Today, the U.S. Department of Justice filed an anti-trust suit to block AT&T’s impending merger with T-Mobile. There are many opinions from many people clogging up Facebook and Twitter feeds, but so many of these people don’t fully understand the issue or the facts involved in this case.

Having worked for AT&T Wireless in 2001, and having survived two mergers – one when Cingular (SBC) bought AT&T Wireless, and a second when SBC bought AT&T – I understand this issue all too well. So I thought I’d shed some light on the issue from the perspective of the companies, the employees, and the consumer.

The most important thing to be aware of here is T-Mobile’s current condition. The 4^th largest wireless company in the U.S., T-Mobile has been forced over the years to keep their prices low in order to compete with larger companies like Verizon and AT&T. Furthermore, they have had to accept customers that Verizon and AT&T turn away because of credit requirements, leaving them with far more customers who don’t pay their bills. Fiscally, T-Mobile is not set up for long-term success, and their sale will happen – whether to AT&T or not.

The one advantage AT&T has in this deal is that they operate a GSM network, just like T-Mobile. Verizon uses CDMA and Sprint uses CDMA and the old Nextel’s iDEN.

All that jibberish means that the AT&T and T-Mobile networks are the most compatible, and would avoid the lengthy and costly conversion that was required when Sprint merged with Nextel – even having to offer a special phone that would access both networks for two years after the deal.

Now, from the consumer’s point of view, this deal would allow some 120 million Americans to realize a larger coverage area, more retail outlets, and an improved buying power which will result in an increased selection of devices and a wider array of available services – including T-Mobile customers finally having access to the iPhone.

Don’t believe me? Simply look back to when AT&T and Cingular merged. Never before had so many wireless consumers enjoyed such a large network, expanded choice in devices, and an unbelievable amount of phones priced at $50 and below – often free with contract extension.

And, because both AT&T and Cingular used GSM technology, customers enjoyed improved coverage overnight.

Not to mention that AT&T’s service has suffered tremendously because of the high-bandwidth content being accessed by iPhone users – and expanding their network overnight will ease this congestion. As an AT&T customer, I eagerly await this.

The biggest complaint from the Justice Department is that this merger will stifle competition across the U.S. However, I direct you to companies like TracFone, MetroPCS, U.S. Cellular, and Cricket (the 5^th – 8^th largest wireless companies in the U.S.) as perfect examples of low-cost – and often no-contract – alternatives to the large companies.

In addition to these choices, there are often concessions made by companies in merger deals such as this. When Cingular acquired AT&T, the new company had to divest its control of several smaller markets to regional carriers – something I am sure would occur here as well. Although I feel compelled to mention that those customers living in the divested areas end up with worse coverage and less choices, because the government chooses to intervene in this manner.

Next up: Employees.

When AT&T Wireless was purchased by Cingular (SBC), several things changed. For one, the new company saw increased purchasing power when it came to negotiating benefit costs for employees. In addition, while there were some initial layoffs because of duplicate positions and redundancies (myself included), the company continued to grow (and I returned as well).

Employees also were able to be part of the largest wireless company in America, which resulted in increased sales – which means increased commissions for sales folks and more job security for everyone else.

Who would argue that T-Mobile employees are better off because they work for the 4^th largest company with the worst coverage of the four major carriers? In addition, because T-Mobile is forced to accept low-credit customers to keep up with the larger companies, many of their sales result in cancellations, and therefore commission chargebacks.

Also, T-Mobile does not offer the iPhone – the most sought after wireless device in America.

This merger would change all of that, and keep the standard of living constant for AT&T employees, but be a tremendous boon for T-Mobile workers.

The one downfall I see for T-Mobile employees is that they would have to deal with the Communication Workers of America (CWA), which is a foul organization posing as a pro-worker union. Although most people against this merger seem to love unions, so I guess this would also be a positive for them.

The labor agreement CWA and AT&T negotiated while I was there was good for Cingular employees, but terrible for AT&T workers – who had a far better deal before the union showed up.

One thing I’d like everyone reading this to remember, is that America is far behind Europe and Asia when it comes to wireless coverage and services. The reason for this is that we demand free phones and low-priced plans, leaving carriers with far less money to re-invest in their networks – which is very expensive. In Europe, there is no such thing as included minutes, free nights & weekends, unlimited text messaging, etc. Because of this difference in culture, created by the carriers themselves when they offered free phones in exchange for contracts, we will never be on par with the rest of the wireless world.

One way American companies can close that technology gap is by continuing to increase their subscriber base, and by creating and selling new services which generate additional revenue.

This merger will help achieve that. It will help offer AT&T’s 97 million consumers and T-Mobile’s 33 million consumers the best in what wireless can offer.

AT&T/Cingular has the most grueling and stringent testing phase for all products and services, and has world-class training programs for its employees to better service its customers.

At no time has T-Mobile ever been a top-tier carrier – and I say that as both a consumer, and as someone who lived the mobile phone culture for seven years.

This merger would be a plus for all involved – except Verizon and Sprint who would realize lower market share.

Verizon and Sprint should realize that they will receive 3-4 million new subscribers from customers who leave the newly combined AT&T/T-Mobile for a variety of reasons – including owing AT&T a previous debt, or disliking AT&T. But I guess they aren’t thinking that far ahead.

In the end, however, the Justice Department is overstepping its bounds by interfering with the free market. They do not understand the wireless industry, they are simply attempting to “protect consumers” by not allowing the 120 million AT&T and T-Mobile customers to enjoy a better experience – while assisting Sprint and Verizon in preventing AT&T from once again becoming the largest wireless carrier in America (until Verizon once again retakes the lead – which it did after the AT&T/Cingular merger, and will again).

The government does not increase competition, private industry does. See TracFone, MetroPCS, U.S. Cellular, and Cricket as examples.

The Justice Department needs to focus on the real challenges in our country – instead of suing states for enforcing the law, banning online poker, and refusing to investigate voter intimidation cases.

Until then, it’s hard to take them seriously.

By, Nancy Tengler

About ten years ago, give or take, then California Governor Gray Davis gave a press conference to discuss the Golden State’s financial crisis (yes, even then). In that press conference he explained to reporters that it was not that state government spent too much, rather that the revenues weren’t large enough. The translation of his remarks for the economically naive is: despite the fact that Californians are among the highest taxed citizens in the nation (exceeding even New Yorkers) they weren’t paying enough for the state’s services. If they were, we can extrapolate from Mr. Davis’ statement, the revenues would be great enough to cover spending.

Thou hath not changed much California.

Except in one regard: businesses and wealthy individuals are fleeing the state. In 2007 according to the Pew Research Center, California experienced net migration of -681,000 individuals. In other words, California, in one year alone lost almost 700,000 taxpaying citizens to other, more tax-attractive states. In one year alone. From 2004-2007 the net loss of California citizens was 1,900,000. That’s 1.9 million.

The California revenue problem has continued to deteriorate.

Enter Dr. Arthur Laffer (who also exited California during that period). He identified the importance of tax policy to economic growth illustrated best by the Laffer Curve. The Laffer Curve demonstrates that lower tax rates increase incentives to produce income and economic growth thereby resulting in increased tax revenues. There are two points on the Laffer Curve–picture a side-saddle bell curve–where tax revenues equal zero: at a zero percent tax rate and at an 100% tax rate. The former equation is obvious–absence of a tax rate will result in no revenues. At a 100% tax rate, zero tax revenues are also collected because all incentives to produce are removed when the government’s take reaches 100%.

Economic growth and job creation needs to return to the forefront of our national dialogue. A realistic and economically sound tax policy should be debated. Economic class warfare benefits no one. Dr. Laffer believes, “the 2012 election will be a referendum on the economic policies of President Obama.”

I certainly hope so.

www.wiseandfrugalgovernment.blogspot.com

The extension of the Bush tax rates (what the media is now calling Obama’s tax cuts) is a victory for Conservatives that should not be squandered. The Obama tax cuts are neither Obama’s–they are Bush’s–nor are they tax cuts–they are an extension of the current rates that were set to expire on 12/31/10. But the claim of the Democrats that these extensions had to be made because raising taxes on Americans in this economy would be disastrous is a true victory for Conservatives. It is also sound fiscal policy and should be capitalized on.

An editorial in today’s Wall Street Journal points out: “As Milton Friedman taught us with his “permanent income hypothesis,” consumers base their consumption on their longer-term income expectations, not merely on current income.” Temporary tax rates return money to its rightful owner, the earner, but without the certainty of knowing what future tax rates are increased consumption will be muted by the lack of clarity. The Republican majority in the House has a golden opportunity to revisit the tax question while they have the Democrats on their heels and push for further, permanent cuts in 2011.

After passage of the bill Senator Dick Durbin (D) claimed: “The president has a big victory here. It’s big because it means there won’t be a tax increase at the first of the year, which could have hurt our economy.”

Suddenly, though not un-coincidentally (recall the landslide November elections), the Democrats have found lower tax religion. If, as the Senator says higher taxes “hurt” our economy, why has it taken two years for the Democrats to support this extension of the Bush tax rates in an economy they call the worst since the Great Depression? Additionally, why didn’t they propose lower and permanent rates to further stimulate demand?

President Obama, too, is a an enthusiastic member of the lower tax club. Only a week ago he was complaining that the House Republicans were holding unemployment benefits hostage to the tax rate extensions, then upon signing the bill declared: “This is real money that’s going to make a real difference in people’s lives. That’s how we’re going to spark demand, spur hiring, and strengthen our economy in the new year” (Reuters)

Ronald Reagan move over and meet the new supply-sider in the White House. His claim that “lower taxes spark demand, spur hiring and strengthen our economy” should be rung from every mountain top from now until 2012.  He is right, of course, but has strayed so far from the soak the rich tax policies he has espoused as recently as last week.  But the ever changing, ever evolving, Chameleon-in-Chief  is claiming the tax cut mantle of Kennedy and Reagan and Bush II for now.

We will have to hope the Republicans are savvy enough to remind him–and the rest of the nation–when he changes his tune again leading up to 2012.

The U.S Treasury Department calculates the federal debt held by the public. The federal debt is the money government borrows from those willing to buy U.S. Treasury notes–investors, or as the liberals like to call them: the wealthy. Those funding the federal debt, the wealthy, are the enemy of every liberal. Liberals hate the wealthy though they have no problem spending their money. Just a problem with the people who provide it. But, I digress.

For the first 200 or so years of our country’s history, from the administration of President Washington to that of President Reagan, the federal debt grew to approximately $2.1 trillion. That’s a great deal of zeros to be sure. But, President Obama, proving that he is truly the first post-sound economic policy president, among other things post, generated $2.5 trillion in publicly held debt in just 19 months raising the total debt outstanding to $8.8 trillion. In one insatiable spending binge Obama beat all the records of the first 200 years of our history in just 19 months.

Yes he did.

And what did we get for all that spending? A chicken in every pot? A BMW in every garage? Not exactly. Despite record spending and promises from the president’s economic advisers that if we spent the money unemployment would not rise above 8%, 19 months later unemployment hovers at 9.6%. The economy is growing in single digits rather than the robust growth the very same economic advisers and the president and the vice president advertised in their Summer of Recovery.

And now our economic-savant president has proposed more spending to get our economy rolling again. If that almost $900 billion stimulus bill didn’t do the trick, how about $50 billion to rev things up? That’s his plan. Oh Yes It Is.

Will it work? Not on your life.

This economy needs jobs. Private sector jobs. And to get those jobs employers need some certainty that they will not be taxed into usurious oblivion by a hostile federal government. And to increase investment in the private sector the government needs to stop sucking every last available cent out of the markets to fund its profligate deficit spending.

In short, we need tax cuts and an iron clad spending freeze. Government needs to shrink, not grow bigger.

Oh Yes It Does.

http://www.wiseandfrugalgovernment.blogspot.com

The Democrats and their profligate spending indicate clearly that they are motivated by the question: How much money can we spend?

Not how many jobs can we create.

And their spending, rather than slowing, is gaining momentum like a snowball rolling down a hill. Faster, more furious, unstoppable. Trillion after trillion after billions zoom by to the point of eyes glazing, minds numbing. A giant blur of dollar signs. Expansive, exploding, multiplying like a deadly virus, unreal in its magnitude and potential for calamity.

Yet despite the spending, the unemployed remain so, in fact their numbers have ballooned. The job creators are punished by irresponsible, class-warfare rhetoric of this Administration and the looming threat of higher taxes in 2011. Still, the worse things get, the more they spend. Despite the breathtaking ignorance of the current ruling class, they are unrepentant and unresponsive to the will of the people. Their Keynsian model only prolonged the suffering during the Great Depression but that doesn’t stop them, in fact, it seems to embolden them. Today’s spending, is a puffed up version of FDR’s, like a cream puff on steroids.

In today’s Wall Street Journal we read that for the 22nd straight month the government spent more than they took in. A deficit of $165 billion. The second highest monthly deficit since last July. Another historic achievement for President Obama–the two highest deficits in the history of our country. Impressively historic. Don’t you think?

The cumulative deficit is even grimmer. Again from the WSJ, “For all of fiscal 2009, the U.S. ran a record $1.42 trillion deficit. Fiscal 2010 might run a little higher—the Obama administration sees $1.47 trillion. ” And this is before health care is funded.

Yet they spend more. At almost breakneck speed. Nancy Pelosi hauled the House members back to DC to pass ever more spending this week; wearing her ignorance like a crown. Christina Romer, of the stimulus bill fame told us that by spending we would keep unemployment from rising above 8%. Bye bye Ms. Romer. Adios to $787 billion in “stimulus”spending. And hello to almost 10% unemployment and another 7% of out of work Americans who have simply given up looking.

The democrats think if the $787 billion didn’t do the trick it is because we didn’t spend enough. Follow their logic. If one or two Vicodin don’t halt the pain, three or four, five or six, seven even, just might.

Or they just might kill you.

The hope and change we were promised didn’t materialize. Instead we got more of the same. Much more and much worse. Unprecedented corruption has infected this White House and Congress. Leadership is no where to be found and the Constitution has been shredded in the interest of self-interest and brazen power grabs unlike any we have seen in our history. I still believe in the ingenuity and the determination of the American people to succeed “in spite of.” But we will be digging ourselves out from under this Everest of debt for generations.

Frankly, I won’t be happy until those who voted for these failed and damaging policies apologize to all of us. Publicly and sincerely.

But that’s just me.

http://www.wiseandfrugalgovernment.blogspot.com

You’d have to be nuts to think that we, that is–us, that is–the United States of America, can continue along this path: public employee retirees that collect north of $100,000 per year in pension benefits. In perpetuity.

Indulge me for just a moment: In the small little county in which I live we have an exclusive club. It is a rather small club at the moment–535 members. Though it is growing rapidly, adding over 100 new members in the last year alone. That’s almost 25% growth. In a sluggish, no growth economy. This particular club doesn’t actually DO anything. Rather, it is a club where the members are rewarded just because.

Because they are part of the cabal that makes all the rules.

The club of which I speak is a subset of the Contra Costa County Employees Retirement Association (CCCERA) and includes those public employees who have retired with pension benefits in excess of $100,000.00 per year. $100K! Guaranteed. No matter what.

I don’t know a business that provides a defined benefit plan any longer. That is not to say they don’t exist. But, it is to say they are rare. Because defined benefit plans are expensive and businesses (you know, the entities that must match revenues with expenses, that can only spend what they take in, based on the value they provide to their clients rather than government which holds the arbitrary ability to increase revenues via tax increases totally disconnected from any value added and not in the least voluntarily paid by those who provide the revenue ) must manage their affairs responsibly. They will not be around for long if they continually spend more than they take in. That’s just the way it is.

So here are the ugly facts of the CCCERA Club from an article written by Bill Gram-Reefer on Halfway to Concord:

The club represents 7.3% of all county retirees but they receive 23.8% of the benefits.

The Club costs the public $5,766,927 each and every month. Guaranteed. No matter what.

The number one position in the club is held by a retiree who receives an annual retirement benefit of $291,000. And, it should be noted, despite the budget shortfalls in our county and our state and our country, his benefits rose last year.

It should not be lost on any of us that while the rest of the population suffers (i.e., the private sector) the public sector is thriving. Since the private sector funds the public sector through the production of goods and services–that people actually want–there is something terribly wrong with this equation. The public sector cannot continue to grow while the private sector shrinks.

And that’s the problem. In a nutshell.

http://www.wiseandfrugalgovernment.blogspot.com

I can’t help it.

I think about taxes all the time. Income, sales, and property taxes. Energy. Excise. And estate. The social security tax, disability insurance tax–an alphabet soup of taxes–FICA, SDA SSI–and somewhere in the mix, a tax for Medicare. Escrow tax when I sell real estate. Food and liquor and cigarette taxes.

A myriad of government fees. The security fee when I fly, the registration fee for my car, license fee for my dog, building permit fee for a remodel, park usage fee when I want to hike, a driver’s license fee; the telephone usage fees for my home and cell phones. Hunting license fees. Fishing, too. Fees to register a new business. Fees for tanning. A permit fee to dig a well in my own backyard.

Not to mention bridge and road tolls. And a whopper of a fee for speeding down a (almost) deserted road.

When I am not thinking about taxes, I am talking about them. To my family, friends, to myself. And when I’ve exhausted my listeners, I write about the evils of, the history of, the effects of. Taxes.

We hear from the ruling aristocracy that we must pay our fair share. We are told there are needs government must meet and to do so government needs more revenue, which means higher taxes. We are asked to suspend our good judgment and believe that government is as good a steward with our money as we are, or at the very least, as good as our favorite charity. And yet…

In the midst of the “worst economic crisis since the Great Depression,” Michelle Obama rents 60 rooms at a five star resort in Spain for yet another vacation, at who knows what expense to the American people. Mrs. Obama’s office has refused to release the cost of the trip to the media according to the Los Angeles Times, but room rates at the resort range from $400-$6,500 per night and initial estimates (so far) are upwards of $250,000. The good news? CBS assures us that Mrs. Obama’s many guests will be picking up their own expenses for incidentals, like “shopping in boutiques.” Finally, according to the UK Mail Online the First Lady “will have enjoyed eight holidays by the end of the summer.”

(Read the whole article: http://www.dailymail.co.uk/news/worldnews/article-1300852/Spanish-police-close-public-beach-Michelle-Obamas-250k-Spanish-holiday.html)

And then there is Senator John Kerry, who according to the Boston Herald has “repeatedly voted to increase taxes for Americans,” berthed his new 76 foot, New Zealand built $7 million yacht in Newport Rhode Island, effectively avoiding $435,700 in Massachusetts sales tax and $70,000 in annual excise taxes.

There is a pattern here. Do as we say. Not as we do. It is the kind of ruling class, let them eat cake mentality that has sparked revolutions, not to mention good, old-fashioned anger.

Quietly, out of the limelight we learn that it is possible to govern responsibly. We can see from the example set by Republican Governor Bob McDonnell of Virginia and Republican Governor, Chris Christie of New Jersey that budget deficits can be eliminated while cutting taxes. But to do may require less spending. I don’t know about you, but I am GOOD with that.

From an editorial written by Karl Rove in The Wall Street Journal: “Already, the GOP victors in last year’s gubernatorial contests are providing powerful contrasts to Mr. Obama’s policies. Virginia Gov. Bob McDonnell erased his state’s nearly $2 billion deficit without raising taxes. Facing a $13 billion shortfall, a hostile Democratic legislature and more than $7 million in negative ads launched against him by labor unions, New Jersey Gov. Chris Christie nonetheless balanced the budget while cutting taxes.”

With courage and determination, responsible leaders can correct the disastrous mistakes facing us. Without reaching further into our pockets with fingers sticky with cake frosting.

Chief Justice John Marshall penned the famous words: “…the power to tax involves the power to destroy.”

By, Nancy Tengler

http://www.wiseandfrugalgovernment.blogspot.com

“In FY 2008, the U.S. Congress pushed through $17.2 billion in pork attached to 12 appropriations bills. There were many moments to cherish but we will consider but one here; certainly not the biggest earmark but one of the most interesting.

Rep. Charles Rangel (D-N.Y.), a nineteen term representative, asked for and got $1,950,000 for a library and archives at the Charles B. Rangel Center for Public Service at The City College of New York. In other words Congressman Rangel received $1.95 million dollars of my money and yours to finance a little library named for himself at a college in his district. He was challenged in his request by a mere two term republican from California, John Campbell who said, “You don’t agree with me or see any problem with us, as members, sending taxpayer funds in the creation of things named after ourselves while we’re still here?” Rangel did not. He responded, “I would have a problem if you did it, because I don’t think that you’ve been around long enough that having your name on something to inspire a building like this in a school.” Huh?

We have strayed too far. This should cause us to converge on Washington. But we have become complacent. The budget is too big, too unwieldy. We’re busy. We have our own jobs to do.

Consider this too. In 2006 138.9 million people filed income tax returns. Approximately 32% of those who filed did not pay income tax, leaving 94.5 million tax payers. If we took Charlie Rangel’s earmark and divided it amongst each of us it would come to something like $0.021 per taxpayer. I don’t know about you, but I might be willing to spot Charlie the two cents if the rest of you were, but when you consider the 17.2 billion in earmarks in FY 2007—that rises to $182 per taxpayer in pork. And if you consider the tally of pork since the Citizen’s Against Government Waste have been keeping track of pork barrel spending in 1991 the total is $271 billion which has cost American taxpayers around $2,868. For some that is a great deal of money. For others it is not.

But the important fact is that it is your money, not theirs. And the fact is, that money is being allocated for pet projects not for the kind of expenditures provided for under the Constitution. Certainly not the way most of us would spend our own money given the other demands on us like food and clothing and providing for our retirement or our children’s education. One of the greatest concerns of the Founder’s when creating this nation was the responsibility of government to protect property rights, not confiscate them. Allocating your money for “projects” not requested by or approved of by you is not freedom. It is tyranny. As I thumb through the 2008 Pig Book Summary I see $1.5 million for the Appalachian Fruit Lab, $7.6 million for grape and wine research, $4.8 million for wood utilization research, $1 million for berry research, $750,000 for olive fruit fly research, $211,000 of which is to be spent in Paris, France, millions and hundreds of millions for space centers and aquariums and presidential libraries, for shrimp and lobster and oysters, sea lions and seals, bears and and latinos. Brown tree snakes in Hawaii, 54 million for the ABL Facility Restoration Program, whatever that is, and on and on and on. This is above and beyond the regular budget of $2.7 trillion or $28,900 annually per tax payer households. This is not counting the $32,000 of the U.S. debt that belongs to each citizen. In my household that obligation is 32x 4.”

I wrote the above two years ago. The debt per person in the almost two short years Obama has been in office has ballooned to $42,800. We now understand that Charlie Rangel’s corruption goes far beyond the interchange I featured. If we stretch our imaginations just a bit we can imagine that there is plenty more of the Charlie style of Congressional entitlement among our representatives yet to be revealed . We wouldn’t have to work too hard to conjure up the kinds of frivolous projects the $787 billion stimulus bill is now bankrolling. While many of us seek desperately for jobs, scrape by each month and watch our children’s futures click by on the national debt clock. $13 trillion. $13.1 trillion $13.2 trillion…

I am sorry Mr. Rangel will end his career in disgrace. I am sorry that he got caught up in the tangled web of greed. I am sorry that Congress continues to act irresponsibly, recklessly with our children’s and their children’s futures. I am overwhelmingly sorry. But there is just a little part of me that sees the Rangel case as a pin hole of light, a kind of hope that even in the midst of corruptness, there is a modicum of justice. I am holding onto that.

With a vengeance.