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People who say it cannot be done should not interrupt those who are doing it. Welcome to From On High.

Tuesday, July 14, 2009

The Human Toll In Southwest Virginia

Lawrence Kudlow:
Why China beats the U.S.

We know China is already our principal banker, to the tune of nearly $1 trillion. As Mr. Obama's record spending and borrowing continues -- he'll be the greatest bond salesman in American history -- our financial reliance on China grows daily. But that's not all.

China also surpassed the United States as the world's biggest automaker in the first half of this year, with June sales soaring 36.5 percent from a year earlier. The Chinese registered 6.1 million car sales for the first half of the year. That way outpaced American sales, which were just 4.8 million.

Also, China has no capital-gains tax. It only has a 15 percent to 20 percent corporate tax. The United States, on the other hand, is raising its cap-gains tax rate to 20 percent.¹ It's also increasing its top personal tax rates.

In fact, the scheduled income-tax increase along with a much-discussed 4 percent health care surtax will balloon the top U.S. tax rate all the way to 51 percent. And there's more. To finance so-called health care reform, congressional Democrats are talking about raising the tax rate on capital gains and dividends by another 1.5 percent while installing a value-added tax (VAT) that would begin at 1.5 percent.

So top tax rates in the United States may edge into the mid-50 percent range.

Here's the clincher: Year-to-date, Dow Jones stocks are off 8 percent, while China's stocks are up 71 percent. The world index is up 4 percent. Emerging markets are up 25 percent. They're all beating us. None of this is good. [link]
A bit of local history. Fieldale, located outside Martinsville:

"In 1916-1917, Marshall Field & Company of Chicago, Illinois, purchased 1,841 isolated acres in central Henry County, Virginia to build a company mill town to produce quality towels for the Marshall Field’s Department store. The area was strategically located along the Smith River between the Danville & Western and the Norfolk & Western Railroad lines. The company town flourished with the 245,000 square foot Fieldcrest Mills, approximately 300 workers’ houses, a business section that contained a grocery store, movie theater, post office and bank, two schools, a community center, churches, roads, and the first electricity in the region."²

"The Fieldale Mills have consistently been said to 'produce enough towels to wipe the face of the earth.'"³

In the last five years, the U.S. textile industry has lost 210,000 jobs.

Before that, Fieldale lost its heart and soul in 2003:

Pillowtex Files Chapter 11 Bankruptcy Petition

At its peak Fieldale had as many as 1,500 local residents working in its Pillowtex factory, the last of its textile mills. When it closed its doors forever, nearly 1,000 Virginians were thrown out of work, and Fieldale was effectively out of the textiles business.

But the name lives on. Being sold over the counter today by a retailer near you, quality dish towels at low discount prices:

Fieldale, the name associated with the mills that produced "enough towels to wipe the face of the earth" thrives.

This was no accident. As Kudlow lays it all out above, we allowed it to happen. It happened.

We now rue our efforts.

May God have mercy.

1 Note: While the Chinese corporate tax rate is between 15 and 20%, the U.S. corporate tax rate is 40%.
2 From National Historic Register of Historic Places registration form
3 From "David Lindsay."
* It is unclear whether today's Fieldale Mills is associated in any way with the former Fieldcrest Mills of Fieldale, Virginia.

What The Lord Giveth ...

... Richmond may take away.

You folks over in Russell County and Lebanon might start to worry. Your largest employer may be on its way out. You know, the one that came to your community with great fanfare back in 2005? The one that won a state contract to store commonwealth data and was contractually obligated to build its data storage facility in Southwest Virginia? The one that Congressman Rick Boucher takes partial credit for having located to your community? The one that donates lavishly to Boucher's reelection campaigns?

If the following isn't straightened out, bad things are going to befall:
Kaine asked to stall technology contract changes
By Michael Sluss, Roanoke Times

Richmond -- Senior state lawmakers have asked Gov. Tim Kaine not to alter terms of Virginia's computer services contract with Northrop Grumman before legislative panels complete their reviews of problems with the contract and the agency charged with implementing it.

The chairmen of the General Assembly's money committees and the Joint Legislative Audit and Review Commission sent the letter to Kaine on Monday, as the two panels probed issues surrounding the state's 10-year, $2.3 billion contract with Northrop Grumman to consolidate and manage the state's information technology services.

A Senate Finance subcommittee received new details about missed deadlines, billing errors and difficulties tracking inventory as the state works through its contract with Northrop Grumman. And a separate panel was told that the board overseeing the state's information technology agency improperly closed an April meeting in which members discussed aspects of the contract.

"It's a huge amount of money and it's not working the way we anticipated," said House Majority Leader Morgan Griffith, R-Salem. [link]
Uh oh. I don't know where this is headed but the 400 employees of Northrop Grumman might have reason to worry.

State contracts are not open-ended. They come due. And it looks like this one is in jeopardy.

Stay tuned.

Can Governor Kaine get away with this?

Is government allowed to go into direct competition with business?
State employee loan program unveiled
By Michael Sluss, Roanoke Times

Richmond -- Virginia has established a short-term, emergency loan program for state employees that Gov. Tim Kaine said could become a model for providing alternatives to high-interest payday and car-title loans.

The Virginia State Employee Loan Program is designed to help qualified workers get small loans of $100 to $500 to help manage financial difficulties without relying on high-interest cash-advance businesses that are under growing scrutiny from state lawmakers.

"This program will allow our state employees to receive small loans without having to go to predatory lenders," Kaine said. "If the commonwealth can offer this kind of program, other large employers may consider similar initiatives of their own."

The loans will carry an annual interest of rate of nearly 25 percent and be repaid over six months through direct debit from the borrower's credit union account. [link]
Aside from the fact that loans through Tim's Tax & Trust are only going to be made available to the chosen few who happen to be on the government payroll, and aside from the fact that a semi-annual percentage rate of 25% is considered in some circles to be usurious in itself, can the government go into direct competition with private companies in the banking business?

We need to get a lawyer on this.

Of Course He Does

The government hasn't defaulted on its Treasuries yet, so why not?

Obama Plans Community-College Initiative

What trillion dollar deficit?

Things Are Looking Up in the Sotomayor Hearing

For the first time in 40 years Ted Kennedy, a man who should be in prison for past deeds gone unchallenged isn't sitting in judgment.

Let Me Complete That Sentence

Sotomayor Pledges 'Fidelity to the Law'...

... and she will determine what "the law" to which she pledges fidelity really means.

Where To Cut? Start Here.

On the same day that we learn that the United States of America surpassed - for the first time in its history - $1,000,000,000,000 in annual budget deficit - and it was accomplished by June - we also get the news that the United States government has filled the token position of Surgeon General.

Why remains a mystery.

The dispiriting news:
Obama Picks New Surgeon General
By Lauren Neergaard, Associated Press

Washington (July 13) -- President Barack Obama nominated for surgeon general a rural family physician who has faced hurricanes, flood and fire to care for impoverished patients along Alabama's Gulf Coast.

Obama says Dr. Regina Benjamin understands the needs of the poor and uninsured, making her uniquely qualified to be America's doctor as his administration tries to revamp the health care system. [link]
So a rural doctor who has experience managing a receptionist and a nurse or two now runs the federal Office of the Surgeon General. That in itself should give a clue as to how important the office is.

Think of the appointee - Regina Benjamin - as being the nation's medical Ann Landers. One in which (a) the administration(s) can fill quota goals (in this case two points - female and black; four if she's a lesbian quadriplegic) and (b) trot someone out on a regular basis to tell us simpletons that teenage pregnancy is bad, condoms are good, and smoking is the scourge of the Western World, worse than a plague of locusts.

But, Democrats will argue, the office only costs us $3 million a year and she'll only make 200 grand for the gig. It's a bargain. And what's that compared to the total federal budget of 3.55 gazillion dollars?

Let's start over. The annual deficit of the United States tripled this year over last and just exceeded a trillion bucks. Why? Because we spend $3,000,000 on bullshit like the Office of the Surgeon General.

3 million here, 3 million there, and soon we have fiscal catastrophe.

For the love of God.

I'm looking for the candidate for high office who says, "Enough is Enough."

A small-time doctor being handed a multi-million dollar, multi-thousand employee agency to run, productivity of which and output from which we expect to be squat, is ENOUGH.

Climate Specialists Are Getting Nervous

What to Think?
From the BBC: “Almost 250 children under the age of five have died in a wave of intensely cold weather in Peru”. “This year, freezing temperatures have arrived almost 3 months earlier than usual.” From CBC news: “Temperatures dropped to a record low in Prince Edward Island overnight Tuesday (July 7 into July 8) with reports of frost throughout the province (in southeast Canada).” “…a meteorologist with Environment Canada said that to his knowledge, frost has never been reported before in July in Prince Edward Island.”

There have been individual record cold days in Chicago and Central Park, New York and New Zealand had the coldest May on record. In addition, the Potato Famine disease (Late Blight) is striking potato and tomato plants from Maine to Ohio and it’s threatening commercial and organic farms according to Reuters news, and according to Meg McGrath, a plant pathologist at Cornell University’s extension center in New York, “Late Blight has never occurred this early and this widespread in the United States.” The destructive disease can spread rapidly in cool, moist weather, infecting an entire field within days. The bottom line, which is causing me increasing concern every day, is that we’re seeing much colder weather in both hemispheres and its effects on humans and agriculture.

"Meteorologist Rich Puzzo, "Deadly and destructive cold...," July 13, 2009