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This page includes posts from
December 1-31, 2007 in the usual reverse
order.
Each posting on the home page is perma-linked to these archive pages.
December
30, 2007 One of the better Delaware political weblogs is running a long piece about the proposed Fair Tax, complete with lengthy running commentary. It's a topic that I've addressed here before, but without expressing any fond hopes for the proposal's passage. Bruce Bartlett, whose 2004 NRO piece I found persuasive, has done some more homework on the subject. I highly recommend his newest article, not least of which because he takes the time to write a detailed, well-supported argument against the Fair Tax. I certainly understand some of the motivation behind the Fair Tax. Lots of folks are deeply unhappy with the income tax system, especially in the ways that so many people of large means and small make no serious contribution toward our common welfare. A national sales tax, at least in theory, holds out the promise of significantly altering the maldistribution of our tax burden. Nonetheless, it is an empty promise, bound to disappoint the Fair Tax's most fervent proponents. Their efforts would be better directed toward reducing the overall cost of government, rather than attempting the wholesale replacement of the Internal Revenue Code. That goal has a least a prayer of a chance at succeeding. Hat tip: Tax Prof Blog.
December
29, 2007 Those of us who practice in Delaware's Chancery Court know that it's a very serious place. In my experience, however, the Chancellor and all of the Vice-Chancellors seem to welcome the occasional opportunity to lighten up the proceedings, at least a little bit. The most recent example, from the usually very reserved John Noble, deserves special commendation. A public Louisiana pension fund is suing Countrywide Financial Corporation, as a shareholder, over access to the company's books and records. A prior decision in the litigation led to a Countrywide motion for reconsideration of Noble's ruling. As he noted:
A new footnote accompanied this sentence: See Abner Mikva, Goodbye to Footnotes, 56 U. COLO.
L. REV. 647 (1985) (“I consider footnotes in judicial opinions an
abomination.”). I do not share that view. Now, that's funny right there, I don't care what anyone else says. I have my reasons. Here are two of them. In one 2006 case in which I represented the State, Noble's 48-page opinion included 155 footnotes. Another Noble decision in a case I handled for DelDOT, also issued in 2006, took up 128 pages, in which 330 footnotes appeared. So when Noble wrote that new footnote in the Countrywide case, I could just see him grinning as he did.
December
24, 2007 Best wishes of the season to you and yours. Here's a link to something worth watching, in anticipation of tomorrow--a Celtic Woman singing the Wexford Carol.
December
23, 2007 You might think that someone who's trying to defraud you over the Internet would at least be careful with their grammar and spelling. That kind of attention to detail would help provide the necessary (but false) assurance that you are dealing with a genuine bank. You would be wrong, however, if the crooks in question are the same ones that sent me a bank account security spam email today. These yahoos managed to mangle the subject line:
Then they compounded their idiocy:
Do tell. Pardon me if I don't do what you ask--you lazy sumbitches. By the way, I don't have an account with the National Building Society. Geez.
December
22, 2007 I've seen several holiday-related videos from various candidates for the upcoming presidential election. This one from Fred Thompson is the best, in my opinion. Hat tip: Glenn Reynolds.
December
22, 2007 I posted my newest golf book review tonight, which you can read here. Andrew Greig's memoir, Preferred Lies, is one of the year's best golf books.
December
20, 2007 This week Dave Burris sent out a broadcast email announcing a series of newly pre-filed Senate bills that are claimed to promote fiscal transparency in state operations: Here's how Burris summarized the bills:
It's an interesting proposal. It will also be intriguing to see how this information will be used (and abused) if these bills eventually become law. In one respect, the bills aren't really all that different than the eventual results of some previous Freedom of Information Act requests filed by the Wilmington News-Journal. Those FOIA filings eventually led to a recent series such as this one, in which folks can enter a name and see if and what the state's financial accounts show as payments to that name (If you type my name into that search space, for example, you will see a list of mostly travel expense reimbursements, paid out over several fiscal years.) The difference, of course, is that the State would generate these searchable files as a matter of eventual routine, complete with immediate direct Web access, instead of waiting for the News-Journal or some other organization to ask for the same stuff so they can post it on their site. Furthermore, the General Assembly should keep in mind the predilection of some folks to come to, shall we say, interesting conclusions on the basis of incomplete information. Transparency legislation such as these bills will inevitably tax state employee time and resources, in addition to the time and money required to create and maintain these retrievable databases. The state agencies will need to be prepared to handle all the follow-up inquiries that this information may generate. The staff will also be forced to react to the inevitable misinformation that may be spread from these databases, regardless of the intentions of the persons doing the spreading. These potential resource demands, and the taxpayer dollars required to support them, don't necessarily support an argument against these bills. State agencies must already be prepared to respond to misstatements about their operations and intentions. Nonetheless, those same needs should be considered in any clear-eyed assessment of the full merits of these transparency proposals.
December
19, 2007 Recent news stories about massive amounts of overtime payments to regular state employees such as correction officers and nurses apparently had their intended effect this week. A state representative introduced a bill to cut overtime pay from the current state law dictating how to calculate pension payments:
Naturally, the proposal brought out its supporters and a few of the expected opponents, such as leaders of various state employee unions. One issue that’s not addressed in the article is whether the new bill as written would apply to current employees, or only to those hired after the new changes would go into effect. My prior work for the City of Wilmington included drafting the legislation to adopt entirely new pension plans for the city's police and firefighters. These changes were enacted in 1984. The new law applied to all new public safety employees and any current employees who volunteered to accept the new plans, which in some respects were not as generous as the old system. That was the point, after all. The City was trying to reduce some of its un-funded pension liability, and adopting new plans that would be fully funded from the get-go was a prime element of that plan. Under Delaware law regarding vested rights in employment benefits, the reduced benefits could not be forced upon those employees whose rights to the current system’s benefit structure had already accrued. Since I haven’t read this new bill yet, I'm assuming that this latest attempt to rein in pension costs will take the same approach, because it must. Therefore, the folks who currently “benefit” from working umpty-ump hours per week in their last few years of state employment will most likely not see this change in their pension checks, no matter what final form this law might take if enacted. The larger issue remains. For a variety of reasons, many of which do not reflect credit on the State, there are too few folks doing the necessary work of staffing our prisons, watching over the patients in state hospitals, and working in lots of other places throughout state government. Overtime is a symptom, not a cause, of this particular problem. Excessive hours on these jobs won’t be reduced until the state’s leaders decide to treat this problem more openly and directly than they have for many, many years. NOTE: In case you were wondering about my own stake in this issue, I don't have one. I'm not paid overtime.
December
16, 2007 This week should bring to a close another chapter in Delaware’s lurching steps toward improving its energy supply for the next few decades. The News-Journal ran a pretty fair roundup today of the remaining issues involving the big offshore wind power proposal:
What struck me about the story was the position staked out by Delmarva Power’s Gary Stockbridge, after months of negotiations and semi-confrontations with the Public Service Commission and the folks at Bluewater Wind:
I confess to some empathy for Stockbridge. It almost sounds like he’s chafing that the state essentially ordered his company to negotiate with Bluewater, which can’t be enjoyable for folks in positions like his. On the other hand, I’d be more impressed if, at the very least, someone at DP&L offered to experiment with onshore wind power in our own state, on state-owned property, and thus called the bet that Stockbridge implied would be better than the offshore windmill proposal. For example, the state owns land that could be dedicated to windmill systems with potentially significant wattage-generating capacity. One spot is the former Houston Landfill site, near the KentCounty/Sussex County borders. It’s a former Superfund location, with land use restrictions and other problems that keep it from being re-used for other purposes. The hundred acres is just sitting there, however, and there could be enough open space set up in the middle of it to put up quite a few large-scale windmills. There’s a similar site near Kenton, Delaware, not far from the Kent County/New Castle County border. These 98 acres were once a borrow pit for the old State Highway Commission, and then became a landfill. It’s all fenced, and largely forested along its borders, and yet there are open spaces within it that could conceivably support a few dozen high-power windmills. In addition, there are state-owned lands where lower-power windmills could nonetheless make a significant contribution, perhaps without the visual impact of some of the really large systems. Nearly every State Park has maintenance facilities and other buildings on-site. How hard would it be to grace each park location with its own environmentally friendly windmill generator, for the park’s energy needs? The two beach area parks, Delaware Seashore and Cape Henlopen, as well as a few of the large upstate parks, including Brandywine Creek and Lums Pond, are certainly capable of hosting these facilities. Furthermore, other agencies such as DelDOT own and operate sizeable maintenance yards and other facilities in locations throughout the state. How about a windmill tower at each place, generating juice to offset the state’s own significant energy demands? In the upcoming General Assembly, the State Energy Office could seek and obtain the necessary appropriations and other authorities needed to start this process, if enough folks in the right places thought this idea was worth pursuing. It seems like a practical solution to alleviating part of the state’s upcoming energy needs, even if it were limited to pilot project status at first. The State might not own its own oil fields, but it certainly has enough publicly-owned open space, and prevailing westerlies, for the government to be far more energy self-sufficient than it is right now.
December
14, 2007 Here are the links to the two most recent golf columns. The December 14 edition is a perennial. I will never run out of material for that one, because it's devoted to all the wrong kinds of golf gifts, such as this:
I hope you like them.
December
13, 2007 Today a friend of mine sent me a YouTube video clip of a fun little song about my native state. It includes a reference and picture of one of Professor Althouse's former hangouts--and a whole lot more. Check it out.
December
13, 2007 Jonah Goldberg wrote an interesting post early this morning about Mike Huckabee and the Fair Tax proposals:
He’s correct. It’s also the best explanation why repealing the 16th Amendment would be the minimally acceptable prerequisite for even considering a national consumption tax, even for those of us who remain ambiguous at best about the alleged benefits of the Fair Tax. Here’s what I wrote about this issue a few years ago, in reaction to a Bruce Bartlett NRO piece: I’m more than a little dubious, especially considering how high the sales tax rate would need to be to match the revenue from the current income tax system: A current proposal by Rep. John Linder (R., Ga.) says that a 23 percent rate would be adequate. But such a low rate can only be sustained by making completely absurd assumptions about what would be taxed. Every serious economist who has ever looked at this question has concluded that a vastly higher rate would in fact be needed. *** With all due respect to Speaker Hastert, trying to eliminate the IRS by adopting a national retail sales tax is a very dumb idea. [B]eyond the fundamental problem of setting a revenue-neutral sales tax rate is a small matter of trust. I just don’t believe Congress would abolish the income tax code permanently. Even in the unlikely event that the Linder plan or something like it becomes the Federal government’s primary revenue-raising system, I fully expect some future Congress to return to the income tax whenever it felt the need for more cash. [That's why] I would be happy to spend more time thinking about the difficult issues raised by a national sales tax proposal, but only on one small condition--if it was accompanied by the repeal of the 16th Amendment. Otherwise, I’m just not interested, thankewverymuch. The one potentially useful result from the current Fair Tax chatter, especially when combined with the ongoing AMT debate, would be to refocus attention on a fundamental issue of tax policy—who really pays how much into the governments’ coffers, and from what sources. If we could ever come to a general agreement on that analysis, it would at least put these new tax proposals into a proper context for legitimate debate, in lieu of low-minded appeals to the politics of envy. Otherwise, most folks will continue to settle for the devil they know, instead of the devil they don't. Note: Here’s a handy explanation for this post’s title.
December
11, 2007 The recent discussions about the subprime mortgage market tended to overlook one of the ongoing side effects of the downturn in the overall housing market, even in formerly hot real estate areas such as Sussex County. That would be the tax effects, none of which are particularly welcome for such places, dependent as they are on the realty transfer tax. For the uninitiated, this tax is collected at settlement, and set at 3% of the purchase price, with the revenue split between the state and the county or municipality in which the property is located. The drop in collections is leading to the first projected budget deficit in Sussex County in the last ten years--about when the current boom market began, in fact:
The downturn is also showing up in other places:
While watching this shoe drop, we will also await the other, larger shoe's next step, when the Delaware Economic and Financial Advisory Council meets next week. DEFAC produces the official revenue forecasts for the state budget cycle, and the December meeting results will circumscribe the Governor's initial proposals for the upcoming FY09 budget. The folks at DEFAC have a longstanding reputation for being clear-eyed about the revenue picture for the state. I don't expect them to sully that reputation by being too optimistic about what will happen over the next few quarters. From all indications, however, the upcoming elections in 2008 should be most interesting in learning how the candidates say they will deal with less than rosy revenues--and that's at the local, state, and federal levels.
December
8, 2007 Despite previously expressed misgivings, I decided to go ahead and make a contribution to the University of Delaware. When an effervescently cheerful UD college student recently called our home, however, I extended the conversation far longer than he expected. My wife groaned a bit, but I kept asking about the indoctrination program that caused such unwanted notoriety. He assured me that it remained suspended. I suggested that he and his fellow solicitors would see better results if the University also openly repudiated the most repugnant stuff in that program, such as Andrew Sullivan's pull quote that defined racists in unacceptably infuriating terms:
The caller said that many alumni are being remarkably direct with him and the other solicitors about this major mistake--and not in a good way, if you're a university in search of donations. After that little venting session, I went ahead and made a contribution, but limited it to support of the men's cross-country team (old allegiances to one's former college athletic team tend to persist). There's no sign of indoctrination in that program, except of course for the commonly held belief among its participants that if there is no pain, there is no gain, and so forth.
December
7, 2007 As other Delaware natives have noted, some of us think of December 7 as Delaware Day, in addition to the usual remembrance of the attack on Pearl Harbor. I can certainly understand why some commenters at Althouse's post on this might express keen disinterest in the Delaware part of this day in history. As someone once said, after Delaware ratified the Constitution, the entire state decided to take it easy and let all the other states be first in everything else--or something like that. Others have fun decrying the Blue Hen State even where it has achieved a leading role after December 1787, such as in American corporate law. I could quietly suggest that jealousy is such an ugly emotion, but let it pass. In the meantime, I'll simply note that whatever else Delaware has going wrong with it at any given time, it's still a nice-looking place, in many different spots. For example, here's a view of Cedar Creek this morning, south of Milford:
With next to no wind, and a slack tide, the creek was glassier than usual.
December
6, 2007 Kevin Fleming is a well-known photographer, with some great books to his credit. He's now taking photographs of wildlife in Delaware for a new publication, and posting some of his work online. It's great stuff, and I've added Wild Delaware to the Delawarean blogroll on the home page. Check it out! Hat tip--Dan Gaffney of WGMD.com
December
5, 2007 Shortly after we married in 1980, we decided we needed to buy a house as soon as we could. The landlord for our one-bedroom flat in a four-unit converted house raised the rent every chance he could. With a month-to-month lease, that was pretty much every 30 days. My job at the time required us to live within Wilmington's city limits, so that limited our options. The fact that thirty-year mortgage rates were running at 17% or more was also a major factor. After several months of searching, however, we found a nice little rowhouse that reminded my wife of where she grew up in Philadelphia. We went to a local bank and applied for the loan. At that point, the bank officer told us we had some options. First, she said we could actually afford a bigger home, based on our joint income. We knew that, but our plans did not include being stuck with a big monthly bill in case one of us took a break from work for something more challenging, such as having a baby or two. The house we were buying was small, but our loan could be managed with one income, and that was more important. Second, she also told us about a new loan product, called an adjustable rate mortgage. The interest rate for the first loan period was only 13.5%. Although that rate could increase after the first three years, it could also drop if conditions warranted. It seemed like the best deal we could obtain at the time, so we jumped in and became one of the first ARM buyers. It worked out well for us. It made our monthly payment far lower than a conventional mortgage at the time. In addition, the rate dropped after the first three-year term, thanks to the inflation-busting efforts of the Reagan administration. Our first baby also came during that time, but dropping back to a single income didn't hurt our ability to pay our housing costs. That's because we hadn't taken on more debt than we could handle.
With that personal history, I might be forgiven for raising
an eyebrow at the
news stories
about the awful interest rate hikes in the current subprime market, as
illustrated in this piece about a proposed rate freeze:
Under the typical subprime loan - those offered to borrowers with
spotty credit histories - the rates for the first two years were at levels
around 7 percent to 9 percent. But after two years, those rates were
scheduled to reset to levels around 9 percent to 11 percent. *** Mark Zandi, chief economist for Moody's Economy.com, called the
administration plan a good first step, but said the government eventually
will have to go further given the problem's size and the threat to the
economy. "This is the most serious housing downturn we have seen in the post
World War II period," Zandi said. "It is a threat to the broader economy.
The risks of a recession are very high." Geez. Only nine to eleven percent? I'd have jumped at those rates in 1980, if something that low was
offered--which it wasn't. I'm not trying to understate the problems that some folks are now having
with making their mortgage payments on adjustable rate loans. Nonetheless,
this risk should not have been unknown or un-considered when they signed on
the dotted line. If it was, those folks neglected the lessons of relatively recent
financial history. And if this perceived crisis leads to a mortgage market equivalent of a
Chrysler-like bailout, some of us will note
that fact as well in the upcoming elections. UPDATE: Welcome,
Instapundit,
Outside the Beltway, and
Megan McArdle fans!
December 1, 2007 Here are links to the most recent golf columns, including a book review of Ann Liguori's A Passion for Golf: Celebrity Musings About the Game. Hope you like 'em:
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Contact Information: Fritz Schranck fschranck-at-sneakingsuspicions.com
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Official small print disclaimer: This is, after all, a personal web site. Any opinions or comments I express here are my own, and don't necessarily reflect the official position of my work as a government attorney or any of my clients. That fact may become obvious later on, but it needs to be said here anyway. © Frederick H. Schranck 2002-2007 |
