Archive for October, 2008

The Maine Casino Question…

Posted: 31/10/2008 in Uncategorized
Tags: , , ,
Question 2: Citizen Initiative
Do you want to allow a certain Maine company to have the only casino in Maine, to be located in Oxford County, if part of the revenue is used to fund specific state programs?
The Casino Question

Have you ever noticed how hypocritical we are as a state? Take the casino question, #2 on next Tuesday’s ballot, for instance. The general gist of the opposition to this question is that Maine doesn’t want gambling to take place within the state borders. OK, that’s fine if it were true, but it’s not. Maine embraces gambling, and the hundreds of millions of dollars the pastime generates every year for the state. Games of chance abound, and can be had in practically every corner store from Kittery to Madawaska and beyond.
Perhaps what the opposition is saying is that they don’t want competition for their own games of chance, aka gambling. We’ve already got the Powerball, Megabucks, Pick Three and Pick Four, scores of scratch ticket games as an organized gambling ring controlled by the state, eager to use the money to fill it’s nearly empty coffers.
Then there are all of the Bingo and Beano games being held in church halls and VFW posts across the state. Heck, even McDonalds hosts a game of chance. So is the question really about gambling? I think not. I believe the question is more one of control, rather than do we want to allow gambling to take place in Maine. What about all of the harness racing that brings income and people to the state fairs? The Racino in Bangor? High stakes bingo in Old Town? Gambling is a part of life in Maine, good or bad, and it’s here to stay, and it will grow. It has to, it’s the nature of the beast.
When it comes to casinos, I believe the state doesn’t want them because they will not be able to garner as large a percentage of income as they do with the lottery games they are hosting, and encouraging people to gamble away their earnings on. So to argue whether the point as to whether or not to allow casinos is pointless. Let them in and grab the tax dollars from them while the grabbing is good.
This casino to be built in Oxford county is reported to be planning on hiring over nine hundred employs after it opens. That’s a lot of jobs for an economically challenged area, such as Oxford county is. Why shouldn’t they be allowed a chance to grab some of the tourist dollars the industry can bring in? After all, LURC gave the go ahead for Plum Creek to develop the dickens out of the Moosehead region because of the tourist dollars they’ll be generating, right?
The only problem that I have with this question is that it asks if we want one company to have a monopoly on the casino business in Maine. I think it would be better if the question simply asked if we want to approve of allowing casinos to be operated in Maine. What good is one casino in relation to the entire state? Shouldn’t Aroostook be allowed a chance to have one as well?
And don’t start in with the crap about all the bad stuff that casinos cause. If it weren’t for the people that frequent the casinos, there wouldn’t be the problems. People need to be held responsible for their actions. If they can’t handle the gambling scene, they shouldn’t participate.
We have a chance to do a few things here, and we can do them right if we’re not stupid about how we go about it. For one thing, we have the potential for another revenue stream to fund Baldacci’s failing government and all of those pet programs, like Dirigo, the has been health program. Actually, Dirigo should be shot in the head and buried behind the barn, like any other useless and dying horse. Why let it linger in the hopes that it may get enough sympathy business to stay afloat.
But anyway, the state can benefit from a cut of the purse, the county and community can benefit from the property taxes, and the feds can suck up some income taxes at the same time. In what way is that a bad thing?
Maine has already said, by approving the Plum Creek plan that they want to become a second class state by catering to people from away. Why aren’t we going full force on this casino issue? Vote yes on #2 and let’s roll the dice into the future, shall we? It’s an excellent chance to solidify our choice to become the place to go to.
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Ethanol’s dangerous consequences

Back during May and June of this year(“08) I made a few entries regarding ethanol, and its use when mixed with gasoline and diesel fuel. In Watering Down the Whiskey I compared the act of adding ethanol to gas in an E10 mixture to watered down drinks at the bar. You still get fuel, but it now lacks the power it had when drank straight out of the bottle. I also mentioned that there were a lot of other problems, and implied that sooner or later the public was going to start to get wise to them, and then ethanol would begin to fall out of favor.

It hasn’t taken as long as I thought it would, and already the real dangers are coming to light. We’ve already seen the price of food stocks rise over the diversion of food crops of corn and some grains from the crops for food to the crops for fuel categories. Have you bought bread recently? I almost exclusively buy a store brand split top wheat bread at a certain retailer. Last year at this time I was paying about $1.19 per loaf. Last night I paid $1.59 for the same bread. Quite a hike in price for a year’s passage of time isn’t it?
So now it’s starting to get a little colder in the mornings. Anybody notice the car running funny with the E10 mixture if you use it? Fortunately, it’s pretty much restricted in its use so far, but the eventual plan is to have it in every tank in the state.
Did you know that ethanol is much more volatile than even gasoline? I came across an article from The Washington Post that I saved for future notes that contained some interesting points about this fuel. The article goes into some detail as to how the flammable nature of it can cause worse problems than any other fuel, and mentions “A 2006 derailment of 23 Norfolk Southern Corp. tank cars in New Brighton, Pa., sparked a fire that burned for 48 hours and forced the evacuation of seven blocks, according to federal safety officials.” Imagine a few tank cars sitting on a siding in downtown Portland, or even worse, some small junction where there isn’t any full time, well trained fire personnel for miles around. What then? Will it be worth the extra few pennies for every fill up, just so you can line the pockets of a subsidized industry?
The Dems talk about how evil Bush and Cheney have been and the favors they’ve given to their buddies in the oil industry, but nobody seems to be wailing about the same favors and breaks the ethanol industry seems to be getting. But we can fight gasoline fires with a special foam, which most larger departments have. Ethanol requires a different foam, which most do not have in Maine. The use of ethanol is not really widespread enough to justify the cost when put to budgetary testing.
Another accident mentioned in that article is from Baltimore, MD, where “…a tanker traveling from Baltimore to a processing facility in Virginia flipped in Maryland and spilled 6,800 gallons of flaming ethanol, killing the truck’s driver and torching a half-dozen cars. The Baltimore City Fire Department did not have the right foam and struggled to put out the fire, which burned for hours. Crews from Baltimore-Washington International Marshall Airport eventually helped smother the flames.?
This brings to mind that cute little bend in the freeway running through Portland just at the Washington Street exits. Wouldn’t that be a you know what at 4:45 PM? Especially on a Friday evening! One of the worst aspects is that the alcohol, which is what ethanol really is, mixes readily with water, and still burns. And to make matters worse the flame is practically invisible in daylight, and gives off no smoke. OK for the environment, but what about the public?
Imagine a tanker on Forest Ave breaking open for some reason, spilling the tens of thousands of gallons they carry onto the street. The fuel rushes down the side of the street looking like harmless water in the street gutters, except its burning and the little kid that likes to splash in water can’t see that it is burning. Hmmm. Are we that stupid as a society that we’re all going to buy into the lie of global warming and simply take this stuff without putting up a fight?
Check with your local fire departments and see if they are prepared to fight ethanol fires should one occur. If they are not, find out why not, and then start doing one of two things. Get them the funding and training they need, or start protesting your local government to ban the substance in your community. The danger is simply too great for what little, if any benefit this fuel mixture provides to us as a society.
We have a recurring problem in this country in that we seem to fail to learn from experience. We didn’t learn from the ’70s oil embargo and the resulting gas rationing, and we haven’t learned from Katrina’s wake, and we still haven’t learned from the current economic collapse and last winter’s unprecedented heating and energy costs. Already with the current decline in pump prices the major auto manufacturers are rethinking their leanings towards smaller, more fuel efficient vehicles.
Prices will not remain this low for long. After next week’s elections we will see the prices start to climb up again. While I don’t believe we will see last season’s high’s matched, we will climb towards those marks. And in our arrogance, we are going to be just as unprepared as last year. The signs are there, why don’t we see them?
The Cato institute just released a study regarding the nations gubernatorial fiscal policies, and our own governor, John Baldacci came in with a score of 56, not real good, but not real bad, either. Just and average Joe, sitting someplace between two shores.
According to the report Cato gave Baldacci a score of 56, and a grade ranking of B. Only three governors received an A grade; Florida’s Charlie Crist, 84, S. Carolina’s Mark Sanford, 68, and W. Virginia’s Mark Manchin, 67. 13 other governors shared Baldaci’s B grade, with scores from 55 to 63.
Table A-1 on page 10 looks at spending and revenue variables, with Maine showing these results; spending score, 74; proposed changes in per capita spending 0.0%; actual changes in per capita spending, 4.0%; revenue score, 50; and changes in revenue from proposed and enacted tax changes, 0.2%.
Table A-2 on page 11 looks at tax rate variables, with Maine showing these results; tax rate score of 50; 0.00 change in the top individual, corporate and sales tax rates and 100 change in the cigarette tax rate.
Let’s look at the summary they post of Baldacci:

Maine
John Baldacci, Democrat
Grade B
Legislature: Democratic
Took office: January 2003

Residents of Maine face one of the highest state tax burdens in the nation. Thus Governor Baldacci’s efforts to cut property taxes on homeowners and get rid of an uncompetitive property tax on business equipment were much needed. He also proposed recently to reduce the state’s top personal income tax ate. However, the governor has supported substantial tax increases on consumers 0f tobacco and alcohol. On spending, Baldacci’s has a good record, although he has supported large spending increases on his Dirigo health care plan, and he opposed a referendum to put a legal cap on state budget growth.

It’s an interesting read, you should go check it out here.

We’re on the final leg of this year’s political marathon, having rounded the last corner and have the finish line in sight. Therefore, I thought I’d take a closer look at some of the issues and make some decisions. Sort of. Actually, I’ve already made most of my decisions; I’m really going to argue in favor of those positions here. We have a few statewide issues to deal with, and the first one is actually question #1 on the ballot regarding the repeal of the often called “soda tax.”

Maine’s newly enacted beverage tax, like most taxes, was given birth in a closed room, with the lights off and the shades drawn so the public could not see what was happening. Sort of like the birth scene from Rosemary’s Baby. For those of you that have not seen, or don’t recall the movie you can check it out here. However, that’s the way liberal politics work, behind closed doors.

In a nutshell, this question is on a veto referendum to repeal this tax. The purpose behind the tax is supposedly to increase the funding for Maine’s Dirigo health insurance scheme. According to some reports, this program is seriously underfunded, and proponents saw this as a non-volatile way to obtain financing for yet another well intended, but ill conceived socialist program by the government of Maine.

According to legislative reports, it will cost us 2.6 cents for a can of beer, 7 cents for a 750-milliliter bottle of wine and just under 4 cents per 12-ounce soda. Just what we need, more hidden taxation to increase the cost of living. However, the biggest reason behind my opposition to this tax is not the way it was enacted, but the reasons behind its very existence.

Dirigo may have noble intentions, but in reality is nothing more than another government grab for power, as well as another kick in the shins of freedom. According to “A study done by Todd Gabe, Associate Professor of Economics at the University of Maine, found that the higher taxes would lead to the loss of 395 full- and part-time jobs in the beverage industry due to lower sales. This would mean Mainers would lose out on $8.8 million in wages and salaries.” (link here) with an economy that is currently in a failure cycle, we really need to do everything we can to increase the number of employment opportunities here in Maine, not discourage them.

Of course, the opponents of the repeal, including comrade’s Baldacci and Elizabeth Mitchell, say that the tax really doesn’t affect the people of Maine. What they are really taxing is big business. In this case, the larger distributors and bottlers of beverages sold here in Maine. They obviously do not understand how business works. These taxes may not be directly paid by the Maine consumers, like the 5% sales tax we pay, but we still are hit with it through a higher product cost.

Taxes are not absorbed by business, but passed on to the consumer as part of the cost of the finished goods. A tax is nothing more than an expense by business. In addition, being an expense, it is merely calculated into the cost of the wholesale and retail prices of what we buy in the stores. We don’t see it, so we don’t actually have to think about it. And in the long run, what we don’t know, won’t hurt us. At least that’s the premise behind this sort of taxation philosophy.

When we buy a gallon of gas there are excise taxes on both the federal and state level that are added into the pump price. When you get your receipt after paying for the gas, you do not see these taxes broken down. Since we don’t see them, we don’t complain, and in this fashion lend support and acceptance to these taxes. The same will hold true to the beverage tax. Out of sight, out of mind, and all that.

The Dirigo health system is not an effective way of covering medical expenses. With fewer enrollees, and I would presume higher risk and less healthy enrollees at the outset climbing on board, the costs incurred by payouts would be greater, and not spread out over a larger population, resulting in its funding problems.

But there are other items of malfeasance that make the bill an onerous one to the Maine taxpayer, and should be discussed in public as well. As I mentioned, this bill does not tax the consumer directly, but through business at the wholesale and manufacturing levels. But there’s more- it also takes 5 million dollars from the tobacco settlement fund, which was supposed to go towards care of people with smoking related illnesses and tobacco cessation programs.

This bill also takes 3.6 million dollars from the general fund, which would have been better used to reduce the tax burden across the board, and imposes a 1.8% surcharge on paid insurance claims. That means you get less back from the insurance companies, also increasing the cost of health insurance, which Dirigo is supposed to reduce.

I guess a good analogy here would be that funding Dirigo is kind of like a bathtub overflowing. The smart thing to do would be to turn off the water and clean up the mess. Then take your bath. Unfortunately, the democrats think that we should get a bucket, pick up the water on the floor and pour it back into the tub. Meanwhile, the faucet keeps pouring water into the tub and overflowing onto the floor. It creates a situation whereby you keep taking water from the floor in an attempt to solve the flooding problem, instead of turning the water off, which is the real source of the problem.

This referendum question, called a “peoples veto” is a step towards turning that faucet off. Taxation has become a detrimental issue to the growth of Maine as a state. We need to reduce the tax burden and figure out a way to pay the bill that we have without creating new ones. Let us pay off what we owe first. This repeal will not eliminate the Dirigo Health Program, but it will mandate a change in the way the program is funded. The state needs to learn to make Dirigo pay for itself, just as any independent business would have to do. If you cannot fund your business, then you must shutter your business. To allow the government to operate a program in any other way makes that program not a business, but a socialist handout in the form of welfare.

Vote YES on question #1 and start turning that faucet off.

Dollars for Dollars…
So here we are on the tailwind of a rush job appropriations bill of 700 billion dollars that was supposed to ease the so-called financial crisis and make the boogey man go away. What happens? Bush decides to spend another 250 billion of our money for more bailout tactics that will not work. Why? Because as a nation, we have become financial morons, that is why.
In their misplaced desire to make republicans look bad just before a Presidential election, the media jumps all over the place trying to pin the tail on the elephant, instead of the donkey. Which is where it appropriately belongs? There has been some interesting articles favoring all sides of the argument, and if you take out the ones that exist simply for the purpose of degrading Bush’s reputation, some interesting facts become known.
One of the most interesting is one from Investor’s Business Daily that parallels the economy of today with that of the era of the Great Depression. According to a graph contained in America’s Second Wake Up Call (10 October ’08) the current crisis has been rolling downhill for several years. Moreover, as much as the Liberalies want to blame Bush, the decline is actually Clinton’s bastard love child. It started at the turn of the century, after the Clinton machine forced the subprime market into the public sectors banking model.
For those of you not wholly cognizant of how the subprime market works, it is actually a fairly simple affair when put into common everyday language. In subprime, loans are given to people who really do not deserve credit. In some instances, loans were even given out to people who had no verifiable income. However, that is OK because the banks and lending institutions were allowed to bundle the loan portfolios and resell them to investors as something called a “mortgage backed security.”
The investors made their money by the interest that was paid by the borrowers. That would be the person down the street who makes 40K a year, bought a 300K home, and walked away from the property thereby defaulting on the said loan, eliminating the interest income the holders of the paper no longer had.
Mortgage backed securities have actually been around since 1938, but subprime is a relatively new term and category in the lending industry. The main market is targeted to those people who are considered to be high-risk recipients of credit. These include lower income and disadvantaged people who cannot afford to establish good credit for one reason or another. While the emphasis is on the housing market, subprime also includes non-secured lines of credit as well.
Retail chains and other sales centered businesses who offer credit, such as department stores, cell phone companies, mail order etc use this tool as a way to boost their sales volume. Unfortunately, plastic money is not real money. And this we have the problems we are currently experiencing. It appears to me as though we would have had a market meltdown at some point, but my feeling is that it is happening now in large part due to the Presidential elections. (Yeah, I know, you think I have no idea what I am talking about. However, follow along for a few more lines.)
We conduct business here in the United States with the US dollar. What we buy, and what we sell is based upon that currency. The value of that currency is based upon a comparison to certain other currencies of the world, and that rate is called the US Dollar Index. In looking at the seriousness of the situation and its history, it appears as though the worst of this problem started when the price of our energy started to skyrocket last winter.
The price of gasoline was shooting through the roof, as well as heating oil, natural gas and other forms of energy. People had to choose between making their house payments and keeping warm and filling up their cars so they could get to work. Many claimed that the price of oil climbed because the Bush/Cheney political machine wanted to suck up as much obscene profits as they could before leaving office. However, that is not really the case. The cost of oil is driven more by the supply and demand ration more than anything else. For this claim to have substance, the supply of oil would have to have been curtailed, but it was not.
In fact, several reports I read through earlier this year stated that the supply was with 5% or so of demand on a consistent basis. So where was the problem? The problem was that the value of our currency plummeted, and it cost the US more to purchase a barrel of oil than it had in the past. A 30 September ’07 article from MSNBC claimed, “The dollar touched an all-time low against the euro on Monday, extending its biggest three-month decline in three years.” Even then, the solidity of our currency was disintegrating; making every single item we imported cost more. Since the US no longer has an intrinsic value to its currency, being fiat based since FDR’s era, credit has to be the main indicator of value.
The value of the dollar was set in March of 1973 at a value rate of 100.00. The index value or rating can go higher or lower as compared to the value of currencies in twenty other nations. As of today, 14 October ’08, the current exchange rate of one US dollar to one Eurodollar is 1.000/1.369. This means that if you want to go to Europe, and buy something, a product at one Euro will cost you about sixty cents. Last year at this time the exchange rate was about 1.000/1.600 or so, which meant the same transaction would cost you forty cents. In the time period of about the second week of January ’08 until early March, the rate was much worse. At one point, it was a rate of about 1.00/1.265 or so, which means the same transaction would have cost about seventy-five cents.
This plummet came at the same time it became apparent that Obama was going to be the selection as the democrat’s candidate. While Clinton was still in the running at that time, most international analysts did not place a lot of weight behind her chances. While I do not care for Clinton’s positions or tactics, she is still less of a tax mongering Socialist than Obama is.
But anyways, because of the oil crisis, people began to default on their loans, being unable to pay for everything they wanted due to the increasing energy costs. The Dow Jones and NASDAQ, as well as other major exchanges are all heavily weighted with financial institutions. When these companies started to buckle under the declining income ratios, their stocks plummeted, and the result was the crashing of the worlds markets.
Bottom line is, at least as I see it, is that if the subprime market had not been foisted onto the banking industry, and perpetuated by lawmakers such as Barney Frank and Pelosi, we probably would not be in the mess we are in today. Bush turned the recession that he inherited from Bill Clinton around and was making headway by trying to implement legislation that would have put an end to these risky lending practices, but was stymied at every turn by Frank and the democrat machine trying to get every person a home and credit to buy what they want without consequence.
It needs to stop, and it needs to stop now. By continuing to labor under the Marxist notion that all people should have equal possessions, we will continue to destroy our economy. Sinking trillions of dollars into buying bad credit, and starting new programs to distribute credit to people that cannot afford it is a ludicrous plan. It had damaged this nation’s credit and credibility, possibly beyond repair. Nobody is bailing me out of my position, why should I have to bail somebody else out with my tax dollars? Have we already sewn a hammer and sickle onto the face of Old Glory?