Author: Bob Weeks

  • Kauffman paper on local business incentive programs

    Do Local Business Incentive Programs Really Create Jobs? Better Data Needed to Know for Sure, Says New Kauffman Paper

    Kansas City, Mo. (PRWEB) April 17, 2014

    Financial incentives are a key strategy for nearly every U.S. city and state to attract firms, and jobs, to their area. But while incentives can be credited with attracting firms to one region or another, how can we be sure they are generating the promised returns in terms of job creation?

    The paper “Evaluating Firm-Specific Location Incentives: An Application to the Kansas PEAK Program,” released today by the Ewing Marion Kauffman Foundation introduces a proposed evaluation method and applies it to Promoting Employment Across Kansas (PEAK), one of that state’s primary incentive programs.

    In the paper, researcher Nathan Jensen, associate professor of political science at Washington University in St. Louis, identifies a need for more comprehensive data to determine the effectiveness of incentive programs in creating jobs. Currently, states and cities provide limited data about companies receiving incentives, and many don’t keep information about firms that apply for incentives but don’t receive them.

    “The data most often used to evaluate incentive programs tells only one part of one side of the story,” Jensen said. “To understand how much job creation can be directly attributed to incentives, and how much would have happened anyway, we need to pursue more granular data that provides better context.”

    The proposed evaluation model, as applied to the PEAK program, uses National Establishment Time Series (NETS) data to capture employment and sales data for PEAK and non-PEAK firms in Kansas. To accurately assess results, the identified PEAK firms are compared to a control group of five “nearest neighbors,” firms similar in structure and sector to the PEAK firms.

    Jensen cautioned that better access to more detailed data is necessary to make conclusive evaluations, but said the model highlights the need to reform the collection, management and sharing of data about incentive programs and recipients.

    “Greater transparency and public sharing of data will allow much more sophisticated analysis of these programs’ value,” said Dane Stangler, Kauffman Foundation vice president of Research and Policy. “Understanding what types of incentives work, and how well they work, will help our cities and states make smart investments in programs that create jobs and drive economic growth.”

    About the Kauffman Foundation

    The Ewing Marion Kauffman Foundation is a private, nonpartisan foundation that aims to foster economic independence by advancing educational achievement and entrepreneurial success. Founded by late entrepreneur and philanthropist Ewing Marion Kauffman, the Foundation is based in Kansas City, Mo., and has approximately $2 billion in assets. For more information, visit www.kauffman.org, and follow the Foundation on www.twitter.com/kauffmanfdn and www.facebook.com/kauffmanfdn.

  • WichitaLiberty.TV: Kansas school finance and reform, Charles Koch on why he fights for liberty

    WichitaLiberty.TV: Kansas school finance and reform, Charles Koch on why he fights for liberty

    In this episode of WichitaLiberty.TV: The Kansas legislature passed a school finance bill that contains reform measures that the education establishment doesn’t want. In response, our state’s newspapers uniformly support the system rather than Kansas schoolchildren. Then, in the Wall Street Journal Charles Koch explains why liberty is important, and why he’s fighting for that. Episode 39, broadcast April 20, 2014. View below, or click here to view at YouTube.

  • On a sunny day in downtown Wichita you can see the street lights

    On a sunny day in downtown Wichita you can see the street lights

    At noon on a sunny day in downtown Wichita the street lights are switched on, competing for influence with the sun.

    Downtown Wichita street lights 2014-04-18 11.37.07 b

    Two hours later, the street lights are still turned on in downtown Wichita.

    Downtown Wichita street lights 2014-04-18 13.52.44 b

  • In Kansas City, private schools seen as ‘a perversion’

    In Kansas City, private schools seen as ‘a perversion’

    If you’ve ever wondered about the difference between public schools and private schools, a top Kansas school administrator knows the difference:

    David A. Smith, Chief of Staff, Kansas City, Kansas Public Schools
    David A. Smith, Chief of Staff, Kansas City, Kansas Public Schools

    David Smith, chief of staff for Kansas City, Kan., public schools, said the bill was targeted at students specifically in low-income districts, including his district. Now, he is trying to figure out what this portion of the bill will mean for public schools.

    “It is beyond my comprehension how encouraging students to go to a private school serves the public good,” Smith said. “It is such a perversion of what it means to serve the public that I don’t get it.” (Legislators offer tax credits for scholarships to private schools, KU Statehouse Wire Service via Hays Daily News)

    Consider these circumstances:

    (a) Parents feel that their children are not thriving in Smith’s public school, and
    (b) parents find a private school that they feel will help their children, and
    (c) taxpayer money for these students is diverted from Smith’s public school to private schools that are teaching the children.

    Is the result of these activities a “perversion?” Isn’t the public also served when children are educated in private schools? And if the private schools do a better job than the public schools, hasn’t the public been delivered better service?

    Smith may not realize that if private schools are not doing a good job, students are not forced to attend them. They can go to other schools, including the public schools. But students who are not doing well in Smith’s school don’t have many alternatives. Perhaps none.

    The attitude expressed by Smith is a opportunity to recognize and understand the real issue in the debate over schools in Kansas: Which is more important — public schools (and unions, teachers, principals, administrators, superintendents, service employees, school architects, school construction companies) or Kansas schoolchildren?

    David A. Smith knows the answer that best serves his interests.

  • Gosnell movie smashes through crowdfunding record

    Gosnell movie smashes through crowdfunding record

    gosnell-movieFollowing is a message from Ann & Phelim Media on the continuing success of the crowdfunding campaign for the Gosnell Movie. I’ve made a contribution, and I hope you do too, as the goal is not yet met.

    The movie on Philadelphia abortion doctor Kermit Gosnell has just become the most successful film ever on the Indiegogo crowdfunding website.

    Gosnell, a made for TV project on the doctor who is America’s most prolific serial killer, has just smashed through the $900,000 mark — overtaking the previous record holder which had raised $898,000.

    Gosnell was convicted of the murder of several live and viable babies at his clinic. It is thought that over a 40 year killing spree he murdered thousands of infants. Gosnell is currently serving several life sentences.

    His case became controversial after the trial received almost no media coverage — and sparked allegations of a media coverup.

    Gosnell Producer Ann McElhinney said the record breaking success of the Gosnell Movie was a testament to the thousands of small donors who wanted the truth to be covered.

    “Dr Kermit Gosnell is America’s biggest serial killer — but there was almost no media coverage of his trial — and then Hollywood — which loves to make movies and TV programmes about serial killers — also decided to ignore the story.

    That’s why we decided to crowdfund and it’s also why we have been the most successful project ever. This was the biggest crime in US history, which led to one of the biggest media cover ups. It makes sense that the American public has responded with the biggest ever crowdfunding campaign.”

    Co-Producer Phelim McAleer said they were “ecstatic” to have achieved a record breaking amount but warned that they would not be relaxing until they had raised the $2.1m needed.

    “We have a fixed funding campaign — which means that if we don’t reach our target, all the money goes back to the contributors.”

    Producer Magdalena Segieda said the record breaking amount raised for the project is proof that people are fed up with censorship.

    “This sends a message to the media and Hollywood that they need to stop ignoring stories that don’t match their political beliefs. By helping Gosnell smash these records the public are making a very strong statement about their dissatisfaction with media bias.”

    More information on the Gosnell Movie crowdfunding campaign can be found at www.gosnellmovie.com.

  • Competition in markets

    Competition in markets

    children-arm-wrestling-beach-176645_1280Competition must surely be one of the most misunderstood concepts. As applied to economics, government, and markets, the benefits of competition are not understood and valued.

    Usually when people think of competition they think of words like hostile, cut-throat, or dog-eat-dog. They may reference the phrase “survival of the fittest,” making analogies to the law of the jungle. There, competition is brutal. The winners kill and eat the losers. Or, they may refer to games or sporting events, where a competition is created specifically to produce a winner and a loser.

    But as David Boaz of the Cato Institute explains in his essay Competition and Cooperation, it’s different in markets. There, as Boaz explains, people compete in order to cooperate with others, not defeat them:

    The competitive process allows for constant testing, experimenting, and adapting in response to changing situations. It keeps businesses constantly on their toes to serve consumers. Both analytically and empirically, we can see that competitive systems produce better results than centralized or monopoly systems. That’s why, in books, newspaper articles, and television appearances, advocates of free markets stress the importance of the competitive marketplace and oppose restrictions on competition.

    We often see people plead for cooperation, as being preferred over competition: “Can’t we all get along?” But Boaz says this: “What needs to be made clear is that those who say that human beings ‘are made for cooperation, not competition’ fail to recognize that the market is cooperation. Indeed, as discussed below, it is people competing to cooperate.”

    Boaz says that cooperation is so essential to human flourishing that we don’t just want to talk about it; we want to create social institutions that make it possible. That is what property rights, limited government, and the rule of law are all about.

    If we didn’t have well-defined property rights and rule of law, we would be continually fighting — competing, that is — over property and who owns it. Boaz says “It is our agreement on property rights that allows us to undertake the complex social tasks of cooperation and coordination by which we achieve our purposes.”

    Cooperation and coordination in markets is what has allowed us to progress beyond the simple societies where each person has only what he himself produces, or what he can trade for with those in his immediate surroundings. Maybe it would be wonderful if this cooperation and coordination could be accomplished through benevolence, that is, by people doing good simply for good’s sake. Sort of like “From each according to his abilities, to each according to his needs.” During the last century we saw how political systems based on that philosophy worked out.

    Human nature isn’t always benevolent. People are self-interested. They want more for themselves. In economies where property rights are respected and protected, the only legitimate way to get more stuff for yourself is by trading with others. You figure out what other people want, you produce it, and give it to them in exchange for what you want. And if you can figure out what people really want, that is, what they’re willing to trade a lot of their stuff in order to obtain, you can prosper. And since the trading is voluntary, both parties to the trade are better off.

    In Adam Smith’s lasting imagery over two centuries ago: “By directing that industry in such a manner as its produce may be of greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention.”

    Figuring out what others place high value on and providing it to them — and doing that better than someone else — is what competition in markets is about. As Boaz said, it is “people competing to cooperate.” When you generate success in this way, rather than by stealing from others, we all benefit. We experience what Boaz and others call the “civil society.” We cooperate with others to get what we want, instead of beating them over the head and stealing from them. Our desire for more stuff, coupled with property rights and rule of law, means that we compete to make others’ lives better, so that in turn our own lives can be better.

    Who knows best what people should have? Each person knows best for themselves, of course. People place different values on things, but it each person who knows best what he values, and how much he values it.

    That’s the way voluntary markets work. But government and politics works differently. Here’s what Milton Friedman had to say on this topic: “[The political system] tends to give undue political power to small groups that have highly concentrated interests; to give greater weight to obvious, direct and immediate effects of government action than to possibly more important but concealed, indirect and delayed effects; to set in motion a process that sacrifices the general interest to serve special interests rather than the other way around. There is, as it were, an invisible hand in politics that operates in precisely the opposite direction to Adam Smith’s invisible hand.”

    So the benefits of market competition and cooperation are turned around and perverted in government and politics. There are many examples of this. Currently in Kansas we have a vivid example unfolding. The Blob — that’s the public school establishment — doesn’t want to allow competition, at least not competition using taxpayer funds in the form of charter schools, vouchers, or tax credit scholarships. It doesn’t want existing teachers to face competition from professionals who haven’t spent years earning a teaching degree and obtained a license.

    Instead of the values of civil society, where people compete to cooperate with others in order to accomplish their goals, our public schools operate under a different system. Politicians and courts will tell us how much to spend on schools, and will pass laws to seize payment from people. Bureaucrats will tell us what schools will teach, and how they will teach it. If parents don’t like what government provides, they’re free to send their children somewhere else. But they still must pay for a product they’ve determined they have no use for.

    The benefit of market competition, that is, the “constant testing, experimenting, and adapting” that Boaz writes about, is missing from government-run schools. Instead, the centralized monopoly of public schools plods along. We place all our eggs in the No Child Left Behind basket. That law is now considered by nearly everyone as a failure. So we attempt to impose another centralized, monopolistic system: the Common Core Standards.

    Instead of peacefully and happily competing to cooperate in the education of Kansas schoolchildren, there is vitriol. Extreme vitriol, I would say. No one seems happy with the system. Great effort is spent fighting — jungle competition, we might say, rather than cooperating. And for some crazy reason, we use this system for many other things, too.

    For more on this topic, see Competition and Cooperation: Two sides of the same coin by Steven Horwitz.

  • Kansas school finance reporting and opinion

    school-crayons-colored-pencils-168392There’s a range of opinion, that’s for sure.

    Republicans concede bill would let teachers be fired without cause (Wichita Eagle)
    “Statehouse Republicans are having to abandon a key talking point in their effort to defuse teacher anger over an anti-tenure bill the Legislature passed a week ago, conceding the bill would allow school districts to fire veteran teachers without having to give a reason why. If Gov. Sam Brownback signs the bill into law, teachers would essentially be at-will employees of their school districts and able to challenge termination only if they allege the firing violates their constitutional rights.” Click here to read.

    Kansas bill renews debate about how easy it should be to fire teachers (Kansas City Star)
    There is a diversity of opinion, much conflicting, it seems: “It’s not too damn hard to fire a teacher,” said Marcus Baltzell, the director of communications for the Kansas National Education Association. “It’s just that the teacher has a redress of due process, a hearing officer, (a chance to say) ‘Here’s my take. Here’s what we’ve done to address the area of concern, and I believe this is unfair.’” … “Lawmakers who backed the change — it becomes law if Gov. Sam Brownback signs it — argued that dumping dead weight from the faculty has become harder than it ought to be.” … “I don’t like tenure. I never have,” said Rep. Ward Cassidy, a Republican from northwest Kansas who worked as a high school principal for 20 years. “Good principals have a whole lot of other things to do besides going through all you need to fire a teacher.” Click here to read.

    In Wichita, Brownback neither praises nor criticizes measure stripping K-12 teacher tenure rights (Wichita Eagle)
    “… most questions he was asked after his short talk concerned a provision to strip veteran K-12 teachers of tenure rights in the recently passed public school financing bill, which he said he has not decided whether to sign. And while he didn’t criticize that provision, he didn’t endorse it either.” Click here to read.

    In Kansas, education is all about money and politics for UMEEA (Kansas Policy Institute)
    “Media reaction to the school finance legislation has been pretty predictable. It focuses almost exclusively on institutions and ignores the impact on students. As usual, it’s all about money and politics. Unions, media and their allies in the education establishment (UMEEA) oppose tax credit scholarships for low income students. They rail against taxpayer money going to private schools and how that might mean a little less money for public institutions but ignore the very real purpose and need for the program. (FYI, the scholarship program is capped at $10 million; schools are expected to spend almost $6 billion this year.) Achievement gaps for low income students are large and getting worse, despite the fact that At Risk funding intended to improve outcomes increased seven-fold over the last eight years. So predictably, a program to give an alternative to low income students in the 99 lowest-performing schools is attacked by UMEEA as being unfair to institutions. Media and their establishment friends don’t even make a token mention of the serious achievement problem. It’s all about money and politics.” Click here to read.

    Far-Right Kansas Legislature Sells Out Kansas Schools (Kansas Democratic Party)
    “But none of these stories could compete with what the Kansas Legislature did to Kansas public schools. Under the cover of night and with virtually no debate or hearings, the Kansas Legislature forced through an education “reform” bill that stripped teachers of due process rights, passed out even more tax breaks to corporations, and potentially widened the disparity between rich schools and poor schools. School districts say new school finance bill will widen disparities.” Click here to read.

    Opinion: Public education under attack (Lawrence Journal-World)
    “The inclusion of these so-called “policy” provisions in the school finance bill passed by the Legislature are a mistake and will actually harm the very schools that the Kansas Supreme Court sought to assist. This is just one more step in the Legislature’s assault on public K-12 education in Kansas.” Click here to read.

    Teachers are sacrificial lambs in school finance (Iola Register via High Plains Daily Leader and Southwest Daily Times)
    A confused editorial. The writer says that teachers are held accountable to, among others, school administrators, but usually it is claimed that teachers need defense from this accountability. “The defense of tenure is at its best when you consider a teacher is accountable to hundreds of ‘bosses’ — parents and school boards as well as administrators.” Click here to read.

    Selling education (Hutchinson News)
    “Two elements of the bill are particularly troubling. One creates a $10 million-a-year corporate welfare program in support of private education. It allows large companies to enjoy a 70-percent credit against their state tax liability if they offer scholarships to at-risk students who move to private schools. This has nothing at all to do with public education equity; rather it creates a mechanism to damage the finance structure for public schools. The second concerning component redefines “teacher” as a way to eliminate due process protections. And the concept of teacher tenure is a myth. The current due process for teachers simply ensures a written termination notice and the right to challenge the decision through review by a hearing officer. In fact the Kansas Association of School Boards reported that the state sees about 10 due process claims each year – hardly a number that indicates a systemic problem that requires legislative action. The measure is little more than a way to break the teachers’ union and silence those teachers who honestly educate and advocate for their students.” Click here to read.

    Richard Crowson: We Need Some Education (KMUW)
    “And that guy who was smiling and joking with me in the checkout line at the grocery last Saturday? He lit a firebomb, taped a tax credit for private school supporters on it, and flung it through the window of a first grade classroom in the wee hours of Sunday morning.” Click here to read.

    Rep. Rooker ‘heartsick’ over results of education finance bill (Prairie Village Post)
    Small steps towards Kansas education reform are “immoral” and make this representative “heartsick.” Click here to read.

    Shame, says Wichita Eagle editorial board (Voice for Liberty)
    The Wichita Eagle editorial board, under the byline of Rhonda Holman, issued a stern rebuke to the Kansas Legislature for its passage of HB 2506 over the weekend. Click here to read.

  • Rich States, Poor States for 2014 released

    Rich States, Poor States for 2014 released

    In the 2014 edition of Rich States, Poor States, Utah continues its streak at the top of Economic Outlook Ranking, meaning that the state is poised for growth and prosperity. Kansas continues with middle-of-the-pack performance rankings, and fell in the forward-looking forecast.

    Rich States, Poor States is produced by American Legislative Exchange Council. The authors are economist Dr. Arthur B. Laffer, former Wall Street Journal senior economics writer (now Heritage Foundation Chief Economist) Stephen Moore, and Jonathan Williams, director of the ALEC Center for State Fiscal Reform.

    Rich States, Poor States computes two measures for each state. The first is the Economic Performance Ranking, described as “a backward-looking measure based on a state’s performance on three important variables: State Gross Domestic Product, Absolute Domestic Migration, and Non-Farm Payroll Employment — all of which are highly influenced by state policy.” The process looks at the past ten years.

    Looking forward, there is the Economic Outlook Ranking, “a forecast based on a state’s current standing in 15 state policy variables. Each of these factors is influenced directly by state lawmakers through the legislative process. Generally speaking, states that spend less — especially on income transfer programs, and states that tax less — particularly on productive activities such as working or investing — experience higher growth rates than states that tax and spend more.”

    For economic performance this year, Kansas is thirty-second. That’s up three spots from last year.

    In this year’s compilation for economic outlook, Kansas ranks fifteenth. That’s down four spots from last year.

    Kansas compared to other states

    Economic Outlook Ranking for Kansas and selected states.
    Economic Outlook Ranking for Kansas and selected states.
    A nearby chart shows the Economic Outlook Ranking for Kansas and some nearby states, shown as a trend over time. The jump of Kansas in 2013 is evident, as is the fall of Missouri.

    Why Kansas fell

    Kansas fell four spots in the Economic Outlook Ranking from 2013 t0 2014. To investigate why, I gathered data for Kansas from 2013 and present it along with the 2014 values. There are three areas that may account for the difference, One value, “Top Marginal Corporate Income Tax Rate,” did not change from 2013 to 2014, remaining at 7.00%. But the ranking for Kansas fell from 24 to 26, meaning that other states improved in this measure.

    Economic Outlook Ranking components for Kansas, 2013 and 2014 compared.
    Economic Outlook Ranking components for Kansas, 2013 and 2014 compared.

    For “Personal Income Tax Progressivity (change in tax liability per $1,000 of Income)” Kansas fell two positions in rank.

    In “Sales Tax Burden” Kansas also fell two spots in rank. The burden is calculated proportional to personal income. The most recent data for these measures is for 2011, so this does not include the sales tax rate change that took place on July 1, 2013.

    Kansas improved three rank positions for “Debt Service as a Share of Tax Revenue.” This data is from 2011.

    Important conclusions

    According to the authors of the report, there are three main conclusions to be drawn from this research:

    States with lower taxes and fiscally responsible policies experience far more economic growth, job creation, and domestic in-migration than their high-tax, big government counterparts.

    States are looking to become more competitive and embrace the policies that have been proven to lead to economic prosperity. Last year, 17 states substantially cut taxes, with Indiana, North Carolina, and Michigan leading the charge to vastly improve their overall economic outlooks.

    California, Illinois, and New York — once economic powerhouses — continue their long slides into deeper economic malaise. While levels of economic output for these states remain high, rates of economic growth are falling behind states like Texas, North Carolina, and Utah.

    How valuable is the ranking?

    Correlation of ALEC-Laffer state policy ranks and state economic performance
    Correlation of ALEC-Laffer state policy ranks and state economic performance
    After the 2012 rankings were computed. ALEC looked retrospectively at rankings compared to actual performance. The nearby chart shows the correlation of ALEC-Laffer state policy ranks and state economic performance. In its discussion, ALEC concluded:

    There is a distinctly positive relationship between the Rich States, Poor States’ economic outlook rankings and current and subsequent state economic health.

    The formal correlation is not perfect (i.e., it is not equal to 100 percent) because there are other factors that affect a state’s economic prospects. All economists would concede this obvious point. However, the ALEC-Laffer rankings alone have a 25 to 40 percent correlation with state performance rankings. This is a very high percentage for a single variable considering the multiplicity of idiosyncratic factors that affect growth in each state — resource endowments, access to transportation, ports and other marketplaces, etc.

  • WichitaLiberty.TV: Schools and the nature of competition and cooperation, Wind power and taxes

    WichitaLiberty.TV: Schools and the nature of competition and cooperation, Wind power and taxes

    In this episode of WichitaLiberty.TV: A Kansas newspaper editorial is terribly confused about schools and the nature of competition in markets. Then, we already knew that the wind power industry in Kansas enjoys tax credits and mandates. Now we learn that the industry largely escapes paying property taxes. Episode 38, broadcast April 6, 2014. View below, or click here to view at YouTube.