It was bound to happen...

[Professor S]

The Obama administration is threatening to rescind billions of dollars in federal stimulus money if Gov. Arnold Schwarzenegger and state lawmakers do not restore wage cuts to unionized home healthcare workers approved in February as part of the budget.

Schwarzenegger's office was advised this week by federal health officials that the wage reduction, which will save California $74 million, violates provisions of the American Recovery and Reinvestment Act. Failure to revoke the scheduled wage cut before it takes effect July 1 could cost California $6.8 billion in stimulus money, according to state officials.

The news comes as state lawmakers are already facing a severe cash crisis, with the state at risk of running out of money in July.

http://www.latimes.com/news/local/la...,4592200.story

So now the stimulus money is being used as a cudgel to force states into doing what the Federal government dictates, and a state like California that is swimming in debt can't even regulate themselves without being threatened with further financial problems.

Wondered why it's taking so long to get the stimulus money out? Now you know why. Money = Power.

This also explains why several of the Republican governors have refused stimulus money.

[Typhoid]

Well, at least Obama has a plan.
Now, a good plan....

[thatmariolover]

So he's dictating the way that ~1% of the money is spent in order to bring wages back to unionized healthcare employees.

California is still going to have 6,726,000,000 available to spend how they wish. Honestly I think the fear mongering here is a little rediculous.

[Professor S]

Originally Posted by thatmariolover

So he's dictating the way that ~1% of the money is spent in order to bring wages back to unionized healthcare employees.

California is still going to have 6,726,000,000 available to spend how they wish. Honestly I think the fear mongering here is a little rediculous.

Read it again.

Failure to revoke the scheduled wage cut before it takes effect July 1 could cost California $6.8 billion in stimulus money, according to state officials.

They didn't say it could cost them a % of the stimulus money, it says it could cost them ALL of the stimulus money. Perhaps the threat has been reduced to percentage of the cut, but if so I haven't seen it yet. To call this fear mongering after reading the article isn't an honest comment, it's simply dismissive.

If I wanted to really fear monger I could go into how this Administration's treatment of Chrysler fits with the literal definition of economic fascism, at least the Italian version.

Fascists explicitly promoted their ideology as a "Third Position" between capitalism and communism.[125] Italian Fascism involved corporatism, a political system in which economy is collectively managed by employers, workers and state officials by formal mechanisms at national level.

http://en.wikipedia.org/wiki/Fascism#Economic_policies

Now is that fear mongering, or a pretty accurate description of what happened? And no, I'm not saying Pres. Obama is a fascist, but his decisions in regards to Chrysler certainly were, but one example does not a fascist make. Then again, four years is a LONG time...

[Ric]

I find it really interesting that despite government money being poured into the system peoples wages were still cut. Surely the extra money means they can afford to pay their employees properly. The fact they are part of a union should go a long way to resolving this position. Trade unions can and have proven to be highly effective in such circumstances here in the U.K

To call Obama a fascist I think may be a little harsh, as ProfS said 'one example does not a fascist make' and when you consider the harsh decisions that have to be made in such an economic climate the buck stops with one man and that man is Obama. You (possibly) voted this guy into power to make these decisions. Perhaps some of his views may be considered fascist but now is the time for hard line no bullshit decisions to get the U.S and indeed in turn the European economy's kick started again. The US and European economies relate to one another so closley that what effects one directly effects the other.

In the past there was a woman Priminister in the UK, her name as you may well know was Margerate Thatcher, she made some truly harsh decisions that I think were far more extreme than any measures yet employed in this current recession. Dont quote me but she basically said at one point, about struggling business' words to the effect of 'if you cant shape up and you cant pull through and you go under then it's tough shit'

[TheGame]

Originally Posted by Professor S

Read it again.

You mis read what he said actually. Or didn't get his point...

The goverment is only dictating what ONE PERCENT of the money that they GAVE CALIFORNIA is being spent on. Honestly, who cares?

To clarify further, if I gave you $500 to invest in food for a few months, but told you that you that you need to buy YOURSELF a $5 extra value meal from Mcdonalds or I'm taking the $500 back.. are you seriously going to take a moral stand and not take the $500?

No wait! I'm fear mongering you!!

Wasn't the problem with the stimulus package from bush that they couldn't control how the money was spent in the first place? So wouldn't this be something that the american people asked for?

[Vampyr]

Originally Posted by Professor S

Read it again.



They didn't say it could cost them a % of the stimulus money, it says it could cost them ALL of the stimulus money. Perhaps the threat has been reduced to percentage of the cut, but if so I haven't seen it yet. To call this fear mongering after reading the article isn't an honest comment, it's simply dismissive.

If I wanted to really fear monger I could go into how this Administration's treatment of Chrysler fits with the literal definition of economic fascism, at least the Italian version.



http://en.wikipedia.org/wiki/Fascism#Economic_policies

Now is that fear mongering, or a pretty accurate description of what happened? And no, I'm not saying Pres. Obama is a fascist, but his decisions in regards to Chrysler certainly were, but one example does not a fascist make. Then again, four years is a LONG time...

I don't think you understood what MarioLover said, or you're reading the article wrong. If they don't revoke the wage cuts they'll lose all of the stimulus money. If they do revoke the wagecuts, they'll only lose the ~1% that it costs them to spend on it.

And I really don't care that the federal government is doing this. These wage cuts will save you 74 million? Well, that's okay, since the federal government just gave you 6.8 billion. If cutting wages is something you don't do lightly, and only as a last resort, as the article stated, then you it shouldn't be a big deal to repeal them in the face of all the new money you're getting.

And if I was going to give someone 6.8 billion dollars, I would probably feel inclined to make sure they spend at least some of it the way I wanted them to.

And those republicans who turned down stimulus money? They'll still not be getting anything whereas California will be getting 6.8 billion - 74 million. I think it's obvious that some people still turned down a crap load of money.

It's completely ridiculous, this argument.

American people to their government, about 10% of which do not have jobs, have no means to feed their kids or pay their bills: "Why did you turn down our stimulus money?"

Government: "Well, you see, the feds were going to force us to either spend some of it to save some of your jobs, or it was all going to be taken away. And we're waaaaaay to proud to have them telling us what to do."

Good lord. This is one of the reason's I voted for Obama. More power to him.

[Professor S]

Originally Posted by Vampyr

More power to him.

Well, you're getting your wish. There is definitely more power to him. And I understand your argument completely when it comes to California and the stimulus money., but I think you've missed mine.

And quite honestly I find a lot of the opinions here more than a little troubling. They are basically tacit agreement's with fascist economic philosophy, a philosophy that has led to more than a little hardship in recent history. You think that it's ok for the Federal government to essentially extort and micromanage states into doing what they say by lording billions of dollars over their head? What gives them the RIGHT? I use that term expressly. Nothing does. They have simply taken that power, and are using billions in dollars that are borrowed from American citizens to do it, instead of using it for what we entrusted them to use it for. There is such a thing as states rights in America as written in the Constitution and Bill of Rights, or at least there used to be. I'm not sure anyone knows anymore, because it's all become so convoluted and murky.

I forget who said the following quote, but I tend to agree with it: "People want to privatize economic gains, and socialize losses" Unfortunately, like with most things, you can't have it both ways.

As for Chrysler, while you might think that it's ok for the Federal government to come in and decide direction, hiring, firing and the budget of private business, we'll see how this works in the long run. As I mentioned before, history does not agree with that assessment. I also don't see how an auto commission or government group can effectively guide a supposedly private company. I don;t really see any other government programs turning profits, do you? I fear all we have gains is an albatross around our necks; a failed company that we will not allow to fail and will instead haunt us for decades, sucking more and more money as we continue the mantra of "this time it will work... this time it will work...". But again, this waits to be seen.

For a government to pick economic winners and losers (the UAW and Chrysler's bond holders, respectively) is oppressive (whether the oppression is "good" or "bad" is irrelevant) and toes the line of destroying the entire concept of contract law, if not breaking contract law outright. If we are not a nation of laws, and each law is respected regardless of whether or not we subjectively agree, we are nothing. If you disagree with a law, then work to change the law. For a government to ignore any law is to eliminate the rule of law.

The proposed "truth commissions" going after Bush administration lawyers over water boarding is a perfect example of this. If these lawyers are charged it will be an obvious break of "ex post facto". You charge people for breaking a current law or legal decision that wasn't against the law at the time. Law does not work backwards, only forwards. I don't blame the administration for this, but instead the Congress, but as a former lawyer Pres. Obama should have spoken out against it instead of taking the "hey, who knows?" opinion that seems to be so popular in politics these days.

http://en.wikipedia.org/wiki/Ex_post_facto_law

And Ric, while I understand your point of view as a European and having grown up in what is essentially a socialized democracy, I certainly would never want American to follow in Europe's economic footsteps. It would reduce our country from being an economic powerhouse to simply an also-ran. Thats not meant as a pejorative, simply an observation. The fact that your country was so affected by an American recession is an example of why I wouldn't want to follow in those footsteps. I prefer our inevitable recessions to come from our mistakes, not someone else's.

I also find it interesting that much of Europe is moving away from government controls in economics to a more free market ideology (France and Germany to be more specific, Ireland did it a while ago). If these fascistic economic tactics are so successful why are these nations starting to move away from them?

[TheGame]

So prof, you think setting expectations for 1% of the money that you give away is wrong?

I think the people who are doing the fear mongering is the republican party and yourself. You're expecting the absolute worst from the government.. You know, the government has and had the power to dictate where 100% of that money went right? But we cry over 1% like its the end of the world...?

[Professor S]

Originally Posted by TheGame

So prof, you think setting expectations for 1% of the money that you give away is wrong?

No, I think the Federal government dictating budgetary policy of a state is wrong, no matter how small. I'm sorry if you think it's not. The triviality of 1% if irrelevant. It could be for a $1 and it still would be wrong. The problem is not with the amount, it is with the act even taking place.

The Federal government has assumed powers that are not theirs. I can remember many people screaming to high hell about the Bush administration being dictators when they pushed through the patriot act. If you believe that is true, I fail to see how this is different. In fact, I see actions like this affecting far more people far more greatly than the patriot act ever did because of how it affects the economy of the state (which affects every resident of the state).

I think the people who are doing the fear mongering is the republican party and yourself. You're expecting the absolute worst from the government.. You know, the government has and had the power to dictate where 100% of that money went right? But we cry over 1% like its the end of the world...?

I'm a little tired of the dismissive "fear mongering" label. I pointed out that what this administration did to Chrysler was fascist. No one disagrees with this assessment, and yet I'm a fear monger? I point out that the administration threatened to refuse stimulus money promised to state swimming in debt in order to enact a policy change, and how it is a huge assumption of power by the Federal government over state government, and I'm a fear monger? Funny, I thought I was pointing out the obvious. I thought people had heard of the 10th amendment. But I guess when point out something people don't want to hear, it's expected that their initial reaction will be hostile.

Perhaps you disagree with my analysis of these two items, and thats fine, but trying to dismiss an argument that is at the very least considerable benefits no one.

[TheGame]

Before I go to our disagreement, let me start with the thing I think we do agree on.. As it stands right now the Fed does have too much power. They have too much control over our currency in general.

But the thing about that is that's a problem that's always been there. And decisions made these days are not going to make much of a difference, we were put on the tracks to this damn near 100 years ago, and at this point I don't think it can be derailed.

I doubt anyone in the government has the ability to affect this without causing havoc. That's just how I feel.

Originally Posted by Professor S

No, I think the Federal government dictating budgetary policy of a state is wrong. I'm sorry if you think it's not.

The Fed isn't dictating this, you can call it that, but once again past decisions led to this. California has been in debt for as long as I can remember. And it was our state government's decision to take the money. If they had their sh** together to begin with we wouldn't have this problem.

And I think only pushing one thing that only accounts for 1% of the funds provided is perfectly reasonable. It'd be unreasonable, if they gave the funds... and then pushed for a lot more to be done, I can't label an exact line on it cause its grey.. but I'd say it depends on how long the state had the money also. 1% this early in is nothing...

If they asked for say, 5% 3 years later, or a return.. then that's when I'd be throwing a fit too.

[Professor S]

Originally Posted by TheGame

The Fed isn't dictating this, you can call it that, but once again past decisions led to this.

No but the Fed does everything BUT dictate this by holding billions over their head like a cudgel. If the Federal government were to actually take over control formally, I think the constitution would literally explode and take out the entire Library of Congress. This is a Constitutional end-around, and everyone knows it.

California has been in debt for as long as I can remember. And it was our state government's decision to take the money. If they had their sh** together to begin with we wouldn't have this problem.

To me, the dire straits of California are a reason NOT to meddle with their budget, especially when they're trying to CUT IT. Also, did the Federal government let the states know that they would be micromanaging them if they took advantage of the stimulus money? No. I wouldn't be this offended if they had. Also, the amount of money being offered is near or more than the total tax revenue of the state and meanwhile they're billions in the red. California was made "an offer they couldn't refuse", but it was never in the power of the Federal government to make the offer in the first place.

And I think only pushing one thing that only accounts for 1% of the funds provided is perfectly reasonable. It'd be unreasonable, if they gave the funds... and then pushed for a lot more to be done, I can't label an exact line on it cause its grey.. but I'd say it depends on how long the state had the money also. 1% this early in is nothing...

Except a violation of the 10th amendment. Thats a sticking point with me, and I don't think there should be any exceptions regardless of the situation. Once we start bending our constitutional laws, I think we will twist them until they don't resemble what they once were. It's human nature.

This is a dangerous precedent, IMO. Once a government begins to take power, they normally don't give it back, or stop acquiring it. This administration's hand has been VERY heavy, beginning with business, and now with California. I'm curious to see if this will happen with other states.

If it stops HERE, I think what has happened hasn't been that bad and in some cases may work out. But we're barely over 100 days in this administration, and so far the precedent that's being set does not bode well for future governmental decisions.

[TheGame]

Prof, you act like the Fed having us by the balls is a new thing. This situation didn't start with Obama being elected. I can understand your concerns, but this is a conversation we could have been having long ago.. the only thing that's different now opposed to a year ago is that the financial meltdown is bringing to light power that has always existed.

[Typhoid]

Keep in mind I have had a few beers at this point, but I would just like to state:

You think that it's ok for the Federal government to essentially extort and micromanage states into doing what they say by lording billions of dollars over their head? What gives them the RIGHT?

Well, the fact they are the government/essential "ruler" of the country sort of gives them the right.




Anyways, my two cents:


I agree with both sides here.
The fact that they are saying "Here, take X amount of dollars, but make sure that 100/X goes towards ____ or else you don't get X dollars" is entirely wrong. It's wrong in the sense they're saying they have to spend a certain amount, nomatter how small on something. However, they are the overall government, which does technically overrule state power.

On the other hand, it is only 1% of the fund they are giving, so no - realistically, it's not a huge deal. If they were saying 60% has to go towards ____, then yes, I could see why it's a big uproar.

[TheGame]

Originally Posted by Typhoid

Keep in mind I have had a few beers at this point, but I would just like to state:



Well, the fact they are the government/essential "ruler" of the country sort of gives them the right.




Anyways, my two cents:


I agree with both sides here.
The fact that they are saying "Here, take X amount of dollars, but make sure that 100/X goes towards ____ or else you don't get X dollars" is entirely wrong. It's wrong in the sense they're saying they have to spend a certain amount, nomatter how small on something. However, they are the overall government, which does technically overrule state power.

On the other hand, it is only 1% of the fund they are giving, so no - realistically, it's not a huge deal. If they were saying 60% has to go towards ____, then yes, I could see why it's a big uproar.

60% would definently be an outrage. Its hard to draw a line though, because it just means if the government tosses a state enough extra money they can get the state to change any little thing they want. Potentially... which is what Strangler is scared of.

I can see how 1% is an annoyance to prof also, but the fact that they could be pulling for a lot more and only asked for one little thing is reassuring in a way. If they really wanted to abuse their power they could, and nobody could stop them.

Some people just chose not to trust the government and make wild assumptions about what will happen. Honestly, I don't trust the govt much, but I'm not gonna sit there and cry about what they could possibly do. Get mad when they actually pull more stunts and don't show contraint. I'm mad at the first bail out package, biggest waste of money ever.

For all I know the first bail out bush made was just done so that future bail outs would come with some more rules attached to them, and people would have to accept them. Who knows? We can't really control what is coming.