NY Times Vindication

Great timing I guess!  Last night, the NY Times posted this article (and it’s in print today) regarding oil prices and the impact on the economy.  It mirrors (with much more detail) my post yesterday on that subject.

The article is here.

Economic Signs Remain Mixed – Oil is a Concern

I continue to track a number of economic indicators and statistics.  Today’s announcement that new single-family home sales were down 18.6% over last years already low rate reinforces the weakness our economy is experiencing.  Initial jobless claims are still averaging 402,000.  Durable good orders in January (excluding transportation) were down 3.6%.

Overall, signs are mixed at best and short-term optimism isn’t growing. 

Now enter the middle-east turmoil and upward pressures on oil.  It’s not a pretty picture.  Higher prices on gasoline will only worsen the economic picture as fewer dollars will remain to purchase other goods and services.

Not good news.

Pseudoephedrine Bill Moves Forward

The Joplin City Council voted 8-1 last night to advance a bill aimed to curb access to certain over-the-counter (OTC) drugs used in the manufacture of meth.  The bill would require a prescription for any drug containing pseudoephedrine.  Those drugs are currently required to be behind the counter and purchased with an ID, but do not require a doctor’s note.  The bill would only apply to purchases within the city limits of Joplin.

The council is expected to have a 2nd/3rd reading on the bill at their next council meeting. 

Wildcats Recognized for Back-to-Back Wrestling Championships

Yesterday afternoon, Neosho’s State Championship Wrestling team was honored during an assembly at Neosho High School.  In addition to the team championship, Neosho had 14 state qualifiers, 9 medalists, 4 state champions, and 5 academic All-State honorees.

Congrats to Coach Phillips for another great season.  We’re proud of all of you!

Joplin’s Proposed Drug Ordinance – One to Watch

The city of Joplin is currently discussing whether or not to pursue a new law that would require those purchasing certain cold medications to have a doctor’s prescription.  Why?  Because those drugs contain pseudoephedrine - a primary ingredient for meth.

On the surface, I see the attraction.  Missouri is ranked No. 1 in the nation for the number of meth labs and SW Missouri is by no means immune.  But will it work?  I guess time will tell. 

With the “metropolis” of Joplin having other cities close by, you may just move the purchases to nearby Webb City.  You also have to weigh the impact on those who truly need a decongestant from time to time when Mr. Sniffles comes to town.

For now, we can sit back and watch to see how this proposal evolves.  Drugs are a problem.  They have a significant cost on all of us, not just those in law enforcement.  I commend Joplin for trying to do more to stop it.  Ideally, a state or federal requirement will be a better “fix”.  But you have to start somewhere.

SAFER Grants Will Keep Neosho Safer

It was announced on Friday that Neosho was the recipient of almost $800,000 in grant monies from FEMA’s SAFER grant program.  Those monies will be used to restore the 9 positions lost to layoffs in 2010.  The program funds the positions for a period of two years, at which time the city will take over the financial obligation to fund those positions.

As of Friday, Neosho’s grant was the 16th highest awarded in the nation for the 2010 application period and the highest awarded in the state of Missouri.

While this funding restores protection on the fire side, the police force has yet to see any increases in staffing.  Finding additional funding for rehiring positions within our police force is still a top priority.

According to the FEMA website:

“The Staffing for Adequate Fire and Emergency Response Grants (SAFER) was created to provide funding directly to fire departments and volunteer firefighter interest organizations in order to help them
increase the number of trained, "front line" firefighters available in their communities.”

Councilman David Ruth Sworn In

Councilman David Ruth was sworn in this morning after being appointed at last night’s city council meeting.  The appointment was a 4-0 decision.  Mr. Ruth will serve until the April, 2012 election.  He is filling the term vacated by Chris Wright in January.

Large Debt Load is Our Golf Course’s Biggest Handicap

Below is my weekly Friday article:

It’s been almost six months since the city of Neosho was forced to make some drastic cuts in services and staffing in an attempt to stop the bleeding of our city’s finances. While those decisions weren’t without consequence, I’m happy to report that the city’s overall financial health is beginning to show small signs of improvement.

As we begin to look past the immediate needs of cash flow, the next battle on the horizon will be discussions over how we deal with the large amount of long-term debt owed by our city. Some of that debt continues to burden the city’s general fund. The one that concerns me the most is the roughly $3 million owed on our 27-hole municipal golf course.

The good news is golf course revenues are more than adequate to cover the day-to-day operating costs of the course. But when you add in the annual payments of the course’s debt, the overall budget picture starts to get ugly. Knowing that these payments will continue to increase over the next five years, it becomes critical that a plan be put in place, sooner than later, to deal with this ever-increasing burden.

Over the next few months, you’ll likely be hearing about more and more discussions of what that long-term plan may be. It’s not going to be an easy fix and it’s not something that can be done overnight, but I am confident we can work together to find a solution that keeps our course operating while minimizing the subsidies it receives from our general fund. Once a solution is in place, it will be yet another step forward in making our city stronger financially.

Stay safe and stay warm. Winter looks to be back in full force early next week.

Until next time, this meeting is adjourned!

Post Office Closings Are The Right Decision

This week’s report that the US Postal Service will shutter up to an additional 2000 post offices (on top of the 491 announced last year) seems like a logical decision based on the continuing financial losses it saw in 2010.

With $8.5 billion in losses posted last year (losses that are made up by taxpayers), it seems only reasonable that the government MUST change the way it does business.  If this was a private organization, such changes would have been forced long ago.  It’s just one example among many others where our gov’t either needs to fix it or cut its losses and run.

It was almost two years ago that the US Postmaster General first went before Congress asking that the law be changed to permit the USPS to adapt its services to a changing business environment.  Lobbying continues in DC for more changes as losses continue to mount.

Those opposed the closings, ranging from residents of towns being impacted to the Postal Regulatory Commission itself, are fighting to prevent the closings citing the negative impact such closings could have on employees and local economies. Supporters say the system is outdated and losses cannot continue.

There is no doubt that cutting will be painful.  And with the size and scope of gov’t today, no one will likely be immune to the impact if the cuts that need to happen ultimately come to fruition.  But as the hole we dig continues to get deeper, it’s only a matter of time before we will no longer be able to afford the ladder and ropes we need to climb out of it.

Verizon Gets iPhone?

It seems more and more likely that whose who love the iPhone but hate the poor service from it’s sole provider – AT&T – will now have options.

Network World reported Saturday (along with the WSJ) that Verizon is preparing to announce it’s getting a version of the iPhone.

As an iPhone user myself, I’m about fed up with the poor service in select areas, including Neosho.  Verizon has had 3G here for years…AT&T is still stuck on dial-up speed “EDGE” around here.

http://www.networkworld.com/news/2011/010811-verizon-iphone-expected.html?source=NWWNLE_nlt_daily_am_2011-01-10

Park and Swipe

Sent by iPhone No coins in your pocket? Don't worry. In Beverly Hills, they take plastic too!

Jesse James - Out of Business

Above is a photo outside of what was West Coast Choppers. The business was shut down October 1st.

Should 405 Simply Say “NO MORE - Not Allowed”?

While past changes to 405 drew much opposition two years ago when the city pursued “updating” the existing 405, did anyone realize the potential consequences it would have on new/expanding businesses in Neosho?  Have we ultimately created a “non-business friendly” environment for people looking to grow in SW Missouri?

This issue comes from the small but significant change in 405 of removing what I refer to as “inclusive zoning” – in other words, allowing a lower class zoning in a higher level area (specifically, allowing commercial development on land zoned “industrial”) combined with putting more restrictive categories within a zone of what “industrial” means (what was “industrial” is now M-1 Light or M-2 Heavy.) 

So what exactly does that mean in the real world?

Well, one thing it means is that anyone wishing to open a business in our industrial park today would need to have an M-2 Heavy Industrial purpose in mind.  Why, because almost ALL of our industrial park is zoned M-2 Heavy Industrial.  If your intent is anything else, be prepared to submit a rezoning request, pay a fee, wait many weeks, and HOPE that no one opposes the idea. 

What was allowed and happened for years can no longer.  And while some may still think that’s ok, let me give you some better examples of what 405 would have done had it been in place years ago:

1)  Scholastic

If the flooding and subsequent relocation of Scholastic would have happened after the 405 changes (it happened prior), they would not have been allowed to relocate to their current location (and “save jobs”) without going through the costly and lengthy (and sometimes contentious) process of rezoning.  Where they are today is zoned M-2.  Commercial call centers are NOT ALLOWED in M-2.

2)  B&B Movie Theater

If B&B would want to open a movie theater today in their current location, they could not because that land is zoned M-2 Heavy Industrial.  Movies theatres are NOT ALLOWED in M-2.

3)  Expanded student housing for Crowder

While some opposed the construction of Rough Rider Village (because we “don’t need residential development in an industrial park”, that apartment complex has turned out to be a great thing for Crowder.  It’s full of students and employees who can now walk to work/school like others can at any other College/University in the state.

But what if someone wanted to further develop residential apartment complexes to help Crowder as it grows?  Good luck!  All of the land around Crowder is zoned M-1 and M-2.  Apartments (R-3) are NOT ALLOWED!

I’ll add a sidebar conversation here:  Like it or not, we have a Family YMCA and a Community college located in our industrial park.  Do those businesses (which by the way are NOT industrial) DRIVE commercial needs?  I think they do, but we’ve not made it easy for that to happen.

4) Neosho Concrete

If Neosho concrete had relocated to the industrial park (from downtown) after 405 was changed, guess what?  NOT ALLOWED!  All of the land on the south size of Industrial Dr. is zoned M-2.  According to the current 405, concrete block plants are M-1 and rezoning would be required.

5)  Any commercial business to help Crowder or the Y

Whether it’s a convenience store for Y members and Crowder folks, a Solar consulting businesses tied to MARET, or any business directed toward Crowder’s students (coffee shops, gas stations, eateries, etc.), don’t hold your breath!  All of the land around Missouri’s fastest growing community college is zoned M-1 and M-2 industrial.  What does that mean?  NOT ALLOWED!

6)  There are many more!

So where am I going with this?  I think the time has come to take another look at what we really want from the 405 and whether our future land uses in the industrial park fit the current and future needs of the area.  If we want Crowder to grow, shouldn’t we plan land use around that? 

If other cities like Carthage can grow and prosper without such restrictions, why can’t we?  Well, I think we can, and I believe the 405, while well-intentioned, is ultimately making Neosho a non-Business-friendly place to be.

New Health Care Plan is Already Sick

 

An article in yesterday’s Washington Post is already predicting possible cost overruns due to higher-than-expected costs associated with the government’s new Pre-Existing Condition Insurance Plan.  The plan is designed to cover people who have trouble getting insurance due to a pre-existing condition (i.e. you’re already sick).

The article poses the question of whether the $5 billion (‘b’ as in ‘broke’) allotted by Congress to start up the pools will be enough.  That as enrollments which were predicted to be around 375,000 are only hitting 8,000.

The plan’s home page even states that the plan “doesn’t charge you a higher premium just because of your medical condition.”

To be eligible for the plan, you must meet some very clear requirements:

• You must be a citizen or national of the United States or residing in the U.S. legally.
• You must have been uninsured for at least the last six months. Please note that if you currently have insurance coverage that doesn’t cover your medical condition or are enrolled in a state high risk pool, you are not eligible for the Pre-Existing Condition Insurance Plan.
• You must have a pre-existing condition or have been denied coverage because of your health condition.

The article cites two cases in which the plan has helped someone who was otherwise uninsurable or would have paid a much higher rate.

• First is a 50 year-old woman who was recently diagnoses with an aneurysm.  The woman had no health insurance after dropping it in July of 2009 due to costs.  She will now “pay” $358 a month for her insurance that will cover her surgery in January – surgery that could cost tax payers well over $100,000 to perform.
• Next is a 57 year-old male who was diagnosed with AIDS in 2002.  He was forced into bankruptcy after his insurance would only cover a small portion of his $3000/month prescription bill.  Now, thanks to this new health care plan, he can pay $600 a month in return for the government paying his $3000/month medicine bill.  (The article notes the man was “floored” when he found out how costly the plan was.  I guess paying $600 a month to save $3000 a month and your life wasn’t generous enough in his eyes.)

China's Wen confident on inflation after rate rise

More information on China's efforts to control inflation. From Reuters. 

Sun Dec 26, 2010 6:09PM EST

By Langi Chiang and Chen Aizhu

BEIJING (Reuters) - China's government will be able to keep inflation in check, Premier Wen Jiabao said on Sunday, a day after the central bank raised interest rates, and he pledged to speed up efforts to rein in house price surges.

Steps taken in the past month, including administrative controls to curb speculation and monetary tightening, had started to produce results, Wen said.

The People's Bank of China raised interest rates on Christmas Day for a second time in just over two months as Beijing strengthened its battle against stubbornly high inflation.

Analysts said the latest rise showed that measures such as increasing banks' required reserve requirements to rein in liquidity were not enough on their own, and that the Chinese authorities were determined to keep inflation under control.

"We have raised reserve requirement ratio for six consecutive times and increased interest rates twice to absorb excess liquidity in the market to keep it at a reasonable level to support economic development," Wen said in a state radio broadcast a day after the rate rise.

"I believe we can keep prices at a reasonable level through our efforts. As a major leader of the government, I have the responsibility and I have the confidence, too," he said in remarks published on www.cnr.cn.

The rate rise came after Beijing said earlier in December it was switching to a "prudent" monetary policy, from its earlier "moderately loose" stance.

"The rate rise shows China is quickening its pace to normalize monetary policies," said Ba Shusong, a senior economist with the Development Research Center, under the State Council, the country's cabinet.

"The front-loaded tightening, before the peak of consumer inflation in the first half of 2011, is helpful to curb inflationary expectations," Ba was quoted as saying on the financial website www.caing.com.

AHEAD OF THE CURVE

Chinese authorities have repeatedly stressed the importance of staying ahead of the curve in the battle against inflation.

"Inflationary expectation is worse than inflation itself," Wen said in the radio broadcast.

"When there is inflation, we must establish confidence, know our vantage points and take forceful and decisive measures in a timely manner to curb price rises."

The central bank said on Friday it would deploy a range of measures to head off inflationary pressures and asset bubbles.

China also intensified its property tightening measures in April and September in an attempt to brake soaring property prices.

"Until now, the measures are not implemented well enough, and we will reinforce our efforts in two ways," Wen said.

The government plans to build 10 million units of affordable housing in 2011, up from this year's target of 5.8 million.

China will also increase efforts to curb speculation in the real estate market, mainly through monetary policies and stricter use of land, Wen said, without giving details.

Property transactions as well as land costs, a major contributor to high housing prices, have shown signs of a rebound in recent weeks, triggering concerns of more tightening.

Despite all the challenges, Wen said: "I believe property prices will return to reasonable levels through our efforts. I have the confidence."

Chinese stock markets have shed nearly 10 percent since mid-November on concerns the government would ratchet up its monetary policy tightening in the face of rising inflation.

However, analysts suggested China's share market could push higher on Monday on optimism about the overall outlook for shares in 2011.

(Editing by Robert Birsel)

Sent by iPhone 

City’s Revenue Shows Mixed Message

While some counties are showing positive gains in recent months for sales tax collections, the City of Neosho hasn’t seen the same trend.  Although December’s receipts were up over last year by more than 5%, November was down more than 8.5%.  For the first three months of the current fiscal year, Neosho’s revenues over last year are down 0.86%

For the past 12 months, revenues are down 0.68% over the previous 12-month period.

China's Economic Concerns Still Growing

This article was on the New York Times website this evening. It gives a very good summary of the issues facing China's overheated economy. The comments mirror what I saw and read during my Asia trip in November.

http://www.nytimes.com/2010/12/13/business/global/13yuan.html?hp=&pagewanted=all

This One Made Me Think

Money To Burn – And You’re Paying For It

If you didn’t catch the Yahoo article, here’s a good one.

The US Treasury has printed more than 1 billion (with a ‘b’) new $100 bills with additional security features.  Unfortunately, the bill was so hi-tech, the treasury had trouble printing them.  The result?   Poor quality printing that makes some of the bills unusable.  What’s worse?  The bad bills are mixed with good bills in such a way that  sorting them will take a 20-30 years if done by hand or 1 year if done by machine.

The solution – burn the bills (wasting the $120 million it cost to run them) and go back to the previous style.

My guess is no six sigma black belts were overseeing the QC aspect of the treasury’s printing operation.

GOP Needs to Be Reasonable on Tax Cuts Now, but Fundamental Changes in Gov’t Need to Happen Too!

With the GOP’s recent wins in the US House of Representatives, those who promised change in 2008 are definitely going to see it come 2011.  But between now and January, many American’s are also going to see a change in their tax rates if Congress doesn’t act and act soon.

Why?  Many of the Bush-era tax cuts are set to expire for the 2011 tax year.  That means many Americans (not just the “rich”) will be paying more, including those making below $34,550 a year.

(I won’t post here my complaints about why democrats have made this a priority only after losing badly in November.  Heck, they’ve had two years and everyone knew it was coming.  But that’s for another day)

So it would seem reasonable, especially during an economic recession, that extending such cuts would be a no-brainer.  After all, leaving money in the hands of the people to spend is a better option than collecting the money in taxes and letting the government spend it (Reaganomics vs. Keynesians).  Right?  Well, yes and no I guess.

Republicans as expected are fully behind the supply-side theory – cut taxes to drive economic expansion.  No cut is too much, no income is too high. 

Democrats are on board too - at least for those making $250k or less (they almost have to be after President Obama “promised” no tax increases for that segment of the population).  But they don’t believe a multi-millionaire will miss a few percent of that vast fortune.  In other words, – they can “afford” it.  Now the battle begins.

How much income is from small business?  Don’t small businesses create most of the jobs?  Won’t a tax increase on the “rich” hurt job growth?  What about the deficit?

I offer this – GOP beware, but DC wake up!  Don’t get me wrong.  I’m all for extending the cuts.  Ideally, I agree that those cuts will help more than they hurt and it’s an overall good strategy that has worked before and will work again.  But I also think the republicans need to concede that at some point (maybe it’s a $1 million, maybe it’s more), imposing a “small” tax increase on some in the short-run may be necessary to get this compromise done.  I don’t think there is much to be gained by republicans drawing a line in the sand that such cuts are an all-or-nothing deal.  That could very easily backfire and hurt them in 2012.

But I also think that all of DC, all parties included, need to understand that the country can no longer afford to spend more than we make (common sense to me, but not politically rewarding to those career politicians we send there.)  We’re already facing unprecedented debt.  (If it wasn’t for low interest rates, our debt would be even worse.)  Without changes in programs at all levels – even those once considered off limits – our country will dig a debt hole so deep that no level of taxation will ever fill it.

Changes in defense, social security, education, medicare, medicaid, and others MUST happen.  Unfortunately, we’re all going to have to suffer to fix it.  But if we don’t act now, I’m afraid the fallout will be even worse.

So get the darn tax cuts extended, get past the bickering, and know that the tax-cut battle is only a small skirmish in a much bigger battle that we have no option but to win.