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PAGE 4A —THE MADISON COUNTY (GA) JOURNAL. THURSDAY. MARCH 26. 2009
Opinions
Frankly
Speaking
frankgillispie671@msn.com
By Frank Gillispie
Would you like to
attend a tea party?
Would you like to attend a tea party? They
are sweeping the nation. People are organizing
tea parties to protest the heavy spending of the
Obama administration, believing that his econom
ic plans can only result in massive tax increases
or runaway inflation, or both. The movement was
started by a reporter on CNBC, Rick Santelli, in
February, when he called for a tea party on Lake
Michigan in protest of government action which
he said was “promoting bad behavior” by subsi
dizing "the losers’ mortgages.”
Over 50 protests have already occurred across
the nation, drawing some 30,000 people. There
were 4,000 at a protest in Orlando and another
five thousand in Cincinnati. Now over 120 cities
and towns have announced plans for “tea parties"
on tax day, April 15. There are currently plans
in a number of Georgia cities including Atlanta,
Augusta, Leesburg, Macon, Savannah and Warner
Robins. You can find a nationwide list of sched
uled parties at http://taxdayteaparty.com.
This movement is sounding a lot like past tax
protest that have greatly influenced our nation.
There was, of course, the Boston Tea Party con
ducted by the Sons of Liberty that helped insti
gate the American Revolution. Then a major tax
rebellion led to the bloodiest war ever fought on
the North American continent. It was in protest of
a massive tax increase known as the Morrell Tax
that caused the southern states to rebel against the
federal government and establish the Confederate
States of America.
Now this series of “tea parties” may well be the
harbinger of the next great tax revolt in America.
But this one will be fought in the media, on the
internet and the election booths, not with guns
and swords. I hope and pray that I am right about
that.
Due to the fact that congressional elections
occur every two years, we will have a new oppor
tunity to strike against President Obama’s danger
ous tax and spend program in 2010. Already the
battle lines are being formed. Bloggers and com
ment writers on the net are urging the Republican
Party to make the Democrat’s spending plan a
major part of their platform. People who explore
the Internet are finding a new interest in indepen
dent and third party candidates among those who
are blaming both major parties for the economic
disaster we now face.
The question is this: Will the April 15 protest
be big enough and loud enough to influence the
President’s spending program, or will he ignore
the protest and charge ahead with his program?
If he listens and modifies his programs to control
the runaway spending, he may be able to keep
control of his administration. If he continues on
his current track, I predict that Republicans will
regain control of the House of Representatives
in 2010, and the Presidency in 1012. I will also
predict that if the Obama administration fails as
badly as I suspect it will, there will not be another
Democratic president for at least 50 years.
Voters of this nation will not let this kind of
economic abuse stand. The only question is
whether they can reverse it before terminal dam
age is done.
Frank Gillispie is founder of The Madison
County Journal. His e-mail address is frankgil-
lispie671 @msn.com. His website can be accessed
at http.V/frankgillispie. tripod, com/
Don’t want to ride shotgun in AIG’s Lamborghini
When I was pulled over for speeding
some time ago, I wasn't so fond of the
officer who got me. But I understood
the rules and the consequence of going
too fast.
I knew that I couldn't exactly pay the
cop some money to make the problem
go away. I couldn’t call a legislator to
have him eliminate traffic laws. I was
upset about the fine and the increase
in my insurance premium, but I rec
ognized that this is part of a necessary
system. Eliminate the traffic laws and
you get chaos and increased danger.
You’re more likely to find yourself
trapped in tangled metal. Traffic laws
are part of a logical, civilized society.
I can’t help but think of traffic laws
when I think of our current financial
debacle. Wall Street wanted to speed.
They didn’t want rules to slow them
down on the way to major stacks of
cash. Washington wanted Wall Street
money, too. It’s a "your chocolate and
my peanut butter" match. So Congress
was glad to take the campaign contri
bution payoffs and relax enforcement
barriers. The philosophy of “deregula
tion" is easy to espouse when the firms
you’re helping help you back. There
was money to be made on both sides.
Forget long-term financial safety for
the general public.
So we ended up with some really
sexy cars that could fly down the road,
exotic creatures like “credit default
swaps." Who knows what makes those
default swaps go so fast — they are
In the
Meantime
zach@
mainstreet
news.com
By Zach Mitcham
certainly confusing mechanisms —
but man they pack some punch. AIG
was a dominant driver of these bad
boys. And they sure had a lead foot.
In reality, "credit default swaps" may
not be as cool as a Lamborghini, but
they certainly helped a lot of hedge
fund managers actually sit in the driv
er's seat of those super-expensive cars.
According to The New York Tunes,
credit default swaps are often defined
as a ‘form of insurance because the
seller guarantees payment to investors
in case their investments go bust."
O.K., so AIG was providing invest
ment insurance policies through credit
default swaps? Well, perhaps, but they
weren't setting aside enough money to
back up the claims. So "insurance” is
not the right word.
"They are not safe insurance in any
familiar sense, however, because AIG
was not required to set aside reserves
in the event of a claim,” The Tunes
wrote in a March 14 editorial. "That
is why, when the bubble burst and
defaults rose, AIG was unable to make
good, provoking the bailouts."
hi plain English, the lack of regula
tion regarding credit default swaps
meant that AIG could avoid the most
basic rule of financial reliability —
putting your money where your mouth
is.
The New York Tunes also noted that
Eric Dinallo, the insurance superin
tendent for New York State, estimates
that “some 80 percent of the estimated
$62 trillion in credit default swaps out
standing in 2008 were speculative.”
Um, $62 trillion? Our country’s
annual Gross Domestic Product is
around $15 trillion. The annual global
GDP is $78 trillion.
I’m no math whiz, but 80 percent of
62 is just shy of 50.
OK, so are we looking at nearly $50
trillion in credit default swaps that are
not backed by any collateral?
That’s not insurance; that’s reckless
gambling on an epic scale.
But in 2000, Congress exempted
credit default swaps from gaming
laws. It’s like Congress decided to
send the kids and the Visa with the
scary uncle to Vegas.
The bailouts are wildly unpopular,
but in my eyes, these decisions were
made back in 2000, when Congress
agreed to open the door for mega com
panies, such as AIG to gamble with
trillions and trillions of dollars without
backing those funds up with any real
collateral.
The bailout money — which
includes $170 billion to AIG — is
a stack of sandbags to a flood. It’s a
huge figure indeed, but still just a tiny
fraction of what’s been put on the line
by Washington’s reckless deregulation
and the Wall Street money grab that
followed.
Right now, we’re focused on the AIG
bonuses, which are truly despicable,
but those bonuses are just an exposed
mole on a really ugly backside. This
mutually beneficial money exchange
between Washington and Wall Street is
nothing new. It’s just that we’re paying
more attention now.
I do believe things will eventually
get better and that there will be some
real positives to come out of today’s
bad.
For instance, I believe we now see the
need for basic rules of the game when
it comes to financing. We certainly
don’t want to sit shotgun anymore with
the lead-footed AIG executive in the
credit default swap Lamborghini.
In any sane society, that irresponsible
fellow gets ticketed or jailed for riding
wild through the streets, endangering
society. We don't expect government
to encourage and facilitate reckless
behavior, not on the roads, not in our
markets.
No, in a sane world, we expect the
speeder to pay a fine to the government
— not vice versa.
Zach Mitcham is editor of The
Madison County Journal.
Budget again full of borrowing, spending and shifting
On March 19, the Georgia House
members voted 123-49 to approve an
$18.6 billion state spending plan for
the next fiscal year, which starts July
1. Despite a shortfall of $3 billion in
state revenues because of the econom
ic downturn, this budget plan is still
chock full of questionable spending
propped up by federal stimulus/bail
out money, more bonded debt, school
tax shifts and the largest property tax
increase in Georgia history.
In other words, the fiscal year 2010
budget is simply one more year of the
fiscally irresponsible policies like those
of the past six years. Because the lead
ership has been unable or unwilling
to implement zero-based budgeting,
the misspent priorities and sweetheart
contracts continue on year after year.
A total of $1.4 billion worth of
stimulus funding from Washington,
D.C., is included in the budget. While
the Speaker Richardson railed against
Congress and the Administration
for “spending like a drunken sailor"
during the budget debate, the House
Appropriations Committee Chairman
acknowledged the stimulus package is
bailing the state out this year and “soft
ening" the blow of spending cuts.
This budget fails to fund the
Homeowner Tax Relief Grants, which
will result in a record $400 million
plus property tax increase. The elimi
nation of these grants will cause an
estimated $200 to $300 increase for
the average Georgia homeowner on
the property tax bills sent out by local
governments later this year.
By Alan Powell
Property owners will also feel the
brunt of another $197 million in QBE,
basic education funding cuts to local
schools, along with $112 million cut
in school equalization funding, affect
ing schools and taxpayers in Franklin
and Madison counties, which are part
of that program. But most alarming
of all is that $375 million in stimulus
funding replaces normal state funds
for public education. My concerns and
questions are: What happens in 12-18
months when the stimulus funds ran
out? How much more will be cut at
the state level and shifted to the local
level when those federal dollars are
gone next year?
Another source of concern about
this budget plan is the additional $1.2
billion in bonded debt. It should con
cern all of us in times like these to
continue borrowing and spending at
such a pace. The state budget impacts
everyone’s fife and pocketbook.
The House budget plan now goes
to the Senate, where amendments to
the plan are expected. Lawmakers will
likely have another opportunity to vote
on the state's economic future after
a conference committee works out
differences between the House and
Senate plans in the final days of the
session.
With only four legislative days
remaining in the 2009 session of the
General Assembly, one issue that
remains up in the air is the future
of Georgia’s transportation system —
how it will be governed and how it will
be funded.
The House-approved proposal call
ing for a statewide one-cent sales tax,
HR 206 and HB 277, became the sub
ject of controversy this week following
media reports about the $25 billion
worth of road projects that would be
funded by the sales tax. Near the top
of the list is a four-lane expansion of
a rural highway in Greene County
leading to the Reynolds Plantation golf
resort, owned by a family well known
as a major contributor in political party
financing. The legislation’s author
declined to identify exactly who drew
up its list of road projects.
But the House proposal has already
been rejected by the Senate, whose
regional sales tax plan for transporta
tion (SR 44) has gone nowhere in
the House. Meanwhile, the governor's
proposal to ship the Department of
Transportation Board, whose members
are elected on a district basis by legis
lator's, of its authority has likewise ran
into problems. SB 200, which would
create a State Transportation Authority
with five members appointed by the
governor, three by the lieutenant gov
ernor and three by the House speaker,
barely passed the Senate and is under
going substantial changes in the House
committee process.
Transportation had been identified
as one of the major problems for law
makers to address this year. But unless
something miraculous occurs between
now and April 3, it appears the trans
portation problem will go unsolved in
the 2009 session.
During the past two weeks, I have
received numerous phone calls from
constituents about SB 31, the Georgia
Power rate increase legislation. One
issue of particular concern in House
District 29 is how the expansion of
the Plant Vogtle nuclear facility will
affect Lake Hartwell's water supply.
In response to my previous column
on this issue, the company issued a
press statement that acknowledges the
power plant expansion could actually
double its consumption of water flow
from the Savannah River. This con
tinues to be an area of great concern,
and everyone with an interest in Lake
Hartwell's water levels should con
tinue to follow the issue closely.
Rep. Alan Powell (D-Hartwell) rep
resents the 29 h District (Franklin, Hari
and Madison counties) in the Georgia
House of Representatives. Contact
him at 507 Coverdell Office Building,
Atlanta, GA 30334; by phone at
404-656-0202 or by e-mail at alan-
powell23@hotmail.com. For more
information, visitwww.alanpowell.net.
The Madison
County Journal
(Merged with The Danielsville Monitor
and The Comer News, January 2006)
P.O. Box 658
Hwy. 29 South
Danielsville, Georgia 30633
Phone: 706-795-2567
Fax: 706-795-2765
Email: zach@mainstreetnews.com
ZACH MITCHAM, Editor
MARGIE RICHARDS, Reporter/Office Manager
BEN MUNRO, Reporter/Sports Editor
MIKE BUFFINGTON, Co-publisher
SCOTT BUFFINGTON, Co-publisher
FRANK GILLISPIE, Founder of The Journal.
Jere Ayers (deceased) former owner
of The Danielsville Monitor and The Comer News
Periodical postage paid at Danielsville, Georgia 30633
SUBSCRIPTION RATES:
Madison & surrounding counties $19.75/year
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POSTMASTER: Send address changes to:
THE MADISON COUNTY JOURNAL
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A publication of MainStreet Newspapers, Inc.
Moving toward closing hours of legislative session
With the much-anticipated “Day
30” now behind us, we are moving
quickly toward the closing hours of
this legislative session. Our work
load may have seemed light this
week compared with the number
of bills we passed last week, but
our pace will certainly pick up in
the days ahead.
This week we completed our
work on the House version of the
FY2010 Budget and we also began
working on legislation previously
adopted by the Senate.
After over three hours of debate
on the House floor, the Fiscal Year
2010 Budget was approved by a
vote of 123-49. With current rev
enues down over 15 percent, the
burden to cut spending and evalu
ate our state’s priorities was great
er than ever. The good news is that
I believe we succeeded in fund
ing our top priorities, cutting out
the fat, and meeting the needs of
our citizens. At $18.6 billion, this
budget was approximately 12.3
percent less than last year. There
is no doubt in my mind that finaliz
ing this budget was an exercise in
fiscal discipline and restraint in the
By Tom McCall
face of declining state revenues.
There are several elements I
would like to point out about the
House version: the budget as passed
included funds for Georgia’s tech
nical schools. Also we cut funding
for “hall of fame” museums in
Georgia and actually moved to
privatize the Golf Hall of Fame
— something we should consider
for all of them. We were able to
save money for the GBI crime
labs, fund 23 new cars for Georgia
Troopers, restore funding to hospi
tals and expand community health
centers. School nurses were saved
and $33 million for Georgia’s
statewide trauma network was
included. Enrollment growth at
our colleges and universities was
fully funded as was enrollment
growth at our secondary schools.
We added additional spots in the
Georgia Virtual Schools program
and funded Graduation Coaches
throughout the state. The bud
get restores funding for RESAs
and Educational Technology
Training Centers (ETTC). These
are resources our local schools
can draw from to utilize emerg
ing technologies. We also included
National Board Certified teachers’
supplements.
One more note on the budget.
Speaker Richardson addressed the
House to deliver an unhappy pre
diction — if state revenues con
tinue to decline as he believes they
will, the General Assembly will
be back in Atlanta later this year
for a special session to implement
further cuts in the FY2010 Budget.
While I hope that our state’s econ
omy will begin to turn around
soon, I just don’t have a crystal
ball that can tell me what the future
holds. I will of course keep you up
to date on our economic outlook
and pass along any relevant infor
mation I receive.
Our conversations on food safe
ty continue at the State Capitol.
This week we adopted Senate
Bill 80 that requires additional
testing at food processing plants.
Specifically, SB 80 requires food
processors to report lab results that
indicate any sort of contamination
to the Department of Agriculture
within 24 hours of receiving them.
The legislation also requires the
plants to keep records of the
results for two years and make
them available upon request by the
Department of Agriculture.
With only 7 legislative days left
in this session, I will continue to
keep you up to date on our actions
as the legislative session progress
es. As always, if you have any
questions or concerns, please do
not hesitate to contact me at your
Capitol office at (404) 656-5115.
Rep. Tom McCall (R), Elberton,
is the District 30 member of the
Georgia House of Representatives,
which includes the southern half
of Madison County, all of Elbert
County and the eastern portion of
Jackson County.