Happy New Year to all of you. It is my desire that this year will bring clarity to the economic fortunes in our country and a change in the worn out theories of the liberal politicians.

      I would like comment on a fantastic article published in the January 3rd edition of the Weekly Standard. Since I am a native Fresnan and Californian, I feel the pain that has been been thrust on our economy by not so well-intended politicians who have no understanding of Fresno County agriculture. Fresno is reeling from the politics of what happened in Zimbabwe and the Ukraine during W.W.II under Stalin. The ability to produce food for its people was demolished and turned the populace into serfs. The denial of water to farmers and crops in the Central Valley has resulted in a similar disaster like what happened in the above mentioned countries. How can this happen to the greatest producer of Ag products in our country? It is a product of the liberal environmental movement that does not believe in dams, favors a rather unimportant fish over the lives of farmers and workers and doesn’t care about the economic contribution of the Ag industry to the well being of this state. The population mix in California now reflects more liberal voters and a lack of understanding of what California used to be before the state was decimated by left wing politicians.

      The not so new governor Brown’s solutions for our budget deficits are only to reduce spending but nothing is being done to increase revenues. Has any of our Democrat politicians tried to raise revenues by encouraging more exploration for oil and gas? That approach would be too logical. The Laffer curve applies here and as demand for energy increases, the price of energy goes up without a commensurate increase in the supply.

      Another worry is the state and local tax-free bond market. The bloated pensions of government bureaucrats is in a battle with state budgets to come up with solutions so that future retirees are not left with zero benefits. Should the public have to subsidize excess spending on public pension plans? What about municipal bond holders? Who will guarantee their principal? My answer in past blogs is to convert entire defined benefit programs to 401(k) plans. In regard to 401(k) plans, Bloomberg news on 12/02/2010 pointed out that savers that kept money in their 401(k) s saw average balances rise 32% last year. The bright spot that is seen is for younger people starting out. Those workers are more likely to have been automatically enrolled into their investment selection. The study says that about 67% of participants in 401(k) plans across all age groups need to improve their diversification and adjust risk levels to reach retirement goals. About 39% of workers are not contributing enough to their accounts to receive the full employer match. 401(k) plans are not the panacea that I would like to see but properly funded with prudent diversification over time will work out. One problem has been too many dollars allocated to company stock and lack of balance between equities and fixed income investments. The use of qualified advisors is recommended. The recent election which ushered in a Republican House majority and a less Democrat controlled Senate has had a positive impact on world stock markets. The continuation of the Bush tax cuts, the possibility of reduced tariffs and Republican governors who want reduced taxes and regulations has helped. Too bad California is following “business as usual” in its budgets and anti-business regulations so we the conservatives could be stuck in the mire for another four years. Gary Marsella

Gary E. Marsella

Return to Home Page