by Dr Bob Stouffer | Jun 27, 2011
For the past few years, I have been watching my weight carefully. I value the life I have been given, and I want to take good care of myself through proper sleep, diet, and exercise. In March, my mother-in-law died, and it only took a couple weeks of constant grazing through the meals of generous friends and families to result in a weight bulge. I could feel the extra weight at my waistline. Try as I might, sucking in my stomach didn’t make the problem go away. A similar lack of discipline with spending has put Iowa and other states in financial messes.
The Iowa Legislature annually engages the state’s school funding formula to provide “allowable growth†to public school districts. Because of the state’s challenging financial situation, the Republican Governor and Republican-controlled House have been attempting to hold the line with a proposed 0% allowable growth against the Democrat-controlled Senate. Impasse occurred. Public school superintendents lobbied hard for a 2% increase. Typical partisan politics have thus far prevented a final budget deal, and the Legislature is several weeks past their anticipated adjournment as a result.
I have an interesting perspective on this issue of educational spending, because I spent the first 20 years of my career as a teacher, coach, associate principal, and principal in several public schools of Iowa. For the past 11 years, I have served as the superintendent of a non-public school.
I am embarrassed to admit some of the spending habits in practice during the first phase of my educational career. We didn’t do anything illegal. And there were no $500 hammers. But, as I look back on those days, we could have been MUCH more effective stewards with the monies entrusted to us by Iowa’s taxpayers.
As we were closing out the books on fiscal years, we were sometimes left scrambling to figure out how to spend balances of General Fund accounts which could not be carried over to the next fiscal year. Budget makers too often padded accounts from year-to-year for “wants,†not “needs.â€Â Such was why I was always a strong advocate of zero-based budgeting, but I was seldom successful in implementing that practice in its purest form.
I vividly recall attending a meeting of government officials who were charged with explaining the process for submitting proposals to obtain Obama stimulus monies for Iowa’s schools. A surreal moment occurred when one of the policymakers actually said, “There is so much money, I don’t know if you can figure out how to spend it all by the deadline.â€Â I shook my head in disbelief at that time. Did he really say that? I thought. He did. No question.
My perspective on educational spending changed dramatically when I entered the arena of non-public education. Our schools survive mainly on the tuition dollars of our parents and guardians, with additional dollars raised through fund-raising. Non-public school leaders take their fiduciary responsibilities very seriously, because we definitely need to give a strong return on the investment of parents and donors. The business practices are much more conservative in non-public schools than in public schools. Waste not, want not.
If I said aloud to my public school colleagues what I am about to write publicly, I would probably be met with fairly defensive responses, but I must say the “unpardonable.â€Â Just as federal and state governments should be attempting to tighten their belts by eliminating duplicated programs and wasteful spending practices, so, too, should the state’s schools carefully scrutinize all line items and expenditures.
Iowa’s schools so often look at increased funding as THE answer to any problem. But I contend that millions of dollars could be saved through concerted streamlining. To whom much is given, much is expected. Accountability is crucial. ALL of the schools in Iowa – public and non-public – must do their parts to be excellent stewards with the financial resources entrusted to them. Times are tough. We’ve got to figure out ways to stretch our dollars. Time to stick to the basics. We’ve got to lose some of that fat which has come to too often characterize our budgets. Discipline and dieting will put Iowa’s schools in better shape.
by | Jun 23, 2011
“The Conservative also recognizes that the political power on which order is based is a self-aggrandizing force; that its appetite grows with eating. He knows that the utmost vigilance and care are required to keep political power within its bounds.†– Barry Goldwater
Evidenced by the fact that I recently finished re-reading Barry Goldwater’s The Conscience of a Conservative on a kindle—much has changed since it was first published in 1960. However, by the staggering parallels that its content has to the political realities of 2011, one could say that not much has changed at all.
Anyone who chooses to invest the few hours necessary to read this book will become apprised of the historical context in which the political and ideological battles of our generation fit into the course of our Country’s history. Indeed it becomes clear that the rise of the Tea Party is not the first attempt to reconfigure our relationship with government, but is merely the continuation of a movement first given voice to by Barry Goldwater 51 years ago.
Written with eloquent clarity, its importance rivals, and perhaps even trumps, the documents surrounding our Nation’s founding in importance based on its remarkable relevance to our day. While the theory behind the writings of Thomas Jefferson, The Federalist Papers, and Common Sense are inarguably still viable, Goldwater is able to make his case specifically against things that did not exist in the 18th century, but did both in the 1960’s and today. In fact, if you replace the word Communism with Terrorism, the entire list of topics that he addresses—a growing federal government, National debt, the welfare state, The United Nations, the erosion of personal freedoms, and labor unions—all remain the exact flashpoints of our modern day political struggles. Here are just a few of the many examples.
Federal Spending
“Now it would be bad enough if we had simply failed to redeem our promise to reduce spending; the fact, however, is that federal spending has greatly increased during the Republican years. Instead of a $60 billion budget, we are confronted, in fiscal 1961, with a budget of approximately $80 billion.†– Barry Goldwater
It is slightly comical, and certainly sad, to read Goldwater bemoaning the entire federal spending for a year approaching, in his mind, the absurd level of $100 billion. The reaction of his contemporaries to his concerns on spending were much the same fare that we are fed from our political leaders today—a set of recommendations from the Hoover administration claiming that the government could save the taxpayers around $7 billion a year just by eliminating extravagance and waste. Sound familiar?
This was useless lip-service then, just as it is now, and prompted Goldwater to lay down a far different doctrine—“The root evil is that government is engaged in activities in which it has no legitimate business. . . . The only way to curtail spending substantially is to eliminate the programs in which excess spending is consumed. The government must begin to withdraw from a whole series of programs that are outside its Constitutional mandate . . . and all that can be performed by lower levels of government, or by private institutions, or by individuals.â€
Taxes
“Government does not have an unlimited claim on the earnings of individuals. One of the foremost precepts of the natural law is man’s right to the possession and use of his property.†–Barry Goldwater
Unlike today’s Republican who largely pins their argument for lower taxes on the received benefit of spurring economic growth, to Goldwater the issue was far more a moral one. He asks, “How can he be free if the fruits of his labor are not his to dispose of, but are treated, instead, as part of a common pool of public wealth?†Not only does this argument seem superior to the present day Conservative one, so do his other thoughts on the subject.
While acknowledging that every citizen has an obligation to contribute a fair share to the “legitimate functions of governmentâ€, he quickly does what politicians on the right nowadays fail to do effectively—tie the size of government’s rightful claim on our money to the definition of “the legitimate functions of governmentâ€. Though it seems overly simple, telling a person what they have to gain financially by restricting government is much more effective than making broad Constitutional arguments. One can’t help but think that advocates for eliminating federal agencies, and in general returning to only the expenditures authorized by the enumerated powers, would get much more traction by clearly making the connection that for every function of government that we can do without, you will keep more of your own money.
He also makes it clear that were he alive today he would be leading the charge for the flat tax, by calling our system of graduated tax rates “confiscatory†and “repugnant to my notions of justiceâ€.
The Welfare State
“The effect of Welfarism on freedom will be felt later on—after its beneficiaries have become its victims, after dependence on government has turned into bondage and it is too late to unlock the jail.â€-B. Goldwater
Among the most poignant and impassioned arguments Goldwater makes are against the continued creation of the welfare state. Largely due to the fact that when he wrote the book the programs that make up our welfare state were not yet insolvent, massively-unfunded liabilities, the nature of his resistance is mainly on moral grounds and the effect that he envisioned it having on the recipients psyche. Just as it remains today, he predicted that the emotional impulse of voters and the temptation it presents to politicians would combine to make it a deeply entrenched and ever expanding problem.
Though in its infancy at the time, he saw the building of a welfare state not only as a political strategy by the left to move the Country in a Socialist direction, but as a corrosive practice that placed the individual at the mercy of the State. It was his sense that this relationship would, over time, sap the welfare recipient of the sense of personal responsibility required to be anything but dependent.
His position is not that there be no welfare, rather that it be administered either voluntarily from citizen to citizen or through local institutions and governments. Indicating that the political perils of this position were just as present then as they are today he states, “I feel certain that Conservatism is through unless Conservatives can demonstrate and communicate the difference between being concerned with these problems and believing that the federal government is the proper agent for their solution.â€
Goldwater 2012
Reading The Conscience of a Conservative is in many ways bitter-sweet. Sweet in that it gives such clear voice to our founders’ ideals, freedom, and Conservatism; but bitter in the realization one is left with that had these battles been fought and won in his time, they would not need refighting now. Perhaps the most important thing the reader takes away from this book is a sobering reminder of how high the stakes are in the upcoming election. Armed with the knowledge of what has transpired from 1960 until now, one shudders to conceive of the consequences of not winning the battle this time around.
In further illustrating how worthwhile and relevant this book remains in 2011, let me close with what Goldwater sees as being the moment that Conservatism will defeat Liberalism: 
The turn will come when we entrust the conduct of our affairs to men who understand that their first duty as public officials is to divest themselves of the power they have been given. It will come when Americans, in hundreds of communities throughout the nation, decide to put the man in office who is pledged to enforce the Constitution and restore the Republic. Who will proclaim in a campaign speech: “I have little interest in streamlining government or in making it more efficient, for I mean to reduce its size. I do not undertake to promote welfare, for I propose to extend freedom. My aim is not to pass laws, for I intend to repeal them. It is not to inaugurate new programs, but to cancel old ones that do violence to the Constitution, or that have failed in their purpose, or that impose upon the people an unwarranted financial burden. I will not attempt to discover whether legislation is “needed†before I have first determined if it is constitutionally permissible. And if I should later be attacked f
or neglecting my constituents’ “interestsâ€, I shall reply that I was informed their main interest was liberty and that in that cause I am doing the very best I can.
Goldwater in 2012 indeed.
![Politicians, Bailouts and Bank-Owned Houses]()
by Steven Waechter | Jun 21, 2011
Around the corner from my former apartment in Newton was a house that was taken in foreclosure. The “For Sale†sign had been there for a very long time, the lawn wasn’t mowed regularly and the shrubs had died in the winter but hadn’t been removed.
Walk around your own neighborhood and see how many houses are for sale. Sometimes the sign openly states that it is bank-owned, other times you might have to search on the county assessors website. There are plenty of bank-owned houses in Iowa; there are many, many more in California, Nevada, Michigan and Illinois.
The point is this: With such a large supply of bank-owned houses, of course houses will continue to fall in price. When a store has excess inventory, they need to have a discount sale to get rid of it, the same is true for houses, and banks are taking more houses every day.
Banks live and die by their balance sheets. If a bank has the cash to keep these houses in their possession, hoping that the prices will stabilize and that they can sell at prices that allow the banks to recover the unpaid mortgage, then they will keep on trying to sell houses in the usual retail market. As soon as a bank runs short of cash, or can no longer carry the costs of the property taxes and the maintenance for all these houses, they will sell their houses at fire-sale prices, probably even at auction. No reserve bids, the highest price gets the house free and clear.
This should have happened back in 2009-2010. Banks, short on cash and overloaded on houses and notes for houses, would have had to dump them for whatever they could get. This would have caused a sharp decline in housing prices, but as the houses were sold and put back to work – the job of a house is to shelter people – the supply would have been worked through and housing prices would have recovered and stabilized in relatively short order.
And then came the TARP bailout. The federal government gave billions of dollars in checks to the banks, giving them a “capital injection†– putting cash on their balance sheets – hoping that the banks would lend it out. They didn’t. They kept it in cash, and were able to carry thousands of foreclosed homes on their books through the crunch of 2009-2010.
Instead of a flash drop followed by a recovery, the American homeowner was “spared†a deep but short fall in home prices and instead have been subjected to this long, slow death march of declining home equity. The decline we got may have been slower, but it will be longer, guaranteeing that more private home owners will be forced – by a bad economy, relocation, or retirement – to try and sell their most expensive asset in a market that is still actively falling. As for potential buyers, the odds are that the longer they hold off making a purchase, the better deal they will get.
If we had skipped TARP, then this glut of houses would have been worked through by now, sold at auction either by the banks or by the bankruptcy trustees of the banks that didn’t get the message of the markets.
Politicians that supported TARP are still finding ways to rationalize it. “We needed to preserve the financial system.†“We needed to prevent chaos,†and on, and on, and on. All they achieved was to prevent real bargains and guarantee continued oversupply. They need to be held accountable for their support of that pathetic misstep passed under the cover of hysterics.
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For the past few years, I have been watching my weight carefully. I value the life I have been given, and I want to take good care of myself through proper sleep, diet, and exercise. In March, my mother-in-law died, and it only took a couple weeks of constant grazing through the meals of generous friends and families to result in a weight bulge. I could feel the extra weight at my waistline. Try as I might, sucking in my stomach didn’t make the problem go away. A similar lack of discipline with spending has put Iowa and other states in financial messes.
