The View from Right Field

A Quick Comment on Egypt

I am not an expert on Egypt, nor do I have any particular insight as to what is going to happen there.  However, I do believe that this could be a determining factor:  Are the leaders willing to issue orders to the police and the army to shoot their countrymen?  And are the police and the army willing to follow those orders?

In Eastern Europe in 1989, the answer was no.  In China in 1989, the answer was yes.  And therein lies the difference for what happened in Eastern Europe and what happened in China.

And therein may lie the answer as to what will happen in Egypt.

Happy 80th, Mr. Cub

Today is Ernie Banks’ 80th birthday.  He was born on January 31, 1931, in Dallas, Texas.  See Phil Rogers’ article on Mr. Cub from today’s Chicago Tribune here.

Thank you, Ernie, for being a great baseball player – and an even better person and example for all of us of what we can be.

A Few Comments on President Obama’s State of the Union Address

As I mentioned on Friday, I got waylaid on my way to commenting on President Obama’s State of the Union address by the projected deficit for 2011.  Now that I commented on the deficit, let me go back to the State of the Union address.  I realize you have already heard the speech or read about it and have heard comment upon comment from professional journalists and other experts.  I am neither a journalist, a professional, nor an expert, so let me at least be brief.

The speech had many parts that talked about bipartisanship and working together and cooperation.  But when President Obama talked of those things, it was usually in generalities.  When he mentioned specific programs or specific ideas, the things he talked about were almost always more spending, more government.

For example, he talked a lot about “investment” – investment by the government.  He wants to “invest” in clean energy, high-speed rail, roads and bridges, etc.  In fact, even when he talked about our free enterprise system, about how “[o]ur free enterprise system is what drives innovation,” he couldn’t help but push for more government spending:

“But because it’s not always profitable for companies to invest in basic research, throughout history our government has provided cutting-edge scientists and inventors with the support that they need.” 

Sometimes government investments do work.  Not all of them are failures.  One of the problems with government investment, however, is the old saying that people are never as careful with somebody else’s money as they are with their own. 

Also, whether these “investments” work or not, where is the President going to get of the money to pay for them, as well as reducing a deficit that will be $1.5 trillion deficit in 2011?  Freezing 12% of the federal budget for the five years, as he proposed, will save $400 billion over the next decade, which is $40 billion a year or about 1/37th of the 2011 deficit.  I am not saying we shouldn’t do it.  $40 billion a year is a start.  It’s just that we are going to need a lot more $40 billion reductions to get the job done, and the President isn’t suggesting them.

For example, here is what he said about Social Security:

“[W]e should also find a bipartisan solution to strengthen Social Security for future generations.  And we must do it without putting at risk current retirees, the most vulnerable, or people with disabilities, without slashing benefits for future generations; and without subjecting Americans’ guaranteed retirement income to the whims of the stock market.”

Not what you would call a “Profile in Courage” moment there.

On tax reform, the President said this:

“[T]he best thing we could do on taxes for all Americans is to simplify the individual tax code.  This will be a tough job, but members of both parties have expressed interest in doing this, and I am prepared to join them.”

In other words, we’re not going to see Barack Obama leading on that issue.

And no matter how bipartisan he is trying to sound, you can count on President Obama to bring in a little class warfare/envy in almost every speech:  He wants to “eliminate the billions in taxpayer dollars we currently give to oil companies” (which is a good idea; we should get rid of government subsidies to oil and gas companies), but he has to throw this in, too:  “I don’t know if you’ve noticed, but they’re doing just fine on their own.”  And he wants to use the money to “invest” in “clean energy” (which is a bad idea; we ought to use it to reduce the deficit).

Also, he brought up his favorite policy, increasing taxes on those people who he thinks have enough money; i.e., those making over $250,000 a year:

“And if we truly care about our deficit, we simply cannot afford a permanent extension of the tax cuts for the wealthiest 2% of Americans.”

Of course, what he didn’t say was how we can afford a permanent extension of the tax cuts for the rest of the people, too, especially since their tax cuts are going to cost four or five times more money than the cuts for those making over $250,000 (for a family) or $200,000 (for singles).

What the State of the Union address mostly showed was a feint to the center for the next two years. Then, once he is re-elected, based on those reasonable sounding, work-together, bipartisan type of statements, President Obama will move to the left and govern there for as long as he can – because that is what he really believes in.

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Note:  The quotes from the President’s State of the Union address are from here.

If the United States Doesn’t Get Its Budget Deficit Under Control, It May Become – Illinois

I had been planning on writing about the President’s State of the Union address, but I was waylaid by this report on the budget deficit for 2011:  the deficit is going to be $1.48 trillion dollars.  That is 9.8% of expected GDP.  Megan McArdle comments:

“It seems clearer and clearer that short of a near-death experience, no one is going to do anything about this problem. Our president spent over 5,000 words Tuesday kind of noting, offhand, that we might have a problem, and then studiously avoiding proposing any serious solutions to the problem.  Paul Ryan's response emphasized the problem, but not the ugly solutions: raise taxes, cut entitlements. …

The market is fully prepared to serve as judge, jury and executioner if we don't straighten up soon.  We don't have to fix the budget right now--but we do have to develop a credible plan that both sides can actually commit to.  Unfortunately, right now the only serious plan anyone seems to have is to put off making decisions, and hope that you'll be out of office when the day of judgment finally arrives."

So what is going to happen if, as seems entirely likely, the President/Democrats and the Republicans are just too far apart, philosophically and politically, to agree on a credible plan for future?

Well, I live in Illinois, and I have seen the future – a 66-2/3% increase in our state income tax, an increase we are paying because we wouldn’t deal with overspending and, if you are going to spend like we did, undertaxing for years. 

As I have commented repeatedly, Rod Blagojevich’s theory of politics was to increase spending while not raising taxes to pay for the spending.  And the legislature let him get away with it.  And in 2006 the voters of Illinois let him get away with it when they reelected him.

Spending increased, taxes stayed low – and Illinois got slower and slower in paying its bills and farther and farther behind in funding its pension promises.  And that was before the recession.

When the recession hit, the problem became a crisis – and then became whatever is beyond “crisis”.  No state had a lower credit rating.  Illinois was paying the highest interest rate of any state in the Union to borrow money*, and we weren’t paying our bills.  Hospitals, school districts, social service providers were all going unpaid for months because our governor, our legislature, and too many of our voters were irresponsible.

And even with a 66-2/3% increase in our state income tax, it is unclear how soon we will be catching up with our unpaid bills.  Because, while Springfield raised taxes, they didn’t cut spending.  Some of them will tell you they are “cutting” spending because the rate of increase in spending is being lowered.  But that’s not a cut.  A cut is when you actually spend less, not when you just don’t increase your spending as much as you have been.

If our leaders in Washington and the rest of the people in the United States want to see what the future will be if they don’t get control of the budget deficit really soon, then they can take a look at Illinois.  We are your future.

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* Douglas Belkin, Lauren Etter and Ilan Brat, “Illinois Braces for Tax Increases,” The Wall Street Journal, January 12, 2011.

Reaction of One Chicago Politician to Another After President Obama’s State of the Union Address

"Thank goodness that’s over.  Now we can get back to important things:  the Mayor’s race!"

Don’t Worry About the “Doc Fix” that Congress Passed Last Month. Obamacare Still Won’t Cost Any Money.

Here is another item that was delayed because of our vacation:

Back in March of last year, after Obamacare passed, I wrote:

“Now that the Obama/Pelosi/Reid health care contraption has passed, to a large extent because of the Congressional Budget Office estimate that it would reduce the deficit, the Democrats need to be held to the assumptions they gave the CBO to get that estimate. The Democrats better not try to stop the 21% cut in doctor reimbursement rates under Medicare that was part of the assumptions. That tax on ‘Cadillac’ health care funds has to stay, too.

And if any of these things, or any changes to the other assumptions in the CBO estimate, do pass Congress, President Obama better veto them. Because he promised.”

Just before we left on vacation in December, the lame-duck Congress passed a one-year “doc fix,” postponing the cut in Medicare reimbursement rates for doctors for one year, until the end of 2011 (or maybe the beginning of 2012).  But don’t worry, even though this “doc fix” is going to cost $19 billion in 2011, Congress has figured out a way to pay for it.

It is very simple.  In fact, it is so simple, I am going to quote the explanation that was published in Politico because I am not sure I would get it right if I tried to summarize it:

“The fix hinges on the health insurance exchanges, which will start in 2014. Some consumers will be able to buy health insurance through the exchanges, web portals similar to Orbitz or Expedia. Low- and middle-income consumers will be eligible for tax subsidies to help pay for their coverage. The bill changes how much money they would have to repay if they misreport their income or their income grows mid-year. …

Under the original rule, if a person gets more of a tax subsidy than they’re eligible for, they would have to repay a ‘flat cap’ of no more than $250. Families would have to repay no more than $450. The bill raises those repayments to between $600 and $3,500, depending on income.

The change frees up about $19.2 billion to cover the one-year Medicare patch ….”

I assume that is clear.  We are “paying” the $19 billion cost of the doc fix in 2011 by having certain people pay more money to the government in 2014 if they get a tax subsidy they wind up not being eligible for.

But don’t worry.  In spite of this little “doc fix,” Obamacare still won’t cost us any money – as long as Congress doesn’t pass any more doc fixes and as along as every other cost saving feature provides just as much money as is planned and no expenditure goes over budget.*

And if you believe that, I have time shares for a bridge in Brooklyn that I would like to sell you.

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* I should note that both Republicans and Democrats voted for the doc fix.  It passed the Senate unanimously, and only two members of the House voted against it.  But it was the Democrats, and the President, who promised Obamacare would be “free” (would actually save money) and who need to deliver on the promises of savings that were the basis of the CBO’s estimate that Obamacare would save money.  If they can’t, then Obamacare will be the budget buster that its opponents predicted.

Update (1/26/2011 12:32 am):  Changed the title by adding "the" before "Doc Fix" and adding "that" after it.

Increasing Gambling – Again

According to a report from Christine Radogno, Republican leader in the Illinois Senate, Illinois has reached an agreement with Northstar Lottery Group to manage Illinois’s lottery.  Illinois is the first state to privatize the management and marketing of its lottery.  I do not have a problem with privatization of many state functions, but I do have a problem with privatizing the marketing of the lottery.  Actually, that is not true.  It’s not the privatization of the marketing of the lottery that bothers me.  It’s the idea of aggressively marketing the lottery in the first place.

Consider this from Senator Radogno’s report:

“Privatization of the lottery’s management and marketing was pursued by lawmakers, who believe that new management and a fresh perspective will help boost revenues and tap into new markets. Currently, lottery sales are driven by older, less affluent players. When pursuing the lottery contract, Northstar laid out plans to attract younger, wealthier players through innovative marketing strategies, increasing the number of retail outlets in more prosperous communities, introducing new games and, potentially, through online ticket sales.”* 

Wonderful.  Apparently, we are currently not taking enough money from our residents through gambling.  Therefore, we have to expand gambling by “innovative marketing strategies” so that even more people can waste money gambling.  At a time of economic problems, when many people are struggling to get by, the state’s goal is to attract even more people to gambling.  Even though an increase in the number of people who gamble will, logically, increase the number of people with gambling problems, and the number of people addicted to gambling, the state wants to encourage more of it.

It is sort of like cigarettes.  We know that cigarettes are bad for you.  We make tobacco companies put health warnings on their products.  We know that gambling causes problems.  Radio ads for casinos give a number to call if you have a gambling problem.  But while the state tries to discourage smoking because of the problems it causes, the state tries to encourage gambling in spite of the problems it causes.

I am not saying we ought to get rid of the lottery.  (I would like to do that, but I don’t think it is realistic right now.)  But just because we can’t end the lottery, doesn’t mean we should have the state itself (or through its agents) actively encourage more and more gambling on it.

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* From "Capitol Connection" e-mail newsletter from Christine Radogno, January 21, 2011,

26th Annual Cubs Convention

A report on the 26th annual Cubs Convention, January 14-16, 2011, at the Chicago Hilton:

Wayne Messmer did a wonderful eulogy for Ron Santo during the Opening Ceremonies.  I also appreciated that he did one for Phil Cavaretta, too.  Phil left the Cubs a long time ago, but he was here for 20 years, and he deserved every bit of it.

Friday night Randy Wells was talking about a stop that the Cubs Caravan made in Springfield earlier this week.  He said a little seven-year old girl came up to him and said, “My brother says you suck”.  Obviously, a family divided.

Saturday morning, in “Meet Cubs Baseball Management,” Jim Hendry said that the fans had a lot to do with Kerry Wood coming back.  You could see what Hendry was talking about during the Opening Ceremonies.  When they introduced the players, they did so in alphabetical order, until they got to the bottom of the alphabet and skipped ahead to Carlos Zambrano.  They were saving one player for last.  The fans knew who it was, and they started cheering even before his name was announced.  Kerry Wood got the biggest cheer of the evening, by far.  It wasn’t even close.  Being there for Woody’s introduction was worth the price of the ticket.

But back to Convention and some of the things you may not have read in the papers.

Randy Bush, who is Assistant General Manager, said that the most important thing in evaluating talent is valuing your own talent.  You need to know who to trade, who to absolutely not trade, and who it will really hurt to trade.  And at the end of the year you need to know who to protect on the 40-man roster.

During “Meet Cubs Business Management,” Crane Kenney noted that they sold the naming rights to the new pro football stadium in Los Angeles for $20 million a year for twenty years.  Kenney said that the Cubs were not going to change the name of Wrigley Field (several years ago, before the Ricketts bought the team, he said that the Wrigley company ought to pay to keep its name on the park), but he then asked where the Cubs are going to get that $20 million.  What he didn’t say, however, was that, even without selling the naming rights, the Cubs had the highest payroll in the National League in 2010 – and they finished fifth.  Maybe what the Cubs need to do is spend the money they do have more intelligently, instead of always worrying about getting more money to waste.

Dave Kaplan, who was the host of the session, was really annoying.  He complained about Cubs fans who object to things like more signs in Wrigley Field, etc.  He basically said that those of us who object to those things don’t want to win.  He doesn’t care how many signs the Cubs put up or what else they do to Wrigley Field.  He says he just wants to win.  And he says it loudly, obnoxiously, and without any respect for people who don’t agree with him.  He didn’t explain why we will win with more money in the future when we didn’t win with all the money we had in 2010.  And he didn’t say what happens if we sell our soul and still don’t win.

I always like “Down on Farm,” the panel on the Cubs minor league system, which they have Sunday morning.  Oneri Fleita, VP of Player Development, said the hardest thing was saying goodbye to players when they are traded.  Tim Wilken, VP of Scouting, said that the Matt Garza trade had created “a little bit of a hole” in our prospects.  (To say the least.)

Tim Wilken mentioned that the change the NCAA made in their rules on bats was going to have a huge impact.  He said the metal bats might be even less potent than wood bats now.  He said you could see players getting drafted in the first round this year who were hitting .280 in college.

And it will affect pitching, too.  Before the change, the aluminum bats were so powerful that pitchers would always pitch outside.  Batters could mishit an inside pitch with an aluminum bat and still get a home run.  Now pitchers will be able to pitch on both sides of the plate.

They noted that, before the 2010 season, instead of sending Tyler Colvin to play in Mexico, they put him on a weight training program in Arizona, where he was able to put on 20 pounds of muscle.  They are going to do that with more guys this winter.   D. J. LeMahieu said he had gone from 195 to almost 220.  Tim Wilken said it’s called “projection scouting”: trying to draft guys who can fill out.

Tim Wilken also commented on the Cubs’ surprise pick of Hayden Simpson in the first round of the amateur draft in 2010.  He said that among the things they like about Simpson is that he repeats his delivery well.  He uses the same motion all the time

In terms of international scouting, one of panelists said WGN is a big help.  Of course, earlier in the Convention, the business people said that the Cubs are putting more games on Comcast because Comcast pays more.  Which means the business people are making the scouts’ job harder.

The person next to me also commented that, in terms of attracting young fans, the Cubs’ problem is not the ticket prices but taking games off WGN, especially in areas which don’t have Comcast.  D. J. LeMahieu said he grew up a Cubs fan – in Detroit.  He probably wouldn’t do that today because Comcast doesn’t get to Detroit.  WGN might, but Comcast in Detroit does the Tigers.  So the kids can’t see the Cubs.  In effect, the Cubs are losing future fans to get a little more money today.  It’s like eating your seed corn.

Finally, they had a couple of very nice programs remembering Ron Santo.  The one with Pat Hughes and the various people who have helped with the radio broadcasts over the last 10 to 12 years was fine.  The one that was really good, however, was “Remembering Ronnie” with Ernie Banks, Billy Williams, Fergie Jenkins, Glenn Beckert, Randy Hundley, Jose Cardenal and Milt Pappas.  Wane Messmer hosted it.  The thing that was so great, especially with Ernie, Billy, Fergie, Glenn and Randy, was that these were not baseball players remembering somebody they played with.  These were friends, people who had stayed in contact and stayed friends for 40 years, remembering one of their friends who passed away. 

It was, and is, what makes the 1969 Cubs so special.  They were with us for so long.  The six of them were together for six years.  Billy and Ron were together for fourteen years, more if you count the minors.  And our TV and radio, especially radio, people were there, too.  They were family.  And we were family with them.  That is why 1969 will always be so special.

The Cubs Backload Yet Another Contract

I have been backed up since the Cubs Convention last week.  I hope to post some stuff on the Convention over the weekend and get to some other things next week.  In the meantime, a quick comment on how the Cubs backload their player contracts.

All teams backload contracts a little; i.e., when they sign a multi-year contract with a player, they will pay him more in the last year or two of the contract than at the beginning.  For example, when the Cubs signed Kosuke Fukudome to a $48,000,000 four-year contract, they paid him $7,000,000 in the first year on the contract, $12,500,000 in the second year, $14,000,000 in the third year and $13,500,000 in the last year.

Marlon Byrd signed a $15,000,000 contract, payable $3 million / $5.5 million / $6.5 million over three years.  Jim Hendry even backloaded a one-year agreement.  When Carlos Pena signed, it was reported that some of his $10,000,000 would be paid in 2012 instead of 2011.

Then on Tuesday, Sean Marshall signed a two-year contract for $4.7 million, $1.6 million in 2011 and $3.1 million in 2012.

Which means the only person left to sign is Carlos Marmol.  Marmol is due for a big raise, so I assume Jim Hendry will try to backload him, too.  In fact, my theory on Carlos Marmol is that the Cubs are going to backload him so much that Marmol will wind up paying the Cubs in 2011.

Thoughts on Illinois’ Tax Increase

The lame duck session of the Illinois General Assembly has passed a 66-2/3% increase in Illinois’ personal income tax.  I have previously commented on the appropriateness of a lame duck session passing a bill such as this, so I won’t go into that again.  Let me, instead, make several other comments.

1.   The governors of Indiana and Wisconsin seem really excited about the possibility of businesses moving there.  The sad thing is that I am not sure Speaker Madigan and Senate President Cullerton (and Governor Quinn) really understand this point.  Or maybe it is just that they don’t consider private businesses and private jobs as important as government spending and public unions.

2.   Of the 60 members of the House of Representatives who voted for this (which was the bare minimum needed to pass the increase), twelve of them left office the day after they voted for the tax increase.*  They either lost last November or they retired, but they still voted to increase taxes more than two months after the voters elected their replacements.  In fact, at least in the House, it could have been the fact these people were not going to have to face the voters again was the reason they were willing to vote for a tax increase that some of them had previously opposed.  (See, for example, what this former representative, who voted for the tax increase, said before the election.  But then, maybe losing the election means your campaign promises don’t count.)

      Of course, Governor Quinn told people before the election that he would not agree to a tax increase of more than 1%; i.e., from 3% to 4%.  But anybody who believes anything Pat Quinn says is being silly.  Pat Quinn may be a nice person.  He may have good intentions.  But you can’t rely on anything he says. 

3.   As I have mentioned, California has budget problems, too.  But their new (well, sort of new) Democratic governor, Jerry Brown, is doing it differently than Illinois.  He is trying to raise taxes $12.5 billion, but he also proposes cutting spending $12 billion.

      In Illinois, we are not cutting spending at all.  In fact, spending is going up.  It’s going up $3 billion next year.  Supporters claim that the increases after that will only be $1 billion a year.  Except that we have already established that you cannot trust anything that Pat Quinn says – or anything legislators do in lame duck sessions.  Besides, the alleged limits on state spending do not apply this year or next year.  They are in the out years.  Does anybody really believe that our legislators will really follow through on this?  Of course, not.  Things will change, just like they supposedly did from October to January (see #4 below), so the promise won’t apply any more.

      When you are doing something hard, like cutting spending, you have to it now.  You can’t put it off.  It’ll never get done.  The diet that starts on Monday, never starts.

4.   In trying to justify the tax increase, Senate President Cullerton invoked Jim Edgar’s name, and said that Governor Edgar had made a temporary increase in the state income tax permanent.  Except there is one big difference:  Jim Edgar told the voters before the election what he was going to do.  Pat Quinn and some of those legislators whose vote was necessary to pass the tax increase said one thing before the election – and did something else after the election.  They tried to claim things were different in January than in October.  That’s just hooey.

5.   Democratic leaders tried to claim that the bad economy is the reason for the increase.  That, too, is hooey.  Lots of states have been affected by the bad economy (about 50 of them), but they have not had to raise taxes this much.  The reason Illinois had had to raise its income tax by 66-23% is that the Democrats in the legislature had combined with then-Governor Rod Blagojevich to spend us into a hole before the national economy went into the tank.

6.   About the only good thing the legislature did was to not expand gambling in Illinois yet again.   I realize the reason that the expansion did not pass is because the current holders of gambling licenses lobbied against it (they don’t want more competition) and not because more state-promoted gambling is immoral, but I will take what I can get.

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* Mike  Boland, Michael Carberry, Robert Flider, Paul Froehlich, Careen Gordon, Betsy Hannig, Jay Hoffman, David Miller, Kathleen Moore, John O’Sullivan, Michael K. Smith, Mark Walker.