The Great Annuity Bundle Bungle: AB 360

banker 2 The Financialists are at play in the current session of the Nevada Assembled Wisdom, with the support of Assemblyman David Gardner (R-NV9) and his AB 360 which will be heard in the Assembly Government Affairs committee today.  Here’s the summary:

“This bill: (1) requires a program for deferred compensation that is made available by the State or the Board of Regents to offer an employee at least five investment options to choose from; (2) provides that any plan authorized by 26 U.S.C. § 403(b) or 457 must offer at least two investment options consisting of fixed or fixed index annuities and at least two securities investment options offered by different investment management companies; and (3) provides that a third-party administrator of a program for deferred compensation must use an open and competitive request for proposals process when selecting investment options for the program.”

Sounds techy?  This link will take you to the UNS page explaining the supplementary (and voluntary) retirement programs currently offered by the institutions of higher education in Nevada.  There are two “record keepers” for voluntary retirement programs: ING and Hartford; and, there are also plans separated from these two offered by TIAA CREF, Valic, and Fidelity.  So, why would the University System have to offer five, including “fixed or fixed index annuities?

First, what’s a fixed index annuity?  The SEC explains the forms currently available:

“There are generally three types of annuities — fixed, indexed, and variable. In a fixed annuity, the insurance company agrees to pay you no less than a specified rate of interest during the time that your account is growing. The insurance company also agrees that the periodic payments will be a specified amount per dollar in your account. These periodic payments may last for a definite period, such as 20 years, or an indefinite period, such as your lifetime or the lifetime of you and your spouse.

In an indexed annuity, the insurance company credits you with a return that is based on changes in an index, such as the S&P 500 Composite Stock Price Index. Indexed annuity contracts also provide that the contract value will be no less than a specified minimum, regardless of index performance.

In a variable annuity, you can choose to invest your purchase payments from among a range of different investment options, typically mutual funds. The rate of return on your purchase payments, and the amount of the periodic payments you eventually receive, will vary depending on the performance of the investment options you have selected.”

So, what could possibly go wrong?  There are several reasons why annuities aren’t all they are cracked up to be.   First, we ought to remember that annuities are forms of insurance, and are regulated as insurance policies and NOT like securities.  For example, with fixed or fixed index annuities there aren’t the disclosure requirements which are in place for investments in securities.  The individual purchasing the annuity is on his or her own to figure out the fees, the comparative performance, and even how the money is being invested. [Kiplinger]   Thinking about fixed index securities? Think again.

FINRA issued an “alert” regarding those “Fixed Index,” or sometimes called “Equity Indexed” annuities (pdf)

“Sales of equity-indexed annuities (EIAs) have grown considerably in recent years. Although one insurance company at one time included the word “simple” in the name of their product, EIAs are anything but easy to understand. One of the most confusing features of an EIA is the method used to calculate the gain in the index to which the annuity is linked. To make matters worse, there is not one, but several different indexing methods. Because of the variety and complexity of the methods used to credit interest, investors will find it difficult to compare one EIA to another.” (emphasis added)

If a person isn’t knowledgeable and comfortable with terms like “ratchet” indexing, or “high water mark,” or “point to point” indexing methods, then the session with the salesperson will be (a) quite long or (b) really confusing.  The salesmanship is an important element, and leads us to the second thing that could go wrong.  Did we explain that because annuities are lightly regulated, unlike equities, that the commissions for selling and managing annuities are in the really high range – like around 6%? [Orman

So, with an almost unregulated product, the opacity of which is nearly legendary, and the fees are some of the highest in the business, why require the University System to offer them?

Because the whole business in annuities goes back to the Romans, but the recent interest has more to do with insurance companies trying to shave off a bit of the money that was going toward money market accounts  in the late 1980s and early 1990s.  And, what the salesman is telling the potential buyer doesn’t usually include: (1) The high costs and fees; (2) The illiquidity (for ‘premature’ distribution; (3) The complexity of the product – remember it’s really hard to compare products; and (4) The taxes, “All withdrawals received from an annuity contract that are not considered to be a return of principal are taxed as ordinary income, regardless of the holding period of the contract (see below). There is no chance to qualify for capital gains treatment.” [Investopedia]

Why AB 360? Perhaps because somewhere out there in Nevada there are insurance companies still seeking to pick off investors who might otherwise sign up for retirement plans associated with the equities or money market sectors – who are ripe for the picking.

If a reader still isn’t sure why DB is opposed to this bit of legislation designed to enhance the bottoms (and bottom lines) of the insurance business, then I’d recommend “Beware the pitch for indexed annuities,” Reuters 2010; and,  “Annuities are not bought, they are sold,” from Forbes 2012; and, “The low down on equity indexed annuities, “ Bankrate.

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Filed under financial regulation, Nevada economy, Nevada legislature, Nevada politics, public employees

The Bundy Boys Join the Circus

AB 408

Remember the Bundy Boys?  Wonkette hasn’t forgotten the Fiore Forays into governmental mismanagement, nor have too many other people.  Now, the flags are flying again, for Freedumb!, in the form of AB 408, a singularly silly bill put forth by the usual group of Tea Partying Fanatics: Assemblywomen Fiore, Dooling, Shelton, Titus, and Seaman. Yes, it’s Ladies’ Day for AB 408, with some fellows tossed in as co-sponsors.  The ladies would like to kick the Feds out of Nevada:

“AN ACT relating to public lands; prohibiting the Federal Government from owning or regulating certain public lands or the right to use public waters; requiring the State Land Registrar to adopt regulations that provide for the appropriation and registration of grazing, logging, mineral development or other beneficial use rights on public lands; requiring the State Land Registrar to sell permits for grazing, logging, mineral development or other beneficial uses on public lands for which such rights are not registered and appropriated; requiring the board of county commissioners of each county to impose a tax on profits from the beneficial use of public lands;…”

Translation: Any rancher who doesn’t want to pay grazing fees for the use of public lands doesn’t have to.  And, we can go one step further – any mining company or logging enterprise can have the State Land Registrar sell off Nevada’s minerals and timber resources at will.  It’s privatization, as they say, on steroids.

What the Tea Bag Biddies seem to have forgotten is that there are other people using those lands too – not just the likes of Cliven “I want to tell you one more thing I know about The Negro” Bundy – and they aren’t hikers and tree huggers, they’re other ranchers.   If the Bundy ilk are allowed to over-graze range lands the land isn’t just Bundy’s problem, it becomes a problem for other ranching operations in the area which might want to use the land eventually.  This isn’t the only thing the Tea Bag Biddies seem to have overlooked.

There is more to BLM land management operations than protecting wildlife, there’s the part wherein the BLM is involved with wildland fire fighting, fuel mitigation, and related issues; combined with programs to manage energy resources, communication right of way and access, and hunting and fishing access.  Then, there’s that pesky bit of Constitutional History, in the act admitting Nevada into statehood:

“Third. That the people inhabiting said territory do agree and declare, that they forever disclaim all right and title to the unappropriated public lands lying within said territory, and that the same shall be and remain at the sole and entire disposition of the United States; …..”

So, the terms of AB 408 are ultimately selfish, deliberately narrow, and most probably unconstitutional – and Ammon Bundy, litigant in a relatively new phony lawsuit against the Feds, is gathering support from the Tea Bag Biddies in the Legislature. [LTN]  And, they’ll be hoping for some company. Company who share the Bundy fictional version of the country:

“The natural resources of America are being stolen from the people and claimed by the federal government. Everything we eat, wear, live in, use and so on comes from the earth. If we lose access to the land and natural resources we become beggars to those who control access. Without doubt this is the greatest immediate threat to the individual person and people as a whole. More lives, liberties and property can be taken under this threat than any other we see.”  [RReport]

No statement could make it more abundantly evident that the Bundy Brigade sees itself as separate from the other 320,000,000 people in this country.  For all the blathering about Constitutional-ism, the Brigade appears to have forgotten the first words of the hallowed document: We the people of the United States, on Order to form a more perfect Union…”  We the people form the government. Not “we the Bundys.”  A rough translation of Bundy-ism might be: What’s mine is mine and what’s yours is mine too.

And lest we forget, it was this same general philosophy which attracted support from the two Bundy-ites who killed Officers Alyn Beck and Igor Soldo, in Las Vegas, NV in June 2014. 

The bill will get its hearing, and should get nothing more. 

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Filed under Constitution, Hate Crimes, Interior Department, Nevada, Nevada legislature, Nevada politics, public lands, Rural Nevada

Legislative Headaches: The Tax Man Cometh

Take Two Aspirin

If the three major tax plans in the Nevada Legislature, and their varied explications, are giving you a head ache, the Las Vegas Sun offers a good comparison of them.  There’s a major problem with the Assembly GOP plan which:

“Would change modified business tax rate from 1.17 percent for general business and 2 percent for financial sector businesses to 1.56 percent for all businesses. Exempts companies with payrolls less than $50,000 per quarter and removes a deduction for health care premiums.”

This is a form of “flat tax.” And, there’s one group of businesses which benefit most from a “flat tax,” – the big ones. I know, it sounds counter-intuitive, but what gives the appearance of equity (the flat tax) actually ends up being one of the most inequitable forms of revenue raising.

Beloved by such think tanks as the ultra-conservative Cato Institute, flattening taxes works against middle income groups, both domestic and business.  Let’s assume that the 1.56% tax were to apply to all businesses in the state with payrolls more than $50,000 per quarter ($200,000 per year.) This would apply to all forms of enterprises except those in the financial sector.  For clarity, the financial sector includes commercial banks, investment banks, insurance companies, investment companies, unit investment trusts, face amount certificate companies, management investment companies (closed/open), and three types of non-bank investment companies: (1) savings & loans, (2) credit unions, and (3) shadow banks. [Investopedia]

Current law and the Sandoval Plan keep the tax on those financial sector enterprises at 2%.  The Assembly Republicans would provide them with a 0.44% tax break. At this point, it ought to be asked – Why is a bank like Wells Fargo with a reported revenue of $21.4 billion (up 4% YOY) getting a tax break when a supermarket is running on a 6% margin?  Or, why is a hedge fund, and those similar firms which operated in the shadows in the run up to the crash of 2007-2008, getting a break?

One conclusion is that the Banking Lobby and associated financialists are running full bore at the tax proposals.  Hedge fund managers already have one of the sweetest tax breaks imaginable in the form of the Carried Interest Loophole, and now the Assembled Wisdom is proposing they get a nice break from the state. [See also: TO.org, BusinessInsider]  If nothing else, the Assembly proposal indicates that Financialism is alive and well in the Legislature’s bailiwick.

In short, what looks superficially “equitable” actually makes it easier on the financial sector firms, and places more of the revenue raising responsibility on those businesses which operate on a local level – retailers, wholesalers, and the like.  “Shadow” financial institutions, already the beneficiary of copious tax avoidance strategies, are paying the same “freight” as the supermarket chain and the retailers.

There’s another point which ought to be addressed:  Who is at greater general risk during an economic downturn?  In case we hadn’t noticed – the financial sector is no longer directly connected to the commercial sector. The advent of the Shareholder Value theory of corporate management is what drives stock prices – it doesn’t matter if employment is dropping, if the cuts in payroll are assumed to be part of the management plan to boost the value of the shares.  However, in the real economy it matters very much if employment is reduced because that in turn yields lower demand for goods and services.

In this instance, “sharing the load fairly” actually means that the businesses most likely to be hurt by any economic downturn, and those businesses which are dependent on local economic conditions, are to “share” an equal burden in terms of revenue raising with those which are all too often the perpetrators of commercial difficulties in the “real economy.”

Putting it less diplomatically, the Assembly proposal really isn’t very fair at all.

*And by the way – doesn’t eliminating the deductions for health care insurance make it less likely employers will sponsor such plans, making it all the more necessary that the health insurance exchange markets under the Affordable Care Act be sustained?

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Filed under banking, Economy, Nevada economy, Nevada legislature, Nevada politics, nevada taxation

There’s a reason tenure cannot be taken from a Nevada public school teacher, and it’s simple.

teacher tenure

There is nothing to take, Nevada public school teachers do not have tenure.  Nevada teachers have either probationary or post-probationary statusAB 378, which is purported to be a ‘reform’ bill is another of those ALEC/AFP dream lists inserted into the Legislative discussion.  Here’s the meaty part:

“Existing law provides for the evaluation, discipline and discharge of public school teachers and administrators. (NRS 391.311-391.3197) Generally, during a 3- year period, probationary teachers and administrators are subject to more intensive evaluation, have no right to continued employment after any school year, and have limited procedural rights if they are suspended or dismissed during a school year. (NRS 391.3125, 391.3127, 391.3128, 391.3197) The admonition, demotion, suspension, dismissal and nonreemployment provisions that apply to postprobationary teachers and administrators are generally inapplicable to probationary teachers and administrators. (NRS 391.3115) However, existing law provides that a collective bargaining agreement supersedes these statutory provisions if the agreement contains provisions relating to dismissal and nonreemployment. (NRS 391.3116) Section 10 of this bill generally eliminates the existing distinctions between probationary and postprobationary employees, except for the purposes of the evaluation requirements applicable to them. Notwithstanding the provisions of any collective bargaining agreement or contract of employment to the contrary, section 10 provides that a postprobationary employee has no status or rights of employment different from those of a probationary employee and may be denied reemployment after any school year.”

Got this? Because it really isn’t very difficult.  There are no “tenured teachers” in Nevada – there are only those with “postprobationary status” who have a less stringent evaluation procedure, and have DUE PROCESS rights if they are to be dismissed, demoted, or refused a contract for the next school year.  That’s all, simply DUE PROCESS rights to answer the allegations of mismanagement or incompetence if they are not offered another one year contract; and – every teacher in Nevada signs ONE year contracts with the local district.  Therefore, what AB 378 does is NOT to eliminate tenure (which doesn’t exist) but to eliminate DUE PROCESS, which does.

Now class, hands up, all in favor of removing  DUE PROCESS for teachers who are challenged by the school administration for mismanagement, incompetence, or generally not being popular with the administration?

This is a piece of legislation entangled with all manner of potential unintended consequences. A few examples:

Which evaluation regime is to be adopted for all teachers in the district if the distinction between probationary and post probationary teachers is eliminated?  It sounds like the probationary model might be the one most aligned with the intent of the legislation, but have the authors of the measure calculated the amount of time a school administrator would have to add to an already busy schedule to implement the enhanced processes in place for probationary teachers to everyone in the building?  Do the bill’s authors intend to fund additional administrators for school districts to fulfill all the evaluation tasks assigned?

If there is no advantage in staying with a school district for any length of time because there is no distinction between probationary and postprobationary teachers, then why should a “highly effective,” or “effective” teacher bother to stay longer than three years in a district if some other district or school offers higher pay or better incentives? 

Frankly, if I were in charge of an affluent school or district I’d be delighted with the prospect of “picking off” the best and brightest in the not-s0-affluent areas, by hinting to the best and brightest that since there was no advantage for them to stay longer in the Not So Affluent district or school,  I could offer, say, smaller class sizes, a lighter schedule, and more input into curriculum design and implementation?  This often happens anyway, but why encourage it?

If due process is denied to an individual who has received “highly effective” or even “effective,” ratings for three years running does the prospect of demotion, dismissal, or refusal of re-employment invite more litigation? The elimination of the hearing process means that the “administrative remedies” are exhausted as soon as the announcement is made to the teacher in question.  So, if there aren’t any “administrative remedies” available, then the next step is into the courtroom.  Expensive? Probably.  This situation leads to the next question.

Does eliminating the due process and related contractual provisions place more school administrators in jeopardy?  Possibly yes.  If administrative remedies are eliminated and any questions remain about the intent or source of the decision to demote, dismiss, or refuse to re-employ, then the administrator or district must demonstrate (as a potential defendant) that the decision made was not arbitrary, capricious, or vindictive.   If there’s  system in place governing the demotion, dismissal, or employment refusal decision making process then the administration has a documented ‘trail’ and it is much more difficult to substantiate allegations that the decision was made arbitrarily, capriciously, or even vindictively.

Other than completely eliminating the due process protections for both teachers and administrators, there’s another element in the bill that should make a person’s skin crawl.

“Existing law requires the State Board of Education to establish by regulation the maximum pupil-teacher ratio in each grade and for each subject matter each school district in this State. (NRS 387.123) Generally, the ratio of pupils teachers in kindergarten and grades 1, 2 and 3 must not exceed a specified and each school district must develop a plan to reduce the ratio within the limits available financial support. (NRS 388.700-388.725) Sections 3-5, 12, 13 and this bill repeal those provisions and eliminate existing references to them.”

It’s difficult enough to be “effective” or “highly effective” as a teacher or administrator in a school anyway… but in which situation are they more likely to be successful:  School A with 40 students in primary grade classrooms; or, School B with no more than 20 students in primary grade classrooms?  Or, put less stridently, in which classroom is a youngster more likely to receive attention to his or her questions?

Assemblywomen Victoria Dooling (R-NV41 and Freedom Works) and Shelly Shelton (R-NV10), the sponsors of this bill, should have paid a bit more attention to the details in NRS 391 before putting this bill forward.  Additionally, they should have noticed that when the subject of employment and due process arise the potential for mischief (and protracted litigation) increases.  Sometimes things aren’t as simple as anti-government activists like Matt Kibbe says. 

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Filed under education, FreedomWorks, nevada education, Nevada legislature, nevada taxation

Spooks, Haunts, and other Scary Things in the Nevada Legislature

Nevada Legislature Scary Things

The GOP controlled Nevada Legislature is haunted. Specters and spooks dog the steps of the members of the Assembled Wisdom, wraiths point toward things of which we must be afraid, very afraid.

We must be afraid of voter impersonation fraud.  The fact that it hasn’t happened doesn’t mean that we ought not to writhe in terror at the prospect.  Speaking of ghosts of elections past, we have Sharron Angle to add her wail to the cries of alarm:

“Former Assemblywoman Sharron Angle, who lost the 2010 U.S. Senate race to Harry Reid, testified for the bill, saying “we do have a voter impersonation problem across the country.”  Anderson asked if she has found examples of voter impersonation in Nevada in her investigations. Angle said no, but that there is “anomalous activity that goes on in Nevada elections that is not easily explained.” [LVRJ]

One might reasonably guess that “anomalous activity” is one of those terms which might be analogous to the Spectral Evidence allowed in the Salem Witch Trials?   However, we might just as well place this within the glossary of meaningless phrases, which while sounding erudite, mean almost nothing, such as “stocks are down on profit taking,” or “there’s lots of cash on the sidelines.” [Ritholtz] Or, such unverifiable and empty notions like “highway miles.”  Or, those gratuitous and equally meaningless phrases which appear in job opening announcements, “self starter,” “team player,” and “highly qualified.”

The point being is that bills like SB 169 (photo ID) are necessary to solve the Republican problem of not being able to win elections if lower income, non-white, young people, and the elderly are allowed to vote.

We must be very afraid of criminals.  Not only must we quake in alarm, according to the GOP Gun Club we must arm ourselves and await the day when we will be called upon to open fire on the evil-doers in our midst. Unfortunately, this serves to remind us that one person who tried this at the Las Vegas Wal-Mart ended up as a victim. [SFgate] No matter, by the lights of the Gun Club we must all be allowed to carry concealed weapons – anywhere – unless maybe not on school grounds.  (AB 148) 

As of 2013 there were 2,790,236 people in the state of Nevada.  There were 16,496 violent crimes reported.  We should put this in some perspective.  First, if we divide the number of violent crimes (victims) by the total population the result is 0.00591.  Shift the decimal to create a percentage and we have 0.59%. [TDC]  Is the likelihood of victimization in a violent crime in Nevada so high that all the dangers associated with carrying a concealed weapon worth the effort? Secondly, there were 163 murders, 1,090 rapes, 5,183 robberies, and 10,060 assaults in Nevada as of the 2013 reporting period.  [TDC]   The numbers don’t suggest a need for a proliferation of arms among ordinary citizens.

But but but… What if the criminals think there will be armed opposition to their nefarious endeavors! That will prevent them from carrying out their heinous designs! Really?  The armed robber already has his or her gun in position, ready to fire. The gun in my purse or holster is going to take a moment to get “into position.” Thus, the obvious outcome is that the robber gets the money, and the firearm.  Then there is the “collateral damage” consideration.  What if the “burglar” isn’t a criminal after all, but some family member who has lost a key?  In public spaces, how does Our Concealed Carry Hero determine if another Concealed Carry Hero is, or is not, a perpetrator of the shooting? The questions go on, but the bottom line is that in the fanciful world of the gun enthusiasts every hero can make practical decisions at 2 in the morning, make every shot count, and insure that every shot is aimed at and will hit the criminal.  It’s a scenario right out of the made for TV melodramas. Legislation should be crafted upon a foundation of facts and rationality, not the fevered imaginings of the frightened.

We must be afraid that someone somewhere is taking money away from us, and that every accumulation of government revenue is robbery, and every public service employee is unworthy.  Those comfortably ensconced in the upper 0.01% of income earners may very well be able to buy all the books they want (therefore there is no need for public libraries) or to spend a vacation on a private island or in a private resort (therefore there is no need for any public parks), and they may elect to spend money on private security, or pay for service firefighting, or pay the tolls on roads and highways, or send the kids to private schools.  When money is no object, other people’s money is little more than a object of attraction. 

Unfortunately, the upper 0.01% has been effective over the last three decades in convincing ordinary people earning $50,000 per year that a public school beginning teacher earning $37,000 is a Pig At The Public Trough.  The median wage of an employee of the State of Nevada is currently $46,590.  Hardly a figure, when agency heads are included, to describe an opulent living.   Yet, public employees are taking fire in this edition of the Legislature.

However, it’s not just the public sector employees who are drawing the attention of the Needy Greedy.   State Senator Joe Hardy (R-Boulder City) wants to repeal the state’s minimum wage.  Hardy’s SJR 6 (pdf) would repeal Nevada’s minimum wage provisions and let the legislature determine if an employer is providing health insurance if the cost is not more than 10% of the employee’s gross taxable income.  Here’s a thought – How about, instead of allowing more employers to pay less than $8.25 per hour, Nevada enacted an increase in the minimum wage? Period.

Want to see fewer people have to rely on housing subsidies to keep roofs over their heads? Raise the minimum wage.  Want to see fewer people have to resort to the SNAP programs? – raise the minimum wage. Want to see fewer individuals have to avail themselves of Medicaid assistance? Raise the minimum wage. 

For too many years we’ve been told the people (including the disabled and the elderly) aren’t working hard enough.  They should get more education (despite the costs and time involved), get more gumption (this in the face of a 5% multi-job rate), work more hours… take individual responsibility!  This is all lovely palaver from the heights, the concepts tend to disintegrate when applied in the real world.  The question could as easily be reversed. For example, the Las Vegas Sands Corporation, with sales and revenue reported as $14.58 billion in 2014, and net income of $2.84 billion, couldn’t spring for more than a paltry $8.25 per hour?  The question ought to be why can’t employers pay more than $10.10 per hour, or a living wage of $15.00?

In the real world most employers do pay more than the minimum already.  Minimum wage workers comprise about 4.7% of the total employed workforce.  The chart shows national trends for minimum wage workers:

Minimum Wage workers

“Leisure and Hospitality,” where have we seen that category before? L&H is the largest employer in the state, accounting for approximately 398,000 jobs earning an average annual wage of $31,600 (net of benefits.)  So, here we sit in a state in which most employees are engaged by a sector most likely to pay earnings at or below the federal minimum wage – and we can’t figure out that those who need housing or SNAP assistance might not fall into those categories if the wages were increased? So, let’s ask again: Why are Nevada employers unwilling to pay wages which would support their employees above the rate at which they are eligible for public assistance?

There are some things about which we should be legitimately concerned, those just don’t seem to have made it into the consciousness of the Legislature’s majority. Here are two examples:

Nevada has an income inequality problem.

“The states in which all income growth between 2009 and 2012 accrued to the top 1 percent include Delaware, Florida, Missouri, South Carolina, North Carolina, Connecticut, Washington, Louisiana, California, Virginia, Pennsylvania, Idaho, Massachusetts, Colorado, New York, Rhode Island, and Nevada.” [EPI] (emphasis added)

This situation is economically unsustainable.  As middle income and lower income earners tighten their belts and shave their budgets, there are simply not enough high income earners to create the demand for goods and services over time.

Nevada has infrastructure issues.  Only in the categories of waste water and solid waste does the state of Nevada get a ‘good’ grade, a B, from the ASCE.  We seem to be handling the excremental elements of our state rather better than our school buildings and our dams.

If the Legislature can move past Guns Galore!, Labor Bashing, and Vote Suppressing, we might want to address these and other pressing issues in the Silver State.

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Filed under Crime Rates, Gun Issues, Nevada economy, Nevada legislature, Nevada politics, Vote Suppression, Voting

Yes, Heller Embarrassed Nevada

newspapers 1 The Reno Gazette Journal adds its editorial voice to the backlash over the #Iran47 participation of Senator Dean Heller (R-NV), in “Heller embarrassed Nevada with Iran letter.”   Thus, the Gazette Journal joins a chorus including the Cleveland Plain Dealer, the Cincinnati Enquirer, the Nashua, NH Telegraph, the Concord, NH Monitor, the Peoria Journal Star, the Salt Lake Tribune, the New York Times, the Kansas City Star, the Sacramento Bee,  the Pittsburgh Post Gazette, the Baltimore Sun, the Boston Globe, the Los Angeles Times,  and others. [Pol]

Senator Heller’s web site doesn’t include any press releases explaining the inexplicable.  Perhaps he’s adopting some of the other incredulous statements made, like Senator McCain’s “snow storm” excuse?  [Pol] Or, he might use the Senator Rand Paul template: “I signed the Iran letter in Order to Help Obama?”  Or, how about the former Governor Jeb Bush idea, “I approved it out of frustration?”  There’s always 60+ day Senator Tom Cotton’s version: “If Congress doesn’t approve the deal it may not last.”

Maybe the junior Senator from Nevada could mash them all together?

“I signed the Iran Letter because I was frustrated with the snow storm, and in order to help the President I thought I’d let the Iranians know that the Constitution allows the Senate to offer “advice and consent” to treaties before they’re ratified, just in case the fellows weren’t educated.”

The last part is really amusing given that the Iranian government has the highest number of US college graduates serving in any foreign government cabinet in the world.  President Rouhani has a PhD from the prestigious Glasgow Caledonian University (Scotland), Zarif has a PhD from the University of Denver; the Science, Research & Technology minister (Mohammad Ali Najafi) did post graduate work at MIT.  Vaezi, Minister of Communications, began his PhD at LSU and finished at the Warsaw University in Poland, the Minister for Industry, Nematzadeh, graduated from Cal Poly in 1968, and studied industrial management at Cal Berkeley. Ali Akbar Salehi, head of the AEO, has a PhD in nuclear engineering from MIT.  Chief of Staff, Mohammad Nahavandian, has a PhD in economics from George Washington University.  [IranPrimer]

The junior Senator from Nevada might want to consider his response and rationale very carefully because when an editorial board uses terms like “condescending, embarrassing, clueless, damaging, and hypocritical,”  the Senator’s next words should be very carefully weighed and measured.

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Filed under Foreign Policy, Heller, Iran

A Second Look At AB 182: ALEC’s assault on Nevada Public Employees

AB 182

REVIEW: If one feels the need for a bit of background information, the origin of bills like AB 182 can be found in the ALEC model legislation package known as “The Public Employee Freedom Act.”  (pdf)  The bill is a veritable laundry list of the ALEC bill-mill wishes:

“(1) AN ACT relating to local governments; prohibiting a local government employer from entering into an agreement to pay dues to an employee organization through deductions from compensation; (2) prohibiting such an employer from providing paid leave or paying compensation or benefits for time spent by an employee in providing services to an employee organization; (3) prohibiting the inclusion of certain employees in a bargaining unit; (4) revising provisions relating to a reduction in force; (5) providing that a collective bargaining agreement between a local government employer and a recognized employee organization expires for certain purposes at the end of the term stated in the agreement; (6) requiring public notice of certain offers made in collective bargaining; (7) eliminating final and binding fact-finding except upon the election of the governing body; (8)  removing a portion of the budgeted ending fund balance of certain governmental funds from the scope of collective bargaining and from consideration by a fact finder; (9) eliminating statutory impasse arbitration for firefighters, police officers, teachers and educational support personnel;…”

Nothing would so please the corporate masters of ALEC and the Koch Brothers alliance than to see public employee unions brought down, scuttled, and preferably stricken branch to root.

Every provision in this bill is strategically calculated to prevent unions from providing their services to their members.  No dues check off, making dues collection more costly and cumbersome for members; combined with the  attack on union leadership – after all, if the leaders can’t afford the volunteer time then service is necessarily reduced.  Eliminate “supervisory personnel,” if they so much as think about making an “independent judgment.”  No lawyers, no doctors, no supervisory personnel, may by involved in a bargaining unit?  No “confidential employee?”

Allow a government agency to reallocate resources such that there is a reduction if force – translation: layoffs – and then say “We did it because we moved the money elsewhere.” Anywhere? Any budget category? For any purpose? For the purpose of laying off personnel?  No “evergreen provisions?” No cost of living adjustments without a new master contract?

AB 182 assumes there will be no employee strikes – illegal for public employees in this state – but there won’t be any resolution options either. No fact finding, mediation, or arbitration results shall impinge on the employer to do whatever the agency wishes.  It’s take it or leave it time.

And, 16.6% of the total “budgeted expenditures” must be kept in reserve.  Really?  While this sounds “financially responsible” it really isn’t.  There are supposed to be funds allocated at the local level for “extraordinary maintenance and repairs or improvements, funds for contingencies, and funds to stabilize operations, and to provide a cushion in case of a natural disaster. [See: NRS 354]  There’s really little more to this than pulling 16.6% away from the bargaining table.

CONSIDER THE SOURCEWho is supporting ALEC?

The corporate sponsorships include:  The American Bail Corporation; the Altria Group (tobacco), AT&T, Diageo, Energy Future Holdings. Exxon Mobil Corporation, Koch Companies  Public Sector, Peabody Energy (coal), Pfizer Inc. PhRMA, State Farm Insurance, United Parcel Service, Amerian, American Express, US Airways, Anheuser Busch, Bayer Corporation, Bell Helicopter, BP America, Burlington Northern, Catepillar, Century Link, Chevron, Comcast, Conoco Phillips (under Phillips 66 brand), Dow Chemical, Eli Lilly Inc, Farmer’s Group, Georgia-Pacific (Koch Bros), Honeywell, Insight Schools Inc, JR Simplot, Marathon Oil, Raytheon, Reynolds American, T Mobile, Transcanada, (yes, THAT Transcanada)Verizon, and Xcel Energy.

However, a more interesting list is who has dropped membership in the organization which provides models for legislation like AB 182: Pepsi, Coca-Cola, Pepsi, Kraft, Intuit, McDonalds, Wendy’s, Mars, Reed Elsevier, American Traffic Solutions, Blue Cross Blue Shield, Yum! Brands, Proctor and Gamble, Kaplan, Amazon.com, Medtronic, Wal-Mart, Johnson and Johnson, Dell Computers, John Deere, MillerCoors, Hewlett-Packard, Best Buy, General Motors, Walgreens, Amgen, Dreyfus, Amgen, General Electric, Western Union, Sprint Nextel, Symantec, Entergy, Merck, Bank of America, Wellpoint, Bristol Myers Squibb, Brown-Forman, Publix Markets, Glaxo Smith Kline, Unilever, 3M, Darden Restaurants, IBM, Intel, Nestle USA, Berkshire Hathaway, NV Energy, Alliant Energy, Microsoft, Pacific Gas and Electric, Yahoo Inc, International Paper, Occidental Petroleum, Overstock.com, Facebook, Google, Union Pacific, eBay, Wells Fargo, and Northrop Grumman. [link]

Not to put too fine a point to it, but the Nevada legislators sponsoring AB 182 – Republicans Kirner, Dickman, Gardner, Oscarson, Wheeler, Edwards, Jones, Hambrick, Ellison, and Nelson – are still promoting legislation (and an ideology) which is no longer all that popular among major corporate sponsors.  The ALEC bill mill has lost some of its patina of late, but 10 Nevada Republicans haven’t quite noticed the train’s left the station?

While ALEC may be headed off to the horizon, the Koch Brothers and their Americans for Prosperity are alive and well.

“AFP adopts the anti-union positions held by its libertarian funders, David and Charles Koch.[56] A video published on YouTube on February 26, 2011 shows Scott Hagerstrom, the executive director of Americans for Prosperity Michigan, advocating “taking unions out at the knees so they don’t have the resources” to fight for workplace benefits or political candidates.” [Sourcewatch]

One has only to look at Michigan, Ohio, and especially Wisconsin under the Koch financed Walker regime, to see that AFP can simply adopt the legislative packages from ALEC, and insert these into state legislatures – like Nevada.

Thus, Republicans Kirner, Dickman, Gardner, Oscarson, Wheeler, Edwards, Jones, Hambrick, Ellison, and Nelson are simply doing the bidding of the Koch Brothers and promoting their reactionary agenda.

CONSEQUENCES:   This assault on unions, and specifically the attack on public employee unions, are part of the general hostility of corporations toward labor, and toward government.  The results are obvious.  As union membership has declined over the years so have middle class incomes.  [MJ] [APO] [EPI]  And, how did many families move into the middle class in the first place?  By becoming police officers, firefighters, teachers, community health nurses, librarians, land management specialists, transportation specialists, heavy equipment operators, social workers, public health service workers, and so on.

The wages and salaries earned by public employees, as determined by negotiated master agreements, put more families into the middle class, and more money into local economies.  Once again – the Koch Brothers aren’t interested in Bob’s Bodega or the Smith Family Furniture Store, or Jill’s Fashions —  the kinds of small businesses which form the core of local economies.  Possibly the view from inside the 0.001% bubble doesn’t allow for the possibility that products such as Koch Brother’s brands wouldn’t sell in such quantities without local retailers – local retailers who rely on middle income consumers to produce their revenue?

The anti-union, anti-labor perspective is ultimately unsustainable.  Yes, paper towels (like Koch’s Brawny brand) are basic household items, but put too much downward pressure on household income and people will discover that re-washable rags will work as well.  Every household needs toilet paper, like Koch’s Angel Soft, but households under pressure to save pennies may find cheaper brands to purchase.  While the Koch’s can fall back on Flint Hills energy products, local grocers can’t fall too far back from their local demand.  Grocers average a margin of 1-6%, [AZBus] which is not a large cushion to sustain too much drop in customer demand.

Perhaps it’s easier to sit back insulated by a top 0.001% annual income and think of Liberty, Freedom, Personal Accountability, and other abstractions, but the middle class consumer, including the middle class firefighter, police officer, teacher, social worker, or public health nurse doesn’t have that luxury.  Freedom for most people comes down to what Franklin D. Roosevelt called “Freedom from Want.”  The freedom which allows a family to procure all that’s necessary for basic needs, and leave  little left over for a home, for retirement, for an education for their children.  They want, and need, the freedom to breathe between paychecks.

Bills like AB 182 take the air out of the room.  If Republicans Kirner, Dickman, Gardner, Oscarson, Wheeler, Edwards, Jones, Hambrick, Ellison, and Nelson would pull this bill, people could all breathe a little easier.

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