There’s been much attention paid to a recent profile of Charles and David Koch that appeared in a recent edition of New Yorker magazine. It’s also been heavily criticized as biased and based on several false premises.

For example, the New Yorker article is critical of Charles and David Koch for funding organizations that are skeptical and questioning of the claims of global warming alarmists. A recent statement added to the Koch Industries website explains Koch’s position:

A free society and the scientific method require an open, honest airing of all sides, not demonizing and silencing those with whom you disagree. We’ve strived to encourage an intellectually honest debate on the scientific basis for claims of harm from greenhouse gases. Because it’s crucial to understand whether proposed initiatives to reduce greenhouse gases will achieve desired environmental goals and what effects they would likely have on the global economy, we have tried to help highlight the facts of the potential effectiveness and costs of policies proposed.

But the stance of the New Yorker article is that global warming is real, it is man made, and it is ruining the planet. Criticism of the Kochs on this matter makes sense only if you uncritically believe what the New Yorker and its left-wing readership believe.

Today, Daniel Fisher of Forbes Magazine takes a look at the New Yorker piece and finds that “lot of what she [author Jane Mayer] paints as nefarious activity is simple business sense.”

New Yorker’s Koch Profile Misses The Point

By Daniel Fisher

Jane Mayer’s much-discusssed New Yorker profile of the Koch brothers is a useful look at how money can buy an outsized voice in our democracy. But a lot of what she paints as nefarious activity is simple business sense. And anybody who’s spent time talking to Charles Koch, as I have, comes away with the conviction that with this man, business is personal and the personal is political. He’s the kind of guy who can fund the right-wing Cato Institute and hope that its mantra of lower taxes, inviolate property rights and personal responsibility will somehow reverse decades of increasing central-government power. (For the record, it hasn’t.)

For Midwestern entrepreneurs of his generation, there’s nothing wrong or even unusual about thinking the New Deal was a colossal mistake, and spending money in a futile effort to roll it back. Mayer quotes a purported friend of the Koch brothers saying they have “a distrust of the U.S. government, and seeing its expansion, beginning with the New Deal, as a tyrannical threat to freedom.” That’s straight out of Friedrick Hayek’s Road to Serfdom and while not to the taste of most New Yorker readers, barely qualifies as conservative compared to the Wisconsin farmers I encountered in my first newspaper job. They considered zoning to be the vanguard of the Communist revolution (I am not exaggerating).

Continue reading at Forbes.

In Sunday’s Wichita Eagle, Wichita Mayor Carl Brewer penned a piece that states his belief in the importance of downtown and prepares the people of Wichita for the start of a prescriptive planning process, with accompanying subsidy to politically-favored developers willing to fulfill the plan.

The mayor used the word “vibrant” twice. Asking citizens question like “Would you like to have a vibrant downtown?” is meaningless. Who doesn’t? It’s only when the question is accompanied by context that citizens can start to understand how they should answer.

For example, in the mayor’s article, he mentions the use of special assessment financing that funded suburban infrastructure, and that this is not sufficient for downtown needs. This statement reveals a misunderstanding by the mayor about the various forms of financing that might be used to help development.

Special assessment financing means that the city spends money to build something, like the new street to serve a site where someone wants to build a house or a shopping center. The cost of this street, plus interest, is added to the property’s tax bill over a period of years. The property owner doesn’t get anything for free.

But in the forms of financing that the mayor and city hall planners favor for downtown, developers do get something for free. Under tax increment financing (TIF), developers get to use their property taxes to pay for the same infrastructure that everyone else has to pay for. That’s because in TIF, the increment in property taxes are used to pay off bonds that were issued for the exclusive benefit of a development. Or, as in the case with a new form of TIF called pay-as-you-go, the increment in property taxes are simply given back to the developer. (Which leads to the question: why even pay at all?)

Some deny that TIF does not directly enrich the developer. They’ll make arguments such as “it’s only used for infrastructure and eligible expenses” or “it’s not lending, it’s bonding” or “it wouldn’t happen but for TIF” or the biggest lie: TIF doesn’t have any cost. But despite these claims, TIF has a cost, and it does directly enrich the developer. That’s its entire purpose; its reason for being. If TIF didn’t enrich the developer, how does it change something that is claimed to be not economically feasible into something that is?

While city leaders say that public participation in the revitalization of downtown is to be limited, we should be cautious and skeptical. Goody Clancy planners have said that public participation will be limited to TIF. This is bad in its own right and should be opposed on its merits.

We need to be skeptical of the mayor and downtown planners because there isn’t enough TIF money available to do what they want to do. I fully expect a citywide sales tax, probably in the amount of one cent per dollar, to be proposed for the benefit of downtown subsidized developers. City leaders speak fondly of such a tax that Oklahoma City has used for many years.

City leaders have already shown themselves to be not averse to imposing additional sales taxes in Wichitans and our visitors, having granted several Community Improvement Districts the ability to charge up to an additional two cents per dollar sales tax. This means that when visitors check out of the Fairfield Inn in downtown Wichita, they’ll be faced with a sales tax rate of 9.3 percent. That’s in addition to the six percent guest tax, which in the case of this hotel is collected for the exclusive benefit of itself, rather than funding general government and tourism activities.

More community improvement districts are in the works. Wichita may soon be peppered with them.

No faith in free markets means no faith in people

The unwillingness of Wichita city leaders to let Wichitans freely decide where they live, and Wichita businesses freely decide where to locate, is a sign of lack of confidence in free markets and the people of Wichita. Because Wichitans do not choose to live and locate their business firms where politicians like Carl Brewer and Janet Miller — to name just two — and city hall bureaucrats like Wichita city manager Bob Layton and Wichita economic development director Allen Bell want them to, they deliver a slap in the face. It appears in the form of a vision backed up by planning, regulation, and the power to dish out favorable tax treatment, as outlined above.

Once formed, a vision is a powerful force. Randal O’Toole, author of The Best-Laid Plans: How Government Planning Harms Your Quality of Life, Your Pocketbook, and Your Future has written about visionaries and government planning:

The worst thing about having a vision is that it confers upon the visionary a moral absolutism: only highly prescriptive regulation can ensure that the vision overcomes an uncaring populace responding to a free market that planners do not really trust. But the more prescriptive the plan, the more likely it is that the plan will be wrong, and such errors will prove extremely costly for the city or region that tries to implement the plan.

An example of planning that many see as having gone wrong is the government planning that led to growth on the city’s fringes. An example that helped make this possible is the government’s decision to build the northeast expressway also known as K-96. Acts of government like this are claimed to have caused the demise of downtown, the very situation that planners now want to correct.

With government making “mistakes” (their claim, not mine) like this on a grand scale, why are we willing to trust that politicians and bureaucrats are making correct decisions now? Especially when you look at the campaign finance reports of most city council members and see the same names giving repeatedly to all council members, with these same names appearing repeatedly before the council asking for their subsidy. This is not a decision making process that gives citizens confidence.

It bears repeating: the existence of the downtown planning process tells Wichitans they’ve made a mistake in where they chose to buy a home or build a business. Not only will Wichitans have to pay for what they freely chose, they’re going to be asked to pay again so that those with purportedly superior vision can have their way.

A Gallup poll finds that Americans overwhelmingly believe that teachers should be paid “on the basis of the quality of his/her work.” 72 percent of public school parents believe this.

A related question asked “How closely should a teacher’s salary he tied to his/her students’ academic achievement?” 75 percent of public school parents answered either “very” or “somewhat closely tied.”

Then, 78 percent of parents answered “yes” to this question: “Do you have trust and confidence in the men and women who are teaching children in the public schools?”

Taken together, the responses to these question indicated that Americans like the people who teach their children, but may have a problem with public school administration and unions. After all, it’s administrators and unions that are responsible for the way teachers are paid. The unions vigorously resist any attempt at starting merit pay programs.

President Barack Obama has said that merit pay is important, but doesn’t seem to push it very hard. In Kansas, Republican candidate for governor Sam Brownback has proposed a master teacher program, which is a very weak form of merit pay.

Democratic candidate Tom Holland doesn’t mention teacher merit pay on his website. It would be surprising if he supported any ideas that the education establishment in Kansas opposes.

Libertarian Andrew Gray promotes the Kansas Education Liberty Act. This does not specifically mention teacher merit pay, but it proposes an expansion of school choice in Kansas. This means more charter and private schools, where teachers are usually paid based on merit.

Merit pay is important. Why? Research is conclusive in showing that teacher effects are the most important factor in student achievement that is under the control of schools. The best teachers need to be rewarded, and the worst ushered out of the field or into improvement programs.

The education establishment in Kansas, however, does not believe in this. Their prescription is more of the same: more spending, more buildings, and basing pay on measures that have been shown to have little or no significance to quality teaching: longevity and education credentials gained.

As the Gallup poll shows, Americans like their teachers but believe they should be paid based on merit, just like almost all other workers. It’s the education establishment that stands in the way of meaningful reform. In Kansas the two most prominent faces of the education establishment and maintaining the failing status quo are the Kansas National Education Association (KNEA, the teachers union) and the Kansas Association of School Boards (KASB).

The speaker at this Friday’s meeting (September 3rd) of the Wichita Pachyderm Club is candidate for the United States Congress from the fourth district of Kansas Mike Pompeo.

Pompeo, a Republican, is challenged by Reform party candidate Susan Ducey, Democrat Raj Goyle, and Libertarian David Moffett.

All are welcome to attend Wichita Pachyderm Club meetings. The program costs $10, which includes a delicious buffet lunch including salad, soup, two main dishes, and ice tea and coffee. The meeting starts at noon, although it’s recommended to arrive fifteen minutes early to get your lunch before the program starts.

The Wichita Petroleum Club is on the ninth floor of the Bank of America Building at 100 N. Broadway (north side of Douglas between Topeka and Broadway) in Wichita, Kansas (click for a map and directions). You may park in the garage (enter west side of Broadway between Douglas and First Streets) and use the sky walk to enter the Bank of America building. The Petroleum Club will stamp your parking ticket and the fee will be $1.00. Or, there is usually some metered and free street parking nearby.

Last week’s release by the Kansas Department of Transportation of a study of the economic impact of Kansas airports caused quite a stir, with newspapers such as the Los Angeles Times (at least its online version) carrying the Associated Press coverage.

Perhaps the reason so many distant newspapers were interested in the story is the sensationally large economic impact figures reported. The number of jobs purported to airports is large, by any standard.

But there’s a problem with these numbers. They’re similar to sensational claims made a few years ago when the case for subsidizing airlines in Wichita was made. Those figures were bogus. So are these.

The staggeringly large figures come from two aspects of the study. First, the study counts the economic activity from businesses near the airport as attributable to the airport. In the case of the Wichita airport, this means that the employees of Cessna and Bombardier Learjet, and all the economic activity these companies produce, is credited as economic impact of the airport.

This economic sleight-of-hand allows the study to attribute 22,313 jobs to the Wichita airport. The total economic impact of the Wichita airport is reported as $4.7 billion.

All these employees don’t work for the airport. Almost all of them work at business firms located near the airport. But the study doesn’t really make that distinction. And when you do things like this, you can really pump up some inflated figures.

It is a convenient circumstance that these two manufacturers happen to be located near the airport. To credit the airport with the economic impact of these companies — as though the airport was involved in the actual manufacture of airplanes instead of providing an incidental (but important) service — is to grossly overstate the airport’s role and its economic importance.

A second problem is the study’s use of economic impact multipliers to pump up the figures. A multiplier reflects the fact that money spent at, say an airport, get spent again. Proponents of multipliers forget that money spent elsewhere get multiplied too. In fact, money that is saved and invested get multiplied, too.

These two factors inspired the Associated Press reporter to lead off a story with “Airports in Kansas support more than 47,000 jobs, generate $2.3 billion in payroll and have an annual economic impact of $10.4 billion …” With numbers so big, you can see why news editors in far-away cities might run the story.

There’s another problem: these studies usually assume that all the activity is the responsibility of the entity being promoted, that none of it would have happened without the celebrated entity, and that since (usually) the promoted entities are government-owned, all this is evidence of the goodness of government.

Another problem is that these economic impact figures get used several times to support various government subsidies to business. Here we have the airport claiming two aircraft manufacturing companies’ employees and their economic impact as the product of the airport.

But when these companies want corporate welfare from the Kansas state government, the economic impact of the companies and their employees will be cited as justification. Politicians, bureaucrats, and the public will believe their case.

Then, the same numbers might be cited again at Wichita city hall, and maybe before the Sedgwick County Commission as the company makes its case for industrial revenue bonds, tax abatements, forgivable loans, and other forms of local corporate welfare.

But this economic impact can’t be recycled like this. It exists only once. If the Wichita airport claims it, then it can’t be used again to justify some other program or request.

Another way the study leaps beyond credibility is its inclusion of the Beech Factory Airport in east Wichita. This is an airport without commercial air service. It exists solely for the convenience of Hawker Beechcraft, and is undoubtedly a necessary component of the capital plant needed to manufacture airplanes.

The study, however, mixes this airport in with all other Kansas airports, so this airport’s claimed $1.8 billion in economic impact is treated the same as any other Kansas airport. But regular people can’t catch a flight at this airport.

When government officials use stretched and inflated figures like these, they diminish their credibility. The Kansas Department of Transportation already snowed the Kansas public earlier this year with their claims of the need for huge spending on Kansas roads and highways.

Now they’re at it again, with claims that simply make no economic sense at all. The fact that news media laps up these figures without any skepticism or critical thought doesn’t help.

Does this mean that Kansas and its local government shouldn’t offer airports and businesses like aircraft manufacturers help from the public treasury? That’s a different question for a different day.

Today, however, we need to realize that accurate, reasonable, and believable information about Kansas airports and other transportation infrastructure isn’t available from the Kansas Department of Transportation.

Friday night’s dinner at the Americans for Prosperity Foundation fourth annual Defending the American Dream summit featured Pulitzer Prize-winning journalist George Will as keynote speaker.

Will’s message was that while progress in limiting the growth of government has been reversed, this can be overcome, and he believes that a restoration of liberty and economic freedom will happen.

As the dinner was a tribute to former President Ronald Reagan, Will told the audience one of his favorite lines from Reagan during the 1980 campaign: “A recession is when your neighbor loses his job. A depression is when you lose your job. Recovery is when Jimmy Carter loses his job.”

Continuing, he said that “Barack Obama is Jimmy Carter 2.0 and it is time to hit the delete button.”

Will told the audience that the “retreat of the state” that started with the election of Margaret Thatcher in 1979 and the election of Ronald Reagan has been reversed. This should be reversed again, he said.

On the federal stimulus, Will said that the downward revision of GDP from a bad number to an even worse number is evidence that the stimulus is not working.

There are two things that the administration is saying that are “funny,” Will said. One is that our current crisis was brought on because there was too little government regulation and administration. The second is that the problem with the stimulus is that Republicans made it too small. “The government is dangerously frugal at the moment,” he said to laughter from the audience.

But Will said that the government controls the money supply and interest rates, leading to control of home mortgages. He traced the edicts of government that increasing percentages of mortgages must be given to those with poor credit. These expansions of the federal government, along with the No Child Left Behind education law, happened under Republican administrations, evidence that not only Democrats are too blame.

Government is dominating the energy sector too. He said that matters because “no less of an authority of energy” than Speaker Nancy Pelosi said that “America should use more natural gas rather than fossil fuels.”

In health care, half of spending is already government money, and that will increase, as will the 138,000 pages of health care regulations.

As to the alleged dangerous frugality of the government, Will said we are “marching into the most predictable financial crisis the world has ever seen.” This crisis is self-inflicted, he said.

Illustrating the size of government, he said that at the time of the first world war, when federal government spending exploded, the richest man in American could have personally retired the federal debt. But today’s richest man could pay for only two month’s interest on the deficit.

The administration’s planned spending program will result in a situation ten years from now when federal entitlement programs (Social Security, Medicare, Medicaid) plus the interest on the federal debt will consume 93 percent of federal revenue. The debt will be one hundred percent of GDP. This will crowd out private borrowing and investment. As a nation, he said we don’t save enough to fund both government and the investment needs of the private sector economy.

Will noted the remarkable progress of American medicine during his lifetime. But both presidential candidates campaigned against the pharmaceutical industry in 2008, which Will said was “shocking.” “It is time to quit stigmatizing those who create wealth, those who extend life, those who reduce pain. Get the government out of the way, and let them get on.”

The economy is fragile, Will said, and we need not burden it more with taxes. He referred to Congressman Paul Ryan, who said we have a nation with “too many takers and not enough makers.”

On education, he said we need an education system that “equips people to compete in a free society.” He criticized the short school year in the U.S., as compared to other countries. He told the audience that a major problem with schools is the teachers unions. The increased spending on schools has not worked. 90 percent of the difference between schools can be explained by characteristics of the students’ families, he said. “Don’t tell me the pupil-teacher ratio, tell me the parent-pupil ratio.”

Even with as many problems as there are, he said that an “aroused citizenry” like that in the room tonight can fix the problems. He’s not pessimistic, he said, because Obama has stimulated a “new clarity” from the American people.

There is a tension today between freedom and equality, two polar values. Liberals today stress equality of outcomes, and believe that the multiplication of entitlement programs to produce this equality serves the public good. But conservatives stress freedom, and that multiplication of entitlement programs is “subversive of the attitudes and aptitudes essential for a free society of self-reliant, far-sighted, thrifty and industrious people.”

The Obama presidency has passed its apogee, Will told the audience. Quoting Winston Churchill, he said that “The American people invariably do the right thing, after they have exhausted all the alternatives.” Will said he believes that Americans believe that “a benevolent government is not always a benefactor, capitalism doesn’t just make us better off, it makes us better.”

Will told the audience that “Americans for Prosperity exists on the principle that when you change the nation’s economy, you change the national character in the process.” Urging the citizen activists to get involved, he echoed a remark made by Minnesota Congresswoman Michele Bachmann, who had spoken earlier: “You are the point of the lance. Go to work.”

Before his speech, Americans for Prosperity Foundation Chairman David H. Koch awarded Will the George Washington award. This is AFP’s highest award, given to Will for his work in defending and advancing economic freedom.

Koch also spoke about the goals of Americans for Prosperity Foundation, which he said are to advance economic freedom and prosperity by limiting government growth, spending, and taxation. It is a grassroots movement that holds political leaders of every party accountable. AFP advocates for the free market economy, which he said improves lives and created the greatest nation on the face of the Earth.

Addressing the general session of Americans for Prosperity Foundation‘s fourth annual Defending the American Dream summit, author and Fox New contributor Dick Morris told an audience of 2,300 that “The recession is over. It is the cure to the recession that we’re experiencing.”

Morris said that when he worked with President Bill Clinton on cutting and balancing the budget, the spending cuts weren’t to balance budget. The budget was balanced by cutting taxes, which caused increased revenue to flow to the federal treasury. He said Clinton cut the capital gains tax, but Obama wants to increase it. He told the audience that when you raise taxes, you depress the economy.

Obama and the big spenders use the economic crisis as an excuse to increase government spending. Other “problems” are used as additional excuses to increase government control.

Morris said that he believes that Republicans will take control of both houses of Congress this year.

After, there will be two fundamental challenges that remain. First, we have to make sure the people we elect based on pledges to reduce spending keep their word.

Then, the states will come begging to Washington for a bailout. We need to say no, Morris told the audience. States should have a way to declare bankruptcy and get out from under public sector union contracts.

At this time next year, Morris said we’ll be here again keeping those we elected accountable to their promises.

Today in Washington, Americans for Prosperity Foundation starts its fourth annual Defending the American Dream summit. The event is expected to be attended by 2,300 citizen grassroots activists from around the country.

AFP has recently been criticized by President Barack Obama, which many interpret as evidence of AFP’s growing influence and effectiveness.

AFP Foundation president Tim Phillips said “never before have grassroots Americans been so interested in the challenges facing our nation. We have a sharp lineup of speakers on the most pressing issues — energy, spending,net neutrality, to name a few — and we’re excited to give people information they can share with friends and neighbors as they examine these important policies being discussed in Congress right now.”

Speakers at this year’s event include Pulitzer Prize-winning journalist George Will, Minnesota Congresswoman Michele Bachmann, author and Fox New contributor Dick Morris, Herman Cain, and AFP President Tim Phillips. Breakout sessions throughout the day will provide a variety of learning opportunities for citizens.

Social Security and its future have been in the news lately. Supporters promote it as one of the best examples of successful government programs, and denigrate its critics as pessimists.

Locally in the campaign for United States Congress from the fourth district of Kansas, one candidate promises to defend the current system, while another has spoken approvingly of Wisconsin Congressman Paul Ryan and the reforms recommend in his Roadmap for America’s future.

Many of the arguments in favor of Social Security and strengthening the system revolve around the issue of fairness, even casting a moral tone. So what about the fairness of the Social Security system?

In Slaying Leviathan: The Moral Case for Tax Reform, author Leslie Carbone looks at the economic impact of Social Security and its payroll taxes on middle income people:

Payroll taxes actually have the bizarre effect of leaving families less able to ensure what they are specifically purported to provide — security in old age. According to The Heritage Foundation, Social Security’s inflation-adjusted rate of return is a paltry 1.2 percent for an average household of two 30-year-old earners, each making just under $26,000, with children. This family will pay about $320,000 in Social Security taxes (including their employers’ share) and can expect to receive about $450,000 back in payments (1997 dollars, before taxes, assuming that they begin collecting at age 67). Had this typical family allocated the same amount to conservative private investment vehicles, such as traditional retirement accounts, they could expect to enjoy a real rate of more than 5 percent per year before taxes, or $975,000 (1997 dollars). Social Security taxes of $320,000 cost this family $525,000.

Social Security is not a very good investment, as we now see. It’s even worse — cruel and unfair, we might say — when workers pay into the system for years and then die shortly after starting to receive benefits. If people owned their own retirement savings, they could pass these assets on to their heirs or anyone else they choose.

An argument often used against privatizing the Social Security system is that people will have to make investments in stocks and bonds. Securities markets sometimes go down, as they have recently, and sometimes do not perform very well for long periods. So the Social Security supporters ask: Do we want Americans’ retirement security dependent on such uncertain investments?

It’s true that markets go up and down. But over the long term, the direction has been up. Young workers do not need to be concerned about the performance of the market over the next few years. Their time horizon is measured in decades.

Furthermore, over long periods of time, the performance of securities markets is closely tied to the performance of the American and world economies. If markets do not perform well over time, it is almost certain that the economy is underperforming too. Such a poor economy makes it even more difficult for young workers to pay the taxes necessary to pay the Social Security benefits that retirees will demand. Those young workers will have to pay, as there is no Social Security trust fund that can be drawn upon, despite the claims of its backers.

It’s contrary to economic freedom and personal liberty for the government to force Americans to participate in a retirement program. Forcing us to participate in one that performs as poorly as Social Security is a tragedy, not a mark of kindness and moral superiority.

Attacks by President Barack Obama on Americans for Prosperity for its promotion of limited government and free markets are a signal that these principles are resonating with Americans.

Now AFP has formulated a video response to the president.

While some characterize the president’s remarks as a personal insult to each of AFP’s 1.2 million citizen members, I see it as evidence that AFP has grown to become “America’s leading conservative grassroots organization,” as described in a recent article penned by Richard Viguerie. Obama wouldn’t even bother to mention the name Americans for Prosperity if he wasn’t concerned about the group’s effectiveness.

In his remarks, the president attacked AFP for spending millions on television advertisements against Democratic Party candidates. The president didn’t note that every dollar given to AFP is a voluntary contribution.

This is in contrast to the way the Democrats operate. The Wall Street Journal has noted, for example, that the recent spending bill passed earlier this month is a boon for Democrat campaign funds: “The National Education Association and other unions will thus get as much as $100 million in additional dues from this bill, much of which will flow immediately to endangered Democratic candidates in competitive House and Senate races this year.”

This week AFP is holding its annual Defending the American Dream Summit in Washington. I’ll be there along with probably two thousand other citizen activists from across the country.