Kansas Watchdog

Occupy Koch Town protestors ignore facts

by Guest Author on February 16, 2012

Below, Paul Soutar of Kansas Watchdog provides more evidence that the campaign against Wichita-based Koch Industries regarding their alleged involvement in the Keystone XL pipeline is not based on facts. Besides this article, U.S. Representative Mike Pompeo of Wichita has also written on this issue in The Democrats continue unjustified attacks on taxpayers and job creators.

Another inconvenient fact is that if the Canadian oil is not sold to the U.S., it will be sold to and consumed in China. If we are concerned about greenhouse gas emissions leading to climate change, it should be noted that it doesn’t matter where the greenhouse gases are produced. The effect is worldwide. But as we know, the radical environmental movement cares nothing for facts in their war on capitalism and human progress.

Facts Refute Environmentalist Claims About Keystone XL Pipeline

By Paul Soutar. Originally published at Kansas Watchdog.

Protesters are gathering on the Wichita State University campus this weekend for a Sierra Club-sponsored Occupy Koch Town protest against the Keystone XL oil pipeline and Koch Industries, Inc. Koch and its subsidiaries are involved in a wide array of manufacturing, trading and investments including petroleum refining and distribution.

Many Keystone XL opponents have focused on Koch, claiming its Flint Hills Resources Canada subsidiary’s status as an intervener in the regulatory approval process in Canada proves Koch is a party to the pipeline project. Keystone XL would carry petroleum from Canadian oil sands to the U.S. Gulf coast.

In a Jan. 25 House Energy and Commerce Committee hearing, California U.S. Rep. Henry Waxman, D-District 30, demanded that the Koch brothers, Charles and David, or a representative of Koch Industries appear before the committee to explain their involvement in the pipeline.

Philip Ellender, president of Koch Cos. Public Sector, which encompasses legal, communication, community relations and government relations, responded to Waxman on a Koch Industries website:

Koch has consistently and repeatedly stated (including here, here, here, and here) that we have no financial interest whatsoever in the Keystone pipeline. In addition, this fact has been verified by TransCanada’s CEO here.

Russ Girling, CEO of TransCanada, owner and builder of the Keystone pipelines, addressed criticism of the pipeline and supposed collusion with the Koch brothers in a Nov. 1 conference call to discuss TransCanada’s earnings. “I can tell you that Koch (Industries Inc.) isn’t a shipper and I’ve never met the Koch brothers before.”A March 2010 document from Canada’s National Energy Board (NEB) approving the pipeline does not mention Koch or its subsidiary, Flint Hills Resources Canada, on any of its 168 pages.

The report does note that on June 16, 2009, TransCanada Corporation became the sole owner of the Keystone Pipeline System, acquiring ConocoPhillips’ interest in the pipeline.

A map of the existing Keystone and planned Keystone XL pipelines shows that Koch’s two refineries in the 48 contiguous states at Pine Bend, Minn., and Corpus Christi, Texas, are not on or near the pipeline routes. Koch also has a refinery in North Pole, Alaska.

Koch does have substantial interests in Canadian oil though, including the thick oil sands mined in Alberta. Those interests are precisely why Flint Hills Resources Canada requested intervener status in the pipeline approval process in 2009.

Flint Hills’ application to Canada’s National Energy Board for intervener status said, “Flint Hills Resources Canada LP is among Canada’s largest crude oil purchasers, shippers and exporters, coordinating supply for its refinery in Pine Bend, Minnesota. Consequently, Flint Hills has a direct and substantial interest in the application.”

Critics have claimed that statement is a smoking gun proving Koch is a party to the pipeline or will benefit from its construction.

Greg Stringham, Canadian Association of Petroleum Producers (CAPP) vice president of markets and oil sands, told KansasWatchdog, “Their intervention itself is not a trigger that says aha, they have a commercial interest or are a shipper on this pipeline.”

The US Legal, Inc. definitions website says an intervener is, “A party who does not have a substantial and direct interest but has clearly ascertainable interests and perspectives essential to a judicial determination and whose standing has been granted by the court for all or a portion of the proceedings.”

US Legal, Inc. provides free legal information, legal forms and help with finding an attorney for the stated purpose of breaking down barriers to legal information.

Stringham said anyone — business, organization or individual — can be an intervener in NEB regulatory proceedings as long as they can show some potential impact, good or bad, from the proposed action. “Then they make a decision whether they’re going to actively engage through evidence and cross examination or whether they’re just there for interest, to get materials and monitor the situation.”

Market interest

Like Koch, Stringham said CAPP is an intervener in the pipeline approval process, because the pipeline will have a direct impact on the Canadian oil market. Stringham said:

The fact that it’s an intervention for interest does not mean that there is a financial ownership or shipping interest. It’s really to make sure that they understand what’s going on in the process and that they have some connection to the project that can be either positive and beneficiary or potentially negative to them. That’s why I believe Koch has intervened in this process.

The Canadian pipeline company Enbridge, Inc.; Marathon Oil Corp. and Britain’s oil giant BP are also among the 29 interveners in the pipeline application. So is the environmental activist organization Sierra Club.

Keystone XL would compete with the Enbridge pipeline that carries the thick bitumen oil from Hardisty, Alberta, for delivery to Koch’s Pine Bend, Minn., refinery. If supplies prove insufficient for both pipelines, Stringham said, Koch could be at a competitive disadvantage since it is not a shipper on the Keystone pipelines.

The National Energy Board’s approval document noted:

Keystone XL shippers have indicated that they are seeking competitive alternatives, and by providing access to a new market, Keystone XL would be expanding shipper choice. The Board places considerable weight on the fact that Keystone XL shippers have made a market decision to enter into long-term shipping arrangements negotiated through a transparent competitive process. New pipelines connecting producing regions with consuming regions change market dynamics in ways that cannot easily be predicted.

Political motivation

On Feb.10, 2011 Reuters published an Inside Climate News article that started the Koch-Keystone explosion. The third paragraph put a political spin on the Koch claims.

What’s been left out of the ferocious debate over the pipeline, however, is the prospect that if President Obama allows a permit for the Keystone XL to be granted, he would be handing a big victory and great financial opportunity to Charles and David Koch, his bitterest political enemies and among the most powerful opponents of his clean economy agenda.

Former U.S. Solicitor General Theodore Olsen, in a Wall Street Journal op-ed, highlighted the political dimension of attacks on the Kochs and recent attempts to compel their testimony before Congress.

When Joseph McCarthy engaged in comparable bullying, oppression and slander from his powerful position in the Senate, he was censured by his colleagues and died in disgrace. “McCarthyism,” defined by Webster’s as the “use of unfair investigative and accusatory methods to suppress opposition,” will forever be synonymous with un-Americanism.

In this country, we regard the use of official power to oppress or intimidate private citizens as a despicable abuse of authority and entirely alien to our system of a government of laws. The architects of our Constitution meticulously erected a system of separated powers, and checks and balances, precisely in order to inhibit the exercise of tyrannical power by governmental officials.

Market and environmental realities

Canada produces about 2.7 million barrels of oil per day with about 1.6 million going to the United States. “About a million of that comes from the oil sands,” Stringham said. “All of that moves through the existing pipeline systems.”

Two Kansas refineries, the Holly Frontier refinery in El Dorado and National Cooperative Refinery Association’s facility in McPherson, refine Canadian oil, including from oil sands, delivered over existing pipelines.

With or without the Keystone XL, oil from Canada’s oil sands will continue to go to markets, according to Stringham. “We have been investigating a number of alternatives. Keystone XL clearly is the most direct route to get to the gulf coast and that’s why the market really spoke up and said this is what we want,” he said.

In a 2010 op-ed in the National Journal, Charles T. Drevna, president of American Fuel & Petrochemical Manufacturers, presciently said, “Canada’s leaders have made clear that if the U.S. won’t buy their oil, they won’t abandon development of their oil sands. Instead, they have said they will ship Canadian oil across the Pacific to China and other Asian nations. That will result in America having to import more oil from other countries. Sending Canadian oil to Asia would actually increase global greenhouse gas emissions, according to a 2010 study by Barr Engineering.”

The Barr study, Low Carbon Fuel Standard “Crude Shuffle” Greenhouse Gas Impacts Analysis (pdf), concluded that transporting oil to Asia for refining would mean not just a lost opportunity for the U.S., but increased greenhouse gas emissions because of transportation by ship instead of by pipeline and less stringent refinery emission standards.

TransCanada has said it will continue to seek approval of the Keystone XL and work is proceeding on alternatives to Keystone XL, Stringham said. “There are other pipeline routes being investigated by Enbridge and BP and a number of others as well to move this oil,” he said.

He said Canada’s oil market is looking at diverse opportunities beyond the United States. “We are looking to the West Coast, which could move it on to tankers. We looked at Asia, it is one of the options, but once it gets to the West Coast, it can also move to the California market,” he said.

Stringham said a proposal for Enbridge to build a pipeline carrying oil to the West Coast has more than 4,000 interveners.

Occupy Koch Town promotional materials say they’ll also protest against the Kansas Policy Institute. KPI helped launch KansasWatchdog.org in 2009 but is no longer affiliated with this site.

Tagged as: Capitalism, Climate change, Environment, Kansas Watchdog, Koch Industries, Paul Soutar

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Kansas committee asks if KBA audit did enough to expose problems

by Bob Weeks on January 27, 2012

By Bob Weeks, Special to KansasWatchdog.org

Members of the joint Commerce and Economic Development Committees expressed concern that a forensic audit of the Kansas Bioscience Authority was not broad enough and that deliberate deletion of data from a KBA computer left questions unanswered.

On Wedesday James Snyder, managing partner for BKD’s Forensics and Valuation Services, told the committee that while his firm was hired and paid by KBA, Kansas Governor Sam Brownback’s administration was heavily involved. Secretary of Agriculture Dale Rodman served as the main contact for the Brownback Administration, although Caleb Stegall, the governor’s chief lawyer, and Steve Anderson, the Budget Director, also participated.

Snyder told the committee the audit process was designed to avoid a situation where after the final report was released, people would ask why certain facts were not considered or covered. “This process was specifically designed to avoid that, and it worked pretty well,” he said.

The Kansas Legislature created the KBA in 2004 and gave it $581 million to bring bioscience research and jobs to Kansas. KBA has been under fire for expenses and salaries paid to top executives and for giving grants to fund projects out of state.

Any disputes about the report’s contents were ironed out by January, but on Sunday, the day before the report was to be released, Rodman raised a difference of opinion over a possible conflict of interest involving former KBA board member Angela Kreps. Snyder characterized this as the only difference of opinion, and that it was a narrow and minor one.

Committee chair, Sen. Susan Wagle, a Wichita Republican, recognized that BKD’s position was “difficult,” as the firm was hired and paid by KBA, but it was also in frequent communication with the Brownback Administration. Snyder said the administration was involved in an oversight role, and also in defining the scope of the audit.

Senator Ty Masterson, an Andover Republican, expressed concern over possible deletion of computer files and that BKD could only “dive into that which you had, that you were provided.” BKD’s timeline of the audit showed that KBA leadership was apprised of an audit on March 10th, 2011. The next day CEO Tom Thornton accessed a computer hard drive on KBA’s network. The drive was accessible to only four people and held personnel records and confidential company information.

BKD was hired on April 11th, a fact Masterson said he found “fascinating” because KBA used a 30-day rolling backup scheme that would not have retained files deleted on or before March 10. The time lag from March 11th to April 11th means that if information was deleted from the J-Drive, it was not available to the BKD audit team.

The timing of this is “highly suspect,” Masterson said.

Snyder said the audit team had access to much information and that BKD received everything they asked for, but Masterson pointed out that we don’t know what might have been missing. Thornton’s personal laptop computer was erased or “wiped” days after the audit was called for in a way that made it impossible for the computer forensic team to recover the deleted data.

Snyder said that the committee should have high confidence in the audit’s findings and that the number of people and computers the team had access to was in many cases “extraordinary.” He also said that core KBA business records had integrity and there was no reason to suspect these systems had been compromised.

Masterson quoted from page 133 of the audit report: “Our analysis found 301 payments without a contract, including 102 payments that violated KBA’s Contract Policy. The total contract cost involved totaled $1,219,271.81 in payments without a contract, including $571,828.20 in payments which violated Contract Policy.”

Masterson noted that there’s no indication anything was technically illegal, but that the purview of the committee went beyond that. “Why do we put policies in place? It’s so that we can show best practice, best stewardship. You have shown over 300 violations of policy … I don’t know how we can paint this in the light that this is instilling confidence, and that it is clearing the air.”

Masterson also said that the best case seems to be that there was unethical management combined with inadequate oversight. He said there is the possibility of a coordinated cover up of behavior that could potentially be illegal.

Snyder answered that over time they observed “increasing sophistication” of board participation and compliance with procedures and that there had also been changes initiated by the board that offered protection.

Wagle said she received faxes from KBA employees expressing concern that the Senate Commerce Committee received altered documents. “It became very apparent that we could not rely on the information we were receiving,” she said. She asked Snyder if it was possible that documents were altered or erased so BKD did not see them.

Snyder said that although one expense report was altered, there was no indication of a “systematic issue” of alterations or erasures.

Wagle and Snyder disagreed over the extent of BKD’s contact with Wagle contending that it did not constitute an “interview” as claimed in the audit report.

Democratic Senator Tom Holland asked Snyder two questions relating to whether KBA has business policies and procedures in place to effectively run the organization, and has KBA consistently followed these? Snyder answered yes, with very few exceptions. “We found a very high level of compliance.”

Republican Senator Chris Steineger of Kansas City asked a series of questions regarding the mission of the KBA, which is, according to KBA “advancing Kansas’ leadership in bioscience” as well as creating investment and jobs in Kansas. Steineger expressed concern that much of KBA’s funding is spent on overhead, such as lawyers, architects, office buildings, travel, and dining.

Steineger distributed a series of calculations based on KBA data in the audit that he said reveals that KBA made $265 million in commitments resulting in 1,347 jobs for a cost of $196,808 per job created.

Steineger showed that removing the largest company from the mix — Quintiles, which created 1,000 jobs for a KBA contribution of $3.5 million — the remaining jobs cost more than $750,000 each.

Senator Jeff Longbine, an Emporia Republican, mentioned that there had been criticism of the KBA for insider activities among board members, conflicts of interest, cronyism, and fraud and asked Snyder if these accusations were true. Snyder said these generalized accusations were not true, although there was one instance where there was “some technical violation of a conflict of interest rule.” He said that KBA is not “fraught with fraud or self-dealing.”

The audit report also noted that KBA made regular use of executive sessions not open to the public and that, “No notes or recordings are made of Executive Sessions. This is a common business practice. Therefore, information discussed in Executive Session was not available for BKD’s review and could not be considered with regard to the findings of this report.”

In response to another question, Snyder said that no changes were recommended to the Kansas Economic Growth Act, the legislation that created the KBA. There were some recommendations to KBA board policies and procedures.

Wagle also noted that conflict of interest rules don’t really resolve conflicts. Generally, if KBA board members disclose that they have a conflict of interest — such as a company they have financial ties to getting a grant — they can refrain from voting to satisfy the rules. “To me, I don’t know if it’s okay with the people of Kansas,” Wagle said.

The joint hearing will continue tomorrow with a presentation from Rodman.

This article originally appeared on Kansas Watchdog.

Tagged as: Chris Steineger, Economic development, Government spending, Kansas legislature, Kansas Watchdog, Sam Brownback, Susan Wagle, Tom Holland

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Kansas and Wichita quick takes: Friday December 30, 2011

by Bob Weeks on December 30, 2011

Year in review, Wichita Liberty-style. Here it is: A selection of stories that appeared on Voice for Liberty in 2011. Was it a good or bad year for the causes of economic freedom, individual liberty, limited government, free markets, and civil society?

Patriots New Years Eve. Larry Halloran of Wichita — South Central KS 912 Group is sponsoring for the second time a “Patriots New Years Eve”: Taking time to relax in the company of Patriots as we dedicate ourselves to the important work ahead in 2012. This event is New Year’s Eve from 6:00 pm to 11:00 pm at the Hawthorn Suites located at 2405 N. Ridge Road, Wichita, KS 67205, telephone (316) 729-5700. The potluck dinner starts just after 6:00 pm, followed by guest speaker Bob Weeks at 8:00 pm. This is a family-friendly event, and no alcohol is served or allowed. Despite that, I still plan to attend. RSVP to LarryHalloran@aol.com.

Legislators to hear from citizens. The South-Central Kansas Legislative Delegation will be taking public comments Tuesday January 3rd at 7:00 pm in the Jury Room of the Sedgwick County Courthouse, 525 N. Main in Wichita. (Use the north entrance to the courthouse). This is your opportunity to let local legislators know your wishes on issues that will be considered during the 2012 legislative session. In the past, each person wishing to talk has been limited to between three and five minutes depending on the number of people wishing to speak. There is usually the requirement to sign up as you enter if you want to speak.

California’s redevelopment nightmare to end. In Kansas, they’re called tax increment financing districts, and in California, they’re about to end. A press release from the Institute of Justice notes: “In a landmark victory for private property owners in the Golden State, the California Supreme Court today upheld a statute abolishing the nearly 400 redevelopment agencies across the state. The court also struck down a law that would have allowed these agencies to buy their way back into existence. The final outcome of the case is that, in 2012, California’s decades-long redevelopment nightmare will finally come to an end. California redevelopment agencies have been some of the worst abusers of eminent domain for decades, violating the private property rights of tens of thousands of home, business, church and farm owners.” Besides eminent domain abuse, the high cost of the redevelopment agencies was a factor, with 12 percent of California property taxes being diverted to what are know as TIF districts in Kansas. … The City of Wichita still views tax increment financing as a wise investment, with one such district authorized for creation this month.

Growth will heal nation’s economy. From Kansas Watchdog: While most economists are predicting something between a long, slow recovery and the impossibility of repairing an economy buried in debt, entrepreneur Louis Woodhill believes the U.S. can come roaring back in just one or two years — with the right actions. “We probably need 25 million new jobs to get to full employment from here,” he said. “But basically it could be done in a year or two at the outside if you did everything right.” His recovery formula focuses on growing the gross domestic product. “If Vince Lombardy had been an economist instead of a football coach, he would have said economic growth is not the most important thing, it’s the only thing,” Woodhill said. … The full story is at Louis Woodhill: Prescription for Growth Will Heal Nation’s Economy.

Assumptions about capitalism. Burton W. Folsom in The Myth of the Robber Barons: “This shallow conclusion dovetails with another set of assumptions: First, that the free market, with its economic uncertainty, competitive stress, and constant potential for failure, needs the steadying hand of government regulation; second, that businessmen tend to be unscrupulous, reflecting the classic cliché image of the ‘robber baron,’ eager to seize any opportunity to steal from the public; and third, that because government can mobilize a wide array of forces across the political and business landscape, government programs therefore can move the economy more effectively than can the varied and often conflicting efforts of private enterprise. But the closer we look at public-sector economic initiatives, the more difficult it becomes to defend government as a wellspring of progress. Indeed, an honest examination of our economic history — going back long before the twentieth century — reveals that, more often than not, when government programs and individual enterprise have gone head to head, the private sector has achieved more progress at less cost with greater benefit to consumers and the economy at large.” … Folsom goes on to give examples from the history of steamships, railroads, and the steel and oil industries that show how our true economic history has been distorted. Concluding, he writes: “Time and again, experience has shown that while private enterprise, carried on in an environment of open competition, delivers the best products and services at the best price, government intervention stifles initiative, subsidizes inefficiency, and raises costs. But if we have difficulty learning from history, it is often because our true economic history is largely hidden from us. We would be hard pressed to find anything about Vanderbilt’s success or Collins’s government-backed failure in the steamship business by examining the conventional history textbooks or taking a history course at most colleges or universities. The information simply isn’t included.” … Folsom’s book on this topic is The Myth of the Robber Barons: A New Look at the Rise of Big Business in America.

Resources on Austrian economics. The prolific and best-selling author Thomas E. Woods, Jr. has compiled a very useful collection of resources regarding Austrian economics. In an essay by Lew Rockwell that Woods refers to, we can learn the essence of the Austrian way: “It is not a field within economics, but an alternative way of looking at the entire science. Whereas other schools rely primarily on idealized mathematical models of the economy, and suggest ways the government can make the world conform, Austrian theory is more realistic and thus more socially scientific. Austrians view economics as a tool for understanding how people both cooperate and compete in the process of meeting needs, allocating resources, and discovering ways of building a prosperous social order. Austrians view entrepreneurship as a critical force in economic development, private property as essential to an efficient use of resources, and government intervention in the market process as always and everywhere destructive.” Concluding his essay, Rockwell wrote: “The future of Austrian economics is bright, which bodes well for the future of liberty itself. For if we are to reverse the trends of statism in this century, and reestablish a free market, the intellectual foundation must be the Austrian School.” … Woods’ collection is at Learn Austrian Economics.

Cato University. One of the highlights of my year was attending Cato University, a summer seminar on political economy. Besides attending many very informative lectures and meeting lovers of liberty from across the world, I became aware of several brilliant Cato scholars and executives whom I had not paid much attention to. One in particular is Tom G. Palmer, who is Senior Fellow and Director of Cato University, besides holding the position of Vice President for International Programs at Atlas Economic Research Foundation. He delivered many of our lectures and is the author of Realizing Freedom: Libertarian Theory, History, and Practice. An important chapter from this book is Twenty Myths about Markets. In this video he discusses being effective in bringing about change.

Tagged as: Austrian economics, Capitalism, Economic development, Economic freedom, Economics, Free markets, Kansas Watchdog, Tax increment financing, TIF districts

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Kansas and Wichita quick takes: Monday December 19, 2011

by Bob Weeks on December 19, 2011

Boeing tanker and Wichita. News reports from this morning’s press conference held by U.S. Representative Mike Pompeo of Wichita indicate that Boeing will not use Wichita as the finishing plant for work on the new air refueling tanker project. It was thought that this work would require 7,500 jobs in Wichita. Political and union leaders speak of holding Boeing accountable to what they believe was a promise Boeing made to Wichita, but I don’t know how they can do that. … Pompeo’s press release states: “… the work will be done in Washington state. Until very recently, it had been my expectation based on representations made to all Kansans, personally to me and my office, and to the United States Air Force, that Boeing would create 7,500 aviation jobs in our great state should Boeing prevail in the tanker bid. We now know that Boeing intends to walk away from that promise, which severely jeopardizes the future of the over 2000 aviation jobs currently held by Boeing employees in Kansas. … Boeing fought a long and fierce battle to build the KC-46A Tanker and secured the largest defense contract in the history of the world. Over a decade Boeing won, then lost and then once again emerged victorious over its competitor EADS. Kansas aviation workers were at the very core of Boeing’s effort that entire time. During that competition, Boeing stressed — both publicly and in its formal final bid proposal submitted to the United States Air Force — that its Wichita, Kansas facility would be critical to building the next generation tanker. For years, Kansas’ elected political leadership worked diligently to secure a contract award for Boeing. In short, Kansas workers and Kansas political leaders were central to the Air Force’s decision to select Boeing over EADS. To remove Kansas from the tanker project not only violates a public trust, but it creates risk to taxpayers and to our fighting forces. … I urge the company’s leaders to do all that they can to honor the Boeing name and to take all steps available to do right by the hard-working, talented people who build the world’s greatest airplanes here in Kansas.”

Wichita school dress code. The Wichita Eagle reports on a new dress code for teachers at USD 259, the Wichita public school district: “Mark Jolliffe, principal at Wilbur Middle School and president of the local administrators group, said the guidelines are intended to ‘enhance our professional position, and model for our students, staff and community’ the importance of professional dress.” Teachers continually complain that they are, in fact, professionals, but are not treated as such. I wonder: What does it say when you have to be told how to dress at work? What the community ought to be worried about is a school district that spends time on issues like this while students continue to receive a substandard education. … Furthermore, the mode of dress of schoolteachers ought to be something that parents decide through a market-based selection process. Those parents who believe that their children are best served by schools where the teachers dress nicely (and perhaps the students are in uniform) could choose schools like this, if we had school choice. Also, parents who believe their children would thrive in a more casual environment could select schools with this characteristic, but again, only if we had school choice.

Kansas legislator briefing book. A very useful publication produced by Kansas Legislative Research Department is now available in a 2012 edition. Its target is legislators, but anyone who is interested in understanding state government will find the 2012 Legislator Briefing Book useful. The section on education, for example, has an explanation of the Kansas school funding formula, complete with descriptions and values for the weightings that determine how much state funding districts receive.

Velvet Revolution voice has died. “Vaclav Havel, the playwright who led the Velvet Revolution that ended communism in Czechoslovakia, has died at 75. … Vaclav Havel helped Czechoslovakia make the transition from one of the most repressive Communist regimes to one of the most successful post-Communist countries.” More from David Boaz at Vaclav Havel, RIP.

Open records in Wichita. “The Wichita City Council approved a $2 million payment to the city’s convention and visitors’ bureau, GO Wichita, despite objections to the lack of transparency in how GO Wichita handles taxpayer money. The Kansas Open Records Act requires that entities receiving public money be subject to the law’s transparency provisions, but one of these provisions states that if such an organization files an annual financial statement, it has complied with the law. At issue is whether a one- or two-page financial report listing total revenues and expenditures can substitute for public access to more detailed records regarding specific expenditures of public funds.” More from Paul Sourtar of Kansas Watchdog at City of Wichita Spends $2 million, Rebuffs Citizen’s Transparency Request.

Cellulosic ethanol. The Wall Street Journal notes the debacle of cellulosic ethanol production and government involvement. This is ethanol produced from “wood chips and stalks or switch grass,” said President George W. Bush in 2006, also stating that “Our goal is to make this new kind of ethanol practical and competitive within six years.” So what has happened? “When these mandates were established, no companies produced commercially viable cellulosic fuel. But the dream was: If you mandate and subsidize it, someone will build it. Guess what? Nobody has. Despite the taxpayer enticements, this year cellulosic fuel production won’t be 250 million or even 25 million gallons. Last year the Environmental Protection Agency, which has the authority to revise the mandates, quietly reduced the 2011 requirement by 243.4 million gallons to a mere 6.6 million. Some critics suggest that even much of that 6.6 million isn’t true cellulosic fuel.” … the Journal cites a recent report by National Academy of Sciences that states “currently, no commercially viable biorefineries exist for converting cellulosic biomass to fuel.” The $132.4 million loan guarantee for a cellulosic plant near Hugoton in southwest Kansas is noted. (More about that at Kansas and its own Solyndra.) … Concluding, the Journal writes: “To recap: Congress subsidized a product that didn’t exist, mandated its purchase though it still didn’t exist, is punishing oil companies for not buying the product that doesn’t exist, and is now doubling down on the subsidies in the hope that someday it might exist. We’d call this the march of folly, but that’s unfair to fools.” See The Cellulosic Ethanol Debacle.

Overcriminilization. A new paper from Paul Larkin of of Heritage Foundation reports on the difficulties facing legislative solutions to the problem of overcriminilization. The abstract of the paper Overcriminalization: The Legislative Side of the Problem reads: “The past 75 years in America have witnessed an avalanche of new criminal laws, the result of which is a problem known as “overcriminalization.” This phenomenon is likely to lead to a variety of problems for a public trying to comply with the law in good faith. While many of these issues have already been discussed, one problem created by the overcriminalization of American life has not been given the same prominence as others: the fact that overcriminalization is a cause for (and a symptom of) some of the collective action problems that beset Congress today. Indeed, Congress, for a variety of reasons discussed in this paper, is unlikely to serve as a brake on new, unwarranted criminal laws, let alone to jettison broad readings of those laws by the courts. Therefore, the key to curbing overcriminalization is the American public: It is the people who, if made aware of the legislative issues that enable overcriminalization, could begin to head off such laws before the momentum for their passage becomes overwhelming.” … The conclusion to the report emphasizes the role of the people: “The legislative dynamic is not likely to serve as a brake on new, unwarranted criminal laws, let alone to jettison broad readings of those laws by the courts. The public needs to head off such laws before the momentum for their passage becomes overwhelming. And that can happen only if the public is aware of the legislative side of this problem.”

No Wichita Pachyderm. This week and next week (December 23rd and 30th) the Wichita Pachyderm club will not meet due to the holidays. Upcoming speakers: On January 6th: David Kensinger, Chief of Staff to Kansas Governor Sam Brownback. … On January 13th: Speaker of the Kansas House of Representatives Mike O’Neal, speaking on “The untold school finance story.” … On January 20th: Sedgwick County Commissioner Karl Peterjohn.

Stevens, Pachyderm President, honored. At last week’s meeting of the Wichita Pachyderm Club, President John Stevens received the “Tough Tusk Award.” In presenting the award, club Vice President John Todd remarked: “Once in awhile a local leader comes along who deserves recognition. From time to time The Wichita Pachyderm Club recognizes these special people. Today it is my pleasure to recognize one of our own who deserves special recognition. The Wichita Pachyderm Club awards committee would like to recognize our club President John Stevens as the recipient of our club’s ‘Tough Tusk Award’ as sponsored by the National Federation of Pachyderm Clubs. … He is a retired business owner who now spends his time volunteering with SCORE counseling small business owners and entrepreneurs. John also works as a community activist through his participation in city and neighborhood organizations. He is a past Wichita Park Board Commissioner and serves on boards and committees for Wichita Independent Neighborhoods. … In 2008 John was elected the precinct committeeman for the 101st precinct in Wichita. He has worked as a volunteer in local campaigns and has run as the Republican candidate for the 86th Kansas House of Representatives seat, concerned that Republican values, attitudes, and principles are not being represented in the 86th District. He continues to work toward having a Republican in the 86th House seat. … John has served as President of the Wichita Pachyderm Club for the past three years. Through the Pachyderm Club he is able to facilitate educating citizens about our government, our leaders and the Republican Party. … John says he is addicted to progress, and I can tell you that he works tirelessly for the betterment of The Wichita Pachyderm Club.” … I will add: Thank you, John Stevens, for a job well done.

Occupiers and crony capitalism. “They’re rightfully angry at what’s happening in the United States today. But unfortunately they have confused capitalism and crony capitalism, and they’ve misdiagnosed the cause of their frustration.” That’s Chris Coyne of George Mason University speaking of the Occupy Wall Street protesters. He explains in more detail in the following short video. This video is from LearnLiberty.org, a project of Institute for Humane Studies, and many other informative videos are available.

Tagged as: Capitalism, Education, Kansas legislature, Kansas Open Records Act, Kansas Watchdog, Mike Pompeo, Open records, Overcriminalization, Subsidy, Wichita and Kansas schools, Wichita Pachyderm Club

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Kansas and Wichita quick takes: Monday October 31, 2011

by Bob Weeks on October 31, 2011

Wichita City Council. The Wichita City Council this week considers two items of interest. Spirit AeroSystems will ask for $15 million in IRBs. Spirit will purchase the bonds itself. It will receive a property tax exemption for ten years and exemption from sales tax. No dollar amount is given for the value of the exemptions. … Then, Southfork Investment LLC, a group headed by Jay Maxwell, is asking for the formation of a new tax increment financing (TIF) district. This item, if the council approves, will set December 6 as the date for a public hearing. The vote to form the district would be taken then. … According to city documents, the project is near 47th Street South and I-135. It is planned for 50 acres and one million square feet of retail, hotel, restaurants and office space. For comparison, Towne East Square has slightly less than 1.2 million square feet of space. There will be a medical park on an additional 22 acres. … It appears that all the TIF financing will be pay-as-you go, which is a recent revision to the Kansas TIF law. No bonds would be sold. Instead, the increment in property tax would be refunded to the developer as it is paid. There’s also a joining of TIF and special assessments, where TIF revenue will be used to pay special assessment taxes. … Only a simply majority vote is needed to form the TIF district after the December 6 public hearing. There will have to be redevelopment plans approved after that, and those require a two-thirds majority. Sedgwick County and USD 259, the Wichita public school district each may pass ordinances objecting to the formation of the district. Sedgwick County did that regarding the Save-A-Lot TIF last year, and that project went ahead, despite the claims of the developer that TIF was necessary. USD 259 Superintendent John Allison has recently stated that the school district would not be participating in the formation of TIF districts in the future, as they lose revenue. This will be the first test of that. In 2008 John Todd and I testified that the district should not agree to the formation of a TIF district because of the lost revenue. Officials assured us that the Kansas school finance formula held them harmless, and it didn’t matter if a TIF district was formed. … There will also be a community improvement district (CID) with an additional sales tax of one cent per dollar. … As always, the agenda packet is available at Wichita city council agendas.

Crony capitalism. The Occupy Wall Street protests, as well as the group that protested against Koch Industries on Saturday, seem to be opposed to capitalism. Their efforts would be better directed against business specifically, or crony capitalism in particular. There’s a huge difference. Capitalism is a system of absolute respect for property rights and free exchange in free markets. As Tom G. Palmer wrote in his introduction to the recently-published book The Morality of Capitalism, “Indeed, capitalism rests on a rejection of the ethics of loot and grab.” … As for free markets and enterprise Milton Friedman explained that business is not always in favor: “The great virtue of free enterprise is that it forces existing businesses to meet the test of the market continuously, to produce products that meet consumer demands at lowest cost, or else be driven from the market. It is a profit-and-loss system. Naturally, existing businesses generally prefer to keep out competitors in other ways. That is why the business community, despite its rhetoric, has so often been a major enemy of truly free enterprise.” Even one liberal New York Times columnist realizes this, as did Nicholas D. Kristof when he recently wrote “But, in recent years, some financiers have chosen to live in a government-backed featherbed. Their platform seems to be socialism for tycoons and capitalism for the rest of us. They’re not evil at all. But when the system allows you more than your fair share, it’s human to grab. That’s what explains featherbedding by both unions and tycoons, and both are impediments to a well-functioning market economy.” Kristof goes on to explain that capitalism means the freedom to fail as well as succeed: “Capitalism is so successful an economic system partly because of an internal discipline that allows for loss and even bankruptcy. It’s the possibility of failure that creates the opportunity for triumph. Yet many of America’s major banks are too big to fail, so they can privatize profits while socializing risk.” … While most want more regulation on Wall Street and banks, I think that it’s impossible for government to write effective regulations. Instead, markets — if allowed to work — provide the most effective regulation: if you fail, you fail. It’s as simple as that. But George W. Bush gave a bailout, and Barack Obama has followed along. The Dodd-Frank banking regulations, for example, make “too big to fail” an explicit policy.

Kansas pensions. Do we know the true magnitude of Kansas’ unfunded pension problem? Do we want to know? Perhaps not, writes Paul Soutar at Kansas Watchdog: “Even though taxpayers in the rest of America eventually may find out what public pensions really cost them, Kansas school accounting practices and the way school retirement is funded may let school districts avoid reporting the true cost of district employee pensions. Some estimates show the unfunded actuarial liability of the Kansas Public Employees Retirement System will more than double from its current official $8.3 billion based on optimistic assumptions to more than $20 billion using the more realistic calculations.” The full story is School Districts May Get to Dodge Accounting Rules on Pensions . … State Budget Solutions, in a recent report (Report reveals aggregate state debt exceeds $4 trillion) made similar findings, writing that our unfunded pension liability is $21.8 billion, well over twice as high as the numbers used by most official sources. The difference: “The AEI figures estimate how large public pension liabilities would be if states used private sector market-valuation methods.” In other words, the real world.

Global economics to be discussed in Wichita. This week’s meeting (November 4th) of the Wichita Pachyderm Club features Chris Spencer, Vice President, Regional Sales Manager Oppenheimer Funds, speaking on “Goliath vs Goliath — The global battle of economic superpowers.” The public is welcome and encouraged to attend Wichita Pachyderm meetings. For more information click on Wichita Pachyderm Club Upcoming speakers: On November 11th: Sedgwick County Commission Members Richard Ranzau and Jim Skelton, speaking on “What its like to be a new member of the Sedgwick County Board of County commissioners?” … On November 18th: Delores Craig-Moreland, Ph.D., Wichita State University, speaking on “Systemic reasons why our country has one of the highest jail and prison incarceration rates in the world? Are all criminals created equal?” … On November 25th there will be no meeting.

Progress, or not. Today’s Wichita Eagle carries a letter that laments the jobs lost due to self-serve checkout lanes, online bill payment, online banking, and online reservation services. Concluding, the letter asks readers to “consider how many jobs could be saved if all of us stopped demanding immediate service or answers.” This reminded me of a recent column by Donald J. Boudreaux, commenting on similar remarks by U.S. Rep. Barbara Lee (D-CA). He wrote: “Fred Barnes reports in the Weekly Standard that you refuse to use computerized checkout lanes at supermarkets (“Boneheaded Economics,” Oct. 24). As you — who are described on your website as ‘progressive’ — explain, ‘I refuse to do that. I know that’s a job or two or three that’s gone.’ Overlooking the fact that you overlook the lower prices on groceries made possible by this labor-saving technology, I’ve some questions for you: Do you also avoid using computerized (‘automatic’) elevators, riding only in those few that still use manual elevator operators? Do you steer clear of newer automobiles equipped with technologies that enable them to go for 100,000 miles before needing a tune-up? I’m sure I can find for you, say, a 1972 Chevy Vega that will oblige you to employ countless mechanics. Do you shun tubeless steel-belted radial tires on your car — you know, the kind that go flat far less often than do old-fashioned tires? No telling how many tire-repairing jobs have been destroyed by modern technology-infused tires. Do you and your family refuse flu shots in order to increase your chances of requiring the services of nurses and M.D.s — and, if the economy gets lucky and you and yours get seriously ill, also of hospital orderlies and administrators? Someone as aware as you are of the full ramifications of your consumption choices surely takes account of the ill effects that flu shots have on the jobs of health-care providers. You must, indeed, be distressed as you observe the appalling amount of labor-saving technologies in use throughout our economy. It is, alas, a disturbing trend that has been around for quite some time — since, really, the invention of the spear which destroyed the jobs of some hunters.”

Business and politics. We often hear that government should be run like a business. But the two institutions are entirely different, explains Burton Folsom: “The differences between business and politics, however, is where our focus needs to be. In business, you hire people with your profits to make and sell your product. With those jobs, your employees earn money, spend money, and thereby create other jobs by their demand for houses, cars, iPhones, and household products. Wealth expands, new entrepreneurs get new ideas for products to make, and, if society is free, it becomes prosperous. In politics, you do hire people to run your campaigns and your administration once you’re in office; you do sometimes dole out jobs to build highways, snoop on business, or run the IRS. But almost all of those jobs require other people’s money (i.e. tax dollars) to continue. They take money out of the economy. For example, the jobs created by the Justice Department to check on the trading practices of corporations, the jobs created by the agriculture department to interact with farmers, or the thousands of jobs created to bring trillions of tax dollars each year to Washington are all jobs that take wealth out of the private sector. Looked at this way, the jobs created in business are the productive jobs, the ones that create wealth and give us the thousands of choices we enjoy in breakfast cereal, cars, clothes, and houses. By contrast, each job created in the political class subtracts a job that could be continued or created in the private sector.” … More at The Difference between Business and Politics.

Tagged as: Capitalism, Economics, Free markets, Kansas Watchdog, Koch Industries, Paul Soutar, Tax increment financing, TIF districts, Wichita city council, Wichita Pachyderm Club

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Kansas and Wichita quick takes: Monday October 17, 2011

by Bob Weeks on October 17, 2011

Government job creation. Reason editor Matt Welch introduces the magazine’s November issue, which contains articles on free-market job creation. After citing the litany of failures, he concludes: “Such persistence in the face of repeated failure suggests that some powerful myths continue to hold sway among politicians and many of the people they represent. Among the most stubborn of these is the notion that passing a bill to fix a problem is the same as actually fixing the problem. This assumption — which reaches its illogical conclusion during times of national panic, when do-something busybodies like Michael Bloomberg will say that it doesn’t matter what Washington does, it just needs to do something — is oblivious to the law of unintended consequences, to the reality of corporatist lobbying, and to the limitations of government power.” … Then having done something, government is oblivious to what it has actually done: “A curious flip side to the myth of government omnipotence is near-complete incuriosity about government side effects. That is, people remain convinced that the state can and should look a problem squarely in the eye and fix it, but they are rarely moved by daily examples of the harm caused by earlier fixes.”

Wichita City Council. Tomorrow the Wichita City Council considers these items: The city will consider revisions the ordinances governing municipal court bondsmen. The agenda packet reports “Currently, six departments are involved in the licensing and oversight of bail bondsmen.” The goal, says the city, is a more efficient process. … Johnson Controls asks the city for a forgivable loan of $42,500. It is proposed that Sedgwick County do the same. The State of Kansas is contributing $1,168,000 through various programs. Worldwide, Johnson Controls has 137,000 employees, sales of $39,080,000,000, and profits of $1,540,000,000. Yet, corporate welfare is still required, it seems. … As always, the agenda packet is available at Wichita city council agendas.

Kansas tax plans. “In the coming months, Brownback and state legislators are expected to deal with at least three major proposals to change Kansas’ tax structure.” More from Kansas Reporter at Competing tax plans head for Kansas Legislature .

Repealer on tour. “Government regulation is costing businesses valuable time and opportunities and denying state and local government millions in tax revenue from business activity and development, according to business leaders speaking at the ‘Drowning in Regulation’ tour stop in Wichita Wednesday.” The event was part of the Office of the Repealer seeking input from Kansans. More, including video, from Kansas Watchdog at Legislators Hear Examples of Businesses Drowning in Regulations. The Repealer (Dennis Taylor, Secretary of Kansas Department of Administration) will make a public appearance in Wichita on Tuesday, November 1st at 11:30 am, in the Wichita Public Library Patio Room (223 S. Main).

Sowell: And then what will happen? Last week I quoted at length from a book by Thomas Sowell (Applied economics: thinking beyond stage one) where he writes about “thinking beyond stage one.” Later that day the great economist was interviewed by Sean Hannity, and he told the same story. Video is at Thomas Sowell on ‘Hannity’.

Zuckerman on Obama. James Freeman of the Wall Street Journal interviews Mortimer Zuckerman, who is a Democrat and an Obama voter. He has been openly critical of President Barack Obama and his leadership, and that again is expressed in this article. Zuckerman told of the real unemployment numbers: “Mr. Zuckerman says that when you also consider the labor-force participation rate and the so-called ‘birth-death series’ that measures business starts and failures, the real U.S. unemployment rate is now 20%.” … Zuckerman is pessimistic about the Obama Administration, writes Freeman. An example: “At that time he supported Mr. Obama’s call for heavy spending on infrastructure. “But if you look at the make-up of the stimulus program,” says Mr. Zuckerman, ‘roughly half of it went to state and local municipalities, which is in effect to the municipal unions which are at the core of the Democratic Party.’ He adds that ‘the Republicans understood this’ and it diminished the chances for bipartisan legislating.”

The fall of California. “California has long been among America’s most extensive taxers and regulators of business. But it had assets that seemed to offset its economic disincentives: a sunny climate, a world-class public university system that produced a talented local work force, sturdy infrastructure that often made doing business easier, and a record of spawning innovative companies. No more. In surveys, executives regularly call California one of the country’s most toxic business environments, while the state has become an easy target for economic development officials from other states looking to lure firms away.” Reasons: “a suffocating regulatory climate,” “California taxes are high and hit employers and employees hard,” and “the state’s legal environment is a mess.” Complete article by Steve Malanga of the Manhattan Institute for Policy Research in the Wall Street Journal at How California Drives Away Jobs and Business: The Golden State continues to incubate cutting-edge companies in Silicon Valley, but then the successful firms expand elsewhere to avoid the state’s tax and other burdens.

Public Sector Inc. Speaking of the Manhattan Institute, its project PublicSectorInc is a great resource for learning more aboout the issues of public sector employment. Says the site: “PublicSectorInc.org is a one-stop-shop for the latest news, analysis and research about the issues facing the public sector and the American taxpayer. It provides a national forum to probe problems and develop solutions at the state and local level. With a critical focus on the urgent topics of pension reform, employee compensation, bargaining and retirement health benefits for public employees, PublicSectorInc.org is shaping the national debate unfolding in state capitals and city halls across America.” … An example article of value is Valuing Job Security as a Public Employee Benefit.

Markets and trade help all. James Otteson explains the motivations and concerns of Adam Smith, one of the earliest economists and author of The Wealth of Nations. In a short video, Otteson explains: “One of the main concerns is … how do we raise the estates of the least among us? He’s deeply concerned about the poor in society.” Continuing: “His investigation of centuries of data … shows that, empirically, the way to help people who are the least among us, the bottom rungs economically of society, is by allowing for commerce: free trade, free migration, limited government. To the extent that you can encourage those policies, their estates will be raised tremendously. … What he’s interested in is those people at the bottom, and his endorsement of markets and of trade is because he thinks they’ll help the people at the bottom, not because they’ll help the people who are already rich.” Over the centuries since Smith, we’ve learned many times that economic freedom is good for everyone, especially the poor. … The video is from LearnLiberty.org, a project of Institute for Humane Studies.

Tagged as: Barack Obama, Corporate welfare, Economic development, Economic freedom, Economics, Free trade, Kansas legislature, Kansas Reporter, Kansas Watchdog, Regulation, Wichita city council

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Kansas and Wichita quick takes: Thursday October 13, 2011

by Bob Weeks on October 13, 2011

Wichita city leaders too cozy with developers? Yesterday I participated in a KAKE Television news story where I explained the need for pay-to-play laws in Wichita and Kansas. These laws generally restrict officeholders from participating in votes or activities that would enrich their campaign contributors. In the story I said “What I, and some of my political allies object to, is what is happening in plain sight: In that there is a relatively small group of people — and their spouses and people who work at their companies — who regularly contribute to a wide variety of city council members, both political liberals and political conservatives, because they know that they are going to be coming to the city council and asking for taxpayer money.” Officeholders and the developers who contribute deny there is a connection between contributions and votes. Curiously, these developers generally don’t make contributions to school board members, county commissioners, state legislators, or federal representatives. Actually, it’s not so curious: It’s primarily the Wichita City Council that is able to vote to give them money. I would say the contributors are acting rationally. … If there is no connection between contributions and votes or consideration, there should be no problem in getting the council to agree to some form of pay-to-pay law for Wichita. An example is a charter provision of the city of Santa Ana, in Orange County, California, which states: “A councilmember shall not participate in, nor use his or her official position to influence, a decision of the City Council if it is reasonably foreseeable that the decision will have a material financial effect, apart from its effect on the public generally or a significant portion thereof, on a recent major campaign contributor.” … KAKE correspondent Deb Farris reported that Wichita Mayor Carl Brewer doesn’t look at the list of campaign contributors. I wonder: does he send thank you letters to his contributors? … Video and story at Wichita City Leaders Too Cozy With Developers?

Obama economic strategy questioned. This year’s Nobel prize in economics went to Thomas J. Sargent of New York University and Stanford University’s Hoover Institution, and Christopher A. Sims of Princeton University. In its reporting, the Wall Street Journal explained (A Nobel for Non-Keynesians: People’s expectations about government policy make it difficult for officials to affect the economy in the ways they intend to): “The Swedish economists announcing the award emphasized, correctly, the importance of Messrs. Sargent’s and Sims’s thinking about the role people’s expectations play in economic decision making and the larger economy. But what they failed to mention is that their work has also offered empirical evidence that the school of thought known as Keynesian economics — which believes that government can turn a flagging economy around with the right combination of fiscal ‘stimulus’ (generally government spending) and monetary policy — is fallible.” In further explanation, the Journal writes: “One of Mr. Sargent’s key early contributions, along with University of Minnesota economist Neil Wallace, was the idea that people’s expectations about government fiscal and monetary policy make it difficult for government officials to affect the economy in the ways they intend to. If, for example, people get used to the Federal Reserve increasing the money supply when unemployment rises, they will expect higher inflation and will adjust their wage demands higher also. The result: The lower unemployment rate that the Fed was trying to achieve with looser monetary policy won’t happen. This conclusion was at odds with the Keynesian model, which dominated economic thinking from the late 1930s to the early 1970s. The Keynesian model posited a stable trade-off between inflation and unemployment.” The 1970s however, saw stagflation — both high unemployment and high inflation at the same time, a danger that some feel will grip us in the near future. Keynesianism, of course, is the basis of the economic policy of President Barack Obama and the reason why the economy has not recovered. … While these economists worked on national economies, does the theory of rational expectations apply to state and local governments, meaning that it is very difficult for local government officials to micro-manage their economies through intervention? I think so.

Public vs. private. One of the curious statements in Rhonda Holman’s Sunday Wichita Eagle editorial (Say ‘no’ to naysayers, October 9, 2011) was where she wrote of the “crowds increasingly assembling downtown for concerts and events.” Curious because not long ago she begrudgingly realized the cool down at the Intrust Bank Arena, writing: “Intrust Bank Arena’s strong performance during its inaugural year of 2010 couldn’t last. And it didn’t.” (Make case for arena, August 19, 2100 Wichita Eagle) I don’t know if these two editorials are at odds with each other. … I have noticed one downtown Wichita venue that seems to have a lot of concerts, that being the Orpheum Theater. That venue doesn’t suffer from government genesis and ownership as does the arena, although the arena’s management is in the hands of the private sector. As part of its restoration the Orpheum may qualify for historic preservation tax credits, a government spending program that I oppose. That subsidy, if obtained, is quite small compared to the total taxpayer funding of the arena.

Kansas tax policy. Several news outlets have reported on how hard Kansas state officials are working on crafting a new state tax policy. That worries me. The best tax policy is one that is simple and fair to all. The more tax policy is worked on, the more likely it is to contain measures designed to manage the behavior of people and business firms. This would be a continuation of the conceit that the state can manage economic growth, and contrary to the concepts of economic dynamism for Kansas, where fertile ground is created for all companies.

Petition drive is on. Last Friday citizen activists started the petition drive to give the people of Wichita a chance to vote on crony capitalism or free markets. See Our Downtown Wichita (motto: “Limited government and free markets in Downtown Wichita benefit everyone. Centralized planning and crony capitalism benefit only a few.”) for more information.

Kansas education scores mixed. From Kansas Reporter: “Kansas students’ performance on reading and math proficiency improved for the 11th consecutive year, according to Kansas State Department of Education’s latest State Report Card for schools released Tuesday. Some 87.6 percent of the students tested turned in scores in the top three of five performance levels for reading and 84.7 percent achieved similar scores in math. But two other performance yardsticks show different results. Statewide Kansas test scores on ACT college entrance exams, which are averaging 22 points out of a perfect 36, have been flat for the past five years. … Most Kansas statewide reading, writing and math scores on the National Assessment of Educational Progress, or NAEP, tests have changed little since 2000, according to the U.S. Education Department, which counts the test results as the broadest national measure of how school systems compare state by state. ‘Fourth-grade math tests have improved significantly, but that’s about it,; said Arnold Goldstein, program director for the federal Education Department’s National Center for Education Statistics.” Complete story on Kansas Reporter at Kansas education scores proved mixed picture of schools’ success.

‘Federalists’ author to appear in Wichita. On October 25th Kansas Family Policy Council is hosting an event in Wichita featuring Joshua Charles, a recent KU graduate who has teamed up with Glenn Beck to write the book The Original Argument: The Federalists Case for the Constitution Adapted for the 21st Century. The book debuted at the top of the New York Times Bestseller List in July. … KFPC says “The event will be at Central Christian Church (2900 North Rock Road in Wichita) on Tuesday October 25th at 7:00 pm. Doors will open at 6:30 pm. This is a free event and dessert will be provided for attendees.” RSVP is requested to 316-993-3900 or contact@kansasfpc.com.

Kansas gas wells appraisals. Some Kansas counties use different methods of gas well valuation for tax purposes, writes Paul Soutar in Kansas Watchdog: “The method used to appraise the tax value of gas wells in Stevens County is ‘not correct or appropriate’ according to a report commissioned for Stevens County and released at their latest meeting. The method is or has been used for at least nine years, possibly since the early 1990s, in nine Southwest Kansas counties covering much of the Hugoton gas field, the ninth highest producing field in the U.S. in 2010.” … The complete investigate report is at Report Says Gas Well Appraisal Method ‘Not Correct or Appropriate’.

Lieutenant Governor in Wichita. This week’s meeting (October 14th) of the Wichita Pachyderm Club features Lieutenant Governor Jeff Colyer, M.D. speaking on “An update on the Brownback Administration’s ‘Roadmap for Kansas’ — Medicaid Reform” … Upcoming speakers: On October 21st: N. Trip Shawver, Attorney/Mediator, on “The magic of mediation, its uses and benefits.” … On October 28th: U.S. Representative Tim Huelskamp, who is in his first term representing the Kansas first district, speaking on “Spending battles in Washington, D.C.” … On November 4th: Chris Spencer, Vice President, Regional Sales Manager Oppenheimer Funds, speaking on “Goliath vs Goliath — The global battle of economic superpowers.” … On November 11th: Sedgwick County Commission Members Richard Ranzau and James Skelton, speaking on “What its like to be a new member of the Sedgwick County Board of County commissioners?” … On November 18th: Delores Craig-Moreland, Ph.D., Wichita State University, speaking on “Systemic reasons why our country has one of the highest jail and prison incarceration rates in the world? Are all criminals created equal?”

Urban renewal. “The goal was to replace chaotic old neighborhoods with planned communities.” Planned by government, that is, with all the negatives that accompany. The fascinating video from Reason.tv is titled The Tragedy of Urban Renewal: The destruction and survival of a New York City neighborhood. Its introduction reads: “In 1949, President Harry Truman signed the Housing Act, which gave federal, state, and local governments unprecedented power to shape residential life. One of the Housing Act’s main initiatives — “urban renewal” — destroyed about 2,000 communities in the 1950s and ’60s and forced more than 300,000 families from their homes. Overall, about half of urban renewal’s victims were black, a reality that led to James Baldwin’s famous quip that “urban renewal means Negro removal. … The city sold the land for a token sum to a group of well-connected Democratic pols to build a middle-class housing development. Then came the often repeated bulldoze-and-abandon phenomenon: With little financial skin in the game, the developers let the demolished land sit vacant for years.”

Tagged as: Barack Obama, Capitalism, Carl Brewer, Economics, Education, Free markets, Government spending, Intrust Bank arena, Kansas Reporter, Kansas Watchdog, Paul Soutar, Rhonda Holman, Subsidy, Wichita city council, Wichita Pachyderm Club

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Kansas and Wichita quick takes: Friday September 23, 2011

by Bob Weeks on September 23, 2011

Downtown Wichita site launched. As part of an effort to provide information about the Douglas Place project, a proposed renovation of a downtown Wichita office building into a hotel, a group of concerned citizens has created a website. The site is named Our Downtown Wichita, and it’s located at dtwichita.com.

Keystone pipeline hearing, bus trip. On Monday the United States Department of State will hold hearings in Topeka concerning a proposed petroleum pipeline. Says Americans for Prosperity: “Our great country has an opportunity to complete a project that would provide billions of dollars in economic activity, create thousands of high-paying manufacturing and construction jobs, and at the same time take a significant step toward providing for greater U.S. energy security and independence. … Because the project originates in Canada and would provide a pipeline extension to the Gulf Coast, through Kansas, the project requires State Department approval. TransCanada owns the Keystone pipeline, which currently runs from Canada to Oklahoma. … It has finally received tentative approval from the Environmental Protection Agency and now sits before the State Department. The State Department is holding a hearing in Topeka on Monday, September 26th from noon to 3:30pm and 4:00pm to 8:00pm at the Kansas ExpoCentre, located at the corner of Topeka Blvd. and 17th Street South.” … To help citizens attend this unusual hearing, AFP has organized a free bus trip from Wichita. The bus will load from 7:30 am to 8:00 am at the Lawrence Dumont Stadium Parking Lot. It will return to Wichita around 7:00 pm. Lunch is provided. For more information on this event contact John Todd at john@johntodd.net or 316-312-7335, or Susan Estes, AFP Field Director at sestes@afphq.org or 316-681-4415.

Health care reform. “Lt. Governor Jeff Colyer spent nearly two hours with the Legislature’s Joint Committee on Health Policy Oversight Monday explaining the imperative and complexity of solving problems with government health care he likened to a Rubik’s Cube. The challenge of the 1974 puzzle and the current Medicaid and health care debate is finding a way to align multiple facets of each side without upsetting another side.” More from Kansas Watchdog at Public Health Care System Reform a Governmental Rubik’s Cube .

Pompeo defends against Obama’s attack on aviation. “Rep. Mike Pompeo (KS-04) spoke on the floor of the U.S. House of Representatives in defense of the general aviation community, which is so important to job sustainability and job growth in South Central Kansas.” Video from C-Span is at Pompeo House speech on aviation.

Wichita corporate welfare opposed. This week the Wichita City Council granted another forgivable loan. Thank you to John Todd for appearing and offering testimony opposing the loan. In his remarks, Todd said: “Over the past few months, I have watched a majority of this council fall into the trap of trying to buy customer business with free-money economic development schemes out of the public treasury. This program might work if the public treasury held unlimited funds and the public gifts were offered to every business owner on an equal basis. … In 1887 President Grover Cleveland vetoed a bill that would have given $10,000 for seed to farmers in drought-stricken Texas saying something to the effect that he could not be a party to taking money out of the treasury to benefit one group of people at the expense of another group, no matter how worthy the cause, stating that it is the responsibility of citizens to support the government and not the responsibility of government to support the people. Cleveland further issued a challenge for private charitable giving for the farmers. A number of newspapers adopted the relief campaign and in the end Americans voluntarily donated not $10,000 but $100,000 to the afflicted farmers. I would suggest a similar publicly driven voluntary relief campaign in lieu of the forgivable loan you are considering today to see if there is public sentiment to charitably fund this local economic development project.” … I’ve been told what the target company really needs is relief from a regulatory trap.

The trap of job creation. Today on C-SPAN’s Washington Journal program, Rhone Resch of the Solar Energy Industries Association appeared. He promoted solar energy as great for creating jobs, telling viewers that solar energy creates more jobs per megawatt than any other form of power generation. This illustrates the trap that politicians and those who benefit from government subsidy usually fall into: that more jobs is a good thing. Wouldn’t it be much better if we could generate all the electricity we wanted using fewer jobs? Then these surplus employees could be put to work on something else — or simply enjoy leisure. … A few years ago an editorial written by a labor union official appeared in Kansas, praising the job-creating power of wind energy. In response, I wrote “After all, if we view our energy policy as a jobs creation program, why not build wind turbines and haul them to western Kansas without the use of machinery? Think of the jobs that would create.” … In a video produced by the Cato Institute, Caleb Brown explains the problems with relying on government and its spending for jobs: “Politicians and entrepreneurs face different problems. Entrepreneurs care about creating wealth, both for their customers and themselves. This means getting more output with fewer inputs. Politicians often care more about maximizing inputs like labor, even when that job creation could make all of us materially worse off. It would be easy for the president and Congress to create new jobs: They could simply ban the use of computers, farm machinery, or any other labor-saving device. But that would clearly raise prices … It’s hard to see how that improves anyone’s standard of living.”

Tagged as: Americans For Prosperity, Corporate welfare, Economic development, Environment, Government health care, Government spending, Kansas Watchdog, Mike Pompeo, Subsidy, Wichita city council, Wichita city government

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Kansas and Wichita quick takes: Monday August 15, 2011

by Bob Weeks on August 15, 2011

Kansas economic development welfare promoted. An email from the Kansas Department of Commerce Business Development department informs us that “Kansas continues to add to its incentive tool box making it an even more competitive state for business.” A link in the email leads to a list of incentives, which include (and I don’t think this is a comprehensive list): Site location assistance; customized incentive proposals (including coordinating with local officials on local development incentives); Promoting Employment Across Kansas (PEAK), which allows companies to retain up to 95 percent of the state withholding taxes their employees pay; wind and solar bonds, paid off from the payroll withholding tax of the new jobs; Kansas Economic Opportunity Initiatives Fund, providing zero percent interest forgivable loans (if the loan is forgivable, why does it carry interest, I wonder); industrial revenue bonds which allow companies to escape paying property and sales taxes; community development block grants; partnership fund; Kansas Bioscience Authority; Investments in Major Projects and Comprehensive Training (IMPACT), Kansas Industrial Training (KIT), and Kansas Industrial Retraining (KIR), which pay for the employee training needs of companies; enterprise zone program; High Performance Incentive Program (HPIP); machinery and equipment property tax exemption; property tax abatements; sales tax exemptions; and machinery and equipment expensing deduction. … Missing from this list is the formation of the Job Creation Program Fund, which is a slush fund under control of the governor and Department of Commerce. And as the email message promoted, some of these programs have been expanded due to action of the recent Legislature. … There are perhaps one or two of these measures that conform to free market and economic freedom principles. The remainder amount to the state taking an “active investor” role in economic development, as explained in Embracing Dynamism: The Next Phase in Kansas Economic Development Policy by Dr. Art Hall, and reported on in Kansas economic growth policy should embrace dynamism. … Looking forward: Kansas officials — starting at the top with Kansas Governor Sam Brownback — want to reduce or eliminate the Kansas income tax in order to make the state more competitive for business. Will we then be able to eliminate all these incentives and the bureaucrats who promote and administer them?

‘Birth of Freedom’ screening. Tonight (Monday August 15th) the film The Birth of Freedom will be shown for free in Wichita. The film is a product of the Acton Institute, whose mission statement describes the institute as “[promoting] a free and virtuous society characterized by individual liberty and sustained by religious principles.” This free event is Monday from 7:00 pm to 8:30 pm at the Lionel D. Alford Library located at 3447 S. Meridian in Wichita. The library is just north of the I-235 exit on Meridian. The event’s sponsor is Americans for Prosperity, Kansas. For more information on this event contact John Todd at john@johntodd.net or 316-312-7335, or Susan Estes, AFP Field Director at sestes@afphq.org or 316-681-4415. … I’ve been told by those who have viewed the film that it is a very moving presentation.

Kansas Republicans meet. At its summer meeting in Wichita, the Kansas Republican Party establishment warmed up to tea party and grassroots ideas and concepts, according to reporting by Paul Soutar at Kansas Watchdog. As an example, delegates approved a resolution rejecting all aspects of Obamacare (a tea party agenda), instead of an alternative resolution by GOP Chair Amanda Adkins, who represents the establishment Republicans in Kansas. … Earlier reporting by Soutar (Ideology, Political Reality Split State GOP on Health Care ) illustrated the division between the establishment and the tea party and grassroots wings of the party over health care, particularly the early innovator grant that Kansas recently rejected.

Wichita City Council. The Wichita City Council in its Tuesday meeting will consider these items: Repair or removal of two unsafe structures and a conditional use permit for a nightclub which the Metropolitan Area Planning Commission rejected. The council will consider final approval of an ordinance regulating seasonal haunted house attractions, even though the need for this seems nonexistent. … The council also considers a letter of intent for Hospital Facilities Improvement and Refunding Revenue Bonds to benefit Via Christi Health System, Inc. These bond are similar to industrial revenue bonds. In each case, the city is not the lender, and it does not guarantee the creditworthiness of the bonds. In the case of IRBs, the benefit is that the borrow generally escapes paying property taxes, and also perhaps sales taxes too. But as a non-profit entity, Via Christi would not pay these taxes. … The council will receive a quarterly financial report for the quarter ending in June. … As always, the agenda packet is available at Wichita city council agendas.

Kansas values to be topic of speech. This Friday’s meeting (August 19th) of the Wichita Pachyderm Club features Jay M. Price, Ph.D., Associate Professor and Director of the public history program at Wichita State University, speaking on “Clashes of Values in Kansas History.” His recent Wichita Eagle op-ed was Kansas a stage for “values showdowns.” In that column, he wrote “The most visceral conflicts in our society arise when deeply held values are at odds. Time and again, Kansas has been a visible stage for such ‘values showdowns.’” The column closed with: “Picking just one value, such as freedom or liberty or private property, without the desire for a law-abiding society that embraces civil rights for all can lead to very unpleasant consequences, and vice versa. However, if we struggle with these ideals, the result can be akin to a suspension bridge that functions precisely because there are numerous forces put in opposition to one another, resulting in a strong, stable structure.” … The public is welcome and encouraged to attend Wichita Pachyderm meetings. For more information click on Wichita Pachyderm Club … Upcoming speakers: On August 26, Kansas State Representatives Jim Howell and Joseph Scapa speaking on “Our freshmen year in the Kansas Legislature.” … On September 2 the Petroleum Club is closed for the holiday, so there will be no meeting. … On September 9, Mark Masterson, Director, Sedgwick County Department of Corrections, on the topic “Juvenile Justice System in Sedgwick County.” Following, from 2:00 pm to 3:00 pm, Pachyderm Club members and guests are invited to tour the Sedgwick County Juvenile Detention Center located at 700 South Hydraulic, Wichita, Kansas. … On September 16, Merrill Eisenhower Atwater, great grandson of President Dwight D. Eisenhower, will present a program with the topic to be determined. … On September 23, Dave Trabert, President of Kansas Policy Institute, speaking on the topic Why Not Kansas,” an initiative to provide information about school choice. … On September 30, U.S. Representative Mike Pompeo of Wichita on “An update from Washington.”

Libertarianism explained. Dr. Stephen Davies of the Institute for Humane Studies explains in this short video message the basic ideas behind libertarian political philosophy: “[Libertarians] also argue that human beings are ultimately autonomous, self-defined, choosing individuals. And the kind of social order which is most conducive to the widest and most diverse range of human flourishing is one in which the role and power of government is kept to the minimum. Now this does not mean, however, that they need support a particular moral code or anything like that. It’s perfectly possible for someone who is a traditional Christian, someone who is a complete atheist, to both be libertarian in the way I’ve just described.” He listed policy issues that libertarians support, if they are being consistent: Free markets, free trade, free movement of people, free speech, constitutional and limited government, and opposition to coercive paternalism. But, for some policy positions, the libertarian position is not as clear and there can be disagreement. Foreign policy and abortion were mentioned as two such areas. Davies also addresses the accusation that libertarianism is an irrelevant political creed. … This video is from LearnLiberty.org, a project of Institute for Humane Studies, and many other informative videos are available.

Tagged as: Economic development, Economic freedom, Free markets, Kansas Republicans, Kansas state government, Kansas Watchdog, Libertarianism, Wichita city council, Wichita city government

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Kansas budget director on budget, fiscal reform

August 3, 2011

Steve Anderson, Kansas budget director, explains efforts to improve the Kansas budget.

Tagged as: Government spending, Kansas legislature, Kansas state government, Kansas Watchdog, Paul Soutar, Sam Brownback, Taxation, Wichita Pachyderm Club

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