard Rick Jensen talking about this blog post over at Delaware Liberal by "Cassandra_m".  Usually I don't even bother to present my fellow Delawareans over there with common sense facts because they often fail to listen to reason.  Governor Markell and I don't agree on much, including his own opinion that he is "pro-business".  Thus far Markell has shown himself to be almost anything but "pro-business".  When Delaware had the opportunity to push for an opt-out of Obamacare which threatens to destroy small-medium businesses and will demand more layoffs even from Fortune 500 companies, Markell supported it and refused to save Delaware businesses.  When the Obama Administration pushed Financial Regulatory reform through the Congress which has already shut down many jobs (potentially a thousand +) in the financial sector in Delaware, Markell supported it.  Markell has shown support for not only RGGI, the regional cap and trade system but also a national Cap and Trade system that would further punish (destroy) Delaware businesses and kill jobs.  So I decided to go ahead and post my critique of her blog posting here.  My comments are in bold.

Building Delaware's Future or How to Throw Taxpayer Money at BusinessesBy cassandra_m

Governor Markell has spent the past three days rolling out his plan to spend newly DEFAC-found revenues of $320M. Links to the Governor’s Press Releases on this are below, and worth looking at in their entirety:
Part I — Building Delaware’s Future Fund, Infrastructure:
Part II — Building Delaware’s Future, Tax Cuts
Part III — Building Delaware’s Future, Education
This is all being billed as a jobs plan, and some of it definitely supports the creation of employment — the Infrastructure proposals look like old school stimulus and takes into consideration that some newly built plant here will need expansion or adjustments to current infrastructure to operate.

Typically, the liberal spirit is to spend money in GOVERNMENT and to buy up as much land as possible so that future land use can be centrally planned.  In other words, if DuPont isn't playing ball with the government (say...on climate change) but Gore is playing ball, why not sell the government owned land to Gore instead of DuPont?  Don't think this could happen?  Well it already has.  Case in point: DelDOT land deals and Chris Tigani.

<back to Cassandra> The disappointing part of this is Part II, in which we find the Governor doing something I don’t think I thought I’d see — actually buying into the fairy tale that tax cuts create jobs. They don’t, of course, otherwise the 2000’s would have been way more robust than they were. And this plan actually extends the fairy tale — while it is certain that the financial industry is changing, there is no way to look at this industry and not see that the changes we see here in Delaware are structural ones. Jobs lost at Wilmington Trust and HSBC (and others, really) are due to serious restructurings that tax cuts won’t undo to any great extent.

Another glimpse into the liberal mindset here shows a complete and total unwillingness to put fact over ideology when they don't mix.  The reality is that going back to the 1920's, every time taxes have been cut, the economy has grown and revenues to the government have increased.  Every time.  Ok, ok, so THAT link was to a Heritage article and I know, YOU say they are biased.  Well, I guess that means that this link to the USA Today opinion piece by Bill Frist is out too?  Fine, I can understand that, but then how do you explain the jump in revenues in 2006 as reported by the New York Times?  The fact is that cutting taxes stimulates the economy as well as it does personal incomes.  It creates more wealth which can then be invested in new businesses or in expansion of current businesses.

<back to Cassandra> Tax cuts targeted at the Financial Industry are particularly galling — this industry has had the benefit of rivers of taxpayer funds in the form of TARP and multiple cheap lending facilities and now Delaware taxpayers are supposed to help support banks that are in trouble because of their own bad risk management. Again, without paying attention to the fact that there are quite a few of these jobs that won’t be coming back, no matter how healthy the economy gets.

Whoops!  Cassandra forgot to mention the REASON why these jobs "won't be coming back" to Delaware.  Part of it is because banks are under assault from all sides thanks to the financial meltdown.  Some of it is warranted and some of it is not so warranted.  A much larger part of it is Financial Regulatory Reform, also known as Reg Z.  Reg Z changed so much within the financial system (and the full impact to companies hasn't even been realized yet) that financial institutions now have some of their costs increased by 200% or more.  And while those who are committed to the causes of the left, namely bringing down the capitalist system in favor of a more redistributive model where your success only means we get to share more of YOUR wealth will not be convinced by a "biased source" it's telling to see what the company Accenture thinks of financial regulatory reform:
As we have seen, The Dodd-Frank Act has many interrelated implications for how all financial services firms will run their businesses, both short-term and long-term, and as a result, the financial services industry could look very different in five years time. The Act will increase costs, potentially hurt profits, produce new operational challenges and pose significant strategic questions about how firms will prop up their return on equity while absorbing the cost of more reporting to regulators, a more expensive cost of capital and the loss of some of their most profitable businesses. The most nimble and efficient banks, insurers and broker-dealers could pick up market share at the expense of their larger, less efficient competitors, which makes it crucial that firms make an efficient strategy for implementing reform part of the DNA of their businesses.
This is no insignificant point folks.  It's the very reason why banks are shedding jobs here in Delaware.  Key sponsors of the bill, Senator Tom Carper, Former Congressman Mike Castle and Vice President Joe Biden, all from Delaware.

<back to Cassandra> Tax cuts targeted at the top rate make no sense at all. (Full disclosure, I would benefit from this tax cut.) We are still in an economy that is finding its sea legs. It will take quite a long time to get to 7% unemployment rate, much less 5%.

And why would we want to cut tax rates on the people who create the jobs we are going to need in order to lower the unemployment rate?  Even if you don't buy the logic that I listed above, with a number of different factual sources from across the political spectrum that shows tax cuts in the past have always increased revenues and lifted the economy, you still can surely see how the rich provide the jobs.  People like Cassandra always like to go after the people making more than $250,000 as some sort of evil rich people who just want to take everything they can get their hands on.  The reality is that these are the people that create the jobs that lift our unemployment rate.  They are the small business owners, the upper level managers and the executives who create jobs.  With that said, it is easy to fall into the trap of desiring what others have, believe me there are times when I would LOVE to be a DuPont heir but we all have to remember that in America, you reap what you sow.  Until recently, America has been a place where you can keep the fruits of your labor but now it is increasingly becoming a place where government takes more of what YOU earn and gives it to those who have not earned it.  It's especially helpful to the liberal cause when these words come from someone who is part of that upper class.  When Joe Biden says "skin in the game" and people like Cassandra who claim to be in the upper class call for more like them to pay more in taxes, it sounds great!  But watch it, because most of them have found loopholes in the tax system that allows THEIR skin to be just a little smaller than most people.  (Tim Geithner anyone?)

<back to Cassandra> And while Delaware seems to have some control over its previous revenue problem, it is not in control of the *real* problem of government budgets everywhere — health care. Deliberately letting go of revenue streams in the midst of all of this uncertainty with no idea what kind of risks will be present next year or the following year can only make sense if you expect that you can just cover any future shortfalls by asking state workers to finance the gaps. Again. Besides, one of the *principles* of using this money is supposed to be:

Limiting our dependence on less reliable sources of revenue, specifically abandoned property. The plan suggests the best way to accomplish this is to cap the amount of this revenue being used to fund the state’s operating budget, and to use any additional collections for one-time investments.

First of all, Delaware does not HAVE a revenue problem, it has a SPENDING problem.  In 2009, Delaware spent $27,362 per taxpayer and we have gone from spending $8.3 Billion in 2009 to spending more than $10.6 Billion now in 2011.  The other problem that I have here is this idea that taxes are "revenue" to be "adjusted" at the will of the elites.  Taxes are "revenue" only in that they are income to the government.  Taxes are a public trust that the people pay to the government in exchange for core services.  With that said, our "core services" haven't been looked at in many years.  I ask you, are two golf courses and two marinas "core services"?  *I* can live without a couple of golf courses and a couple of marinas, how about you?  So if you reduce spending on these "discretionary" items, you free up enough money to reduce the tax burden on businesses and individuals.  As for asking state workers to "finance the gaps", Cassandra is using liberal speak for "taking pay cuts", I say that the New York Times admits the wage/benefit gap between the public and private sector workers.  In addition, there is plenty of room for public employees to contribute a little more toward their pensions and health care.  With that said, if you eliminate redundant, wasteful and costly state programs, it will reduce any potential pay cuts or increased benefit contributions.  But let's live in the world where taxes are "revenue"...even under that idea, tax cuts INCREASE revenue.

Bush Tax Cuts:  President George W. Bush’s 2003 tax cuts generated a massive increase in federal tax revenue and were followed by 52 consecutive months of economic growth. From 2004 to 2007, federal tax revenue increased by $780 billion, the largest four-year increase in American history.  Total federal revenue from 2003 to 2007:

2003 -- $1.78 trillion

2004 -- $1.88 trillion

2005 -- $2.15 trillion

2006 -- $2.40 trillion

2007 -- $2.56 trillion

<back to Cassandra> Unless these tax cuts are just for one year, you’ve just financed this tax cut for years assuming you’ll have this revenue on a recurring basis. And tax cuts of this kind are NOT an investment.
Reducing business taxes provides balance sheet support — not real incentives to hire. Because the majority of businesses on the planet will hire people because they can keep a pair of hands busy, cover the costs of that pair of hands and still make some money.

Oh Cassandra, you miss the points so eloquently.  Tax cuts ARE an investment, especially tax cuts for businesses and those who create jobs.  Reducing taxes provides PROFITS (what she refers to as "balance sheet support") to businesses and those profits are used by business owners to reinvest in their businesses, to expand production and yes, to create jobs.  Likewise, tax cuts for the wealthy put more money back into the pockets of the people who invest in businesses (venture capital anyone?).  This is a concept that JFK espoused and that the Congress in the 1990's confirmed. 

<back to Cassandra> Nowhere that *I’ve* ever worked has justified hiring based on the tax cuts available. (And yes, I hire people.) Tax cuts cover some of the costs of that pair of hands and/or maybe some of the profits. This is why lots of businesses who get a great deal of support from local governments can get up and go after that support sunsets.

No one has ever suggested that companies hire people only because of tax cuts.  What we've said is that tax cuts stimulate growth and stimulate hiring which is absolutely true.  This is why business exploded from 2000 to 2007 despite the 9/11 terrorist attacks, two wars and Hurricane Katrina.  

<back to Cassandra> See this book and this book for the gory details.

And once you read those books by the committed leftist former "journalist" whose wife runs a philanthropic distribution group that handled more than $160 million in donations, please take a look at this book and this book.

<back to Cassandra> It is possible that we do not have all of the details here, but there has to be a smarter use of found money than these tax cuts. At least a smarter use that still acknowledges that we are economically no where near being out of the woods. And if someone from the Administration wants to tell you that these tax cuts will pay for themselves, demand to see their calculations. Because this will be the first time that this has ever been true.

Cassandra, it wouldn't be the first time it's ever been true, in fact, Michael T. Griffith can point to 5 major tax cuts that DID pay for themselves, the Bush, Clinton, Reagan, JFK and Mellon (Harding & Coolidge administrations) cuts.  They didn't just pay for themselves, they preceded times of great economic growth and increased revenues.

<back to Cassandra> The recent budget submitted by the Governor reduced some of the grant funds available to service providers in the state. Groups that are doing extraordinary work in their communities. Groups that may be laying people off or not help others to become employable due to the reduced funds. And yet this doesn’t count in the employment calculation.

My first question is, if the work is so great, why does it require government to fund it?  As someone who runs a non-profit organization that does NOT accept government funds (by choice) I can tell you that the world of community "service providers" is muddied by many who are swimming in taxpayer dollars and providing little return on investment.  I know what it takes to run an organization on nothing but donations and I think it's a testament to the longevity of groups like Founders Values, Delaware Family Policy Council and others who operate solely on the donations of like minded individuals.  In fact, some of those groups even have entirely volunteer staff and still need to produce high quality results in order to continue providing their services.  These organizations should compete like everyone else instead of reaching for handouts of taxpayer dollars.  The best will rise to the top and the worst will dissolve and contribute their good ideas to those effective organizations.

<back to Cassandra> What is truly unfortunate is to see this genuinely smart man reduced to pushing the horribly false narrative about taxes, and basically work at reinforcing the republican-pushed idea that you can have All of the Government You Can Eat for Free. And provide a revenue stream to businesses too! Don’t expect leadership on this to come from the Dem Caucus, either. Because if Governor Markell can succumb to this fairy tale, there’s no chance the Caucus will get a sudden attack of responsibility.

What is even more unfortunate is that Cassandra does such a poor job of attempting to explain "Republican-pushed" ideas and that she attributes Governor Markell's mad dash to spend the cash to Republicans.  As you can see from this week's proposal from the Republican caucus in Dover, the Governor's plans don't even come close to meeting Republican goals.  Instead of going on a spending spree like a 17yr old girl with daddy's credit card in the Mall of America, Republicans have proposed tax cuts to stimulate the economy, spur investment, ease the pain at the pump and to fix failures in government that cost taxpayers millions of dollars.  Republicans show their responsibility and leadership in their plan by proposing to fix the way that DelDOT operating funds are spent and to provide transparency and openness with respect to how the agency works. 

Republicans as a rule call for a LIMITED GOVERNMENT (not "All of the Government You Can Eat for Free") but I'm glad that Cassandra agrees that government isn't free.  Now all we need to do is remind her that you can't get to a balanced budget simply by eating the rich:

I'm also happy to see her admitting that the Democrats have their own problems with leadership.

Job Losses and Toll HIkes: Markell's legacy of pain

Since Jack Markell took office in 2008, following 8 years of the most corrupt administration in Delaware's modern history, Delaware has indeed experienced "change".  Both Governor Markell and President Obama promised a healthy dose of change in their 2008 campaign.  For my money, I'd trade all of the change they gave us for some jobs.

Since Jack Markell took office and named Alan Levin as Secretary of the Delaware Economic Development Office, Delaware has experienced a net loss of 36,000 jobs.  That means that today, there are 36,000 Delawareans who cannot find work.  Meanwhile, as the layoffs keep coming, Markell and Levin do nothing.  Markell just inked a deal with China, the largest foreign holder of U.S. debt, to invest in Delaware bio tech.  In reality, this deal doesn't do squat to create jobs.  It provides Markell with a photo op and a favorable news story which gives the appearance of him actually doing something.  If anything does come of it, Markell has just invited China, America's largest debt holder, to purchase their way into the Delaware economy.  Since Markell took office, Delaware's industrial footprint has died.  Some may think that is by design, and while that might seem outrageous, there certainly has been a real and wholesale loss of blue collar jobs in Delaware's private sector.  I find it difficult to believe that Markell and Levin don't WANT to create jobs but I submit to you that GM and Chrysler (closed in 2008 under the Minner Administration where Markell served as Treasurer) left the state which left thousands of Delaware Autoworkers without jobs, Valero closed and shed nearly 1000 jobs, HSBC and Wilmington Trust cut more than 1200 jobs, DuPont and AstraZeneca have laid off more than 1,000 workers and scores of small businesses around the state have closed.  Even with the purchase of the Chrysler plant by U of D, Fisker moving into the GM Plant and the new owner of the Valero plant moving in, Delaware faces a net loss of 36,000 jobs.  In January alone, Delaware shed 700 jobs and the unemployment percentage stayed flat at 8.5%.  Even the News Journal, not known for displaying the failures of Delaware Democrats, has had to admit that the employment picture in Delaware is not good.  The Markell Administration has consistently talked about the budding Delaware bio tech industry, green energy jobs, healthcare and financial services as being Delaware's economic future yet the only thing materializing in those areas is government spending and job cuts.  Healthcare dropped 600 jobs in January while banks and finance companies have been shedding Delaware jobs by the thousands since the passage of the financial regulatory bill. 

Regulations, especially as they pertain to the environment in Delaware have increased and so has Delaware's spending.  In fact, Delaware's personnel costs and the cost of government services are so high that there isn't an opportunity for the state to commit to creating a pro-business climate.  Markell and the General Assembly have been content to focus on social issues like homosexual equality and gimmicks like Markell's bottle bill rather than to address Delaware's problems with job creation and spending.  In 2011, Delaware faces a $377 million budget shortfall that must be closed by the General Assembly and the Markell Administration.  This is the 3rd straight increase in budget gaps under Markell and his accounting gimmicks and tricks will only work for so long before it becomes undeniable that Delaware has a spending problem.  I only hope that enough of us wake up by 2012 to stop this train before it totally derails.

Speaking of shortfalls, DelDOT (whose budget is a mere 8.5% of the entire Delaware budget...dwarfed by education and health and social services) is facing a shortfalls totalling "$1 Billion over the next 5 years and more than $3.7 Billion through 2023" says Jeff Montgomery of the News Journal.  State Senator Robert Venables from Laurel doesn't think the General Assembly understands the severity of the problems (and he's a Democrat by the way) and outgoing DelDOT head Carolann Wicks says that "We're now down to the core programs, primarily,".  Still, the following excerpt from Jeff's story is chilling:

Filling the budget gap without cutting back on projects would require more than $169 million in new revenue just for the budget year that begins July 1, an amount DelDOT officials said could be raised with $85 million in new taxes or fees and an additional $85 million in borrowing.

By 2023, however, the single-year shortfall could grow to nearly $498 million.

Confining DelDOT spending only to "core" maintenance, safety, operating and vehicle replacement spending would still leave a $125 million gap next year that would rise to a cumulative $545 million by 2016 and nearly $1.4 billion by 2023, officials said.

State officials have blamed a combination of rising costs, growing demand for services, inadequate funding and rising debt-service payments for the trust fund's quandary. Payments on past loans and interest alone now amount to about $123 million a year.

Folks, this is STAGGERING.  Even if we ONLY spent money on core services from DelDOT, we're looking at a $125 million gap in 2012.  That's no new roads, no updates that aren't critical, no new bus routes, etc.  The blame from the state officials goes not on poor planning, excessive borrowing and administration failures but on the INTEREST for the debt they ran up.  Folks, the payments for the past debt alone total $123 million per year.  So next time you hear that Delaware's financial situation is better than the federal government and that we have nothing to worry about, remember that DelDOT...who makes up just 8.5% of the state budget pays out an amount equal to about 1/3 of the FY2012 budget shortfall.

There is an interesting sidebar in Jeff's story:

TOP REVENUE-GENERATING OPTIONS

Impose $1 per barrel fee for crude oil barge transfers in Delaware Bay: $100 million

Raise Del. 1 weekday toll to $2, weekend toll to $3: $36.4 million

Raise all I-95 tolls by $1: $24.5 million

Shift DelDOT operating funds from Trust Fund to General Fund: $14.1 million yearly for 10 years
Eliminate trade-in discount for new vehicle document fee: $12.2 million
Charge toll for new Indian River Inlet bridge: $7.6 million
Hike vehicle registration fee by $10: $6.7 million
Raise Del. 1 commercial vehicle toll by $1: $4.5 million
Increase gas tax by 1 cent: $4.5 million
Shift Paratransit service costs to General Fund: $4.3 million yearly for 10 years 

 

HIGHEST-RANKED TRANSPORTATION TRUST FUND REVENUE OPTIONS

$1 increase in Del. 1 commercial tolls: $4.5 million

10 percent fee on sale of Delaware tags: $15,000

Illegal sign fees: $9,000

Shift Paratransit service costs to General Fund: $4.3 million yearly for 10 years

Double current $25 fee for driver's license suspension reinstatement: $510,000

$10 additional for driver's license permanent renewal: $87,000

Increase revocation reinstatement to $200 from $143: $230,000

Double late registration renewal fee to $20: $831,000

Double over-size vehicle permits to $40: $903,000

Double fee for paratransit trips outside regular transit corridor: $2.1 million

These are the ways that the special planning board that the Markell Administration created has come up with to "fix" the problems.  You'll notice that there are a lot of fee increases and toll charges but no real cuts.  Oh, and you'll see that they recommend shifting costs...which only hides the costs in the General Fund budget instead of spotlighting it like the rest of the transportation spending.

This is how Delaware Democrats deal with our problems.  They bury them.  We saw it with Chris Coons in New Castle County as we are finding out, his accounting gimmicks masked the fact that our County is bankrupt and in danger of becoming insolvent and we've seen it now at the state level.  The only way we're ever going to fix our problems is to make big changes in the way we do things.  Delaware is in trouble.  We've got to cut spending, cut regulations to bring jobs back to the state immediately and reduce the size and scope of government at all levels.  If we don't make some real changes, face some pain today and get our house in order, we're going to face FAR worse pain in the future. 

Taking a Stand for Sanity

Jack Markell was elected in 2008 after a long primary with then former Lt. Gov. (now Congressman) John Carney.  Carney was considered the more liberal of the two and at the behest of nationwide conservative talk radio host Rush Limbaugh, thousands of Delaware Republicans changed their political party affiliation not only to ensure that Markell was the gubenatorial candidate but also that Barack Obama beat Hillary Clinton in a move dubbed "Operation Chaos".  This move in Delaware created artificially high Democrat registration margins, gave the liberals in the Delaware Democrat Party a dataset to use in order to claim a massive liberal mandate. 

The Delaware Republican Party has been largely silent in the last 3 years as Jack Markell and the Democrat controlled General Assembly has "balanced the budget" by using accounting tricks and half measures that ignore the real roots of our problems, the rampant over spending and bloated size of Delaware's state and local govenrments.  To be fair, I should point out that government largesse is concentrated in State government, New Castle County government and Wilmington city government.  While Sussex and Kent have largely controlled the size of their governments, the northern half of the state has exploded.  While some descrepency is expected since the majority of Delawareans live in New Castle County, government has taken advantage of that fact.  We can no longer be silent about the fact that Jack Markell and his ENTIRE administration is failing the people of Delaware.  This includes DEDO chief Alan Levin who is the real reason why the GOP is silent about Markell's failures.  Levin was brought in by Markell to show his bi-partisanship and was hailed as a brilliant economic mind.  Delaware has a higher unemployment rate than it did when Levin/Markell took over, a higher unemployment rate than the national average and is continuing to lose jobs left and right.  HSBC, Wilmington Trust and countless small businesses have laid off thousands since they took office.  Fisker has yet to build a car, the University of Delaware hasn't yet created a job at the Chrysler plant and the reopening of the Valero plant has produced a net loss of 200 jobs.  Yet, the Delaware Republican leadership is SILENT...because of Levin.   Mr. Levin, you HAVE FAILED.  It's time that you followed the lead of former DelDOT chief Carolann Wicks and resign.  Perhaps you could start another drug store and create more private sector jobs than you have as DEDO head.

I'm not willing to pull the same punches as the Delaware GOP leadership.  They live in a world where a few ultra rich people control their every move.  I don't.  Where I live, the people of Delaware MATTER.  Where I live, jobs need to be created and created NOW.  Where I live, spending is out of control and the answer is to cut the size and scope of government.  Where I live our children are failing and out administrators make millions in unearned taxpayer dollars.  Where I live we owe them a better education system and a better chance at making it.  Where I live the city of Wilmington needs an injection of hope, capital and common sense.  Where I live is with you, the people.  This is the first in a series that will highlight the problems we face and how we fix them.  I'm not going to sugarcoat it folks, our situation is dire.  With that said, we can survive and if we work together we will.  I don't pretend to have all the answers but I know the fools in office now don't seem to have any.  Let's rescue Delaware.

Indiana Dems have joined Wisconsin Dems in running for Illinois to hide out.  Below you can see a video of them leaving for Kentucky and Illinois.

Please read my full Examiner article which contains the excerpt below:


What does this all mean for Delaware? Well, as I've mentioned in previous posts, the personnel costs in Delaware are 30% of the total budget. Meanwhile, the leadership of Delaware's public employee unions say:

In Delaware, public employees' health insurance and pension programs do not constitute a huge "budget buster," as they do in other financially troubled states. Our budget woes result primarily from the continuing effect of the Great Recession on state revenues.

Well there must be a fundamental disconnect her because I see 30% of the budget being devoted to employee costs as a "budget buster". The slide show on the left contains a couple of charts that show the benefit packages that state workers recieve and the current underfunding of Delaware's state worker pension packages. Also, let's keep in mind that Delaware state workers contribute 3% to their pension accounts while the state contributes 7.5% to that plan over and above. Add to that the fact that state workers are becomming more brazen and demanding to know "When am I going to get a raise..." even as the Governor is looking at the budget and seeing a nearly $300 million shortfall (almost twice what Wisconsin is closing with their bill). At some point, Governor Markell is going to have to face the facts that DSEA, AFSCME and other unions MUST have their deals restructured to ensure that out state remains solvent. That doesn't mean that we have to destroy the current way of life of union workers. We can institute changes that affect new hires, we can offer early retirement to those who are at the end of their careers and we can make minor changes to the current benefit packages (like increasing employee contribution by 2% and decreasing State contributions by the same amount making the contributions equal at 5% each).

Wisconsin shows Delaware how it's done

Delaware Governor Jack Markell was acosted by a state worker at a townhall this week who asked "When am I going to get a pay raise?"  Markell answered, "I don't know...I don't know..."  With everything going on in Wisconsin with the public employee unions protesting Gov. Scott Walker's decision to close the state's $1.8 Billion shortfall by asking the public employees to...*GASP* contribute to their retirement plans, healthcare and the bill would " make various changes to limit collective bargaining for most public employees to wages. Total wage increases could not exceed a cap based on the consumer price index (CPI) unless approved by referendum."  In addition, Walker's bill cuts elected official and political appointee retirement calculations down to public employee levels.  Currently, those officials are given higher payouts.  Another contention with the bill is the removal of collective baraining for certain state workers such as family child care workers,  University of Wisconsin Hospital and Clinic employees, University of Wisconsin faculty and academic staff.  In short, "This bill limits the right to collectively bargain for all employees who are not public safety employees (general employees) to the subject of base wages. In addition, unless a referendum authorizes a greater increase, any general employee who is part of a collective bargaining unit is limited to bargaining over a percentage of total base wages increase that is no greater than the percentage change in the consumer price index."

You can read the bill summary here and the full bill here.

The bill calls on public sector employees to up their healthcare contribution from 6% to 12% (the average private sector employee contributes 24% to their plan) and it calls on them to contribute 5% to their pensions while the average private sector worker contributes just over 50% to their plans.

Walker's bill has led to teachers unions and other employees unions staging walkouts, using CHILDREN as protest tools (despite the fact that most of the children have NO IDEA why they are protesting).  It has led to teachers and other union members carrying signs depicting Scott Walker as Hitler, placing bullseye targets on him and even calling Gov. Walker, a dictator.  The video below depicts some of the scenes from the Wisconsin protests and the rhetoric (that I remember the left BLASTING the TEA Party for after a left leaning psychopath shot a Democrat Congresswoman):

So what does this have to do with Delaware?  Well, as I mentioned, state workers (and their union leaders) right here in Delaware are beginning to call for pay raises and they have been resistent to any changes in their current compensation package.  Delaware is facing a $280 million budget shortfall and since Delaware has a balanced budget amendment that gap must be closed.  Delaware's largest employer is the state of Delaware which is followed by New Castle County government and therefore, government workers are one of the greatest costs to the state.  This includes police, EMS, teachers, inspectors, clerks, mechanics, electricians, construction workers, drivers, office managers, etc. and is not limited to public safety employees despite the fact that the left will point to teachers, police and EMS technicians as the only people affected.

I want the people at the top to take the cuts first like everyone else.  I want to see our politicians and public servants sacrificing FIRST.  Governor Markell likes to talk about the 20% paycut he took but he fails to mention that the office of the Governor had an 18% pay INCREASE when he was elected.  He then took a 10% pay cut right off the top, meaning that the office of the Governor actually got an 8% pay INCREASE when he took office.  Now he has taken another 20% pay cut after his 8% raise.  So he has now finally taken a 15% pay CUT from where he SHOULD have been when he was elected.  So while I would like the cuts to come from the top, there comes a point where we have to realize that cutting the pay at the top will not solve all of the budget problems.  There also comes a point where the state has to recognize that it is living beyond its means and needs to change the way it does business. It’s time to make cuts and these unions and state workers with these incredible compensation plans to recognize that they have been living beyond their means: http://sunshinereview.org/index.php/Delaware_state_government_salary

State workers and their union leadership are beginning to spend time and money pointing out that the state workers are being punished for planning for their retirement and that they are the scapegoats for the economic disaster.  They are saying that state workers make less in pay than those int he private sector in exhcange for better benefits.  I decided to look into these "facts" and what I've found is a bit disturbing.  The average salary for FT state workers in Delaware is $50,124.  The average Delaware worker’s salary (including public AND private sector employees is $46,270. Some simple math helps you find out that the average private sector worker makes $42,416 which is almost $8,000 LESS than state workers. Not to mention, we private sector workers pay for our medical plans…which the state workers don't.  State workers (as illustrated below) pay nothing for their healthcare or their family's healthcare unless they want the ultra-high end plan with little to no office co-pays and other "perks" that many private sector employees don't even have the option to purchase. The chart below details the payouts from the state and from the state employees per month in order to receieve the plans.  You will also notice that they pay a whopping $193 per mth for the highest end plan.  The average private sector worker pays around $250 per mth for a MUCH less comprehensive plan.  In fact, the avg private sector worker pays $250 per month for the same plan that the Delaware state workers pay $82.44 per month for.

Oh and their definied benefit package which they call "prudent planning"?  They contribute 3%. jus like the average private sector employee.  So what is the difference?  The state contributes 7.5% MORE to that plan but in the private sector you MIGHT get the 3% matched by your employer if you are lucky.  The real problem is that the average private sector employee contributes to a defined CONTRIBUTION plan that grows as you contribute which is called a 401(k) whereas the state workers contribute to a defined benefit package that grows at an ASSUMED rate (meaning it could grow less or more) of 8% per year.  NOTHING is growing at 8% per year right now and that is why these plans are rarely offered in the private sector.  These plans are usually only seen in industries where unions control the collective bargaining and negotiations.  Unions have such a stranglehold on political candidates and wield so much power today that they often have a TREMENDOUS advantage over corporations and even governments.  Let's remember here that While that doesn't mean we shouldn't honor the committments we've made in the past, these are CLEAR reasons why we should follow the example of Gov. Walker in Wisconsin and restructure the deals going forward.  A final look over the pension funding shows that Delaware has about $700 million in unfunded liabilities.

It's pretty clear from our look over the FACTS that the union leaders and their spokespersons are at best misleading Delaware citizens and at worst, out right lying to the people.  I will leave it to you to decide which it is but the facts are unmistakeable.  State workers make more than private sector workers on average, they pay less for their healthcare benefits and they contribute far less than the average state worker to a pension plan that most people couldn't even dream of.  It's time to fix our fiscal house and it's time to decrease the size and scope of our government.  Noone wants to see people unemployed but unfortunately, that means we have to look into how to make government more efficient and how to transition public employees to private sector employment.  Of course, that means that the government will have to actually help the private sector create jobs, something Alan Levin and Jack Markell can't seem to wrap their arms around...but that's for another post.

Where is our response?

In the last 3-4 years Delaware has lost two auto plants, an oil refinery, 750 jobs at HSBC and now hundreds more will be leaving Wilmington Trust thanks to the merger with M&T Bank.  These are just the bulk losses.  Gone with them are THOUSANDS of support jobs and small businesses whose customer bases lost their jobs in these major layoffs.  Since 2007 it has been one hit after another but what do we hear from our leaders in Dover?  *Crickets* *Crickets*

To be fair to the Markell administration the auto plant closings occurred on the watch of Governor Minner.  Of course, Jack Markell was Gov. Minner's Treasurer and he was fully aware of the economic problems we faced and if he wasn't than he was derelict in his duties.  The reality is that in just a few years during two Democrat administrations, Delaware lost more than 3,700 jobs.  For all the economic star power in the Markell Administration, including Alan Levine (of Happy Harry's fame) whose cross the party lines appointment was seen as genius and an illustration of a Governor who understood the challenges in front of him.  Democrats and Republicans alike praised Markell and to this day he is given a pass.  No one from either party questions the fact that Delaware has not created jobs.

You would think that the administration would have worked to bring new businesses in to replace jobs being lost but you would be wrong.  The Chrysler plant, when abandoned by Chrysler was not turned over to flourishing companies like Ford, Hyundai, Nissan or Toyota.  Instead it was sold to the University of Delaware who will now embark on a decades long cleanup project to make the facility into a new medical complex.  They've promised grandiose plans that will lead to thousands of jobs but of course, they're long term projections.  The old GM Boxwood plant?  It's now owned by another company with lofty long term goals and no immediate results.  Fisker will employ 2000 autoworkers when it finally reopens the plant and begins making taxpayer funded electric cars.  Never mind the fact that every car it sells is subsidized 50% by state and federal taxpayers and that in all likelihood each car built will represent a net loss of taxpayer dollars.  Valero closed back in 2009 and nearly 1000 people lost their jobs.  In what represents the best hope for the creation of new jobs, it is expected that the plant will reopen under new management (PBF Energy, a foreign owned company has agreed to take ownership) this April and that 700 jobs will be picked up.  Still, that is assuming that everything goes to plan.  As for the more than 1400 jobs lost in the banking sector?  *Crickets* *Crickets*

Yet, still, we hear NOTHING from Dover and even LESS from the opposition party.  Where are the Republicans?  Why aren't they calling on Markell to produce jobs the way we hear John Boehner and Paul Ryan calling on the Obama Administration?  It's called "The Delaware Way".  The misnomer is that this is a unique brand of civility in Delaware but in reality it is nothing short of cowardice and wanton disregard for the business of the people.  It's very much the reason why there is single party rule in Delaware.  The Delaware Republican Party is scared to DEATH to call a spade a spade.  Sure, you may see a few people (like me, Charlie Copeland, Dave Anderson...etc.) with blogs who are critical of the administration but where are the press releases from the Delaware GOP leadership railing against this hemorrhaging of jobs and the lack of economic growth?  Far from being an act of civility, this silence is an act of servitude where the Delaware GOP ignores the transgressions of Delaware's ruling Democrat Party and in exchange is allowed a few token election wins.  Who would want to vote for a party that just does what the other party wants them to do? 

I'm calling on the Delaware Republican Party to STAND for something.  STAND UP for these people who have lost their jobs.  STAND UP for these people are desperately in need of help.  BE the GRAND old party again.  Stop maintaining the status quo and start rocking the boat.  Delaware needs leaders and there are people in the Delaware GOP who I KNOW can provide the leadership we need in order to turn our situation around.  What we need is for those leaders to STAND and to stop waffling.  Make your CASE...and the people will follow you.  I'm reminded of one of my favorite movies....Braveheart:

Craig: Sir William, where are you going?

William: We have beaten the English, but they'll come back because you won't stand together.

Craig: Well what will you do?

William: I will invade England and defeat the English on their own ground.

Craig: Invade? That's impossible.

William: Why? Why is that impossible? You're so concerned with squabbling for the scraps from Longshank's table that you've missed your God given right to something better. There is a difference between us. You think the people of this country exist to provide you with position. I think your position exists to provide those people with freedom. And I go to make sure that they have it.

---

Robert the Bruce: Wait! I respect what you said, but remember that these men have lands and castles. It's much to risk.

William: And the common man who bleeds on the battlefield, does he risk less?

Robert the Bruce: No, but from top to bottom this country has no sense of itself. Its nobles share allegiance with England. Its clans war with each other. If you make enemies on both sides of the border, you'll end up dead.

William: We all end up dead; it's just a question of how and why.

Robert the Bruce: I'm not a coward. I want what you want, but we need the nobles.

William: We need them?

Robert the Bruce: Aye.

William: Now tell me, what does that mean to be noble? Your title gives you claim to the throne of our country, but men don't follow titles, they follow courage. Now our people know you. Noble, and common, they respect you. And if you would just lead them to freedom, they'd follow you. And so would I.

---

Response to the SOTU (and to Gov. Markell's SOTS)

Our nation still stands.  While other nations around the world are collapsing like dominoes in a chain, America remains a land of freedom and a place where men can rule themselves by law.  The foundations of America put in place by our founders and the genetic spirit of liberty passed down through our nations DNA remains strong.  With that said, our state and our nation are in crisis.  Rampant overspending has taken root and we have drifted away from the principles on which our nation was founded.  Those principles of limited government, fiscal responsibility and free markets have been replaced by a massive and ever growing government, reckless fiscal policy and government intrusion into almost every industry. 

The 2008 election was won with the motto of "Hope and Change" and too many of us are still waiting to see those things happen.  Congress passed a huge universal healthcare bill that nearly 70% of the nation disapproved of and while the Congress removed SOME of the more divisive provisions, like federal funding for abortions and the public option, the Obama administration is working them back in through regulations.  In the last SOTU our President chastised the Supreme Court and divided the nation.  In Delaware a long term political icon, former Congressman Mike Castle was defeated by a challenger who embraced the TEA Party values (those original principles of our nations founding).  By November 2010, America took the "hope and change" mantra into its own hands.  They elected conservative leadership, most backed by TEA Party groups across the country.  It happened in New Jersey, Pennsylvania and Virginia but it missed Delaware. 

The national debt stands at more than $14 Trillion and Delaware's debt is $9 Billion.  Our elected officials have only grown MORE irresponsible over time and they have spent, spent, spent and taxed, taxed, taxed without remorse.  New Castle County has blown through almost all of their $200 Million surplus and their answer?  Raise fees and maybe taxes.  Folks, the time for a discussion about fiscal responsibility is here.  The Obama administration has spent $4 Trillion in 3 years.  His spending habits have trickled down to the states.  Delaware has a Constitutionally mandated balanced budget.  That means that the state legislature MUST balance the budget every year.  Sounds great right?  The problem is that every year our structural deficit (that's the amount our state "overspends") grows every year.  Last year it was over $200 Million and we expect it to be more than $300 Million this year.  Last year state workers took a 2.5% pay cut and a myriad of taxes and fees were raised to close the gap.  Delaware even got deeper into the gambling business and still we are more than $300 Million overspent this year.

What our nation needs now is a fiscal intervention.  We must get in touch with our inner Calvin Coolidge.  Now is the time to roll back spending and get our debt under control.  Delaware must live up to our nickname "The First State".  We must lead the nation into prosperity by reestablishing fiscal sanity.  It's time to get our public employee pensions under control and back in line with the private sector.  We must ensure that our state is debt free.  Our federal government must do the same.  We must roll back spending and cut in EVERY department.  Yes, even the Department of Defense must make cuts.  That doesn't mean we should leave our nation unsecured.  We must maintain the security of the nation but there are plenty of areas where we can cut fraud, waste and abuse, out of date programs and overpriced services.  Our nation prospered for more than 100 years without massive government spending by relying on the goodness of our society and placing the trust largely in faith based organizations.  Americans are the most generous people in the world, especially to our own people.  It's time that we take back the responsibility of caring for one another from the government.  This is not all theatrics and theoretical either.  There is a practical reason to reduce our spending.  Reducing our spending will lead to the elimination of our debt.  This stabilizes our economy, protects the value of our currency and it leads to more certainty in the markets.  Spending cuts alone, like tax cuts alone, are only a temporary fix.  There is a ceiling when one is undertaken without the other.  That's why our state and federal taxes should be reduced by at least 10% across the board, our state and national corporate taxes should be eliminated at least for 24 months and our state and national death taxes abolished.  Cutting taxes puts more money back into the pockets of individuals and businesses who will invest in more innovation and increase the economic output of America.  Further, every time taxes are cut, under Reagan, under Kennedy and under Coolidge, revenue to the government has increased.  The greatest benefits were realized under Coolidge when spending AND taxes were cut.  Then, America REALLY prospered.

Cutting spending and taxes will by extension cut the size and scope of government at all levels.  Under the Obama administration, we have seen an expansion of executive power not seen since Teddy Roosevelt.  Anything that the administration wants, that the Congress cannot pass, the administrations regulatory czar  Cass Sunstein does with regulations.  We've seen it with provisions in the healthcare bill like death panels and with restrictions on energy usage and pollution.  We must shrink the power that the federal government holds back to where it was intended to be.  Government was never intended to be efficient because government is powerful.  The more efficient it becomes, the more control it usurps and the more liberty we lose.  In Delaware the state is likewise becoming too large.  They are telling us where we can use the phone, where we can smoke and what we can throw away.  Our lives are becoming decided by bureaucrats instead of ourselves.  We must take back responsibility for our own care.  Our founders believed that man could rule himself and I agree.  It's our time, we must seize the day.

Our markets face an increasing encroachment by the federal government.  Our auto industry, banking industry and our energy industry are all but under the direct control of our federal government.  Labor unions now control the auto industry and our teaching corps and they have formed an unholy alliance with the Obama Administration.  The time is now to end this encroachment, get the government out of our markets.  Our federal government needs to get out of our industries, reduce burdensome regulations and create a fiscal climate where the private market can thrive and grow.  Here in Delaware, we've heard more than our fair share of times that Delaware is creating a "partnership" with business.  I must respectfully ask, where's the beef?  Corporations like GM, Chrysler, Valero and now HSBC are fleeing Delaware left and right.  I think it's time that Delaware's government did what it said it would.  I think it's time that the state created a climate where private business can thrive. 

You can listen to President Obama and Governor Markell and you can take in their words and what you will end up with is....9.8% national unemployment (8.5 in Delaware) and jobs leaving the state and nation like water over Niagara Falls or you can listen to our founders and return to their original principles and get real prosperity.