We the People

If Ron Paul’s victory in the CPAC straw poll demonstrates anything, it proves that it’s not only the pot-smoking, anti-war hippies that support Ron Paul. Hippies have had trouble voting for years because — surprise! — they tend to have a lack of motivation; Paul’s supporters definitely care and know how to organize for their cause.

What exactly is that cause? It is currently centered around one man, but, let’s be honest, Ron Paul isn’t exactly a young-looking charismatic speaker who’s in with all the latest fads. On the contrary, he’s a whiny-sounding old man.

It seems that we young people are drawn to Paul for a variety of reasons. Some like his “non-interventionist”/anti-war foreign policy. Others like his stands on the Constitution, Austrian economics, and the Federal Reserve. And yes, some are pot-loving hippies that hate “the Man.”

an Austrian defense of short selling against invasive government regulation

Short sellers beware! Not only is the Securities and Exchange Commission after you, but so is The New York Times. In the article “S.E.C. Temporarily Blocks Short Sales of Financial Stocks,” Vikas Bajaj and Graham Bowley adopt a moralizing tone in their reporting – admonishing short sellers and siding with the feds.

In the wake of the government’s bailout of the banks in September of 2008, the S.E.C. “issued a temporary ban on short sales of 799 financial stocks” (Bajaj & Bowley, para. 1). What the reporters do not explicitly illustrate until the end of the article is that these protected stocks comprised the interests of 19 banking firms and the federal government that bailed them out. This kind of regulation – aimed at protecting the interests of the government – hurts ordinary market participants by forbidding short selling.

Short selling is often criticized as a form of speculation. In order to short sell, one borrows stock in a company he expects is overpriced, sells the stock, and repays his loan when the price drops – making a profit if his prediction is correct.

Justifying the short sale ban, New York State’s comptroller Thomas P. DiNapoli said, “This speculative selling has put downward pressure on the entire stock market and threatens to drive our national economy deeper into decline” (Bajaj & Bowley, para. 29). The conclusion that the economy suffers through the practice of short selling is incorrect, because speculation facilitates a healthy market economy.

Speculation helps a market by driving prices towards their equilibrium point, neutralizing the volatility of booms and busts, and spreading information. In Man, Economy, and State, Murray Rothbard writes, “The general effect of speculation is to make both the supply and demand curves more elastic… The more people engage in such (correct) speculation, the more elastic will be the curves, and, by  implication, the more rapidly will the equilibrium price be reached” (p. 251). Relating this knowledge to short selling, one discovers how critical a technique it is for a healthy market economy.

Sort selling acts as speculation, and helps determine supply and demand schedules. Specifically, short selling affects the reservation demand of a stock. If one expects a stock price to increase in the future, he will take a long position: choosing to hold the stock over holding money. This increases the reservation demand of the stock, therefore increasing the price of the stock – all else remaining equal. Short selling works in reverse, and is useful if one expects a stock price to decrease in the future.

In MES, Rothbard writes, “In so far as the equilibrium price is anticipated correctly by speculators, the demand and supply schedules will reflect the fact: above the equilibrium price, demanders will buy less than they otherwise would because of their anticipation of a later drop in the money price; below that price, they will buy more because of an anticipation of a rise in the money price” (p. 250-251). This quote reinforces the importance of action on each side of the equilibrium price.

Short selling is the downward force bringing inflated prices towards equilibrium. When government bans short selling, it cripples the market’s ability to drive prices downwards – creating volatility. This volatility manifests itself in inflated prices, or bubbles. The burst of the housing market bubble led to the banking crisis and the subsequent bailout. By banning short selling, even temporarily, the government runs the risk of creating more bubbles in the market.

Fortunately, attempts to ban short selling cannot entirely halt the market forces in their drive towards equilibrium. This is due to the signals that the S.E.C. sends to investors when it temporarily bans short selling – especially in regards to specific stocks. An observant investor interprets the S.E.C.’s action as negative information, avoids purchasing the protected stocks, and therefore drives down the reservation demand for those stocks – inevitably lowering their price.

Short selling spreads information throughout a market. In his article “Don’t Sell Short Selling Short” Gary Galles writes, “Short selling is part of the information-revealing process that Mises, Hayek, and others emphasized as the central aspect and advantage of the market process. In a world of uncertainty and change, information is the scarcest good, and short selling is an important source of additional information that would otherwise be lost” (para. 4). In this light, the S.E.C.’s actions can be seen as censorship. Indeed, the entire market is harmed by the destruction of the negative information revealed by short selling.

Opponents of short selling justify regulation by raising concerns about abuse. New York State attorney general Andrew Cuomo said of short sellers, “They are like looters after a hurricane” (Bajaj & Bowley, para. 11) Cuomo is accusing short sellers of profiteering after the collapse of the banking industry. However, short sellers predict catastrophe, and get that information out onto the market, stabilizing the prices and avoiding volatility. Cuomo’s accusation could apply to a shareholder who wants to offload his banking firm stocks after the crisis. This nuance is not always clear to government bureaucrats however.

The feds frequently regulate against short selling “abuse” as well. The S.E.C. classifies naked short selling as abusive. Naked shorting takes advantage of the time between agreement to sell and delivery of the stocks in order for the seller to never own or borrow the stock. Naked short selling is not fraud if the transaction goes through. Naked Shorting is fraudulent when the deal does not go through and the buyer suffers a loss while the seller suffers none.

The government attempts to halt all forms of naked short selling, but cannot effectively do so for two reasons. First, how can you know someone is manipulating short selling? Second, how can you tell a manipulator from a legitimate short seller? Regulators can’t tell, and often argue for a permanent ban on short selling. However, any argument against taking a short position is also an argument against taking a long position! Each position is just a reflection of individuals’ reservation demands. Therefore government opposition is an argument against all ownership! This is clearly in violation of man’s property rights, and another approach must be taken.

How do Austrian economists suggest protecting against fraud? In his article, “Short-Sale Restrictions are an Exercise in Naked Power,” Robert P. Murphy writes, “Traders aren’t stupid. They understand the possibility of manipulative schemes, and can take defensive actions accordingly. For example, if a trader believes someone else is engaging in a ’short and distort’ operation, he can buy the stocks on the cheap, preventing them from falling significantly in price” (para. 18). In this situation, a defensive investor in a long position increases his holdings in hopes that the ’short and distort’ operation is proven fallacious. His portfolio might suffer for a short period of time, but if he is correct he will be handsomely rewarded!

Austrian analysis shows that government bans on short selling only hurts the market economy. Taking a short position is the converse action of taking a long position and is no less important in determining market prices. Short selling drives prices towards their equilibrium point, neutralizes volatility, and spreads helpful information to investors. By banning short selling, the government destroys information, creates bubbles, and contributes to the crises they set out to stop. The market must be allowed to operate freely, even when it involves the shorting of influential banking firms.

an Austrian critique of Eminent Domain

In his 2007 article “Now you own it, soon you don’t,” Russ Buettner of the New York Times shares the story of a married couple fighting to keep their home. The city government of Long Branch, N.J., instead of helping this couple retain their property, is aggressively attacking their property. In fact it has worked unrelentingly for the past 12-years in order to give the land to a private developer of luxury condominiums.

The process by which the city attempts to deprive its citizens of their property is called eminent domain. The Supreme Court of the United States, in its controversial 5 to 4 decision of Kelo v. City of New London (2005), ruled in favor of a city government’s ability to take land from its citizens. Several reasons were given to justify this provision some of which are discussed below.

Firstly, the land must be taken for the public use. The Court decided that public use was defined as public purpose. The assumption is that the city knows what is best for all in society, and must therefore act to deprive the individual for the sake of the collective. In doing so justifies itself by providing services to the society, which can be as minimal as increasing tax revenues for more spending.

Secondly, the idea that the whole is greater than the sum of the parts was adopted by the Supreme Court in order to assert the dominance of a city’s planning over that of an individual. The value of the land then is worth more in the hands of the many, than of the one.

The dissenting voice of Justice Sandra Day O’Connor is quoted in Buettner’s article saying, “Under the banner of economic development, all private property is now vulnerable to being taken and transferred to another private owner, so long as it might be upgraded” (para. 13). This is the primary concern of many citizens and economists. Property rights protected by the United States Constitution, are directly under attack by the ruling in Kelo.

This concern is addressed by Austrian economist Murray Rothbard in his 1962 work Man, Economy, and State. Rothbard writes, “Some land would be artificially and coercively withdrawn from use, since land that could not be used by owners in person would have to lie idle. Furthermore [continuing ownership] is self-contradictory, since it would not really permit ownership at all” (p. 151). Continuing ownership is the concept that a man must continue working at the location of his property in order to retain its title. It is important to understand how Austrians define property ownership in order to address the issue of eminent domain.

Man expresses ownership in three ways. First, he owns himself. Second, he owns property when he mixes his labor with land. Third, he owns any capital or consumer good he produces. Rothbard also writes, ” There is no requirement, however, that land continue to be used in order for it to continue to be a man’s property” (p. 147). This must be the case, for once a man mixes his time and labor into the land, he cannot retrieve it. In order for eminent domain to function, man must possess property to be taken. However, if his property may be taken by force, what kind of exchange is this?

Austrians describe this type of interaction as economic violence. Rothbard defines economic violence as, “gain for one at the expense of another” (p. 68).  In this way, eminent domain is clearly seen to be economic violence. It is evident that the individual who is defrauded is at a disadvantage. The question remains – who benefits from this transaction? Proponents of eminent domain would argue that society is benefitted, and that this justifies the taking of property.

Austrians do not define society in the same way as the supporters of eminent domain. To such supporters, society is a real collective entity with needs and aims of its own. Rothbard writes, “The term ’society’ then, denotes a pattern of interpersonal exchanges among human beings. It is obviously absurd to treat ’society’ as ‘real,’ with some independent force of its own” (p. 71). This being the case, it stands to reason that some individuals benefit from the loss of the one individual. In the case of the couple from Long Branch, those receiving the benefit from the taking are the members of the city government and the private contracting firm who plans to build luxury condominiums.

Even so, a proponent of eminent domain could argue that the compensation received by the couple would be just, and thus eminent domain is distasteful but still viable. They argue that the couple be given “fair market value” for their land. In a city, this could mean 125% of the current market value of their property. Austrianism shows, however, that there is no way to justly compensate the couple while still employing forceful methods.

First, the 125% figure is an arbitrary number that entirely neglects the consideration of the couple’s psychic enjoyment of their property. Buettner’s article mentions how the couple loves waking up to the salt air. Does the 125% account for this enjoyment? How can one measure enjoyment on an objective level? This is the mistake made by supporters of eminent domain. Unless the couple voluntarily agrees to a price for the exchange of their property, the transaction is inherently coercive.

Attempts by legislatures to fix eminent domain have been disastrous. Mr. Brodsky, a state assemblyman, says, “The bottom line is we can fix the law so it protects average people and still maintain it as a tool” (para. 30). This is self-contradictory, as it is logically shown that the law cannot both protect man’s natural right to property in one instance, and assault it in another. Furthermore, no individual has the resources to fight the government alone, whether in litigation or insurrection.

What then is the alternative to eminent domain? Austrians would support the formation of a contractual society. Rothbard elaborates on this concept writing, “In a contractual society, each individual benefits by the exchange-contract that he makes… this is in contrast to a hegemonic relationship, where power is asymmetrical where the dictator makes all the decisions for his subjects except the one decision to obey, as it were, at bayonet point” (p. 77). The choice between a contractual society and a hegemony is that of equality or tyranny. All men are either equal, or subject to the rule of others. Eminent domain would not exist in a contractual society, as any attempt by an individual to take the property of another would be seen as theft, without the veil of government to hide behind.

How then does one protect against this theft without a government? Rothbard explains that, “In a free market, all invasive acts by one person against another’s property, either against his person or his material goods, will be combated by the enforcing agency or agencies” (p. 158). Agencies will be formed to protect producers and consumers against fraud, theft, and coercion. This contrasts sharply with a hegemonic society, in which there is no other enforcing agency other than the government.  If those individuals who comprise the government desire a man’s land, there is no choice for him but that of a slave – to obey or rebel.

Special thanks to:

Kathryn Gaines for helping me think through the difficult issues of enforcement of rights and property in a free society. Also, to Ron Meyer for lending me his Capitalism books. Finally, to Mises.org for providing study guides for Rothbard’s Man, Economy, and State.

Dear President Obama,

One year into your rule, you’ve accomplished little while losing the love of much of your populace. I recommend to you my work The Prince. Within this little book, I’ve summarized many useful rules for governing a newly acquired republic. These rules and warnings could save you significant grief in your endeavor to rule.

On your rise to power:

And since the very fact that from being a private citizen he has become a prince presupposes either ability or good fortune… the less a man has relied on fortune the stronger he has made his position.

You displayed great ability in rising in the ranks of your party. Your usurpation of the Clinton dynasty was very impressive indeed. You also inherited great fortune by running against a party that had lost much of its popular support under the previous ruler.

I would caution you against relying too much on good fortune and the good will of the populace in the future however. This will prove difficult, as you have proven little ability beyond that of being elected. You had never governed, written legislation, or any military experience, and this will be to your detriment as a ruler.

On unconstitutional rule:

It should be borne in mind that there is nothing more difficult to handle, more doubtful of success, and more dangerous to carry through than initiating changes in a state’s constitution… men are generally incredulous, never really trusting new things unless they have tested them by experience.

In your attempts to change the constitution of your republic towards socialism, you have alienated the majority of the population. As a democratically elected leader, you have exposed yourself to impending removal from office in the next election cycle. It would be prudent then to govern the people under the constitution to which they are accustomed.

photo credit: AP

On social programs:

There is nothing so self-defeating as generosity: in the act of practicing it, you lose the ability to do so, and you become either poor and despised or, seeking to escape poverty, rapacious and hated. A prince must try to avoid, above all else, being despised and hated; and generosity results in your being both.

Mr. Obama, your commitment to social programs makes you despised and your country poor. You are despised by those you loot in order to fund these lavish and wasteful institutions. As a ruler of a democracy, it would be wise not to garner the hatred of the wealthy in order to gain favor with the poor. By destroying the wealth of the rich, the entire country suffers as a result.

photo credit: moonbattery.com

Therefore it is wiser to incur the reputation of being a miser, which brings forth ignominy but not hatred, than to be forced by seeking a name for generosity to incur a reputation for rapacity, which brings you hatred as well as ignominy

It is clear that lavish spending only alienates and harms the citizens of the state. Instead, a ruler should be frugal and only experience the shame of having to do so. This is preferable to the combined shame of destroying your state and hatred from the people who will subsequently vote you out of office.

On your advisers:

The first opinion that is formed of a ruler’s intelligence is based on the quality of the men he has around him. When they are competent and loyal he can always be considered wise, because he has been able to recognize their competence and to keep them loyal.

You have assembled many experts in the field of socialism, but few in knowledge of fiscal responsibility. Your appointees have been fraudulent in their payment of taxes, and it is unwise to put them in charge of financial concerns. This will result in unwise fiscal policy and incur the distrust and hatred of the citizens over which you rule.

photo credit: moonbattery.com

As mentioned above, the aim of changing the constitution is unwise and will result in hatred for you and your staff. Likewise, your appointing of czars is antidemocratic and will garner the hatred of the people. Men, being accustomed to rule by elected officials, will view the power held by these unelected officials as abusive and unjust.

Furthermore, you must maintain the loyalty of your advisers:

When you see a minister thinking more of himself than of you, and seeking his own profit in everything he does, such a one will never be a good minister, you will never be able to trust him.

It should be very disconcerting to you that your Secretary of State, and former opponent, Hillary Clinton did not attend your State of the Union address. This shows disloyalty, a distancing of herself from the ruler, and her possible ambitions towards taking power. It would be wise to respond with one of these two options. Be considerate towards Clinton, increase her power and wealth to the point that she becomes dependent on your good will. Otherwise, remove her from her post for her disloyal actions.

In conclusion, you should consider reading my work as a guide towards a longer rule. The above examples are only a few that apply to your situation. If I were not dead, I would surely be requesting a position in your cabinet. Alas, I must retire back to the spirit realm and continue my discussions with Plato and Aristotle.

Yours in spirit,

Niccolò Machiavelli

By Ron Meyer

Obama Stares into the Eyes of his Teleprompter

WTP Exclusive

President Barack Obama is trying to pull a ‘Bill Clinton.’ After failing to pass health-care,  he is attempting to pose as a moderate conservative.

I couldn’t help thinking about Bill Clinton’s quote, “the era of big government is over,” when Mr. Obama proposed the veto-enforced discretionary spending freeze starting in 2011. He also promised to invest in nuclear and clean coal power — a total flip on his part — and then promised to cut capital gains taxes for small businesses.

First off, it’s about time. Secondly, talk about some blatant political posturing. After campaigning specifically against spending freezes, drilling, and tax cuts, he now wants to embrace them. Hmm. I wonder if Senator-Elect Scott Brown’s election has anything to do with this sudden about-face.

Well, maybe he realizes “it’s the economy, stupid.” It’s not health-care, not cap-and-trade, and not bank taxes. It’s jobs.

While he is still in denial when it comes to the bailouts and the stimulus package, I think he finally gets that if he wants any chance of winning in 2012, he must give fiscal relief to small businesses. To be honest, we should have gotten rid of the capital gains tax on small businesses a long time ago. Cutting these taxes frees up capital for businesses to use on new employees.

As Mr. Obama giveth, so he taketh away. In an act that would certainly cut jobs, Mr. Obama also promised to tax big business and big banks; this policy will take away capital and make it harder for any business to get loans. But hey, maybe he’ll get some political points for taking it to the fat cats — even if they are the one who provide jobs for numerous American workers.

Concerning Gov. Bob McDonnell’s response: great messaging and a solid delivery. It was rather refreshing to see a Republican clearly articulate free market economics and lay out a path for job growth.

Mr. McDonnell gave a terse speech in defense of liberty and of the founding father’s intent for our government. I was taken aback to actually hear a Republican use the word “federalism” in a large-scale address.

This quote says it all: “Top-down one-size fits all decision making should not replace the personal choices of free people in a free market, nor undermine the proper role of state and local governments in our system of federalism. As our Founders clearly stated, and we Governors understand, government closest to the people governs best.”

This is exactly the fresh outlook on government the country has been seeking. America has never liked centralized power or long lectures. Mr. McDonnell offered a short, punchy rebuttal of the centralized model proposed by the Democrats. Most importantly, Mr. McDonnell looked America in the eyes — not in the teleprompter.

By Ron Meyer

WTP Commentary

Published in the Santa Barbara News-Press

One of the most popular topics for letters to the News-Press has been gang violence. Santa Barbara and Santa Maria residents seem to be growing more concerned on this issue, and I want to present a couple policies I think could help both of these cities.

The first major step would be to implement gang injunctions.

A gang injunction is a restraining order against a group filed through a civil suit; these injunctions create strict rules directed at the gang’s public behavior and activities. Oftentimes, these injunctions have proven to reduce the number of felonies in the areas they are implemented.

Police and residents in Los Angeles, and more locally in Lompoc, love the gang injunction policies they’ve adopted. They have proven to be extremely effective. The LAPD reports that it has been able to destroy gang activity in small areas and significantly reduce activity in the large, gang-entrenched areas.

One big concern about gang injunctions is that they will be too expensive. The LAPD has found a way to enforce injunctions in even the toughest of areas with a “small team of law enforcement officers.” Santa Maria and Santa Barbara may have to spend a little more money, but if they look at the LAPD model, they should be able to enact this program rather inexpensively.

While fighting the gangs above ground with injunctions, we should also address a root cause for gang involvement in the first place: poor public school systems. Parents and children need to have the choice to opt out of gang-infested schools.

Our children are mandated to attend school; if parents cannot afford private schools or home-schooling, these kids have to go to their local public school.

The problem is that gangs have taken over the social scene at many of the public schools in our cities. For students, sometimes the only way not to be threatened, harassed or hurt by a gang is to become a member. Gangs rely on this intimidation to build numbers. This is a pressure that should never be forced on our children.

No child should ever fear going to school, but unfortunately this has become the harsh reality for many students whose parents cannot afford better schooling.

We need to offer these kids a ladder out.

Some form of a school voucher program would be the most effective way to help these children. A voucher program gives parents a government-issued certificate that they can use to pay for their kid’s education at the school of their choice.

Instead of school funding going directly to public schools, part of this funding would go to these vouchers. Parents would then decide if they should send their child to any public, private or charter school in the area. The vouchers may not completely cover the cost of private school, but it would certainly help a lot of families.

Many folks are skeptical about these programs; they fear public schools will lose all their funding because not enough parents choose to send their kids there. For one, this should motivate public schools to be more competitive; and secondly, a voucher program could still allocate a mandatory amount to public schools before dividing the rest of the funding for vouchers.

Another substitute for vouchers is a tax credit that would allow parents to deduct the costs of sending their children to private school. This program is not as effective as vouchers because parents would have to pay the costs up front, leaving out many low-income families that cannot pay the initial tuition. The tax credits would also be predictably more expensive for the cities, but it is still a viable option.

With both vouchers and tax credits, the same principle applies: Give parents more freedom to choose where to educate their children.

Once parents and children are given this freedom, the cornerstone in the gangs’ infrastructure will be removed. The first day a parent finds out about gang activity, they can have the means to move their kids out of harm’s way. Not only that, this reform would allow these children to access a better education and gives them reasons and incentives not to join a gang.

If we mix vouchers/tax credits with new gang injunctions, we will start strangling gangs from both the inside and the outside. Residents of Santa Maria and Santa Barbara — who have been searching for solutions — should demand these proposed changes be implemented by our city councils. We can be the new standard for how to fight gangs in California and across the country.

To drill or not to drill...

By Ron Meyer

Published in the Santa Barbara News-Press

Finding tar on your feet after a scenic beach walk is something Santa Barbarans are used to, but I was a bit shocked when it first happened to me a couple of weeks ago. I frantically asked the people I was with if it was because of a leak from a platform or the result of a spill. I was surprised to find out it was natural oil seeps.

In fact, this natural seepage is the most abundant source of pollution on the Santa Barbara coast. The Santa Barbara County Energy Division reported that Coal Oil Point’s seepage rate is between 150 and 200 barrels per day. The 6-mile stretch around Coal Oil point produces approximately 10,000 gallons each day.

My knee-jerk reaction was that if there’s oil just gushing out of the sea floor, we ought to drill. If there is an abundance of liquid gold out there just hurting the environment, why not remove it and boost our economy?

Unfortunately, it’s not quite that simple — but almost. While drilling doesn’t completely stop the seepage, it significantly decreases it.

A UCSB report showed a 50 percent decline in seepage when they tested the area around Platform Holly. Similar studies across the world have shown drilling removes pressure from the reservoirs that cause seepage.

Considering every year this area seeps about 86,000 barrels of oil into the ocean — the equivalent of the infamous 1969 oil spill — drilling could definitely cut pollution.

Not only are offshore seeps the largest air polluter in the county, these seeps negatively impact the sensitive wildlife in the area. Seals, sea otters, whales and birds are just some of the animals affected.

These adverse impacts have brought oil companies and environmentalists in Santa Barbara together to address this issue. While some of the more radical environmental groups refuse to drill no matter what, others have been quite willing to negotiate.

The Tranquillion Ridge (T-Ridge) Project is a great example. This project would give new leases to oil company Plains Exploration and Production Co. (PXP) in exchange for dismantling four of its platforms by 2022.

Every local environmental organization has endorsed the T-Ridge project and made statements to the state Lands Commission in support of it. They like that PXP will be using existing infrastructure because pollution would be limited. More importantly, these organizations agreed that slant drilling could be done safely from these structures.

As I’ve spoken to locals, their biggest concern is having another big spill. After looking at the pictures and stories, I can’t blame them. But things have changed since 1969.

New and improved slant drilling technology, combined with other upgrades like spring-loaded valves that automatically shut down oil flow if a leak develops in the pipes, and caging that goes deeper into the bedrock as a protection against major blow-outs have revolutionized the drilling process.

PXP went through the proper steps locally, and while both sides have come to a deal, the T-Ridge project has been held up for now in the state’s bureaucracy. The California Legislature needs to act, but we all know how quickly things move in Sacramento.

On Monday, Carpinteria’s City Council put another project, Venoco’s Paredon Oil and Gas Development Initiative, on the ballot for next June. Venoco proposes to use 35 acres in Carpinteria, bordered by Dump Road, City Hall, the ocean and the bluffs, for the exploration and extraction of oil and natural gas from both offshore and onshore fields using slant drilling.

Paredon would bring in revenue and jobs for the city and county, while reducing seeps. However, the locals point out — and I agree — that the specifics of this plan take away too much regulatory control from Carpinteria and give it to the state.

Venoco needs to learn how to negotiate with locals and environmentalists like PXP did with T-Ridge. Folks in Carpinteria want to be able to make sure the oil companies don’t harm their city. Venoco needs to do a better job convincing these people that not only will they do no harm, they will help the local environment and the city coffers.

If more companies like Venoco follow the T-Ridge model, more drilling sites may be able to be opened in the area. If we can use new, safer technology to extract the oil polluting our waters, while making way for a transition to renewable fuels, it would be in the best interests of everyone in the county.

Some still may be resistant to drilling because they live in the illusion that the world can and should immediately switch to renewable energy. The fact is, we still need a bridge to renewable fuel. A cheap and abundant alternative to oil has yet to be completely developed. I hope one comes soon.

We still will need oil for this transitional period, and we can either get that oil from California — bringing jobs and revenues to the state and cities along the coast — or we can keep getting it from Russia and OPEC. Especially in tough economic times, we cannot afford to keep shipping money overseas to people who don’t have our best interests at heart.

All levels of government ought to consider allowing offshore and slant drilling in California. Localities know their area and environment the best, so any major decision should be allowed to be made by them. Sacramento and Washington shouldn’t be making this choice for us.

In Santa Barbara County, we should advocate for smart drilling in areas of high seepage. We should have the freedom to access this resource and gain the benefits from its removal.

by Matt Donatelli

Barack Obama’s legislative and executive inexperience was frequently exposed during the 2008 presidential election, only to be excused by supporters with the argument that: Obama will listen closely to his advisers. After his electoral victory, President Obama showed concerned citizens who his advisers are through cabinet appointments and czar concoctions.

Upon further examination, many of these advisers are radicals with many agendas, few qualifications, and shady dealings. Obama’s Safe Schools Czar, Kevin Jennings, was selected due to his organization of the Gay, Lesbian, and Straight Education Network (GLSEN). GLSEN is responsible for promoting dangerous sexual activity to children as young as 14. Timothy Geithner, United States Secretary of the Treasury, was appointed to tackle tax evaders despite his own history of tax evasion. Anita Dunn, White House Communications Director, led a failed attack on the Fox News Network, and has stepped down from office.

None of these appointments placate the citizen concerned with Obama’s inexperience or political leanings. In fact, each adviser shows signs of radicalism, inexperience, and corruption. With all these thoughts tumbling in my mind, I stumbled across this magazine cover in the checkout isle of my local grocer.

What an unfortunate cover story to publish right before the discovery of Tiger’s mistresses, who now number in the double digits. It is surprising that Obama hasn’t appointed a “Publicity Czar” in order to recall all copies of Golf Digest’s January 2010 Issue. Perhaps Chris Matthews at MSNBC has the proper qualifications, or leg tingling sensations, for the job.

In light of Tiger’s infidelity, here is an updated list of “10 Tips Obama can take from Tiger.

1.  Don’t lie if you cheat on your wife

This tip could have saved Bill Clinton from impeachment. Remember that he wasn’t impeached for infidelity; he was impeached for perjuring himself.

2.  Don’t “Just Do It”

Just because you can have a dozen or more mistresses, doesn’t mean you should. The “if it feels good, do it” mentality of the 60’s is no way to run a country.

3.  Don’t leave your Blackberry lying around

It was a hassle for Obama to keep his Blackberry upon becoming president, but he better be careful how he uses it and where he leaves it.

4.  Keep Michelle away from the presidential golf clubs

Still not convinced Tiger got his wounds exclusively from his car accident? Neither am I.

5.  Don’t t-off the tea party protesters

There’s only so much wasteful spending the taxpayer can tolerate.

6.  If you’re playing the wrong hole, take the penalty and move on.

As 1994 proved for Clinton, government mandated healthcare is unpopular legislation.

7.  Be careful where you put your stimulus package.

Funneling taxpayer money to ACORN, sponsor of prostitution, is a no-no.

8.  Rules and regulations won’t stop cheaters.

The answer to corporate greed isn’t a “pay czar,” and Bush’s deregulation didn’t cause the current financial crisis.

9.  Look out for sand traps.

As commander-in-chief, Obama has one shot to succeed in Afghanistan. He needs make it count.

10.  Don’t let fame go to your head.

Obama may be the media darling now, but it’s surprising how suddenly the tides can turn.

The article in question says that Tiger and Obama are, “two men [who] might have much to talk about, like siblings separated at birth.” Now it will be interesting to watch if Tiger can salvage his marriage, sponsors, and golfing career. Similarly, can Obama save healthcare, the Afghanistan war, and the democrats in 2010 and 2012? Let’s “hope” Obama can learn from these tips and “change” his ways.

CA Drowning in Red Ink

By Ron Meyer

Published in the Santa Barbara News-Press

Young people have an obvious stake in our future: We are the future. More importantly, we are the generation that will have to deal with the long-term problems currently being created by our local, state and national governments.

How many U.S. Congress members are there under 30 years old? One: Rep. Aaron Schock, R-Ill., who is 28. People under 30 are the most underrepresented demographic in the U.S. Congress, state legislatures and city councils across the nation.

What’s wrong with that? People with more life experience should be our leaders, right? I would normally agree, but unfortunately these folks with more experience have been loading up my generation with their debt.

People my age can no longer afford to be apathetic, especially in Santa Barbara.

Last week I wrote about how city salaries and pensions have forced the city to precipitously withdraw money from our city’s rainy-day fund. We have $1 million left; that’s enough to cover 1 percent of the annual budget.

Once that fund is gone, we have three options: raise taxes, cut union-backed positions, or borrow money. We know option No. 2 is probably off the table.

Paying down the deficits the city accumulates and the subsequent tax hikes will hurt Santa Barbara’s economy. The current politicians aren’t going to be motivated to act because these problems will not come to the forefront until after their terms have expired.

Future generations will be stuck paying for current excesses. This has become an unfortunate theme in American government. While Santa Barbara’s fate isn’t exactly desirable, the city’s future deficits and taxes seem rather minor when compared to the debt piled up by the federal and state governments.

The non-partisan Legislative Analyst’s Office reported that California — the token welfare state — will accumulate more than $100 billion in budget deficits between now and 2015. California’s spending has grown by an astounding 50 percent in the last five years, and the state has shown no sign of stopping anytime soon.

The federal government is even worse. Our national debt has reached a record $12 trillion; that’s almost $40,000 per person in America, and the future looks even dimmer. In 10 years, the interest on the debt alone will be $500,000 billion and in 2030 the debt will surpass GDP.

These numbers are tough to grasp, but in real terms this means tons of future taxes. We have had to sell bonds to pay for our debt, and many of these bonds are short-term bonds with reasonably low interest. Unless we figure out how to miraculously pay for these bonds in the next couple of years, this debt will have to be rolled over into higher-interest bonds.

The hard part will come when we can no longer roll over our debt because we have so much that no one will buy our bonds. Then we have to pay for it with tax revenues, and this is where my generation will have to come in.

We get to fork over these future taxes — that is, unless we do something about it.

To stop this rapacity, we must address the third rail of politics: entitlements.

In Santa Barbara, this means addressing pensions; we can only promise to pay current employees what we know we can afford in the future. The city needs to take the first step and make long-term budget projections so people know what’s coming.

In California, binge spending and revenue shortfalls have been dangerously mixed with a growth in entitlement spending. Illegal immigration is causing some of this growth and is consequentially costing the state billions of dollars. California needs to get serious about illegal immigration, but let’s face it, the budget issues run deeper than that.

California has unraveled the welfare reform of the 1970s and 1990s and has built a state that is once again encouraging government reliance instead of individual responsibility. New welfare reform is in order.

The federal government’s challenges are almost insurmountable. Welfare reform is just the first step. Social Security and Medicare are the definition of unsustainable.

Current workers pay for the current retirees; in 1940, there were 42 workers per retiree, but today there are about three. In 20 years ,there will be two workers per retiree, creating a $2 trillion deficit for these programs. It only gets worse after that.

Current and near-retirees should be given what they were promised, but we need to phase out these programs and put in place something that we can afford in the future.

Deficit and debt reduction will require action from the youth of this nation. More young people need to get informed, vote on election days, run for public office, and, yes, even write opinions for a local newspaper.

Older folks can advocate for us, but it’s about time we speak for ourselves.

Ron Meyer Jr. attends Principia College in St. Louis. He is interning at the News-Press.

SEIU Bankrupting Santa Barbara

As a politically minded newcomer to Santa Barbara, I began searching for reasons why this city is struggling financially. It didn’t make much sense to me at first; the city’s residents appear to be fairly well-off. The average value of a house was over $1 million in 2007, and the city seems to be weathering the recession better than most of the state. Yet the city still cannot pay the bills.

I’ve discovered the reason, and it wasn’t hard to find.

Many in this city and on the pages of this paper have discussed this issue at length, but never before has it been addressed with all the necessary data compiled into one column. As I looked at these figures with fresh eyes, the case became clear.

Consider that city employee salaries and pensions make up 75 percent of the budget. The average salary for a city employee is approximately $75,000 compared to the city’s private sector average of around $55,000.

In April, the News-Press published a list of more than 100 city employees making over $90,000, even excluding the city’s police and fire departments. The paper held back on publishing the 8-page list of city employees making over $60,000 and the list of past and current employees with pensions over $100,000. The fact that these lists even exist is astonishing.

Plus, the current employees have raises coming their way in the next two years. By looking at these exorbitant salaries and unprecedented benefits, you would never guess that the city is running millions in red ink and that we are in a recession.

Why has the city continued these unsustainable practices? It’s simple, really.

We forget that it is only businesses that are forced to cut back during hard times while the government largess continues to operate from the fruits of those same businesses. When times get tough, government usually looks to make up for lost revenue by raising taxes instead of rolling back its own spending.

This pattern occurs at all levels of government because vested interests don’t want to give up power. In Santa Barbara’s case — as in many cases across the nation — the SEIU (Service Employees International Union) is the strongest of these interest groups.

SEIU Local 620 represents a majority of the city workers in Santa Barbara. The union’s objective is to get as much pay and benefits for their members as possible — an acceptable and even noble goal for a union.

SEIU is no normal union. Nationally it represents millions of workers from various industries who band together financially to bargain effectively with employers. The problem arises when they begin to collude with the government.

In Santa Barbara’s case, SEIU circumvents the normal union-employer battle and simply gives money to the politicians in charge of the budget. When this happens, SEIU ends up on both sides of the negotiating table, leaving the taxpayer unrepresented.

The current and future mayor and three of the six current and one future council member have received substantial campaign contributions from SEIU.

Mayor Marty Blum received $2,000 for her reelection campaign in 2005; Mayor-elect Helene Schneider got $8,500 in 2009 and $5,000 in 2007; Councilman Grant House received $11,500 in 2009; Councilman Das Williams received $5,000 in the 2007 election; Councilman-elect Harwood “Bendy” White received $1,000 this year; Dianne Channing even collected $9,000 in her 2009 losing bid.

This is big money in local elections, and while this is not illegal, it is certainly unscrupulous and shady.

Political action committees (PACs) have been giving money to candidates supportive of their desires for years, leading many people to distrust these special interest groups. SEIU consorts the functions of a PAC and a union; this becomes particularly worrisome when this union represents government workers.

This combination of factors leads to a slavish trust between the city officials and SEIU. The union helps fund campaigns in direct return for higher benefits and salaries for their workers.

Usually, during union negotiations, the people who would be forced to pay the higher salaries are present. The taxpayers appear to be unrepresented or at least under-represented at these talks. The future taxpayers saddled with paying for the pensions of current workers — some of them over $100,000 — are definitely not there.

The good news is that city voters can take steps to change this broken system. The obvious first step is to demand that officials stop taking money from SEIU. The second is to demand reform of the current system.

Not all city employees are overpaid; it would be unwise to make across-the-board cuts. As one recent letter-writer pointed out, some employees have modest salaries and benefits. But in many cases, they have gotten out of hand and must be rolled back.

These changes would ensure a more honest, affordable and sustainable government for the residents of Santa Barbara.

The author is a student at Principia College in St. Louis. He is interning at the News-Press this winter.