Corruption and Cronyism is Alive and Well in NC

Mike Easley, Corruptocrat

This morning’s Charlotte Observer has a major piece on the North Carolina State Bureau of Investigation. It is some very interesting and enlightening reading. But, this goes way beyond the SBI. Corruption and cronyism run rampant through the whole North Carolina state government. In my opinion, this is because the state has been under one party rule (Democrat) for the entire 22 years I have lived in NC, and probably much longer.


They say Chicago is a culture of corruption, but you don’t have to look past Raleigh to see that corruption and cronyism is alive and well in North Carolina. We have seen a few Republican governors, but from the Attorney General on down, the state has been controlled by Democrats. Democrats have controlled who gets new highways, who is appointed to state regulatory agencies, and most important they have controlled redistricting for state and federal legislatures that have created districts that favor Democrats. For example, you have the 12th Congressional District that was added after the 2000 census that was engineered to favor a Democrat. Also, Lake Norman is split and added to two predominately Charlotte districts so LKN residents see their Senators repeatedly vote against their interests.

Here is an example. Since 1993, only two people have been Attorney General, Roy Cooper and Mike Easley. And, Mike Easley is currently being investigated for corruption. If you Google “NC SBI Corruption” for an image, you get a picture of Mike Easley.

As far as SBI Directors, except for the one who died every one of them who served for the last 20 years are still in the NC government at high levels. Greg McLeod, the one appointed last month was a lobbyist for Roy Cooper. Shouldn’t the Director of the state’s highest law enforcement agency have a law enforcement background? Robin Pendergraft, the one who ran the agency for the past nine years was not fired, just reassigned to Deputy Attorney General for Medicaid Fraud. Brian Beatty is now a commissioner of the NC Industrial Commission. Jim Coman is a Senior Deputy Attorney General. This looks like employment for life, they just shuffle their friends in and out of jobs in the state government.

The cure for this corruption is a total colon cleanse. We need to vote out the Democrats in charge so we can get rid of the corruption and cronyism. We need a new deal in allocating highway funds. We need to have at least one house of the legislature to be in Republican hands so the Democrats don’t have a free hand to direct money and projects to the home districts of their cronies. We need to have redistricting that makes sense and is fair.

Former Charlotte Mayor Pat McCrory Speaks to the Subcontractors

Pat McCrory address the ASAC and PHCC

Former Charlotte Mayor, Pat McCrory spoke to a joint meeting of the American Subcontractors Association of the Carolinas Charlotte Chapter and the Charlotte and Gastonia chapters of the Plumbing, Heating and Cooling Contractors Association. The meeting was held on Tuesday August 17th at Byron’s Southend. Over 80 members and guests were in attendance.


The mayor’s topic was change and resurgence in Charlotte. There are many things that encourage him about the future of Charlotte and the likelihood that Charlotte will experience a resurgence ahead of the country in general. Some of the reasons are as follows:

The banks in Charlotte are hiring. Even though Charlotte lost the headquarters of Wachovia, Wells Fargo and Bank of America are increasing jobs in Charlotte due to the lower cost of living as compared to New York and San Francisco.

The availability of educated and trained employees and Charlotte’s infrastructure are fueling the opening of new businesses and relocations to Charlotte.

Charlotte’s airport with over 500 direct flights daily to locations coast-to-coast make Charlotte desirable for corporate and division offices.

Charlotte’s dynamic city center, South End district and the light rail to connect them makes Charlotte attractive to young urban dwellers. Getting people to transfer to Charlotte is generally not a problem

The cloud on the horizon is government spending and taxes at the state and local levels. Charlotte and North Carolina are no longer low tax areas. Also, the number of government employees has continued to increase. Even though Charlotte has curbed the rate of wage increases and now makes city employees participate in the cost of healthcare, this is not true at the county and state levels which have continued to give 7-8 percent increases and pay 100% of healthcare costs. These generous benefits are far more than are available in the private sector and since government employees are able to retire after 30 years at 80% of pay, this will be unsustainable in the near future as these increases and benefits continue to grow at twice the rate of the private sector.

Mr. McCrory issued a call to arms for business men and entrepreneurs, who typically work years at low salaries and benefits to get their businesses going, to show up at city and county budget meetings to make their voices heard. The city fathers hear a drumbeat every day from city and county workers about how hard they work and how little they are paid. Most on the city council and county boards have never had to meet a payroll and have no idea how hard the private sector has to work to pay for the government salaries and spending.

Mr. McCrory concluded to a standing ovation.

A Lexus Lane to Nowhere

I recently read that the NC Department of Transportation has applied for a $30 million stimulus grant to convert the HOV lanes on I-77 to HOT lanes. A HOT lane is a High Occupancy TOLL lane. It means you can pay your way into the” fast” lane. In places that have this type of lane, it is mockingly known as the Lexus Lane.

The grant would pay for the electronic signs and sensors necessary to make the change. The toll would change during the day, going from a nominal charge most of the day to $2-3 dollars during peak periods. Sensors would sense traffic flow and increase the toll when traffic increases, say, after a Panthers game. Drivers would be required to have a transponder chip to utilize the lane so you can be billed for your trip.

I question the sanity of this proposal. I make the trip to and from Charlotte every day. I cannot reason why I, or anyone else for that matter, would pay a couple dollars to travel at the same speed as the free lanes only to run headlong into the bottleneck that occurs a mile or so after the HOT lane ends. Or, in the morning, after I have driven in stop and go traffic from Exit 25 to about mile marker 22, the traffic frees up before you get to the HOT lane and is unobstructed until you get to Charlotte.

I have another idea. On a couple of trips to Virginia, Northern Virginia and the Tidewater area, I have seen the way Virginia is handling this problem. If this were Virginia, they would beef up the shoulder and add an additional lane that could be used during peak times. This could easily be done from Exit 23 going north to Exit 28 and From Exit 28 going south all the way to the four lane section of the highway. Since the lanes would necessarily be narrowed, they would have to reduce the speed limit to 55 or 60, but that would be a big improvement over the 20 to 30 MPH that you drive a peak times on this stretch of highway.

If the purpose of a stimulus grant is to increase jobs, I contend that paving highways produces more jobs than putting up some signs, laying down sensors and creating an agency to collect tolls. They say that highway construction jobs are not “green” jobs. I say they are. To eliminate traffic bottlenecks and keep traffic moving can reduce traffic pollution far more than a Lexus Lane to nowhere.

Who Will Be the Next Milton Friedman?

I was recently watching a business program on television where several people were debating the wisdom of spending another vast sum of money in another stimulus bill (now called a jobs bill) in order to stimulate the economy. One of the people made the statement, “Anyone who has taken economics knows that in a recession you need to inject money into the economy to stimulate spending and jobs.” That started me thinking, “Where did this guy learn economics?”

This thinking is the product of Keynesian economics, named after John Maynard Keynes (1883-1946). Keynes hypothesized that government can use fiscal and monetary policy to mitigate the adverse effects of business cycles with their periodic recessions. Keynesian theories were the basis of the policies of Franklin D. Roosevelt and the New Deal when massive amounts of government spending and government agencies were set up in an attempt to restart the economy during the Great Depression. If you distill Keynes down into a word, it would be demand. Keynesian economics attempts to create demand to level out a downturn in the economy.

If this guy had a balanced lesson in economics, he would have learned about the theories of Milton Friedman (1912-2006). Friedman, a disciple of Keynes, went to Washington in 1943 to work in Roosevelt’s New Deal. He realized there was a flaw in Keynesian theory in that the “Phillips Curve” which described the consumption function did not work. During the 1950’s, Friedman became the leading advocate opposing Keynesianism and promoted a macroeconomic policy called monetarism. He argued that the government could not micromanage the economy because the people would realize what the government was doing and would change their behavior and neutralize the policies. He predicted that Keynesianism would cause “stagflation,” high interest rates and minimal growth. (Remember Jimmy Carter?). Friedman argued that a small increase in the money supply and relaxing of business regulations were all that were required.

Friedman and his disciple, Arthur Laffer (The Laffer Curve), were the architects of the policies of Ronald Reagan, which took only 18 months to turn around the malaise of the Carter years. If you boil Friedman down to a word, it would be supply. In the Reagan years, this was known as supply side economics. The increase in money supply was provided by tax cuts which resulted in an economic turnaround that also increased the total tax revenue to the government. This also worked for John F. Kennedy who used a tax cut to avoid a recession. George W. Bush also used tax cuts which increased total revenues, but strayed from Friedman in that he allowed spending and the size of government to increase which negated the positive effects.

Keynesian thought came to the forefront again in 2007 and has been the basis for the policies of Barack Obama and former British Prime Minister, Gordon Brown. Gordon Brown has now been removed from office. The Obama administration has pumped trillions of dollars into the economy and has little to show for it except they have doubled the national debt in 18 months. We have had only minimal growth. The Fed is loaning money to banks at zero interest in an effort to hold down inflation, but that is the only thing currently keeping us from a full blown case of stagflation.

The causes of our economic crash are for another time. Read Paul Schiff’s book, "Crash Proof: How to Profit From the Coming Economic Collapse" (2006). Written one year before the economic problems started, he predicted both the stock market and the real estate collapses. There is a third collapse in his prediction, the collapse of the dollar. There is your stagflation. Friedman is dead. Arthur Laffer is seventy years old and retired. Where is the next great economic theorist to get us out of this Keynesian debacle? I wonder.

Fannie Mae on Wheels?

I’m seeing an ominous parallel here. In yesterday’s Charlotte Observer, I read an article about General Motors’ upcoming purchase of Americredit. They called it, “a deal that allows the automaker to expand loans to customers with poor credit…” It further states that, “GM, which is 61% owned by the US Government, is getting back into the business of making risky loans.” The article goes on to say that GM is missing sales opportunities due to lack of credit for lease deals and financing for subprime buyers.

We the people (US Government) own 61% of GM; the unions own a big chunk of the rest. We the people will now own 61% of Americredit which will finance GM cars to buyers with subprime credit. If these subprime borrowers default on their loans, the loss will be ours.

It’s one thing for a company to raise capital and risk it to offer subprime financing in return for a chance to get a higher reward from higher interest rates. It’s totally another for the government to do it and force the risk onto the taxpayers.

This is exactly what happened to the real estate market. The government passed laws to encourage subprime loans to homebuyers to increase home ownership. These loans are purchased by Fannie Mae and Freddie Mac, two quasi government agencies, which are backed by the US Government. The taxpayers are now on the hook for the future losses of these agencies which now own over half of the outstanding home mortgages.

So, now we are in the process of creating a Fannie Mae on wheels. I, for one, cannot see anything good coming out of this. GM will have the unfair advantage of offering subprime loans to buyers with poor credit; all backed by the people of the United States.

How does this affect competition with Ford Motor Company, which did it the right way? When Ford saw the government’s deal, they walked away. They sold off or mortgaged assets to build up cash. They invested in new technologies, quality control, cross platform efficiency and designing cars that people will buy. They made a deal with the unions to eliminate the “job bank.” This allowed them to close unnecessary factories. Ford started making a profit and has actually made a big payment into the pension fund to reduce the unfunded pension liabilities. Ford has increased market share while GM, Chrysler and Toyota have all decreased. Ford has now surpassed Toyota in the J. D. Power ratings of buyer satisfaction. Now they have to compete against US, the taxpayers of the United States who now have a huge stake in the success of GM.

Until GM pays back all the money to taxpayers and fixes its own problems, I will buy Fords. It is my little protest. I say little because when I buy a car, I drive it until it drops or until I can’t stand it anymore. My 2 year old Ford has given me 37,000 trouble free miles so far. It may be a long time before I need another.

A New Mission

I am a long time member of Davidson United Methodist Church. Last Sunday, our Senior Associate Pastor, Jeff Hassell, gave a sermon on the new direction of front line missions. Jeff came to Davidson after several years of service in Lithuania and also serves as our Director of Missions. This is a major post in our church as we have an annual missions budget of $1 million.

Jeff announced, that after thirteen years, Davidson was severing ties with our sister church in Shalaiu, Lithuania. Teams from Davidson have gone to Lithuania to mentor and help build this church. Now that the church is complete, the bureaucracy in the Lithuanian Methodist system limits the independence of the churches and creates a culture of dependence where 95% of all funding is controlled outside the local church. In other words, continuing to send money to this church will just enable the status quo and will not further the goals of the mission.

Jeff told of a visit by a group of mission directors from Davidson and other large churches to a church in Jamaica that has developed a program of micro loans. These are loans to people to better themselves and their communities. To get these loans, the recipient has to attend a class, develop a business plan and go through interviews. The example was a man known as the “Wacker Man.” This man supported himself with a homeowner model Weed Wacker cutting weeds along steep banks where tractors could not go. He was given a loan for $500 to purchase a commercial grade machine to increase his productivity. He was able to pay back the loan one month early. Later, he got another loan to buy another machine and hire an employee. Over the course of this program, no one has yet defaulted on a loan.

Davidson intends to take this concept to Nicaragua where we are partnering with a Texas group to start a mission in a Mayan village. We also continue to work with Habitat for Humanity in Guatemala.

I had the chance to speak to Jeff after the service. I told him I was encouraged by this. I used the analogy of giving a man a hand up, not just a hand. He said it was more like extending the old analogy of if you give a man a fish he has a meal but teach him how to fish he can feed his family. The extension is now to help him buy a boat so he can feed the community. And, when the loans are paid back, they can be reinvested to extend the program exponentially.

I like this. It makes sense. It's not just charity, but an investment in self reliance and the betterment of the world.

It's Going To Be an iPad World

I recently decided to buy an iPad. I will be going on vacation soon and later on in the year going to an industry trade show in Las Vegas. I normally travel with a laptop and an Amazon Kindle. I caught a debate on TV, Kindle vs iPad, and what got me interested was the final argument that you could sync your iPad to your Kindle account.

I posed a question on Facebook for any iPad users. Is it reasonable to think you can replace both a laptop and Kindle with an iPad while traveling. I got the answer back from my friend Dudley who is currently living in Shanghai, China. The answer is absolutely, he does it all the time. His final statement was that I would probably never use my Kindle again. That's a pretty strong statement from someone who has a 15 hour plane ride any time he comes back to the states.

Once the decision was made, the question is how to purchase it. I visited Best Buy to test drive one. Do they have one in stock? No. Can I reserve one? No. You have to call them every day to see if any have come in and get someone to put it away for you. Next, I called the Apple Store. After a dozen tries to get through the busy signals and automated answering system, I learned that the Apple Store has none in stock and also does not know when any are coming in. They would reserve one, if I had an Apple account, but could not guarantee delivery before my vacation in June.

So, I went online to set up my Apple account. While there, I saw that I could order the iPad online with a shipping time of 7-10 days. Doing the math, I could expect to get the iPad in time for my vacation. So, on May 16th I ordered the iPad and two accessories, the docking station and the camera input adapter. I got my acknowledgment that the docking station would ship immediately, the iPad delivery date was to be June 4th and the camera adapter would be delivered June 28th.

I got the docking station in two days, shipped from Carol Stream, IL. When I opened my email on May 27th, I saw an email from Apple advising me that the iPad was shipped on May 26th and gave me a tracking button to follow the shipment on Fedex. I clicked the button and saw that my iPad was currently in Anchorage, Alaska. Huh? Did it go in the wrong direction? Then, I scrolled down to see the shipment origin was Shenzhen, China. Who knew? Apple is shipping the iPads directly from China to the consumer. Anyway, the iPad spent a little over a day in Anchorage awaiting customs clearance, then screamed across the US. In a little over 8 hours, the iPad left Anchorage, had a two hour stop in Memphis and was on to Charlotte, arriving at 6:50AM Saturday morning May 29th. Now here on Memorial Day weekend, I am anxiously awaiting my iPad's delivery to me at the office on Tuesday.

Doing a little checking, I found out that this is routine for Apple. They also ship their Apple TV's directly from China. I've also found out that Apple is not alone in doing this. I have another Facebook friend who is currently awaiting delivery of his new Droid phone from China. My office supervisor's husband also has a Droid phone coming from China.

What does this mean for America? If this method of logistics catches on, it means that another whole level of the logistics chain is going offshore. The current method of delivery is to ship a container load of product to a fulfillment contractor in the US. When an order is placed, the fulfillment contractor pulls the item, labels it and ships it to the consumer. Now, even this basic function will be in another country along with the manufacturing and call centers. My only contact with an American on this purchase will be the Fedex driver next Tuesday.

My friends, this is a changed and changing world. Whatever you do for a living, don't think you will not be affected. If you can't do more, you will probably have to accept less. What part of your job can be done in China, or India, or in the case of my employer, Mexico. Our company moved most of it's manufacturing to Mexico ten years ago. And now, we have all of our IT, data processing functions and help desk located in Mexico. What few IT people we still have in the US are now independent contractors employed by EDS-Mexico.

Folks, our economy will never be the same. Look out for yourself. The government can't continue to bail everyone out or we will end up like Greece. Don't stop learning. Think about what you can do if your job goes away and get prepared for it.