Governor Reynolds supports crony capitalists.

Governor Reynolds has proposed legislation to make, “…biofuels the clear choice for Iowa drivers…”, by mandating a minimum of 10% ethanol in all gasoline and 11% biodiesel in all diesel fuel sold in Iowa.  (See link to Register report below.)  If her proposal becomes law, it would make biofuels the clear choice – because then there would be no other choice.

This is a shining example of how government works when a law or regulation has concentrated benefits and dispersed costs.  Those who receive the concentrated benefits, (in this case farmers and biofuel producers), will lobby heavily to get their benefits, while the cost to any individual is so small that it doesn’t justify the time or money to lobby against the legislation.  Then, those who receive the benefits become dependent on them and continue to lobby to ensure that the benefits never come to an end. Don’t call it free-market capitalism.  It’s called crony capitalism.  

Link to Register report – printed 1/27/21:  https://www.desmoinesregister.com/story/money/agriculture/2021/01/26/kim-reynolds-plans-require-10-ethanol-11-biodiesel-iowa-fuel/4259109001/

Money grab by States in anti-trust suit against Google.

As reported in The Des Moines Register, Iowa has joined 37 other states in an anti-trust suit against Google for discriminating against other search engines. (See link below.)

The purpose of anti-trust action against any company should be the protection of consumers, not the protection of competing businesses.  If consumers are not harmed, which is the case here, then anti-trust action should not be taken.  I have a strong feeling that the State governments joined this lawsuit in order to share in the billions of dollars of penalties or settlement – a money grab from a deep pocket.

Why should Google be forced to list links to other search engines in the results of their Google searches?  Why shouldn’t Google be allowed to pay smart phone makers to make Google the default search engine – which helps to reduce the cost of cell phones?  Where is the harm to consumers?  In fact, Googles actions arguably help consumers.

Link to Register report: https://www.desmoinesregister.com/story/news/crime-and-courts/2020/12/17/google-antitrust-lawsuit-iowa-joins-case-with-38-states-over-internet-search-and-advertising/3939064001/

Good news for Iowans – COVID-19 on the decline.

Here’s some good news for Iowans:  Although more than 75,000 Iowans have tested positive for COVID-19, that represents less than 3 out of every 100 people – and two-thirds of those have recovered.  Although more than 1,200 Iowans have died from COVID-19, the highest peak was in May and the current trend is sharply down from the lower second peak in early September.  We have kept COVID-19 hospitalizations, intensive care bed use and ventilator use well below our capacity, and healthcare system availability continues to get even better..  The number of Iowans being tested for COVID-19 continues to increase and the percentage of people testing positive continues to decrease.  So, Iowans, keep up the social distancing and the wearing face masks when appropriate so that these positive trends continue until a vaccine becomes available.

 

Source: https://coronavirus.iowa.gov/#CurrentStatus

Iowa does not have the highest coronavirus growth rates in the U.S.!

The statistics used in the recently published White House coronavirus report for Iowa, and published in The Des Moines Register do not prove that the coronavirus is growing faster in Iowa than the rest of the nation.  The two key statistics used are not valid indicators.  The statistic “average number of positive tests per day per 100,000 population” is not valid because the results vary depending on how many tests are reported each day, and because those getting tested are not representative of the entire population.  The statistic “percent of tests reported each day that are positive”, (the positivity rate), is not valid because, again, those getting tested are not representative of the entire population.  The only currently available valid statistic is the death rate, which is a lagging indicator, and which is going down.  We should not be locking down parts of our economy based on bad data.  We should continue to encourage mask-wearing and social distancing when appropriate.

LInk to Register article:  https://www.desmoinesregister.com/story/news/health/2020/08/31/white-house-coronavirus-taskforce-says-iowa-has-highest-rate-country/3449153001/

Bootleggers and Baptists – strange bedfellows.

During the time of alcohol prohibition, bootleggers and baptists were both opposed to repeal of the Eighteenth Amendment.  It’s an example of how, “politics makes strange bedfellows.”  Even though the two groups seemed to have completely opposite views about drinking alcohol, they both opposed the repeal of prohibition: The baptists for moral reasons, the bootleggers for financial reasons.
I read the report in The Des Moines Register about how scared the Iowa medical marijuana dispensaries are about losing money once the legalization of recreational marijuana in Illinois begins next January 1st.  (see link below)  It makes me wonder if Iowa might face a similar situation in the future. The governor and many other politicians oppose efforts to legalize the recreational use of marijuana for moral reasons.  I wonder if Iowa’s legal medical marijuana producers and sellers will oppose efforts to legalize recreational marijuana for financial reasons?

Need to end Iowa’s excessive Drug Stamp tax.

Thanks to Lee Rood for her expose’ in The Des Moines Register about the financial devastation of an Iowa citizen that was caused by Iowa’s drug tax.  As Rood reported, Stephanie Hilgenberg was arrested in 2016 after police found about $5,000 worth of meth in her purse.  She was convicted and served time in prison.  She is now free and working to support heself and her two kids.  But she still owes the Iowa Department of Revenue about $150,000 in tax, penalty and interest!  She had failed to pay the “drug stamp tax” required in order to avoid the penalties and interest.
Iowa’s Constitution prohibits excessive fines, but this is technically a tax, not a fine.  Again as Rood reported, part of the strategy of the tax was to use as a negotiating lever to get small time dealers to give up their suppliers.  In our failed drug wars, the little guy is often sacrificed as a means to what drug warriors consider  more important ends.
Drug addiction is a terrible thing.  But we will be better served as a society by treating addiction under a medical model rather than a criminal model.  Education works better than punishment.  One step in the right direction would be to repeal the punitive stamp tax that is added to the injury caused by drug prohibition.  State legislatiors should take that up next session.

Big marijuana bust in Iowa – Mayor found growing pot!

As the Des Moines Register reported yesterday, the Mayor of Jamaica, Iowa and her husband were busted two days earlier at about 4:20 p.m. (no joke) for growing 18 marijuana plants inside their home.   The various related charges include a Class “D” Felony for the manufacture and possession with intent to deliver less than 50 kilograms of marijuana.

It’s a shame that our laws in Iowa still make it a crime to do something that is peaceful, voluntary, and uses no force or fraud against others. Marijuana prohibition laws do little to make our state safer, and yet do great harm to people who are victimized by them.  In this case, if these two people are found guilty of the felony, they could be sentenced for up to 5 years in prison, be required to pay up to $7,500, lose their voting rights, be disqualified for military service or student loans, and more.  Compare that to the fact that nothing happens to a person in her home who is found to be brewing 5 gallons of beer – a standard home-brew batch – and possessing, say, 10 to 20 more gallons that were brewed earlier.

Marijuana is no more dangerous than alcohol, and yet today we see the same unintended consequences resulting from drug prohibition that we saw from alcohol prohibition in the 1920s and early 1930s: violence, deaths from impure products, and the arrest and punishment of people who are otherwise honest and peaceful.  Make no mistake, the violence associated with the illegal drug trade is caused by prohibition laws.  If Walgreens moves into a community, CVS doesn’t send out a gang to kill them.  When drugs are delivered to a pharmacy, both parties don’t carry weapons to protect themselves.  Instead, they call the police if someone uses violence against them.  But you can’t can’t call the police for help if you’re dealing in illegal drugs.

We need to follow the trend in other states and around the world:  Legalize recreational marijuana and treat addiction using a medical model, just like alcohol.  Let your elected representatives know your feelings.  That is the way to get these unjust laws changed.

Link to Register article: https://www.desmoinesregister.com/story/news/crime-and-courts/2019/01/17/jamaica-mayor-ladonna-kennedy-pot-weed-gurthrie-county-crime-marijuana-search-ames-shooting-suspect/2606455002/

Pay gap between men and women does not need further regulation or legislation.

According to an article in the Des Moines Register, The American Association of University Women (AAUW) issued their annual report on the “pay gap” between women and men.  According to the report, women in Iowa earn about $10,000 less per year than men. This article, and the related report, are excellent examples of misuse of meaningless statistics.  (See link below.)   Comparing the median pay for all women with the median pay for all men tells us nothing about whether or not sex discrimination is taking place. A valid analysis would compare the pay of women and men who do the same work for the same employer.  The report by the AAUW did not do that.
This report tells us more about the bias of the AAUW than it does about bias in the workplace.  As you reported, Kim Churches, chief executive officer of AAUW, said, “It’s unacceptable. There is no gender differentiation when it comes to quality, skills, and talent.  It’s time to close this gap and give every woman in Iowa and across the country the salaries they deserve.”  She advocated for more regulation.
Based on the facts given in the article, and assuming that women and men can and do perform equally, then it is fair to presume that the AAUW would agree that if any woman wants to earn the same pay as a man, then they should go for the same jobs that men go for.   When the relevant qualifications, working conditions, and job duties are accounted for, the difference in pay between women and men reduces dramatically.  The pay gap has been reducing for years.  Our current laws are working.  We don’t need to add more regulations.

Link to AAUW report: https://www.aauw.org/aauw_check/pdf_download/show_pdf.php?file=The_Simple_Truth

Iowa Public Employees’ Retirement System needs to be changed to a defined contribution plan.

Recently, candidates for office in Iowa have been asked to promise future Iowa public employees that they will make no changes to the Iowa Public Employment Retirement System (IPERS) retirement plan.  Instead, politicians need to state clearly that they make no promises to future employees about their retirement benefits.  The fact that IPERS is currently underfunded by about $7 billion shows clearly that we already have over-promised benefits when compared to what we expected taxpayers and public employees to pay.

(When government has a defined benefit plan, the participants seem to think that any over-funding is their asset, but any under-funding is a liability of the taxpayers.  In the past, when IPERS was over-funded, benefits were increased!)

The way to make sure that we don’t make retirement benefit promises that turn out to be more expensive than we expect to pay is to put new government employees on a defined contribution retirement plan – just like most employees in the private sector.  This will cause the unfunded liability to come due over the next 50+ years, but at least it won’t get worse.

 

 

Stop Defined Benefit Plan for Public Employees. It’s a Ponzi Scheme!

In a recent Iowa View essay in the Des Moines Register, Josh Mandelbaum wrote that Republican proposals to move the Iowa public employee’s pension plan (IPERS) away from a defined benefit plan and toward a defined contribution plan are, “ideologically driven”.  If by that term he means an ideology under which employee pensions should be financially sustainable and fair to both employees and taxpayers, then count me as ideologically driven also… and that’s a good thing.

In our political/government employment environment, defined contribution plans have mostly been significantly underfunded and unsustainable. In an actuarially sound defined benefit plan, the balance in the fund should have a surplus as often as it has a deficit.  But, as we have seen in the past, when there appears to be a funding surplus, politicians increase benefits rather temporarily lowering the contributions paid by both taxpayers and employees.  There is a built-in tendency for politicians to over-promise and under-fund because future benefits will not be paid out until many years later.  Supporters of the current IPERS system like to say that Iowa has one of the most financially sound retirement systems in the U.S.  IPERS is only about $7 billion short of the funds necessary to keep its promises!  It has only about 81 cents for each dollar that it owes.

Defined contribution plans can have most of the same benefits, and potentially more, for employees.  It does shift significant responsibility and risk to the employee to invest wisely and to not spend retirement money too fast during retirement.  But, under a defined contribution plan the employees own the money in their retirement account, and can take it with them if they decide to change employers, and can leave it to anyone they wish after they die.

There will be a significant fiscal challenge that must be met if we were to make the change from a defined benefit to a defined contribution plan: If new employees put their retirement contributions into a defined contribution plan and don’t contribute to the existing defined benefit plan, the already-existing $7 billion of under-funding of IPERS will come due and need to be paid out over the next 50 – 60 years. In a big way, IPERS is still operating like a giant Ponzi Scheme – taking money from new investors to payoff old investors.  (Illegal if done in the private sector.)  It is time for us to lock-in the under-funding liability and stop making it worse. We need to put new government employees into a defined contribution plan.

Link to Register letter: https://www.desmoinesregister.com/story/opinion/columnists/iowa-view/2018/06/12/dont-jeopardize-ipers-ideologically-driven-changes/692231002/