Time to Manage the Managers

California government has 120 legislators and one governor yet they collectively introduce over 4,000 new bills during each legislative session covering a two-year period.  My last tally for the 2011-12 session put the number of Assembly Bills at 2,700 and the number of Senate Bills at 1,580.  This follows a combined 4,294 for the 2009-10 session and 4,865 for the 2007-08 session.  So many of these proposed new laws and regulations do not even address the most pressing issues at-hand that the people of California say they want fixed.  So many are frivolous, unnecessary and ridiculous yet they waste valuable time of our leaders and their staff not to mention burden our society with costly regulation when passed.  Given the volume of these bills, the magnitude and complexity of some of the issues, the capacity for abuse and self-interest, and the sheer burden of implementing new laws and regulations tells me something has to be done to slow down this regulatory machine!

There is no better way to rein in new laws and regulations than to force our legislators to prioritize and further restrict each member to a very limited number of bills they can introduce each session (which currently stands at 40 per member per year).  Large and small businesses regularly plan, evaluate their priorities, allocate resources and then focus their attention on addressing the biggest issues or challenges they face.  If they don't, they risk business failure. It seems our legislators have lost sight of self-governance because they do not have the real pressures that businesses, self-employed or every household faces - how to pay for what they want! We need to get them back on track.

I would propose that the people of California establish a constitutional amendment that limits legislators in their capacity to introduce new bills as follows:

• At the beginning of each legislative session, the governor and legislative leaders establish the top five priorities of the state - whether that is job creation, spending cuts, building infrastructure, revising the tax code, etc. Whatever they deem the voters want they establish as the top five priorities.  The more top priorities the easier it is to dilute the focus on the real concerns of the voters and pass bills that don't matter.
• Limit each legislator to a maximum of ten bills per session of which eight or 80% much directly impact one or more top five priorities.  If the bill doesn't have a direct, concrete and measureable impact on those priorities it gets "killed" automatically unless the legislator introduces it as a non-priority bill.
• The remaining two slots of each members' maximum ten are open for introduction as non-priority bills.  Here each legislator can address the "priority" issues they each face within their own districts irrespective of what the states issues might be.  This is where they can take care of dog licensing laws or monitoring the habitat of the Red Legged Frog.
• The last part of the amendment would require that outdated laws and regulations be removed or appealed.  This can be done by requiring each legislator to propose one removal or appeal for each four new bills they introduce.  In other words, they must look to address the top five priorities of the state in "reverse" as well.

Granted this won't stop all the frivolous new laws and regulations nor the opportunity for self-interest and abuse of power but it will cut down on it significantly and it might actually get the legislators to read those few bills that do get introduced.  It will certainly push more control down to local government and allow greater freedom to choose how much governance we actually want. Moreover, it would reduce the number of staff each legislator has to employ, cut-down on other department staffing that is responsible for implementing the new laws and regulations and could even make each legislator a part-timer.  Wow, wouldn't that be something if the people of this state actually started to take control and manage the very folks that are responsible for managing!

The Tsunami of Ponzi Schemes

Madoff is a drop in the bucket.  Even Social Security pales in comparison to what is transpiring before our very own eyes.  It takes no special investigative unit of the government to uncover this massive fraud nor a congressional inquiry to analyze how this could happen.  No, this is the grand daddy of all ponzi schemes and it's in plain sight yet so many continue to play despite all the warnings and the magnitude of the problem. Buyer beware because the time will come when there is not enough to support the bottom rungs of the US debt pyramid and the collapse will be catastrophic.

Think about it! The US continues to sell bonds, notes and t-bills ("treasuries") at an enormous clip building a mountain of debt nearing $16 trillion with no end in sight.  The funds from these treasuries are used to pay-off maturing treasuries keeping those holders happy and satisfied with their return on their investment.  In the meantime, the culprit of this massive fraud continues to sell even more treasuries to splurge on a lavish lifestyle (military, bailouts, social services, massive government, etc.) to which it can ill afford.  Like every ponzi scheme there is no basis for paying back the earlier investors (e.g., sufficient invested capital for which revenues can be generated) other than through the continual flow of funds from new investors.  As long as new investors keep the blinders on this "bonzi" scheme (as I will call it) it can continue to prosper as a "sound investment" but the time will come...

If you're in these, you better get out.  And now is the time!  The 10-year US treasury bond is at an interest rate of 1.6% after hitting an all-time historic low of 1.47% this month.  Keep in mind that treasuries filter everywhere within our society so you better know where your money is and how it's invested.  For example, many mutual funds hold treasuries while they search for new investments consistent with the main objectives of the fund.  Banks hold treasuries while they evaluate the lending potential of new borrowers.  Corporations hold treasuries as they look to obtain nominal returns whilest they pursue their primary mission for their existence.  You may even have some United States Savings Bonds lying around the house from birthdays or Christmas - time to cash those in.  I'd rather be early to the exit like I was in the housing bubble than to be caught in the tsunami of this debt bubble.

Time to learn what's in your investment portfolio and begin to divest yourself of holdings that are exposed to US government debt. The end result of this ponzi scheme will leave investors holding the bag.  There won't even be the satisfaction that the culprit in this case will serve time in prison - they'll be free to do it again!