I Told You So

As the back rooms in the White House and Congress are currently filled with high-level Democrats making deals on the healthcare bill, we are being treated to blatantly partisan politics to a degree probably not seen since the days of the first Adams administration. The following snippet from ReasonTV is a good summary of the rampant hypocrisy that seems to trouble no one in power:






I hate to say "I told you so," but I did warn about what would happen if Barack Obama was elected president, long ago in this post. I first noted that the choice we were being given was no choice at all, since both candidates -- McCain and Obama -- were equally bad choices. I likened the process of electing one of them to the highest office in the land to a giant game of "Chicken":

I submit that the presidential election has come down to a great big game of "Chicken." Two groups of voters, who constitute by far the majority (the second largest group will be those who elect not to vote at all), are literally egging each other on: "Your candidate stinks! I dare you to vote for that candidate of yours! Go ahead---but if you do, then I'm going to vote for ours! So there---that will teach you to vote for a [fill in your epithet of choice]. I can do it, too!"

Sounds childish? It is. Given what we all now know, the rational choice on November 4 should be: "Neither of the above. Go back to the drawing board and give us better choices." Instead, however, we all hold our collective noses and vote, consoling ourselves by saying under our breath: "Maybe it will be better next time." (As for those voters who genuinely believe that their candidate will do what he promises, well, I have a bridge I'd like to sell you.)

Right -- so you didn't actually believe Obama when he guaranteed to have the negotiations over the healthcare bill televised on C-SPAN, did you?

Then I warned what would happen under an Obama presidency, given that he was from an academic background, with zero practical experience in running a business, let alone a whole country:

(Note to Democrats: If Obama wins, any attempt at a radical agenda might succeed for the first 100 days or so, but then will come the inevitable backlash, and the special interests will eat each other up in the ensuing melee. Obama will not be strong (or experienced) enough to pick a course and stay with it, and Pelosi and Reid will move greedily into the power vacuum his vacillations will create. Think Washington is a jungle now? Just you wait.)

As I say, I hate to have to say it, but I told you so.

Friday TED Talk: Loretta Napoleoni on the Economics of Terrorism

Italian economist Loretta Napoleoni lays out, in sixteen short minutes, the basis for her conclusion that terrorism operates just like any other business, seeking to exclude its competitors and to maximize profits. To fund her research, which began when she was allowed to interview the head of Italy's infamous Red Brigade, she sold her own company and then traveled around the world gaining access to terrorist groups who were only too happy to confirm their methods and goals with her:

You can view Loretta Napoleoni's Web page here, with a link to the book (Rogue Economics) which resulted from her research. There is a brief bio here, and the high-resolution version of her talk may be watched here. Download her talk in that and other versions from this link.

ECUSA's Finances Are a Disgrace

The latest budgetary statement available from the ECUSA finance site is the (as yet unaudited) report for November 2009. With eleven-twelfths of the year's income and expenses booked, the picture of ECUSA's finances is becoming clear. ECUSA is no longer fulfilling its mission as a church. Its mission operations have been scaled back severely. The greatly reduced expenses help keep ECUSA's deficit from being so large -- and they help bury the unbudgeted drain caused by 815's subsidies to the dioceses engaged in litigation over property. Meanwhile, ECUSA is able to show an operating "surplus" in part because -- are you surprised? -- its revenues from the Government are up.

ECUSA? Getting federal money? Yes -- the Government is the second largest source of ECUSA revenues, after diocesan contributions, and is now even greater than ECUSA's income from investments. They are called "EMM Revenues," for "Episcopal Migration Ministries." Essentially, the Government pays ECUSA to assist in finding homes for refugee families. ECUSA is one of ten official "resettlement agencies" recognized by the federal Government, and accounts for settling between 2500 to 3500 individuals per year via a network of thirty offices in twenty-six of the 96 domestic dioceses.

The EMM operations for 2009 have helped keep ECUSA in the black (on paper, at least). Here are the year-to-date figures through November 2009:

EMM Revenues (Govmt.) $ 8,843,729

EMM Revenues (Non-govt.) + 517,852

Total, all EMM Revenues $ 9,361,581

EMM Expenses (all depts) - 9,022,731

Operating Surplus $ 338,850

These actual figures may be compared with the budgeted amounts:

EMM Revenues (Govmt.) $ 8,238,420

EMM Revenues (Non-govt.) + 385,917

Total, all EMM Revenues $ 8,624,337

EMM Expenses (all depts) - 8,374,545

Budgeted Surplus $ 249,792

Now let's look at ECUSA's other sources of revenue. Here are actual contributions from dioceses for the first eleven months of 2009, compared with the budgeted amount (in brackets), and the shortfall between budget and actual (in parentheses):

Diocesan commitments $ 27,924,731 [28,447,217] (522,486)

And here is 2009 investment income through November:

Investment Income $8,640,855 [8,800,917] (160,062)

All together, then, these two sources are below budget by nearly $700,000.

The operating surplus from EMM, as you can see, compensates for slightly more than half of this shortfall. And yet ECUSA's total picture is a healthy overall surplus:

2009 Total Rev. to Date: $ 50,688,591

2009 Total Exp. to Date: $ 49,271,519

Operating surplus to date $ 1,417,072

How can this be? Well, scroll through page 2 of the November 2009 report, and have a look at how the amounts budgeted for mission have been slashed in actual operations. Here are some examples of total mission expense, year-to-date, compared with the amount that had been budgeted (in brackets), and the savings thus achieved (in bold):

Mission Direction $262,993 [360,393] $ 97,400

Mission Funding $741,792 [808,016] $ 65,224

Mission Leadership $3,205,377 [4,451,037] $ 1,245,659

So that is the story: to show an operating surplus of $1.4 million, after revenues have fallen short by $350,000, simply slash mission expense by $1.4 million from what you had budgeted on spending (and make up the $350,000 in savings elsewhere, as we shall shortly see).

But that is not the real picture, even yet. For there is a huge unbudgeted expense which is also throwing the numbers out of balance. The annual (full-year) budget had only $100,000 allocated to this expense, but the actual year-to-date number is a whopping $1,896,217!

Can you guess what this item could possibly be? You are right -- it is called "Legal Assistance to Dioceses". (See my earlier post on this topic for more detail on this expense.) It represents an item that is 1,896% over budget. What kind of management of a $60 million-per-year outfit could get away with misjudging such an expense? After all, it is not as though the attorneys' bills are a sudden surprise.

How does ECUSA make up this drain, and manage to hide it in an overall "surplus"? Easy: just cut back by $1,000,000 in "Partnerships", such as payments to the Anglican Communion (down by $344,841 from the $1,630,390 budgeted contribution), ecumenical and interfaith operations, and in grants and covenant expenses, and throw in another half a million saved on slashing CCAB (Committees, Commissions, Agencies and Boards) reimbursables, and on trimming the expenses for the Office of General Convention (the next one will be shorter, remember).

Oh, and one other contribution to the bottom line: if you lay off your financial staff (you are handling less money now, anyway), and postpone debt repayment from what you had budgeted, you save another $1,000,000 which you can use for those expensive attorneys! And voilà -- the $1.9 million is buried, and you can show a $1.4 million operating surplus for the ones who cannot figure out what is really going on.

Overall, then, ECUSA's public finances are a disgrace. It is surviving only by slashing to the bone its entire raison d'être at the national level (remember, it created the "Domestic and Foreign Missionary Society" to be able to accept charitable gifts for its mission as a national religious organization). It is as dependent on revenues from the government each year as it is on income from investing all of the gifts made to it over the past one hundred and sixty years. And it is slackening on repaying its obligations.

Meanwhile, the Executive Council allows the Office of the Presiding Bishop to dole out nearly $2 million in money to pay litigation costs that is not part of the triennial budget approved just seven months ago. (Yes, I know -- the budget approved by GC 2009 was for the 2010-2012 triennium. But the failure to take the overrun for the 2009 into account for that budget makes it suspect as well. For example, ECUSA has gone 1,896% over the $100,000 it budgeted for that category in 2009. And what does it have budgeted for that item in 2010? Only one-half of what it managed to spend in 2009, or $1,000,000. Is it rational, when the lawsuits keep multiplying, to project that even less will spent on attorneys' fees?)

When an organization evidences such out-of-control behavior as ECUSA is doing, the receivers cannot be far off. No one is in charge; 815 is spending money even faster than a drunken sailor, and robbing its own missions to do so. Will no one in the church call 815 to account? Where is the much-vaunted "hierarchy" at the top? Even the Pope has to be accountable to his bankers.