A Defiant Governor Christie

           Governor Christie has indicated in an interview that he would consider defying a ruling by the NJ State Supreme Court should it decide that his cuts to school funding during 2010 and 2011 school years were unconstitutional.

            The New Jersey Constitution requires under Article VIII Section IV, “1.  The Legislature shall provide for the maintenance and support of a thorough and efficient system of free public schools for the instruction of all the children in the State between the ages of five and eighteen years.” There are many advocates that indicate his drastic reduction in school funding is denying students this guarantee especially in poorer areas where state funding is critical. Amongst these advocates is Paul Tractenberg, founder of the Education Law Center, which brought the lawsuit.

            It goes without saying that while a ruling against the constitutionality of the Christie school cuts would be a windfall victory for Christie’s opponents, including the NJEA whom the governor has been at war with since his election, it will leave both the state (financially) and the governor (politically) in a very precarious position.

The question that immediately comes to mind when contemplating this ruling is with a 10 billion dollar budget deficit where is Governor Christie going to come up with the money? Christie has indicated that a variety of drastic cuts to hospitals and townships would be in order but in light of recent events one shouldn’t rule out a continued attack on state public worker pay and benefits.

More disturbing is the indication from the Governor that he may just ignore the Supreme Court’s ruling placing the state in a Constitutional crisis. 

Should the Governor choose to flagrantly deny the Supreme Court’s ruling it will only show him to be a petty tyrant and not the elected leader of a democracy. 

            The checks and balances of our democracy are critical to its continued existence and one of the only things that separate us from an autocratic dictatorship. Even indicating that refusal to obey the court’s decision is a possibility leads me to believe that the Governor is behaving like a spoiled child whose parents just told him he had to give back the toy he stole and not an intelligent elected official of a representative democracy.           

http://www.nj.com/news/index.ssf/2011/04/if_nj_supreme_court_orders_sch.html

http://www.njleg.state.nj.us/lawsconstitution/constitution.asp

Governor Christie's Healthcare Plan

            In an article published Sunday April 17th Governor Christie detailed his latest Healthcare plan for state public employees.

            The plan is estimated (by the Governor's office) to save the state 870 million dollars by the year 2014. The plan would reach this level of savings by raising healthcare contributions for public sector employees over the next 3 years from their current level of 1.5% to 30% by 2014.

            If we prima facie accept the Governor's numbers as correct (as of this time they are unsubstantiated) the savings are quite impressive. This is especially true considering the current state of New Jersey's finances and the deficit that the state faces in a number of areas.

           

            Of course before throwing any type of support behind a bill that increases cost of living for a large number of citizens of this state raises a couple of questions need answering.

            The first question that comes to mind is how, if at all, is the Governor going to spend his new found savings? And with that question I would add is any portion of these funds going to benefit either the public workers or the public as a whole in the State of New Jersey or will the governor pocket the savings for the State and call it a day?

            Considering the 10.5 billion dollar deficit the state is facing, the 1.2 billion dollar NJ Supreme Court decision on school funding that is pending, the 54 billion dollar deficit in the state's pension fund and the near bankrupt Transportation Trust Fund one cannot blame the Governor if he just decides to pocket the money.

            Of course hearing the Governor say that and assuming that is what he is going to do are two entirely different things altogether and I have yet to read any newspaper headline or article that discusses what he plans to do with these savings.

Regardless of Christie's answer one has to feel for any workers, public or private, that are forced to pay any out of pocket increase in these tough economic times.

            Following that notion the next question that needs answering is what is Governor Christie doing about driving down the cost of healthcare in a state that already has one of the highest costs of living in the country?

            It is one thing to squeeze citizens and employees of this state for more money from their paychecks to cover healthcare costs but it is another thing altogether not to expect our vendors to bear some of the financial burden for our current economic condition. After all there is more than one way to reduce costs and our corporate vendors have to expect waxing and waning in rates with the good times with the bad

           

Additionally I would imagine that the large number of public workers in this state would act as an excellent bargaining chip with healthcare insurance providers. Bottom line is if you want to do business with our 500,000+ public employees you need to sharpen your pencil or move over for someone who will. This is how corporations would approach the problem so why shouldn't our government do the same?

            As with the first question though I have yet to read any article or hear of any press conference discussing the governor pressing insurance companies for lower premiums. Paul Krugman posted an interesting blog the other day detailing how the inflation of healthcare costs has far outpaced CPI numbers as a refutation of Congressman Ryan's healthcare plan. It was shocking to view the inflation of healthcare costs over the last 30 years on a graph and must lead one to wonder why our headline grabbing Governor isn't taking on this issue that would surely be popular with the citizens of New Jersey.

http://www.nj.com/news/index.ssf/2011/04/christie_estimates_changes_in.html#incart_mce

http://www.agc.org/galleries/conmark/NewJerseyfactsheet0207.pdf

http://www.nj.com/news/index.ssf/2010/08/nj_transportation_chief_critic.html

http://krugman.blogs.nytimes.com/2011/04/18/janitors-and-corporate-executives-have-the-same-pay-plan/

Oil Speculation vs. The President

     On Thursday April 14th, 2011 President Obama was interviewed by George Stephanopoulos and was specifically asked about rising Gas Prices. President Obama's answer was the following;


"But the-- the last thing I want to say on gas prices, ‘cause I know it’s on people’s minds.  I- I gave a major speech about this about a week and a half.  There-- there aren’t going to be a lot of great short-term solutions to this problem.  And what happens every time gas prices spike like this, and the last time it happened was when I was running for President is politicians get up and "We’ve got to do something about gas prices."  And then when they go back down, we do nothing"

     Yes Mr. President, it is on people's minds and it most certainly shouldn't be the last thing that you say on the matter.      

     Mr. Stephanopoulos makes a point of saying during the interview that this was the largest number of questions that he got from viewers and it is an issue that needs to be addressed at length as far as this citizen is concerned.  

     The price of gasoline has risen from $68 to $113 per barrel in less than one year. That is nearly a 100% increase in the cost of fuel and should be one of the core issues of any discussion that we have as it pertains to the economy.


     Now for President Obama to say that there isn't "...a lot of short-term solutions..." is ridiculous and I don't really believe the President thinks this to be true. 

     Just about every expert on the issue of oil prices freely admits that the price has been driven up by Wall Street speculation and not by any actual demand surge or supply decrease. Actually demand is currently down in the U.S. (thanks to prices) and as such supply is up. Basically this means that the oil market is ignoring the Laws of Supply and Demand and thatsomething foul is at work here.

     Now there are laws on the books to control the kind speculation that would drive up price needlessly (Dodd-Frank Act) but no one in our Executive branch seems to be enforcing these laws where it concerns oil. There have been no major investigations publicized by the media or announcements made by someone from CFTC that they are looking into any of the sudden sharp rises in price.

     The real cost of oil per barrel is somewhere between $30 and $50.00 per barrel. Today oil closed at around $107 per barrel a little up from its opening price. Ironically the markets were down significantly today on a variety of news ranging from U.S. debt to Chinese inflationary control measures. You would think this would chase down the price of oil a bit, after all the tightening up of credit and budgets stunts growth and results in less gas being used. 

     In the end money spent on inflated gas prices is money not spent on goods or services. This affects a large number of individuals in a variety of ways and most likely will slow our recovering economy. Even in instances where the additional cost isn't that great it has been shown that just the psychological effect of rising fuel on the American consumer causes them to tighten the reins. 

     It appears as if Oil Speculation has won and our President is fiddling while gas is burning a hole in our pockets. 




Sources
http://www.oil-price.net/
http://blogs.abcnews.com/george/2011/04/exclusive-interview-with-president-barack-obama-transcript-part-one.html
http://levin.senate.gov/newsroom/release.cfm?id=332185
http://uk.mobile.reuters.com/article/stocksNews/idUKLNE72M02M20110323