Hillary’s money grab (with help from a few Oregonians)

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Bill Clinton must have thought we all forgot his history when he began his 2016 Democratic Convention speech with the cringeworthy, “In the spring of 1971, I met a girl.” Oh my God, where’s he going, millions of viewers probably wondered.

But Bill didn’t continue about his sexual exploits. Instead, he went on to call his wife, a “change-maker”. Given the amount of money she’s raising for her presidential campaign, she’d be better named a “money-maker”.

This despite her proclamation, “Our democracy should work for everyone, not just the wealthy and well-connected.”

“There’s no question that we need to make Washington work much better than it does today,” Hillary said on June 22, 2016. “And that means, in particular, getting unaccountable money out of our politics. … That’s why I’m so passionate about this issue, and I will fight hard to end the stranglehold that the wealthy and special interests have on so much of our government.”

But Hillary Clinton and her supporters have been dogged in their pursuit of campaign money.

Clinton clearly likes the big givers the most and cultivates them assiduously. At an event at the Sag Harbor, N.Y. estate of hedge fund magnate Adam Sender a family photo with Clinton went for $10,000, according to attendees. For a $2,700 donation donors’ children under 16 could ask Clinton a question.

 More than 1,100 elite moneymen and women, called Hillblazers, have together raised better than $113 million for Clinton, operating as bundlers who collect checks from friends or associates, according to an analysis by the Center for Public Integrity.

Hillblazers are individuals who have contributed and/or raised $100,000 or more for Hillary for America, the Hillary Victory Fund, and/or the Hillary Action Fund since the launch of Clinton’s campaign on April 12, 2015.

Among the list of high-profile Clinton bundlers, which includes actor Ben Affleck, filmmaker George Lucas, Facebook Chief Operating Officer Sheryl Sandberg and fashion designer Vera Wang, are a few (very few) people who list themselves as Oregonians:

  • Timothy Boyle, president and CEO of Columbia Sportswear, and his wife, Mary Boyle.
  • Peter Bragdon, Executive Vice President, Chief Administrative Officer, General Counsel and Secretary, Columbia Sportswear
  • Carol Butler, Principal, Carol Butler and Associates, Democratic campaign consultant
  • Dwight Holton, former U.S. Attorney for Oregon/ defeated by Ellen Rosenblum in 2012 Democratic primary for Oregon Attorney General, and his wife, Mary Ellen Glynn, chief of staff to Anne Holton, wife of Democratic vice-presidential nominee Tim Kaine.
  • Jane Paulson, a Portland personal injury lawyer at the law firm of Paulson Coletti.

The money has flowed into Hillary Clinton’s campaign organization, Democratic Party committees and so-called independent outside groups.

According to OpenSecrets.org, Clinton and her acolytes had raised a total of $698,169,981 as of the end of last month, and pushing for $1 billion.

Presidential fundraising through Aug. 31, 2016

Category Clinton  
Candidate $373,281,866
National Party $181,378,218
Outside Spending $143,509,897
Total $698,169,981

Most of this money has come from large donors.

Clinton’s campaign, for example, has raised nearly $300 million in large contributions, or donations bigger than $200, the threshold for detailed disclosure of donor information, according to OpenSecrets.

Only about 19 percent of her contributions (roughly $70.7 million) have come in smaller amounts. Obama, in contrast, received about 37 percent of his contributions in amounts of $200 or less through August in his 2012 campaign.

So much for ending the stranglehold that the wealthy have on our government.

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Rent control: Kotek’s folly

On Sept. 12, Oregon House Speaker Tina Kotek (D-Portland) said she planned to push for an end to Oregon’s ban on rent-control laws, enabling local governments to move ahead with measures of their own.

Kotek said she also wants to ban all rent increases above a “reasonable” percentage and end to no-cause evictions.

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Oregon House Speaker Tina Kotek

The problem is, no matter how much liberals embrace the concept, rent control doesn’t work. Any short-term benefits, including the applause of some constituents, are always overshadowed by the long-term problems rent control creates.

  • However you phrase it, under rent control, government dictates what private owners are allowed to charge for their private property. Yes, the free market has flaws, but it is far better than having bureaucrats running things.
  • Landlords who can’t raise the rent on their property to a market price are more likely to cut back on maintenance and less likely to invest in improvements. Not only will landlords have absolutely no economic incentive to invest more in their properties, they may not even have the funds because of limits on their rental income.
  • Rent control distorts the housing market by misallocating rental units to those who are already renting them. Whenever government prevents the charging of prices high enough to clear the market, shortages will occur.
  • The imposition of rent control can lead to a “demolition derby” where older controlled rental units are purposely torn down and replaced with higher priced units.
  • Rent control does not guarantee low rents because it doesn’t regulate the starting rent for a new tenant. When a tenant in a rent-controlled unit moves out, any savvy  landlord will set the rent in the new lease at the current market rent, which is likely to be much higher.
  • In a review of 140 economics studies on rent control in Economics Journal Watch, economists overwhelmingly agreed that, “A ceiling on rents reduces the quantity and quality of housing available.” From the abstract: “I find that the preponderance of the literature points toward the conclusion that rent control introduces inefficiencies in housing markets. Moreover, the literature on the whole does not sustain any plausible redemption in terms of redistribution.”
  • A broad survey of economists by the IGM (Initiative on Global Markets) Forum revealed a similar repudiation of rent control. The Forum is a program of the University of Chicago’s Booth School of Business. “Rent control discourages supply of rental units,” said Associate Head of the MIT Department of Economics, David Autor. “Incumbent renters benefit from capped prices. New renters face reduced rental options.”
  • Once rent control is imposed, it is extremely hard to get rid of, even where its futility is eventually recognized. That’s because rent control will have held rents far below the market rate, so removing them is likely to cause immediate and substantial rent increases, something few politicians (and even some rent control critics) will be willing to embrace in the face of a potential public outcry.

As Art Carden put it in The Unintended Consequences of Rent Control, “Suppose that you want to destroy a city. Should you bomb it, or would it be sufficient just to impose rent control?”

It’s bail-out time for the United Mine Workers of America union

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It’s election time, so let’s bail out somebody.

The Senate Finance Committee voted Wednesday to rescue the coal miners union’s pension plan and avoid its likely insolvency by the end of this year.

The Committee approved a bill, known as the Miners Protection Act, that would transfer hundreds of millions of dollars from a federal fund meant for cleaning abandoned mines to the United Mine Workers of America’s (UMWA) multi-employer pension plan.

Supporters of the bill included all the Democrats on the Committee, but some Republicans cautioned that the bill could set the stage for bailout demands by hundreds of other multi-employer pension plans at risk of insolvency.

Among the supporters of the bill was Sen. Ron Wyden (D-OR). “Today, tens of thousands of mine workers and their families, including so many widows, are in serious danger of losing that lifeline, losing that security,” Wyden said. “These are hard-working people who come from communities where broken promises, bad policies and bankruptcies have hit like one wrecking ball after another for decades,” he said. “Congress, in my view, has an obligation to step in and make good on the promise that America made back in 1946.”

The fate of the bill in the full Senate and the House is still to be determined.

This isn’t the first time Wyden, no friend of fiscal responsibility, has backed efforts to bail out the United Mine Workers of America union.

In 2014, while Congress, the country and media were fixated on the twists and turns of efforts to rescue the Highway Trust Fund, Wyden tried to use the Trust Fund legislation to bail out the underfunded United Mine Workers of America’s pension plan.

When the Senate Finance Committee, which Wyden chaired at the time, first reported out a Highway Trust Fund bill it slipped in a provision advocated by Senator Jay Rockefeller (D-W.Va). The provision called for $2.7 billion of the funds raised to be diverted to help bail out the underfunded pension plan for retired coal miners.

In 2014, Wyden’s committee proposed paying for the union rescue with a gimmick called “pension smoothing” that has been roundly criticized by liberals and conservatives alike as nothing more than a sham.

Thankfully, Wyden’s gambit failed when the Senate accepted a House version without the miners’ pension provision.

But bad ideas never seem to die in Congress, and it’s election season, so here we go again.

 

 

 

SoulCycle: be careful out there

 

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SoulCycle, the high-hype indoor cycling fitness chain, filed with the SEC on July 30, 2015 to raise up to $100 million in an initial public offering.

More than 13 months later, the market is still waiting.

Privately held luxury-gym chain Equinox Holdings Inc. wants to spin off SoulCycle, but apparently, it’s not easy.

In March 2016, Harvey Spevak, Equinox’s CEO, told Bloomberg TV Canada’s Pamela Ritchie the company was delaying the IPO until the right time.

“We’ve all seen what’s happened with the U.S. stock market,” he said. “If you look at the history over the last 12 months, the data says there are only two IPOs that are now trading above their offering price. So, we’re kind of in a watch mode right now.”

Asked whether the IPO would occur before the end of this year, Spevak was non-committal. No one knows where the global economy, the U.S. economy and the capital markets are going, he said, so it was just a matter of watching.

SoulCycle began as a small cycling studio in New York City in 2006. The wealthy investors behind the company hope to reap a windfall when the company goes public, and there’s a lot of positive talk on the street.

But investors who are still salivating over the IPO, despite the delay, should be cautious.

First, there’s as much chance investors will lose money as make it with many IPOs.

The stock price of the vintage and craft online marketplace, Etsy Inc., for example, had an offering price of $16 a share when it went public in April 2015. It surged 87.5 percent on its first day of trading, but then began to collapse. It ended 2015 as the worst performing IPO of the year and closed on Sept. 19 at $13.36 a share.

As SoulCycle’s Prospectus notes, risk factors include the company’s ability to maintain the reputation and value of its brand, to attract and retain riders and to gain acceptance outside its Eastern geographic base.

There’s also competition and SoulCycle will have to deal in a timely way with inevitable changing trends. It could, frankly, be just another fitness fad.

There’s been a lot of talk about the dearth of IPOs so far in 2016. Deals peaked in 2014, retreated in 2015 and are almost non-existent so far this year, according to Denis Smirnov of Gordian Advisors.

In this climate, SoulCycle is still watching and waiting. Potential investors in the company should, too.

 

 

Playing fast and loose: Multnomah County and the Wapato Jail

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The still empty Wapato Jail

Has Multnomah County been flouting the law in its management of the Wapato jail?

In 1996, Multnomah County voters approved a $79.7 million public-safety bond measure to deal with inmate crowding and predictions of rising crime.

Of the total, $43.9 million went toward construction of the $58.4 million Wapato Jail in North Portland. The 168,420 sq. ft. jail was completed in 2004…and has sat empty ever since.

Now some folks, including Multnomah County Commissioner Loretta Smith, want to turn the jail into a giant homeless shelter. But other county officials are adamant the jail is unsuitable for such a use.

A major reason is because county officials have chosen to do what was convenient, rather than what was right.

When property at the County Sheriff’s office or other county jails broke or got too old or just needed replacing, rather than buying something new, the county ransacked Wapato.

“What people think is out there is a fully functioning building with kitchens and everything. It has none of that. It’s been stripped bare,” County spokesman Dave Austin told KGW-TV. “What we did was, if the sheriff’s office in their other three jails had a need for something — you know a big stove, an oven, a dishwasher — if those broke, we didn’t spend taxpayer dollars and buy new stuff. We went and took the stuff from Wapato.”

It would cost taxpayers at least $5 million to $7 million to replace all the stuff that was spirited away and get Wapato ready for occupancy, Austin told KOIN 6 News.

That’s right. County employees have ripped off $5-$7 million of Wapato property for other uses.

The problem is the 1996 bond measure for Wapato didn’t say that after the county built the jail, it could loot it.

The Dec. 17, 1996 Official Statement, the offering document delivered to prospective investors for the $79.7 million of bonds that were sold in the public market, specified that the bond proceeds would be used for the following:

  • Increase jail beds to end unsupervised early release of prisoners
  • Secure treatment facilities for mandatory drug and alcohol treatment of offenders
  • Computer systems and high-tech equipment for tighter tracking of criminals
  • Restructured booking facilities to eliminate delays for police
  • Expansion of the juvenile justice complex
  • Child Abuse Center

 In 2003, the State authorized the County to shift from building the bed alcohol and drug / work release / mental health beds to building 300 jail beds, instead, raising the total number of Wapato jail beds to 525 and committing $58.4 million to the project.

Wapato Jail was finally completed in July 2004.

But one thing didn’t change with all the machinations. There was still no provision allowing for the Wapato jail to be raided of contents worth millions so they could be shifted to other facilities.

A California case supports the view that such slippery shenanigans are prohibited.

In 2008, voters in the San Diego, CA Unified School District authorized $2.1 billion in general obligation bonds for school projects listed in a 96-page pamphlet. Later that year, voters challenged the District’s use of general obligation bond proceeds for the acquisition and installation of field lighting for the football stadium at a local high school.

In 2013, the California Court of Appeal determined in Taxpayers for Accountable School Bond Spending v. San Diego Unified School Dist. that the school district’s failure to make explicit reference to the installation of stadium lighting within the site-specific section of a bond project list rendered that expenditure unlawful.

Maybe some folks involved in pillaging the Wapato Jail should be in it.

 

Should the two major parties make the rules? It’s debatable.

thirdpartychoiceAnother reason why so many Americans are frustrated, despondent, and bitter this election year.

Both parties have lost ground among the public. Independents now outnumber either Democrats or Republicans, with 40% of Americans choosing that label, according to the Pew Research Center.

But the private, Democrat and Republican-created and -controlled Commission on Presidential Debates announced on Friday, Sept. 16, that only Donald Trump and Hillary Clinton will be allowed on the stage for the first presidential debate.

This when:

  • In a recent Quinnipiac University poll that asked likely voters, “Do you think that Gary Johnson, the Libertarian candidate for president, should be included in the presidential debates this year, or not?”, 62% answered “yes.”
  • Johnson is going to be on the ballot in all 50 states and the District of Columbia
  • A new Washington Post/Survey Monkey poll shows Johnson is in double digits in 42 states. In 15, he’s at 15 percent or higher, including 25 percent in New Mexico, 23 percent in Utah and 19 percent in Alaska, Idaho, and South Dakota.

So here we have a Commission that’s a creature of the two major parties setting the ground rules for who gets to be on the debate stage, securing free airtime for its choices on C-SPAN, ABC, CBS, FOX and NBC, as well as all cable news channels including CNN, Fox News, MSNBC and others.

Not exactly a reason to celebrate our political system, is it?

Libertarian Gary Johnson: an emerging threat to the status quo?

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He must be getting under their skin

The major media have all but ignored Libertarian presidential candidate, Gary Johnson, until now.

On Thursday (9/8), Johnson flubbed a question from an MSNBC commentator about Aleppo, the besieged city in Syria. After months of repeated exaggerations, lies, and bluster from Clinton and Trump, the media went ballistic over Johnson’s blunder.

All of a sudden, the reliably liberal New York Times, which has done little more to date than report on Johnson’s poll numbers, questioned his fitness for the presidency.

“Gary Johnson, the former New Mexico governor and Libertarian Party presidential nominee, revealed a surprising lack of foreign policy knowledge on Thursday that could rock his insurgent candidacy when he could not answer a basic question about the crisis in Aleppo,” the Times said. “The stumble could be a serious blow to Mr. Johnson’s campaign…”

The Times followed up with, “…Mr. Johnson’s presidential chances appear shaky…And on Thursday, Mr. Johnson’s credibility suffered a blow when he fumbled over a question about the crisis in Syria…”

Media of all stripes have piled on with wall-to-wall coverage, most of it suggesting Johnson proved he was unfit for office, some saying it showed he should withdraw from the race.

“Libertarian presidential candidate Gary Johnson may have just disqualified himself as a common-sense alternative to Donald Trump or Hillary Clinton,” said the Atlanta Journal Constitution.

Reflecting the concern among progressives pols and pundits, on Saturday (9/10), NYT Op-Ed writer Timothy Egan said Johnson doesn’t deserve the votes of people disenchanted with Clinton and Trump.

“A voter of conscience, in a normal year, could go for Johnson and feel O.K. about it,” Egan wrote. “But this year, in a tight election, any vote by an independent or a Democrat for Johnson could burden that citizen with a lifetime of guilt for handing the world over to Trump. His presidency could “lead to the end of civilization,” as his own ghostwriter, Tony Schwartz has said.”

If you want to know why the liberal gang is now after Johnson, just look at the polls.

Johnson is going to be on the ballot in all 50 states and a new Washington Post/Survey Monkey poll shows he’s already in double digits in 42 of them. In 15 of them, he’s at 15 percent or higher, including 25 percent in New Mexico, 23 percent in Utah and 19 percent in Alaska, Idaho, and South Dakota.

Then you have today’s revelation that Johnson is the top choice of respondents in the most recent polling of the military community.  The poll was conducted between Sept. 7 and Sept. 10 via SurveyMonkey.

Johnson was preferred by 37 percent of respondents, which include active-duty, retired and former members of the military, as well as their family members.  Trump came in second, at 30 percent, and Clinton third at 24 percent.

Who would have thought that Hillary Clinton, who expected her march to the White House to be a cakewalk after Donald Trump secured the Republican nomination, would be forced to add Gary Johnson to the equation?

Nothing like a real challenge to their power to get the powers that be all charged up.