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Posts published by “Bob Weeks”

Analysis of Wichita Eagle News Coverage

I received this analysis and commentary from a friend of mine. It concerns an article that appeared on the front page of The Wichita Eagle a few months ago. I have removed mention of specific names.

I was appalled to read the front page editorial that appeared above the fold on the front page of the April 22, 2007 Wichita Eagle. Let me count some of the egregious flaws in this article:

1) The article mentions the "...a drop off of $185 million..." in state revenues but does not mention the primary reason. Let me provide it: "The new legislation setting aside $122.7 million for the school finance 'lock-box' and $80 million for statewide maintenance and disaster relief is primarily responsible for the large adjustment to this (revenue) source." (source: April 19, 2007 Kansas Legislative Research State General Fund receipt revisions for FY 2007 and FY 2008, page 5). This point alone deserves a correction.

There's $202.7 million that explains the main reason for this drop off. The money is being spent on increased state spending programs. Add to this the money that was shifted out of the general fund and over to the highway fund, "...enacted in 2004 for the Comprehensive Transportation Program reducing the amount of sales and use tax receipts deposited directly into the SGF (state General Fund)..." (ibid, page 1).

What was neglected in this article was the fact that Governor Sebelius and many legislative spending advocates want even more spending in both the current and next fiscal years. Last week Governor Sebelius proposed a $54 million increase in the current fiscal year plus $146 million in FY 2008 that begins July 1. That salient fact was missing in this article.

2) You repeat the lie that the tax cuts in 1997 and 1998 led to dramatic declines in state revenues leading to spending "cuts." That did not occur. State General Fund expenditures in FY 2000 (1999-2000) were 4.1% above the previous year's levels when the last of the 1995, 1997, & 1998 tax cuts phased in. The state ran into budget problems as part of the 2001 recession and the negative economic impact of the September 11 atrocities. These events were separated by several years. I have the FY 1999, 2000, 2001, & 2002 budgets if you need to revisit that fiscal history.

If you will look at past state budgets, the state has increased spending every year from 1993 to 2002. There was a decline that started during the recession in 2001 and the other events of that terrible year but this commentary tying the 1998 tax cuts to a budget shortfall four years later needs to be part of Brownlee's operation on the editorial page and not on the news pages.

3) The tiny tax cut enacted this year at $36 million (ibid, page 1) is magnified by stretching this out over five years. This 2007 tax cut is slightly more than 1/2 of 1 percent of the state's general fund spending this year.

If you used the same measuring tools the state's spending it total in the billions on top of the total state spending (All Funds budget) that will far exceed $60 billion over five years (I can inflate these numbers the same way [the reporter] did, but I don't have a front page position to have my commentary appear).

[The reporter's] article does provide some of the numbers so I could calculate the five year phase out of the franchise tax is $135 million (I did that addition) and the total for the social security tax cut over five years is only $56.9 million.

That's a total of only $191.9 million. Where's the other tax cuts to get to $570 million total this commentary claims? Where's the rest of the $378 million?

This editorial commentary then ignores the earned income tax credit hike that was part of this legislation. The EITC is where the Dept. of Revenue ships tax funds out to low income Kansans. Critics view it as welfare using the tax code since these folks have no Kansas personal income tax liability. That welfare style tax break was raised a little over 13 percent in this bill.

I can only guess that the "...$570 billion in lost revenue..." must also include the unemployment tax reduction too. That would be the largest single item bulk of the "reduction." Based on the rest of the figures you cite, the EITC would then be the next largest, if the social security reduction has only a $5.4 million price tag in 2008.

Left wing spending advocates pulled this stunt back in the 1990's to try and magnify the size of the tax reductions during the 5 year unemployment tax moratorium from 1995-1999. Fortunately, unemployment taxes can't be shifted into the state's general fund budget. The mainstream Kansas press largely swallowed this as did [the reporter's] article, "...Gov. Bill Graves responded with record-setting tax breaks--an estimated $4 billion during Graves' eight-year administration."

Sorry: That's $500 million a year in annual tax cuts. Graves' first budget was FY 1994 and Gen. Fund spending was $3.111 billion. By FY 2002 Graves budget had grown to $4.466 billion or 43% increase (KS Fiscal Facts 2006, p. 23). How did these "cuts" reduce state revenues and spending? The single largest item in these calculations was the unemployment tax moratorium enacted in Graves first year as governor and excluded from the General Fund. Including this figure misleads your readers.

If you wanted to be more accurate you could point out that in nominal dollar terms Kansas had its first $3 billion General Fund Budget in 1994 and stands a good chance of enacting its first $6 billion General Fund budget for FY 2008 depending upon what the legislature does in their 2007 wrap up/veto session. That would be close to a 100% hike in nominal dollar terms.

Or you might point out that the state had its first All Funds budget exceeding $6 billion (including Medicaid and highway programs) in FY 1994 and has gone over $12 billion in the current fiscal year. Even adjusted for inflation, state spending is soaring in Kansas.

The Eagle hasn't reported that the Tax Foundation's latest ranking of state and local taxes as a percentage of income ranked us 15th highest among the 50 states earlier this month. That is where this state's economic problem lies. Not with your unsourced commentary, "...lawmakers...wonder whether it's a road map back to the budget crisis of the early 2000s, when tax cuts took effect just before a downturn in the economy and left the state scrambling to provide vital services."

I guess that is fine in editorial commentary but it should be forbidden in news stories. Or, perhaps you could find some legislator or other elected official to make this type of assertion.

Let me add, that despite [my organization] and my best efforts, a sizable portion of the property tax cuts enacted in 1997-98 at the state level never got to taxpayers. They were grabbed by local units who raised their property taxes to offset the state reductions. So, much of the "tax cuts" never got back to the folks who paid them.

This commentary should have appeared on the editorial page. The only useful point in this piece was Rep. Jim Ward's (D-Wichita) statement that "...We spent it..."

Liberty Search

Liberty Search is a Google custom search engine that I developed. It searches sites friendly to liberty, capitalism, and free markets, such as mises.org, cato.org, and many others.

Google Custom Search

Or, visit the page at Google for Liberty Search. This page has more information about this Google custom search engine.

A Few Random Quotes

Barbra Streisand told Diane Sawyer that we're in a global warming crisis, and we can expect more and more intense storms, droughts and dust bowls. But before they act, weather experts say they're still waiting to hear from Celine Dion.
-- Jay Leno

More taxes for Wichitans

Expanding gambling in Sedgwick County will lower taxes and provide “…tax relief…,” according to casino advocates’ campaign flyer. This claim is preposterous in light of the soaring property tax hikes and spending expansion plans being generated by local government in our community.

For a New Liberty: The Libertarian Manifesto

For a New Liberty: The Libertarian Manifesto by Murray N. Rothbard

An absolutely awesome book. If you are interested in liberty, this is, in my opinion, the most important book to read.

I think Lew Rockwell, who I recently had the pleasure to meet at the Ludwig von Mises Institute, says it best about this book:

Once you are exposed to the complete picture -- and For a New Liberty has been the leading means of exposure for more than a quarter of a century -- you cannot forget it. It becomes the indispensable lens through which we can see events in the real world with the greatest possible clarity. ... Its logical and moral consistency, together with its empirical explanatory muscle, represents a threat to any intellectual vision that sets out to use the state to refashion the world according to some pre-programmed plan. And to the same extent it impresses the reader with a hopeful vision of what might be. ... He never talks down to his readers but always with clarity. Rothbard speaks for himself. ... The reader will discover on his or her own that every page exudes energy and passion, that the logic of his argument is impossibly compelling, and that the intellectual fire that inspired this work burns as bright now as it did all those years ago.

And finally, from Lew again:

The book is still regarded as "dangerous" precisely because, once the exposure to Rothbardianism takes place, no other book on politics, economics, or sociology can be read the same way again. What was once a commercial phenomenon has truly become a classical statement that I predict will be read for generations to come.

This book is available for purchase at the Mises Institute at http://mises.org. It may be read in its entirety from that site, and an audio recording is available there as well.

The Perverse Kansas Gambling Law

As humans, we have the right to gamble, as it is an activity that people may voluntarily take part in, and it causes no harm or violence to others.

As such, we have to wonder why most forms of gambling have been illegal in Kansas for so long.

More importantly, what has changed this year that would cause the state to allow us to gamble in casinos? What has happened that would cause this activity, formerly considered a vice by the state, to be allowed and even desired?

The answer is simple: the anticipation of millions of dollars in new revenue for the state to spend. It is for that reason that the legislature and governor are willing to let the people gamble in casinos.

They changed their mind cheaply, too. The amount of revenue it is estimated casinos would bring to the state is barely more than one percent of the state's total spending. Subtract from that the extra spending that even casino supporters concede the state will need to fix the problems some gamblers will cause.

It's sad to realize the legislature and governor can be bought so cheaply.

We as humans have the inherent right to gamble. The legislature should not have to pass a law allowing this right, we should not have to gain a majority vote in order to exercise this right, we should not have to suffer huge expansion of government regulation to tell us where and when and on how many of what type of machines we can exercise this right, and we shouldn't have to pay the state a huge chunk of casino revenue in order to exercise this right.

That's what is perverse about gambling law in Kansas.

The Kansas Gambling Law I’d Vote For

Here's the one law concerning gambling in Wichita and Kansas that I would vote for: "All laws prohibiting and regulating gambling in Kansas are hereby repealed."

That's the only law consistent with personal freedom and liberty.

The law that has been passed, however, provides more power for the state and more opportunities to regulate our lives.

Even casino supporters concede large social costs will accompany a casino. As we have government that stands willing to pay these costs, the taxpayer will suffer these costs.

In the balance, the expansion of state bureaucracy, tax collection, and regulation, plus the social costs that the state believes it must shoulder; these considerations outweigh our freedom to gamble.

Toward a Free America

The libertarian creed, finally, offers the fulfillment of the best of the American past along with the promise of a far better future. Even more than conservatives, who are often attached to the monarchical traditions of a happily obsolete European past, libertarians are squarely in the great classical liberal tradition that built the United States and bestowed on us the American heritage of individual liberty, a peaceful foreign policy, minimal government, and a free-market economy. Libertarians are the only genuine current heirs of Jefferson, Paine, Jackson, and the abolitionists.

A Free Society: It’s Not All About Country

The opening words of Capitalism and Freedom, by Milton Friedman, written around 1962:

In a much quoted passage in his inaugural address, President Kennedy said, “Ask not what your country can do for you -- ask what you can do for your country.” It is a striking sign of the temper of our times that the controversy about this passage centered on its origin and not on its content. Neither half of the statement expresses a relation between the citizen and his government that is worthy of the ideals of free men in a free society.

Disenfranchising and Dissing Kansans

When was the last time you got to vote on raising your property taxes for city, county, or other local services? How about a local bond issue that didn’t involve the government schools? This political power might be inherent but for most Kansans it is mainly invisible. In most other states these votes are routine and in several of our neighboring states these votes are mandatory.

Government makes things worse, not better

John Stossel eviscerates David Brooks, the ostensibly conservative columnist for the New York Times. Brooks has argued for big new government initiatives to boost human capital. Stossel correctly notes, though, that Brooks wants to expand failed government programs when the right approach is to move in the other direction:

Unlearning Roosevelt

Writing in the July 8, 2007 Washington Post, George Will has a column titled "Declaration of Dependence." The link to it is here, although you may have to register (for free) to read it.

All through my public school education, we were taught that Franklin Roosevelt was godlike for saving the country from the Great Depression. While I don't directly know what schoolchildren are taught today, I imagine that the stature of Roosevelt has only increased, as his vision of large, overpowering government is in perfect alignment with the goals of public schools. This is more that I need to unlearn.

Some excerpts:

Some mornings during the autumn of 1933, when the unemployment rate was 22 percent, the president, before getting into his wheelchair, sat in bed, surrounded by economic advisers, setting the price of gold. One morning he said he might raise it 21 cents: "It's a lucky number because it's three times seven." His Treasury secretary wrote that if people knew how gold was priced "they would be frightened." … In his second inaugural address, Roosevelt sought "unimagined power" to enforce the "proper subordination" of private power to public power. He got it … Roosevelt, however, made interest-group politics systematic and routine. New Deal policies were calculated to create many constituencies -- labor, retirees, farmers, union members -- to be dependent on government. … Before Roosevelt, the federal government was unimpressive relative to the private sector.

Political Decision Making Leads To Conflict

Writing from Davenport, Iowa

A column by economist Walter E. Williams (Why we're a divided nation) strongly makes the case for more decision making by free markets rather than by the government through the political process.

When decisions are made through free markets, Dr. Williams says, both parties win, because in a free market, parties voluntarily enter into only those transactions that benefit them.

When decisions are made for us by the government, however, it is almost always the case that one party's gain is someone else's loss. Therefore, there is conflict. The more decisions made through politics, the more potential for conflict. Coalitions arise in order to try to get more from the government, and the most effective coalitions "are those with a proven record of being the most divisive -- those based on race, ethnicity, religion and region."

The final paragraph of the column is this:

The best thing the president and Congress can do to heal our country is to reduce the impact of government on our lives. Doing so will not only produce a less divided country and greater economic efficiency but bear greater faith and allegiance to the vision of America held by our founders -- a country of limited government."

In an earlier post, I mentioned some columns by Dr. Williams that I thought were important. This column is certainly one of his best, as it very simply, in one short page, shows us a major fault in our current political landscape.

A Message From Ron Paul

I received this in an email from Ron Paul's campaign:

As my great mentor Ludwig von Mises showed, government meddling in the economy creates conflict, as special-interest groups seek to rip us off through big government. The voluntarism of the free market, on the other hand, brings social cooperation and peace.

I have never heard Ron Paul describe Ludwig von Mises as his mentor. Now I know I really like Ron Paul!

The Candlemaker’s Petition

You are on the right track. You reject abstract theories and little regard for abundance and low prices. You concern yourselves mainly with the fate of the producer. You wish to free him from foreign competition, that is, to reserve the domestic market for domestic industry.

Henry Hazlitt explains Frederic Bastiat, or, a broken window really hurts no matter what the New York Times says

This simple lesson from Henry Hazlitt's Economics in One Lesson explains so much, yet so little people realize and apply the truths explained here. Even trained economists like Paul Krugman, writing in The New York Times, fail to recognize the truth of Bastiat's lesson as explained by Hazlitt when he remarked that "the terror attack [of 9/11/2001 that destroyed the World Trade Center] could even do some economic good."

Michael Moore Confirms that Government Health Care is Sicko

This is an excellent article that exposes how little some people like Michael Moore think about the systems they consider corrupt and unworkable. It appears that Mr. Moore is so consumed with an anti-market bias that he hasn't really considered the true causes of the problem with healthcare in America. He isn't the first person to have problems with an anti-market bias, nor do I suspect he'll be the last.

Michael Moore Confirms that Government Health Care is Sicko
by Diana M. Ernst, Pacific Reserach Institute

Michael Moore showed up in Sacramento last week to promote his film Sicko. Senator Sheila Kuehl hailed Moore as a prophet of truth to the American people but the filmmaker is so mired in his own health hysterics that he regularly contradicts himself .

He rails against “for-profit” health care, but 85 percent of U.S. hospitals are non-profit, and almost half of privately insured Americans have polices from non-profit health insurers.

Moore referred to the Martin Luther King Jr.-Harbor hospital in Los Angeles, where a patient died of a perforated bowel after lying on the emergency room floor for 45 minutes. Since 2004, the hospital has received more than a dozen state and federal safety citations. Hospital errors included leaving sick patients unattended which resulted in death for three of them, giving patients the wrong medications, and using Taser stun guns to restrain psychiatric patients.

This hospital is not private, however. It is owned by the County of Los Angeles. So much for reliable government care. And the private insurers Moore rails against are currently selling health policies laden with government mandates and regulations.

The Council for Affordable Health Insurance (CAHI) has reported that mandated benefits have increased to the more than 1,800 today. In some states, mandated benefits have raised the cost of individual health insurance by 45 percent. Government solutions that create more government amount to nothing but expensive salt in the wound. Such is Governor Schwarzenegger’s plan to tax hospitals and physicians for mandated health coverage, and such is Senator Kuehl’s government monopoly plan, promoted as a "single payer" system.

We need to help insurers to be more competitive, not scrap them for big-government bureaucracy. Mr. Moore’s foolish preference of abolishing private insurance in favor of government-run, single-payer health care will not create universal care, only a government monopoly. In other words, Moore thinks the government should provide “free” health care that isn’t required to meet any standards.

Mr. Moore also thinks Canada is a good role model, but two years ago the Canadian Supreme Court found that government monopoly health care violates basic human rights. The winning plaintiff in this case, Mr. Zeliotis, needed hip surgery. When he tried to pay privately for his operation rather than wait in the public line (which takes two to four years) the Canadian government stopped him. Mr. Zeliotis argued against government interference with his freedom to choose private medical care. The denial of such a choice prolonged his pain and threatened his safety.

Mr. Moore also likes the single-payer system in Cuba, a one-party communist state. Some 11 million Cubans attend run-down facilities, receive dated prescription drugs, and are even required to bring their own sheets, food and soap to the hospital. Communist Party bosses get better treatment but when it came time for the great dictator Fidel Castro to go under the knife, he flew in a specialist from Spain. To adopt the health-care system of a totalitarian dictatorship like Cuba would be kind of, well, sicko. But government-run health care also presents problems right here at home.

Medicaid was instituted in the 1960s under President Johnson for the poor, but it has grown far beyond its capacity, putting its financial capabilities under great strain. In order to keep costs down, Medicaid underpays physicians, who have increasingly stopped accepting Medicaid beneficiaries as a result. Government restrictions on physicians also make it challenging to get prescription drugs for Medicaid patients.

Mr. Moore's remedies fail as heath-care reform and do not even amount to effective propaganda. He needs less rhetoric and more direct experience. He should get on a Canadian waiting list for treatment, try the “second” system that serves most Cubans, or follow a Medicaid patient’s struggle to get health care from the government.

Meanwhile, union nurses and hospital employees were among 1,000 people who must have taken sick time to cheer Michael Moore Tuesday. Perhaps Speaker Nuñez and Senator Kuehl will investigate how patient care suffered while their caregivers took to the streets.

Attacking Lobbyists Wrong Battle

The economist Walter E. Williams has recent column that places the recent lobbying scandal in proper perspective.

Professor Williams explains to us that given the "awesome growth of government control over business, property, employment and other areas of our lives" Washington politicians (and I would add state and local politicians too) are in the position to grant valuable favors. "The greater their power to grant favors, the greater the value of being able to influence Congress, and there's no better influence than money."

Continuing: "The generic favor sought is to get Congress, under one ruse or another, to grant a privilege or right to one group of Americans that will be denied another group of Americans. A variant of this privilege is to get Congress to do something that would be criminal if done privately."

"Here's just one among possibly thousands of examples. If Archer Daniels Midland (ADM) used goons and violence to stop people from buying sugar from Caribbean producers so that sugar prices would rise, making it easier for ADM to sell more of its corn syrup sweetener, they'd wind up in jail. If they line the coffers of congressmen, they can buy the same result without risking imprisonment. Congress simply does the dirty work for them by enacting sugar import quotas and tariffs. The two most powerful committees of Congress are the House Ways and Means and the Senate Finance committees. These committees are in charge of granting tax favors. Their members are besieged with campaign contributions. Why? A tweak here and a tweak there in the tax code can mean millions of dollars."

What is the solution? I believe, and I know Dr. Williams does too, that we should reduce the power that government has over our lives. I believe we should rely more on free markets for solutions to problems, as these markets are composed of people voluntarily entering into transactions, rather than a coercive government forcing decisions on us based on who lobbied the hardest. Dr. Williams also relates this story and solution: "Nearly two decades ago, during dinner with the late Nobel Laureate Friedrich Hayek, I asked him if he had the power to write one law that would get government out of our lives, what would that law be? Professor Hayek replied he'd write a law that read: Whatever Congress does for one American it must do for all Americans."

Hayek also wrote in his book The Road to Serfdom: "As the coercive power of the state will alone decide who is to have what, the only power worth having will be a share in the exercise of this directing power." We are well down this road, where government becomes more important than liberty and individuality. This is the battle we need to fight. Lobbying scandals are just a symptom and manifestation of the larger problem.

Adjusting the Testing Gap

In the July 25, 2006 Wall Street Journal Charles Murray has a commentary titled "Acid Tests" which describes how the way that the No Child Left Behind program uses test scores is misleading. Actually, misleading is too mild a word. The subtitle of Murray's article is "No Child Left Behind is beyond uninformative. It is deceptive."

How are the performance measures that are the yardstick of the success of No Child Left Behind deceptive? By adjusting what states use to measure "proficiency," states can appear to be closing the gap between different groups of students. In Texas, the gap between the percentage of white and black students that passed a test was at one time 35 percentage points. Now it is only ten. Does that mean the gap in true student learning and performance has decreased?

The answer, Murray says, is we can't tell from the data we have. Perhaps Texas made the test easier, or changed the definition of passing, or "taught to the test." Any of these could explain the narrowing of the gap. As Mr. Murray wrote: "If there really was closure of the gap, all that Texas has to do is release the group means, as well as information about the black and white distributions of scores, and it will easy to measure it."

The fact is that these tests, administered by the individual states, are subject to manipulation that is not in the best interests of schoolchildren:

Question: Doesn't this mean that the same set of scores could be made to show a rising or falling group difference just by changing the definition of a passing score? Answer: Yes.

At stake is not some arcane statistical nuance. The federal government is doling out rewards and penalties to school systems across the country based on changes in pass percentages. It is an uninformative measure for many reasons, but when it comes to measuring one of the central outcomes sought by No Child Left Behind, the closure of the achievement gap that separates poor students from rich, Latino from white, and black from white, the measure is beyond uninformative. It is deceptive.

You can learn more about deceptive testing from a recent study performed by The Civil Rights Project at Harvard University. A press release titled "Testing the NCLB: Study shows that NCLB hasn't significantly impacted national achievement scores or narrowed the racial gaps" is at http://www.civilrightsproject.harvard.edu/news/pressreleases/nclb_report06.php.

The Charles Murray article may be read here: http://www.opinionjournal.com/editorial/feature.html?id=110008701

Winning lawsuits: how being irresponsible pays off

They are everywhere -- in the office, on the street, in the malls, and even in your house. They can end up costing you hundreds of thousands of dollars. No, it’s not pests I’m referring to. What is this pervasive problem, you ask? Torts.

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