analysis by Gina Hamilton
Coastal Journal staff

Anyone who has bought gas or filled their oil tank in the last couple of weeks, or shopped at the grocery store, or bought copper pipe, or purchased a gold necklace for their sweetie for Christmas, has noticed something remarkable in an economy with the lowest overall inflation rate since the mid-50's: The prices of everything seems to be going up.

Well, the prices of everything aren't really going up, it's just that the prices of things that ordinary human beings purchase are going up. Because ordinary people - at the pump, at the supermarket, at the hardware store and at the jewelry store - are dealing with commodities.

Commodities are goods for which there is typically a reliable demand, but the supply might fluctuate somewhat from time to time. They are considered to have similar quality for finance purposes. For instance, consider spring wheat. As far as traders are concerned, spring wheat is spring wheat, whether it is grown on an organic farm, harvested when the grain is sprouted, or whether it is raised near toxic chemicals. Consumers might see and be willing to pay more (or less!) for such a difference, but traders do not take such things into account (which is why organic farmers have less ability to compete on a commodity-wide scale). While people continue to eat bread, and bakeries have a steadyish demand for wheat, the price of bread falls and rises depending on the supply available - usually.

analysis by Gina Hamilton
Coastal Journal staff

WASHINGTON D.C. -- In a late night session last Thursday, the House capitulated to the Senate's version of the tax cut extension bill, which is known formally as The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010. which will extend most of the provisions of the 2001/03 tax cuts for two years, while extending unemployment insurance for another 13 months and decreasing Social Security payroll taxes by 2%.

The package, which was brokered by President Barack Obama and Republican leadership in the House and Senate after the November elections, angered many Democrats, who have long argued that the Bush tax cuts were skewed to benefit the wealthy. But it also angered many fiscal conservatives, who believed they had been elected to cut the ballooning deficits.

In the end, the bill passed in the House by 277-148, with 112 Democrats and 46 Republicans voting against. Because no changes had been made to the bill, which had already passed in the Senate, 81-19, with 43 Democrats, 37 Republicans, and independent Joe Lieberman voting in favor. Among those voting against was Congresswoman Chellie Pingree. In a statement, she said that she had received over 500 calls from Mainers urging her to vote against the tax cut provision that provided a large break to people making over $250,000. "Congress lost track of their priorities," Pingree said. "Instead of tax relief for working Americans and an extension of unemployment benefits for those still struggling to find work, the focus was on giving tax break to the rich."

analysis by Gina Hamilton
Coastal Journal staff

AUGUSTA — Last week, the Maine Heritage Policy Center (MHPC), a conservative think-tank affiliated with the national Heritage Foundation, released a new report revealing the Top 40 fastest growing programs and agencies funded by Maine's General Fund. The report was a revisit of 'Where the Money Is', a report issued two years ago by the center that identified the programs that were the fastest-growing ones in the state, financially.

In 2009, when the first report was issued, legislators and the governor were trying to cure Maine's budget gap by across-the-board flat cuts. The problem with that 'fair-sounding approach', wrote Steve Bowen of MPHC, is that not all state programs are equally responsible for the state's budget woes. Rather, a handful of programs are driving the bulk of state spending growth. A number of state programs, in fact, are actually spending less today than they were ten years ago. Administrative spending by the Maine State Library, for instance, fell 64% over the past decade. Spending by the Department of Corrections, by comparison, has risen by more than 33%. According to the MHPC, some programs are more responsible for ongoing budget shortfalls than others, and in their view, should take the lion's share of any budget cuts.

Not too surprisingly, of the 40 fastest-growing programs in the new report, 'Where the Money Is, Vol. II', 25 are either in the Department of Health and Human Services or the Department of Corrections. Three other programs are related to law enforcement. One surprise is that the Department of Education has a much smaller rate of increase.

"Just as we found in our 2009 report, average spending growth by the Top 40 programs far outpaces the General Fund average. While General Fund spending grew just 8.8% over the past ten years, spending by the Top 40 state programs shot up 35%. Spending by General Fund programs not among the Top 40 actually dropped 8.5% over the same period," Bowen wrote.