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Florist strives to keep Mother’s Day spending local

ST. PETERSBURG, Fla. – It seems youre spending more on Mom this year — $12.00 more to be exact.

Most of you will be sending her flowers, and one local florist is making sure that money spent on Mom is staying here to help the local economy.

Flowers show love. Theyre bright, theyre cheery. So when you get them, it makes you happy, said Bruce Wilson, manager of The Flower Centre of St. Pete.

Flowers are a popular gift. About two thirds of consumers will buy mom a bouquet. On average, The National Retail Federation says youre spending $152.00 on gifts this year, which means pretty good business for The Flower Centre of St. Pete.

Holidays make it possible for us to work year-round, to keep everybody full-time year round, said Wilson.

Six or seven trucks willmake deliveries, and extra peoplewill answer phones, process orders, and make that special gift beautiful. The Flower Centre will triple its business on a weekend like Mothers Day and its found a way to keep that money not only in the US, but here in Tampa Bay as well.

Were trying to buy more and more US because that will keep the money as local as possible and here in the country, said Wilson. He added flowers that used to come across the globe from Holland, Colombia, and Ecuador now ship from across the country.

All of our peonies are coming from the Carolinas. Ive gotten the tulips from Virginia. We do our tropicals from Hawaii. Any time I can find flowers that are local…Florida snaps were in for a while and theyre grown in Lakeland and Palmetto and stuff, so we try to buy where we can.

So of the $18.6 billion spent on Mom this year, at least we know some if it stays right here in the Bay Area. Its keeping our economy moving and growing and we feel like were doing our part, said Wilson.

While many of you will spend your money on flowers, cards, and brunch, the National Retail Federation says 13 percent will give electronics like tablets and digital cameras.

MacKay denies DND obscured info on military spending

Defence Minister Peter MacKay is denying the Department of National Defence tried to hide details of its military spending by quietly awarding a $105-million contract to a German company to build armoured vehicles.

Speaking exclusively to CTVs Question Period, MacKay said information about the project was readily available online.

That information was on a DND and Public Works website for three years, MacKay said in an interview that will air Sunday. It was released accurately in detail at the time hellip; and suggestions otherwise are simply false.

However, critics say that DNDs website did not include an announcement that the contract was awarded to the German firm FFG. A notice about the deal was posted in April on an industry website where companies can bid on government work.

The fact they didnt issue a press release suggests they didnt want people to know about it. So it gives a perception they were nervous about this, and they were trying to cover it up, said Steven Staples, president of the Rideau Institute, an Ottawa-based think tank that has scrutinized DNDs spending figures.

MacKay is fighting back after weeks of attacks from opposition parties. On Friday, he was accused of downplaying the true costs of Canadas mission to Libya last year.

The incremental cost of the mission was double the $50-million figure MacKay gave last October, a report by the Rideau Institute showed.

Recently released figures show the incremental cost of the Libya mission was $103.6 million. The full cost of the mission was $347 million. The DND typically only reports the incremental costs of military missions to the public — expenses considered above and beyond normal operating costs.

MacKay told Question Period that the initial figure he provided was true in the early days of the conflict.

I believe theres a deliberate attempt to confuse the public and then blame that confusion on me. When I said the cost was $50 million to date, thats exactly what it was to date, he said.

MacKay said he always cautioned the final price could increase since wars are unpredictable.

But critics say the Conservatives have a long history of hiding the true costs of projects, from the proposed F-35 purchase, to the new tank contract.

Its difficult to understand somebody who represents the government,a minister of crown, can so consistently mistake numbers to the public, NDP Leader Thomas Mulcair said.

With a report from CTVs Richard Madan

France’s Hollande may roll back spending promises

Daniel Flynn

Reuters

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PARIS–France’s Socialist president-elect François Hollande may use a summer audit of state finances to water down his generous campaign promises rather than risk a backlash from financial markets against stubbornly high deficits and rising debt.

Advisers say he could even freeze some spending if the review turns up any nasty surprises, soothing investors who are worried he has become the figurehead for a fight against German-imposed austerity in the eurozone.

Hollande, due to take office this week after toppling President Nicolas Sarkozy in last Sunday’s election, dismayed analysts with his campaign spending promises, such as hiring 60,000 school staff and creating 150,000 state-aided jobs.

France already has one of the highest levels of public spending in Western Europe, at around 55 per cent of GDP, and has not balanced its budget since 1974.

But Hollande, a 57-year-old graduate of France’s elite ENA civil service school, together with other Socialist leaders has already been discretely preparing the ground to play a more cautious game.

“There are certainly deficits, things hidden in the shadows,” Jean-Marc Ayrault, the Socialists’ parliamentary leader and a candidate for prime minister, said of the audit.

“We will discover the reality and strike a balance between fostering growth and making the necessary efforts to reduce the debt.”

Those close to Hollande are now urging him to use the review by the country’s top audit body, the Cour des comptes, as a justification for lowering his growth forecasts for the eurozone’s No. 2 economy, widely seen as too optimistic.

Advisers are pressing him to pare back spending in certain areas, particularly the deficit-ridden social security system, and to raise taxes by eliminating widespread exemptions and raising the CSG welfare charge on income and capital revenues.

“There are holes in the program on the spending side and we will be obliged to take action,” said one long-standing adviser, who asked not to be identified.

The situation is delicate for Hollande after he promised change to voters tired of unemployment running at a 12-year high of nearly 10 per cent and talk of spending cuts.

Sarkozy, despite his tough rhetoric, took only tentative steps to putting France’s finances on an even keel and the country was stripped of its prized triple-A credit rating by Standard & Poor’s on his watch.

In a strongly-worded report in February likely to presage its summer findings, the court, a quasi-judicial body, said at the current pace it would take 10 years to eliminate the deficit, which ended last year at 5.2 per cent of gross domestic product. It said public debt was approaching a “danger zone” of 90 per cent of GDP.

With markets edgy, the Socialists will have to be careful how they manage the Court’s report. In February, Spain’s new conservative government sent shock waves through eurozone markets after it uncovered a worse-than-expected deficit of 8.5 per cent of GDP from its Socialist predecessor.

“It will certainly not be on that scale but the Court of Audit always finds some bad surprises,” said Jerome Cahuzac, the Socialist head of the National Assembly finance committee and a possible candidate for budget minister.

Aware of the political risk of angering left-wing voters, Hollande’s advisers say he must act within two months of taking office on May 15, allowing the Socialists to point the finger at Sarkozy’s outgoing government.

Any announcement would likely be after June 10 and 17 parliamentary elections, essential for Hollande to gain a working majority for legislation.

“We have a window of opportunity, but it has to be done quickly,” said a second Hollande adviser.

Some economists have warned that the election of a tax-and-spend Socialist, with no agenda for much-needed structural reform in France, could plunge the heart of the eurozone into disarray as the situation deteriorates in Spain and Greece.

But Socialist heavyweights have emphasized they will be fiscally responsible, as well as planning reforms to improve France’s flagging competitiveness — though these do not include the German-style wage restraint which Sarkozy advocated.

“No one can expect us to arrive and give everyone handouts. That is not the reality of the situation,” said Michel Sapin, who oversaw Hollande’s program and is tipped as a future finance minister. “Joy . . . gives way very, very quickly to responsibility.”

The Socialists say research and innovation, production quality, speed and flexibility are more important than cutting wages, which could hurt domestic consumption.

While Sarkozy clashed head on with France’s powerful unions, the Socialists’ closer ties with them — particularly the moderate CFDT — may allow them to accomplish bolder reforms.

Hollande wants a deal on an overhaul of the retirement system at a conference with unions in the autumn, to put the loss-making system permanently in the black. Socialists say this could vastly improve state finances with no short-term negative impact on growth.

In the meantime, financial markets — jittery after Greece’s weekend elections cast its future in the eurozone into doubt — will impose a financial corset on the Socialists.

With debt forecast to peak at nearly 90 per cent of GDP next year, France is already paying out around 2.5 per cent of GDP in interest payments, even with interest rates at record lows. This would spike much higher if the markets lost faith in France.

To keep his promise to balance the budget by 2017, Hollande wants to find 100 billion euros: half from new revenues and half from limiting growth in public spending to 1.1 per cent per year — a small cut once inflation is taken into account.

But his plans are based on optimistic growth assumptions of 1.7 per cent of GDP next year, rising to an average 2.5 per cent after 2013. France’s trend growth rate for the last 20 years has been 1.6 per cent, and economists expect that to dip to 0.9 per cent this year.

“The Court is not going to find any big holes in government finances because national accounting in France is very serious, but the problem will be the growth: the forecasts are too optimistic,” said the second adviser.

Going on past form, the Court will recommend a mix of tax rises and spending cuts to plug the deficit. It has also said the social security system deficit was unprecedented in Europe and must be cut by trimming spending.

Such considerations may influence an extraordinary session of parliament in July which Hollande is due to convene to pass a revised 2012 budget and a medium-term spending plan.

The month-long session is scheduled to pass legislation ending several tax exemptions, imposing tax surcharges on banks and oil companies, approving a top tax rate of 75 per cent for the wealthy and quashing a social VAT introduced by Sarkozy.

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Look at spending for measure of equality

The professor gets a C. And thats only because Im a soft grader. Im talking about Steve Haycoxs recent column on income inequality and capitalism (Inequalitys roots deep in US history, May 4).

I took the History of Alaska class from the professor a while back. He does a terrific job when sticking within his field of expertise. But as most college students know, professors often indulge themselves and lose their judgment when they go off on a political rant.

Professor Haycox is correct. Income inequality in the United States is historically high. It is hard to argue otherwise. But thats not the important part of the story. Our standard of living is way above most other nations. Even the poor in the United States live quite a bit better than the average person elsewhere in the world. And we have quite a safety net.

In fact, a better way of looking at inequality is looking at data on spending (including safety net transfers), not on income. It is a better measure of standard of living.

Diana Furchtgott-Roth of the Manhattan Institute does just that and notes, The effective purchasing power of those with the least cash income is augmented by food stamps, rent supplements, Medicaid-funded health care, subsidized school lunches and other social programs.

She argues that measuring income on an after-tax basis and including these transfers substantially reduces inequality. Specifically:

Government data on individual spending patterns show that the ratio of spending between the top and bottom 20 percent of the income distribution, measured on a per person basis, was essentially unchanged between 1985 and 2010. In 1985 people in the top quintile had spending that was 2.5 times that of people in the bottom quintile. By 2010 that ratio was 2.4.

In other words, economic inequality has diminished slightly since 1985.

Andy Kessler has another take on the inequality debate. Writing in The Wall Street Journal he looks at The Rise of Consumption Equality. He argues that because of changes in technology, these days the wealthy cant enjoy much more that what the middle class does.

He notes: Luxury suites at the Super Bowl? Why bother? You can recline at home on your massaging lounger and flip on the ultra-thin, high-def, 55-inch LCD TV you got for $700 — and not only have a better view from two dozen cameras and fun commercials, but can hit the pause button to take nature break.

It used to be that only the rich could afford cellphones. Remember those two-pound clunkers the size of a shoe that cost a fortune and had limited range? Now practically everyone has a cellphone with a camera in it. Plus, you can fly almost anywhere in the world for $1,000 and use it.

Still, the notion that income inequality is unfair and can cause social disharmony has some traction, as Occupy Wall Street demonstrates. Perhaps this is what President Obama was thinking when he told ABC News that he would raise capital gains taxes even if he knew it would result in less revenue to the government. He would do it for purposes of fairness.

Notions of income inequality and fairness go way back to ancient Greek times and probably before. Aristotle favored just prices and worried about inequality leading to civil unrest. But as another UAA professor (Lee Huskey in Economics) would remind students, context matters. Athens was surrounded by enemies, so internal cohesion was important for survival. Best not to show off and create bickering and distrust at home.

The other fact Aristotle was dealing with was a fixed pie. Up until the 1700s world economic growth was anemic, practically zero. It wasnt until the industrial revolution and rise of capitalism that growth really accelerated.

When the pie is fixed, the only way to get a bigger slice is to take it from someone else. That isnt the case these days, but that was Aristotles world and influenced his thinking. It was a zero sum world. That hardly describes America today. Yet that is the mindset of many liberals.

Jeff Pantages is an investment adviser. He lives in Anchorage. The second part of this Compass will appear Monday on the Opinion page.

Perry Says Fed Spending Before Election Almost ‘Treasonous’

(Updates with Rove comments in 12th-13th paragraphs.)

Aug. 16 (Bloomberg) — Texas Governor Rick Perry, the latest entrant in the fight for the Republican presidential nomination for 2012, said it would be almost treacherous — or treasonous for Federal Reserve Chairman Ben S. Bernanke to increase stimulus spending before the 2012 election.

If this guy prints more money between now and the election, I dont know what you would do with him, Perry said yesterday at a backyard appearance in Cedar Rapids, Iowa. We would treat him pretty ugly down in Texas. Printing more money to play politics at this particular time in American history is almost treacherous — or treasonous — in my opinion.

Perry, traveling across Iowa, was asked at the fundraiser, what he would do about the central bank.

We have to learn the lessons of the past three years that theyve been devastating, he said. The president of the United States has conducted an experiment on the American economy for almost the last three years, and it has gone tragically wrong.

When first questioned about the central banks policies, Perry said he would take a pass on the Federal Reserve. Asked in a follow-up interview whether he thought the Fed was playing politics to help President Barack Obama win re-election, ABCnews.com reported, he said: If they print more money between now and this election, I would suggest thats exactly whats going on.

Bad Idea

White House press secretary Jay Carney criticized Perrys remarks today, saying the governors statement threatening Bernanke was not a good idea.

Carney told reporters traveling with Obama, who is also in Iowa, that any candidate for president should consider the impact of statements about an independent entity such as the Fed. The Feds independence is important, he said.

Mark Miner, a Perry spokesman, didnt directly respond to a query for comment on whether his boss was threatening the Fed chairman.

The governor was expressing his frustration with the current economic situation and the out-of-control spending that persists in Washington, Miner said in a statement. Most Americans would agree that spending more money is not the answer to the economic issues facing the country.

Democrats Response

Democrats quickly pounced on Perrys statement.

On just day three of his campaign, Rick Perry said he would have allowed the US to default on its debts, and unleashed inflammatory schoolboy taunts at the chairman of the Federal Reserve, Brad Woodhouse, a spokesman for the Democratic National Committee, said in an statement. Suddenly, the rest of the Republican field is looking positively thoughtful.

Some Republicans also were critical, including Karl Rove, a Texan who was former President George W. Bushs longtime political advisor. Rove chided Perry for a very unfortunate comment that wasnt a presidential statement.

In an interview on Fox News, Rove added: Governor Perry is going to have to fight the impression that hes a cowboy from Texas. This simply added to it.

Cornelius Hurley, a law professor at Boston University who was once an assistant general counsel to the Feds Board of Governors, said he was chilled by Perrys remarks.

Not Appropriate

You just cant run around shooting your mouth off and talking about the Federal Reserve and talking about treason and getting ugly, said Hurley, who referred to himself as a disenchanted Obama supporter. Thats just not appropriate.

Hurley said that while there is a long history of tension between politicians and the Fed, Perry had taken that to new heights.

I have never heard the rhetoric ramped up the way Governor Perry did, he said. Thats a very troubling development. We expect more of our president and should expect more of our presidential candidates.

Ga. regulators approve nuclear plant spending

ATLANTA –
Georgia utility regulators have approved Georgia Powers spending on a new nuclear plant and set a schedule for reviewing the companys plan to meet the states electricity needs in coming years.

The elected members of the Public Service Commission voted Tuesday to approve construction spending at the Plant Vogtle site for the second half of last year. The subsidiary of the Atlanta-based Southern Co. is trying to win permission to build two more nuclear reactors near Augusta.

It’s the Aggregate Demand, Stupid

With the debt limit debate temporarily set aside, the Obama administration is talking about finding some way to create jobs and stimulate growth. But the truth is that there really isn’t much it can do and it knows it. There may be some small-bore things it can do without Congressional action that may help a little, but the operative word is “little.” The only policy that will really help is an increase in aggregate demand.

Aggregate demand simply means spending spending by households, businesses and governments for consumption goods and services or investments in structures, machinery and equipment. At the moment, businesses don’t need to invest because their biggest problem is a lack of consumer demand, as a July 21 study by the Federal Reserve Bank of New York documented.

The federal government could increase aggregate spending by directly employing workers or undertaking public works projects. But there is no possibility of that given the political gridlock in Congress and President’s Obama’s desire to appear moderate and fiscally responsible going into next year’s election.

That really leaves just consumers as a potential avenue for increasing spending. But that will be difficult as long as unemployment remains high, thus reducing aggregate income, and households are still saving heavily to rebuild wealth, which was decimated by the collapse in housing prices. Saving is, in a sense, negative spending.

Changes in wealth affect spending because people will spend a percentage of their increased wealth. And they are more likely to raise their spending when the wealth increase is perceived to be permanent rather than transitory.

Historically, people have viewed increases in home equity as more permanent than increases in stock market wealth because they know the latter is more volatile. A recent Federal Reserve Board working paper estimated that the long-run increase in spending from an increase in housing wealth may be as high as 9.1 percent per year.

As home prices increased, many people came to believe they had no real reason to save since they could always tap their home equity which banks were more than happy to help them do in the event that they needed funds. Thus the personal saving rate fell from 3.5 percent in the early 2000s to just 1.4 percent in 2005 at the peak of the housing bubble.

Home prices roughly doubled between 2000 and 2006, according to the Case-Shiller index, and many homeowners talked themselves into believing they would continue rising indefinitely. Thus they increased their spending and reduced their saving based not only on actual price increases, but also on expectations of future increases.

A prescient 2007 Congressional Budget Office study explained how this would affect spending and growth in the economy. It said that if people were expecting a 10 percent rise in home prices and instead they fell 10 percent, the impact on spending would be equivalent to a 20 percent fall in prices. The budget office estimated that this might reduce growth of gross domestic product by 2.2 percent per year. Since actual home prices have fallen by about a third, this suggests that GDP. may be $500 billion less this year than it would be if home prices had simply remained flat since 2006.

One way that the rise and fall of spending can be visualized is by looking at the velocity of money. This is the speed at which money turns over in the economy. When velocity rises, more GDP. is produced per dollar of the money supply. When velocity falls, the economic impact is exactly the same as if the money supply shrank by the same percentage.

The chart below comes from the Federal Reserve Bank of St. Louis and shows velocity as the ratio of the money supply (M2) to nominal GDP. It rose from 1.85 in 2003 to 1.96 in 2006. It has since fallen to a current level of 1.66. Thus one can say that each $1 increase in the money supply produced almost $2 of GDP. in 2006 and only $1.66 today.

Budget Control Act of 2011 Forces Real Cuts to Defense, and Difficult Choices

Enactment of the Budget Control Act of 2011 now provides specific information on the future course of defense spending.

One recalls the budget adjustments proposed by former Defense Secretary Robert Gates as recently as May 2010, and the subsequent efficiency initiatives. These were relatively modest compared to what has followed. The president submitted a 2012 budget with fairly generous projections for defense out through 2021. This was voted down in Congress as his entire federal budget was rejected. In the same year, the president also proposed a reduction to defense of $400 billion over 12 years.

The Budget Control Act has two phases. The first sets a single cap for all discretionary spending. In fiscal years 2012 and 2013, it separates the cuts between security and non-security. Security is broadly defined as Defense, Homeland Security, Veterans Affairs, the National Nuclear Security Administration, the intelligence community management account and international affairs. The caps are $684 billion in 2012 ($5 billion less than 2011) and $686 billion in 2013 ($36 billion less than requested in the aforementioned and rejected 2012 budget request).

A proportional distribution of cuts would have the defense base budget at $525 billion (versus $530 billion enacted for 2011). It is also $28 billion less than the president originally requested for 2012. Fiscal year 2013 would have the defense base budget about the same for 2012, according to a study by the Center for Strategic and Budgetary Assessments.

The 2014 through 2021 plan does not separate security and non-security, but the Office of Management and Budget estimates reductions to the defense base would total around $330 billion over 10 years, the same yearly reduction calculated from the president’s proposed $400 billion in cuts over 12 years. A coincidence?

The Joint Committee on Deficit Reduction must act to propose spending cuts across the federal budget of at least $1.2 trillion. If the committee proposes less than that amount, or if Congress fails to enact the committee’s recommendations, the “trigger” takes effect. The trigger sets separate caps for security and non-security, and defines the security category as only the 050 account (most of which is defense). If Congress fails to enact, the Pentagon would lose $54 billion in 2013 — leaving a base budget of $472 billion. Trigger-forced cuts over 10 years (2012-2021) would subtract $968 billion from the president’s 2012 proposal.  Recall that these cuts are similar to the Fiscal Commission’s recommendations in December 2010.

So the big question is: What are the actual cuts going to be? Will the committee propose something similar to either the president’s $400 billion over 12 years or the BCA’s $330 billion over 10 years? Or will the committee settle on a number closer to the trigger numbers — $54 billion per year? Splitting the difference results in a base budget around $482 billion, or $42 billion less than the 2011 enacted defense base budget.

The next question to consider is how the cuts might be distributed within the department: force structure (manpower and equipage), operations and training tempo (Oamp;M), Ramp;D, investment (acquisition of new equipment), or personnel (pay, retirement, health benefits).

The services are working on this now. The Military Officers Association of America has been keeping tabs on some of the proposals relating to the personnel account. For example, “Cap, Cut and Balance” (HR 2560) caps outlays below 20 percent of GDP by 2017; Corker-McCaskill (S 245) limits outlays to 25 percent of 2009-2011 GDP average with follow-on reductions of 5 percent to retiree pay, Tricare for Life, Survivor Benefit Program in 2013, which would grow to 19 percent by 2021. A proposed House Balanced Budget Amendment cuts outlays to 20 percent of GDP. Finally the Gang of Six proposed major adjustments to retiree pay, Tricare and pay raises — quite similar to the Deficit Commission recommendations.

The Quadrennial Defense Review also proposed major adjustments to retirement, moving toward a 401(k) type system. And the current Defense Business Board (DBB) retirement task force has proposed a similar plan with a high-cost option that would grandfather current serving members and a low-cost option that would transfer all currently serving members to the new system. Both options would eliminate the current defined benefit retirement system for military members. The DBB final report is due out in February 2012.

This is an uncomfortable place for defense to be. Defense planning, training and equipping take place over decades. Military personnel make career and retirement plans extending over 20 to 30 years. Yet all this is about to change big time, and the change will be defined in less than six months and implemented beginning in 2013. The magnitude and pace of change is breathtaking. That we are forced to this quick action, certain to have adverse consequences, is proof certain of the dire straits this country finds itself in.

The depth of the cuts will put people in competition with investment and operations. Some of the choices will be distasteful to all. Protecting the quality and fighting ability of the forces will be tough. Protecting families and keeping our commitments to them will be even tougher.  

The service vice chiefs recently testified to Congress that readiness is adequate for now, but the services are unable to meet all missions requested by the combatant commanders. Cuts beyond $400 billion would grow risks significantly, requiring force structure cuts and a change in strategy.  

Whatever economies are imposed by Congress, it must keep faith with serving men and women and the commitments that have been made to them.

Insight: GM hopes spending on start-ups will make it cool

Chevrolet Cruze car chassis move along the assembly line at the General Motors Cruze assembly plant in Lordstown, Ohio July 22, 2011.

Credit: Reuters/Aaron Josefczyk

The Large-Market Pittsburgh Pirates Keep Spending

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Aug 16, 2011 – People want the Pirates to win. If the Pirates win 20 in a row this September, zooming past the top of the division, even Cardinals and Brewers fans will find it hard to be too ticked off. Its time. And when the Pirates were floating around the top of the division around the All-Star break, it was more than a little exciting, even if you had some inclination that it just might be somewhat of a mirage.

When I was a blossoming baseball nerd years and years ago, this wasnt the case. The Pirates struggles were just a few seasons old in the late 90s, and the team was the subject of scorn on the World Wide Web. The Pirates set aside huge chunks of the budget for players like Pat Meares, Kevin Young, and Derek Bell. In a 45-team league with 67-man rosters, this might have been a prudent idea. Alas, under the configurations of MLB at the time, this strategy was less than effective.

The Pirates could have spent that money on more practical things, like warm sweaters or first-aid kits. The refrain at the time was that the Pirates should have spent that money on player development. Scour the world for top international free agents. Draft high-school kids who drop in the draft because of strong college commitments, and pay them a lot of money to skip not just some of their college classes, but all of them. The $15 million paid to Meares could have gone a long ways toward securing young prospects.

The Pirates kept on doing it wrong, too. Matt Lawton, Mark Redman, Sean Casey, and Matt Morris shuffled on through, and the Pirates were adept at acquiring players to whom they had no business writing million-dollar checks. And when it came to the draft or international free agency, sometimes talent took a back seat to budget. The classic example is Daniel Moskos in 2007, who most people projected as a left-handed reliever, and who was selected over Matt Wieters. The Pirates were spending a little money, but it was being funneled to weird places.

Neal Huntington took over as GM after the 2007 draft, and he grabbed someone important by the lapels and explained the value of good prospects — that those extra millions the best young kids get doesnt just get wasted on video games and moon pies. The Pirates didnt shy away from the high price tags of Pedro Alvarez or Jameson Taillon. They drafted high-school players early, and paid them enough to bring them into the organization.

And with the 2011 draft, theyve outdone themselves:

Once again delivering on a promise to spend liberally on the Draft, the Pirates paid out more than $17 million in signing bonuses on 24 players. Such an amount is unprecedented in Major League history, but it was also very much necessary in order for the Pirates to sign No. 1 overall pick Gerrit Cole and second-rounder Josh Bell.

Over the past three drafts, the Pirates have spent more than $31 million in bonuses. Theyre doing what they should have been doing for years, what fans wanted them to do. And now?

Everyone gets to wait around for a few years.

It might not work out. Thats the worst part. Finally, the Pirates are committing the bulk of their resources to player development, and it might not work out because young players are horrible, volatile things that can stomp on your heart.

But its about the only sensible strategy the Pirates can take. Theyre building the best farm system they can, and from that theyre hoping for a foundation that can finally give the city and the beautiful park the team it deserves.

If the spend-on-the-draft thing doesnt work out, everyone who advocated for it will pretend that it wasnt their idea. Well slowly back away from the carnage, blaming someone else. But just about everyones rooting for the Pirates at this point, and its nice to see that theres a glimmer of hope. Heres hoping that it works as it should.

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