Wednesday, March 13, 2013

Is the Glass Half Full: Are Colorado Dems Doing Themselves In?

As I listen to talk radio, grab tid-bits of local news on TV and read the local and even the national news, Colorado it is the spot light.  Our state is getting a lot of attention right now.  The topic? Guns. I don't like the battle or the direction is it going but I took a moment to think about what it might mean in the long run. What might the unintended consequences look like?

Colorado for the first time in its history has a democratic House, Senate and they have the Governor's office.  It has never been this blue. The cities love it; the majority of the land mass, which is rugged, rural and independent, hates it.  Of course in the mountain towns, the affluent hamlets where the motel maid must commute an hour and a half because she cannot afford to live in the town where she works, the very rich come to play.  With the advent of high speed internet some of these mountain towns are places that working people can now call home with no need to commute. There was a time when Boulder was referred to as the California of the Rockies -- it was that different. 
The Californication has oozed into the Denver metro area and bled into the multitude of urban areas that form the apron around the Capital.  In the 2010 Census, the Denver-Aurora-Broomfield Metropolitan Statistical area held 50.7% of the entire state's population, up over 14% from the 2000 census.  This statistical area has a land mass of a mere 8,102 square miles in a state of 104,100 square miles. Almost 51% of the state’s population lives on less than 8% of its land. The remainder of the population is focused on the Front Range and scattered about the western slope, the mountains and the eastern plains; they have similar needs, desires and aspirations. City-folk tend to be more like-minded than those in the rural areas.  A rancher on the eastern plains might focus on water issues when the mountain man in the Sangre de Cristos might be more concerned with beetle-killed forest and the fire danger. In cities it is far easier to build powerful coalitions than it is to unify the scattered people of the plains or the out-lying edges of the mountain counties.

The concentrations of social liberalism from the city now dominate the climate of the once burly, fiercely independent western state. First settled by miners and fortune seekers who had grit if not brains, Colorado's storied past is filled with a cast of characters plucked from a Twain novel then married with some Zane Grey and Louis L'amour: prostitutes, politicians, gun fighters, cannibals and cowboys. Now populated by more modern transplants and college students, the shift from red to blue was inevitable.  With the temperate climate, the stunning scenery and activities of all sorts only a stone's throw away who wouldn't want to live here?  The metro areas are also doing fairly well in this horrific economy. Heck you can even get a degree for brewing beer and it would be considered a marketable skill!  And you and Mary Jane can cavort legally.  Civil Unions are being fast tracked too.  There is talk of Denver becoming the Amsterdam of the West.  Blue, blue so very blue.
But back to guns.  In the wake of the recent, and some not so recent, tragedies in Newtown, Aurora and even going back to Columbine, guns and gun control have taken control of all state politics here in Colorado; the rest of the nation is watching.  It is a heated debate.  However there is little real debate going on. What seems to be happening is the elected leaders are forging ahead with what they, as individuals, seem to think is the best idea and listening to what other elected officials and even the Vice President is telling them they should do.  The fact that they were elected to represent people whether they are red, blue, purple or some other shade of the rainbow has been lost.  The public testimony has be stacked in their favor with deliberation and elected leaders from far away have been openly calling Colorado representatives and "suggesting" what they should do.  The Colorado Senate was not elected by these out-of-state people who are calling…they were elected by us, for us.

Nearly every elected Colorado County Sheriff made the trek to the Capitol to testify before the Senate hearing committees and few were heard. All came to testify that the "gun control" laws being debated would do little, if anything to curb gun violence.  The new legislation would only add yet another law that was impossible to enforce. They wanted to tell the omnipotent Democratic leaders that they were missing the point. There is now talk of the Colorado State Legislature trying to strong-arm our County Sheriff's by reminding them that the State Legislature has the power to affect their salaries and their department budgets…it will be interesting to see how this story develops but that is a rabbit I would rather not chase right now.

What makes me think that the glass is half full is this.  The Colorado legislature has become so myopic about gun control and has become drunk on their power that they don't realize they may be their own undoing.  The people -- regardless of political affiliation are not feeling heard nor are they happy about gun control being the #1 topic at the state level there are several things that rank higher to most Colorado residents including, the economy, public education and taxes. While the State Senate and now the House debate and rant about how bad guns are the people of the state are feeling disregarded.
A new poll measuring public opinion of gun control measures being considered in Colorado finds the issue could be politically dangerous for Democrats. Most Coloradoans don’t think “sweeping gun control measures will make them any safer,” according to the pollster.

While pro gun and anti-gun sentiment falls, as expected, along party and ideological lines, there are some political dangers that Democratic leaders should be paying attention to,” writes pollster Rob Autry, of Public Opinion Strategies, in a memo detailing the poll’s findings.
Autry went on to write, “Democratic legislators also have to be mindful that even members of their own partisan coalition are conflicted about this proposed legislation.  While only 8% of Democrats oppose all of the gun control measures we tested, 70% of Democratic voters oppose one or some combination of the proposals (either the comprehensive package, the background checks, the liability claim, or the high-capacity magazine ban).”

 “These poll numbers prove that Governor Hickenlooper and the Democrats are listening to Bloomberg and Biden instead of Coloradans,” commented state Senator Greg Brophy, responding to the poll, in an email to Weekly Standard blogger, Daniel Halper.
From Halper's blog:

                "The fact of the matter is, Autry writes, most Coloradans don’t think the legislation will make them “safer.” “Importantly, Colorado voters do not believe these sweeping gun control measures will make them any safer.  Two out three Coloradans (65%) say these new gun control laws won’t reduce crime or make the state any safer, while just a third say they will (32%).”"
                And there “very well could be political repercussions for supporting this legislation, as well.  Nearly half (48%) of voters say they would be less likely to vote for their State Senator in the  next election if he or she supports these gun control bills (40% more likely).  There is strong intensity behind this as well – thirty-seven percent (37%) of voters overall say they would be much less likely to vote for him or her.”

 The biggest shift in this future voting sentiment comes from independent voters -- the "chosen ones", the highly prized voting bloc of both parties. The Independents oppose the key gun control measures tested in this survey.  A solid 69% of them oppose passing the comprehensive legislation (33% oppose outright, 36% think it goes too far) a whopping 84% oppose holding manufacturers and sellers liable, and 55% oppose the high-capacity magazine ban when presented with both sides.

I oppose the gun legislation that is careening its way into becoming state law.  None of them affect me too much but the erosion of constitutional rights and the sense that my government is trying to disarm me one regulation at a time rubs me wrong.  I will now have to pay for my background check the next time I purchase a firearm.  I have issue with parameters and restrictions being attached to my exercising my constitutional rights – it is not my fault or yours that lawmakers have attached costly barriers to my constitutional right.  We have heard the argument against voter ID and that it is tantamount to a poll-tax.  So what makes this different?  The dems want zero barriers to voting, the republicans want to reduce voter fraud.  The dems want to charge for background checks the republicans believe it is a constitutional violation of rights. It is always interesting how willing pots are to call the kettle black.
In summary -- I am a "glass half full" sort of person; I try to look for the good in everything.  I exercised my right to vote and avoid exactly what is happening now. I tried to elect leaders who would better represent me and what I thought was good for Colorado and the Nation.  My people lost.  So now I see the leaders elected by others doing things that the very people who voted FOR them do not even like.  So I will focus on how this current situation might be of benefit when considering the "big picture".  It would seem that some of the state democrats have not only woven their own hemp rope, they have fashioned their own nooses and are quite possibly sizing it for their own political necks.  I for one am not going to counsel them on the ramifications of their actions -- let them hang themselves. After all it might just be good in the long run!

Saturday, March 2, 2013

Inflation Rates - Truth and Consequences

Okay being the GEEK I am I have to look up the current rate of inflation to calculate the REAL interest rate I will be paying on my new car.  For those of you who don't recall it is really very simple.  Let's pretend for simplicity that the rate you are paying on a loan is 4%.  If the rate of inflation is 2% then you subtract that from the interest rate and that is the rate in REAL terms.  So you are only paying 2%.  The next thing you do to determine if this is a good deal is to figure out what that money could earn you if placed elsewhere.  This calculates the opportunity cost of the loan.  Say you can make 2% in savings and the loan is costing you two percent then the opportunity cost is 4%.  Simple huh?

Let's go back to getting a loan and comparing it to the rate of inflation.  IF you get say a loan rate of 2% and the inflation rate is HIGHER at 3% then you should NOT pay off the loan early because the cost of the loan is lower than the "cost of money".  In effect they are paying YOU to borrow their money.  Of course the rate of inflation changes over time -- but if you watch it you can optimize your borrowing power.

 Well go on -- look up the current rate of inflation that is being reported by the Fed.  It says the rate of inflation is 1.7%.  Wow, that seems low doesn't it?  With all the printing of money that the current administration is doing you should wonder, HOW IS THAT POSSIBLE? Well it is not. When the Fed prints a bunch of money (i.e stimulus dollars are the prime example) it injects the money into the economy but that money doesn't represent anything of value, it is just paper, so that flood of new money DEvalues the money that was already circulating -- this causing INFLATION.  With money "growing on trees" you have to give more of your now lower valued dollars to buy what fewer dollars used to buy. It always catches up and the market seeks equilibrium or balance.

Now how DOES the Fed determine what the value of money is? The Federal Reserve calculates the rate of inflation for us -- tax payer dollars at work!  They use something called the Consumer Price Index or CPI. In that they take a bundle of goods -- things we all buy all the time and price them in the market.  They compare the current prices of that bundle of goods, or how much it would cost them to buy all the stuff on their shopping list to the prices of the SAME bundle of goods over time -- voila you now know what the inflation rate is.  But WAIT, there's more!

What is IN this bundle (or list) of goods they are pricing?  More appropriately what is NOT in this bundle of goods?  That is the million dollar question.  What are things EVERYONE must buy?  Well food for one -- you would think that food MIGHT be in the "bundle of goods" -- it is not.  If you are the grocery shopper in the family you KNOW that a loaf of bread didn't used to cost nearly $5.  You also know that meat didn't used to cost what it costs. The worst drought to hit U.S. cropland in more than half a century could soon leave us reaching deeper into their pockets to fund a luxury that people in few other countries enjoy: affordable meat. Rice and beans are looking pretty good! Some analysts are projecting that we could see food prices rise by 14 percent or more over the next year. I am the shopper in the family and I know that I am spending nearly DOUBLE what I was only three years ago on the same stuff. What else do we all buy?  Energy?  We all buy fuel for our cars, pay electricity bills and heat our homes usually with natural gas or in the northeast oil. Have you filled up your tank lately? Ouch! Energy of all kinds is also left off the list for the CPI when determining the rate of inflation.  Crazy huh?
One begs the question, why? One can only guess -- but it sure makes our elected leaders look good! Here is how they do it.

First it reflects ONLY buying habits of people in urban, metropolitan areas -- if you live in the "burbs" or in the country you are not represented.  Those of us who live in places OTHER than a city buy the most fuel; we commute to work, the store is farther away. We drive more and we don't have the option of public transportation.  Also, they survey a whopping 7000 families in a nation of over 300 million to determine the Consumer Price Index (CPI).  That is .00002333% of the population.  Hardly a snap shot.  But as far as surveys go it is true that the larger the population the smaller the sample size can be -- that said for an optimal survey of 300 million people the sample size should be at least 11,520 or 40% larger.  So that is a problem too.
Now the Bureau of Labor and Statistics does do a better job calculating the rate of inflation because their bundle is more reflective of what we all actually buy.  However it gets little attention because unlike the Fed, they don't set interest rates.  The Feds have the rate of inflation inaccurately low -- so in real terms it is a good time to take on debt (if you are sure you can pay it back of course and after reading this you might alter your grocery habits).  Based on their calculations money is cheap right now. On the flip side it is always good to understand what the REAL-life inflation rate is -- what IS the cost of LIVING?  It isn't 1.7%.  The term used for the things people REALLY buy is the EPI or "Everyday Purchase Index". This list does include energy and food.  If one looks to this for a real rate then things change dramatically.
If any of us remember science classes we know in order to study something we need a "control" -- if we don't have something that is constant HOW are we expected to document change over time?  How do we compare apples to apples if we don't have an apple? The way that the government calculates inflation has changed more than 20 times since 1978. The government is constantly looking for ways that it can make inflation appear to be even lower. If inflation was measured the same way that it was back in 1990, the inflation rate would be about 5 percent right now. If inflation was measured the same way that it was back in 1980, the inflation rate would be about 9 percent right now. But instead, we are expected to believe that the inflation rate is hovering around 2 percent.

Here is just ONE example of ONE of the TWENTY changes in how the government calculates the rate of inflation.  It is called of all things HEDONICS!!  Now that is funny!

Hedonics was introduced in 1998 and is a means by which the government actually DECREASES the price of items, even if the price you paid was higher or the same. The reasoning is that if the items are of better quality, than the value you receive is greater and should be accounted for with a lower net price. They are saying that you got more "bang for your buck" and somehow because what you bought today is better than what you could have bought ten years ago, even if the item of lower quality isn't even available to buy anymore.

Here is an example: If you bought a base model computer with 20 GB of hard drive space with 1 MB of ram at a cost of $999 in 1998 and the next year that same base model computer had 30 GB of hard drive space with 2 MB or ram for $999 in 1999, the government might use $500 as your price for the computer when calculating CPI because IF the older model of computer were still available it would have only cost $500 since the better-faster model cost the same.  So they are discounting the advances of efficiency.
Two organizations actually release information that reflect reality -- the problem is that you must put down the spoon you are being fed with and dig with a knife and fork to find it.  Even when the news is not good -- it is better to know the truth. Isn't it?

The American Institute of Economic Research (AIER) and Shadow stats are two organizations that do more accurate calculations for everyday living. Both use data with the old calculation methods. The EPI put out by AIER shows that inflation the last three years averaged 5.2%, the CPI was about 2.5% (average). That is DOUBLE the amount of inflation being reported by the Fed. If we look at Shadow stats, it shows inflation has been near 10% total for the previous three years. What Shadow Stats does is compare APPLES to APPLES. They use the methodology in place prior to 1980. In actuality we are in an inflationary period akin to the 1970's under Jimmy Carter.  Brutal to know the truth, huh?
Don't believe the CPI data, believe the prices you pay, and place the blame on where it truly belongs, the Government and the Federal Reserve -- printing money is an immature why to keep the masses happy for a short period of time.  When the pain and suffering hit -- it is too late, they are already in power. So when you vote, vote with facts and don't vote with the fiction being fed to you by the very people who want you to vote for them!  The ONLY way to change anything in this country is through your voice and your vote.  Make it count!

 

A Girl and Her Dog

A Girl and Her Dog