Voice For Liberty

Category: Quick takes

  • Kansas and Wichita quick takes: Monday May 16, 2011

    Wichita City Council this week. This week the Wichita City Council handles several important issues. One is approval of the policies regarding incentives for downtown development. Then, the council will consider approval of the city’s portion of the Hawker Beechcraft deal. In order to persuade Hawker to stay in Kansas rather than move to Louisiana, the State of Kansas offered $40,000 in various form of incentive and subsidy, and it was proposed at the time that the City of Wichita and Sedgwick County each add $2.5 million. Of note is the fact that Hawker’s campus in east Wichita … oops, wait a moment — their campus is not within the boundaries of the city. Like Eastborough, Hawker is surrounded on all four sides by Wichita, but is not part of the city itself. I don’t know if this should have any consideration as to whether the city should give Hawker this grant. … Then, there’s approval of the Industrial Revenue Bonds for the Fairfield Inn in downtown at WaterWalk. The agenda material says that the hotel is now complete, so the construction loan is being refinanced with the IRBs, “which will be initially purchased by the construction loan lender and then later redeemed with the proceeds of a permanent commercial loan insured by the Small Business Administration.” The benefit of the bonds is that the hotel escapes paying $328,945 in sales tax on its furnishings, etc. The city has already issued a letter of intent to do this, so it’s likely this item will pass and someone else will have to pay the sales tax this hotel is escaping. … The complete agenda packet is at Wichita City Council May 17, 2011.

    Wichita as art curator. The controversy over spending $350,000 on a large sculpture at WaterWalk promoted one reader to write and remind me of the city’s past experience as custodian of fine art. In 2004, the city mistakenly sold a sculpture by James Rosati as scrap metal. Realizing its mistake, the city refused to complete the transaction. The buyer sued, the city lost and appealed, losing again. Estimates of the sculpture’s worth ranged up to $30,000. Editorialized Randy Scholfield at the time in The Wichita Eagle: “That the sculpture ended up in an auction of surplus junk in the first place says something about how much the city valued it or exercised proper stewardship.”

    Legislature fails to confront KPERS. This year the Kansas Legislature failed to confront the looming problem of the Kansas Public Employees Retirement System, or KPERS. A small revision was made to the program, and a study commission was created. Neither action comes anywhere near to solving this very serious problem, as described in Economist: KPERS must undergo serious reform.

    Over 30 major news organizations linked to George Soros. Business and Media Institute: “When liberal investor George Soros gave $1.8 million to National Public Radio, it became part of the firestorm of controversy that jeopardized NPR’s federal funding. But that gift only hints at the widespread influence the controversial billionaire has on the mainstream media. Soros, who spent $27 million trying to defeat President Bush in 2004, has ties to more than 30 mainstream news outlets — including The New York Times, Washington Post, the Associated Press, NBC and ABC.” … This is from the first of a four part series.

    Romney seen as candidate of business, not capitalism. Timothy P. Carney in To Mitt Romney, big government is good for business: “Mitt Romney has the strongest business backing of any Republican presidential hopeful, and he carries himself as a technocratic problem solver. … Examine Romney’s dalliances with big government that have caused him such grief, and you’ll see a trend: They all are described as ‘pro-business,’ they all amount to corporate welfare, and they all reflect the technocratic mind-set you’d expect of a business consultant. Romney’s record and rhetoric show how managerialism veers away from the free market and into corporatism.” … Carney discusses Romney’s disastrous health care program in Massachusetts — which is seen as a prototype for Obamacare, his efforts to lure business to the state with subsidies, his support of ethanol subsidies, a national catastrophic insurance fund, and the Troubled Asset Relief Program.

    Programs for elderly must be cut. Robert Samuelson in The Washington Post: “When House Speaker John Boehner calls for trillions of dollars of spending cuts, the message is clear. Any deal to raise the federal debt ceiling must include significant savings in Social Security and Medicare benefits. Subsidizing the elderly is the biggest piece of federal spending (more than two-fifths of the total), but trimming benefits for well-off seniors isn’t just budget arithmetic. It’s also the right thing to do. I have been urging higher eligibility ages and more means-testing for Social Security and Medicare for so long that I forget that many Americans still accept the outdated and propagandistic notion that old age automatically impoverishes people.” … Samuelson goes on to show that many are doing quite well in old age and gets to the heart of the problem: “The blanket defense of existing Social Security and Medicare isn’t ‘liberal’ or ‘progressive.’ It’s simply a political expedient with ruinous consequences. It enlarges budget deficits and forces an unfair share of adjustment — higher taxes, lower spending — on workers and other government programs. This is the morality of the ballot box.” In other words, the elderly, which are a powerful voting bloc, have found they can vote themselves money. Concluding, he writes “Social Security was intended to prevent poverty, not finance recipients’ extra cable channels.”

    Social Security seen as unwise, financially. A video from LearnLiberty.org, a project of Institute for Humane Studies, explains that apart from the political issues, Social Security is a bad system from a purely financial view. Explained in the video is that 22 year-olds can expect to earn a 1.6 percent rate of return on their “investment” in Social Security contributions. Further, the “investment” is subject to a “100 percent estate tax.”

    Market development in Wichita. From Wichita downtown planning, not trash, is real threat: “While the downtown Wichita planners promote their plan as market-based development, the fact is that we already have market-based development happening all over Wichita. But because this development may not be taking place where some people want it to — downtown is where the visionaries say development should be — they declare a ‘market failure.’ But just because people make decisions that visionaries don’t approve of, that’s not market failure. And this is one of the most important reasons why Wichitans should oppose the downtown plan. It proposes to direct public investment away from where free people trading in free markets want public investment to be. The public investment component of the downtown plan says that people who decided not to live or work downtown are wrong, and they must now pay for others to be downtown. … We have market-based development in Wichita. We don’t need a government plan to have market-based development.”

  • Kansas and Wichita quick takes: Wednesday May 11, 2011

    Kansas Arts Commission layoffs. Kansas Governor Sam Brownback has dismissed all the employees of the Kansas Arts Commission. Earlier this year, the governor issued an order disbanding the commission, but the Senate reversed that order. The House had withheld funding for the commission, but recently reversed its position and added funding. The action by the governor, along with his line-item veto power, appears to end the life of the commission. … Government-funded arts supporters used a number of arguments and an aggressive lobbying campaign to make their case for funding. In the end, their arguments are like that of most others who plead for government funding — “the special pleading of selfish interests” that Henry Hazlitt identified. He also wrote of “… the persistent tendency of men to see only the immediate effects of a given policy, or its effects only on a special group, and to neglect to inquire what the long-run effects of that policy will be not only on that special group but on all groups. It is the fallacy of overlooking secondary consequences.” For more, see Kansas governor should veto arts commission funding, Arts supporters make case in Kansas Senate committee, and Arts funding in Kansas.

    Sculpture spending in Wichita. Yesterday the Wichita City Council voted four to three to spend $350,000 on a large sculpture at WaterWalk in downtown Wichita. The fact that the sculpture will be paid for with tax increment financing funds was used as an argument for proceeding with the expense, as the money is already allocated and can’t be used outside the TIF district. But, there’s nothing that requires the money be spent. … Council Member Michael O’Donnell said it is an “audacious” amount of money at a time of financial difficulty, and added that “I think it could set the arts back instead of propelling it forward because people would see that as a waste of government money.” He suggested tabling the idea until the economy improves as a way to “highlight fiscal responsibility that this council needs to show.” … If the benefit of the sculpture to WaterWalk is large, it seems that the WaterWalk developers would have an incentive to build it on their own. Except, being a public-private partnership, it’s sort of hard to tell where public subsidy ends and private ownership begins. … Not mentioned was the fact that the sculpture site is nearly next door to where the Wichita city manager owns a residence, and whether this requires that the spending and surrounding deliberations be handled in a special way.

    How much more can we soak the rich? Writes Jennifer Rubin: In the wake of Osama bin Laden’s killing a significant tax story did not get much notice. The Wall Street Journal reported this week that “a new congressional study concludes that the percentage of U.S. households owing no federal income tax climbed to 51% for 2009.” After presenting some figures that illustrate the progressivity of the American income tax system, she concludes: “There are legitimate arguments about how progressive our tax system should be; at what level of taxation do we risk impeding economic growth and which goals we want to promote through the tax code (e.g. family economic stability, home ownership, investment)? But we should at least be clear on the facts and our starting point. We can’t solve the debt problem by grabbing more money from the rich. And we simply don’t have, as Obama asserts, a tax system that undertaxes the rich.”

    School reform in Kansas, this year’s edition. From the Kansas Association of School Boards, on the major piece of school reform legislation this year: “HB 2191 passed 106-16. It will allow teachers to agree to extend their three-year probationary period by one or two additional years. The school board must provide a plan of assistance and give the teacher time to consider the special contract.” … Tinkering with the teacher tenure formula is all that has been accomplished this year regarding school reform. This is in a state that ranks very low among the states in policies relating to teacher effectiveness, according to the National Council on Teacher Quality.

    Wichita teacher cuts. Speaking of policies that work against teacher effectiveness: USD 259, the Wichita public school district has announced that it will reduce the number of teachers next year. The district’s contract with the union requires that teachers be laid off in order of seniority, so that new teachers are let go first. If the district was able to lay off their least effective teachers first, the district could end up with a smaller, but more effective, teacher workforce. … It might seem like automatically retaining the most experienced teachers is a beneficial policy. But research tells us that longevity in the classroom is not related to teacher effectiveness. One study found results that are typical: “There appear to be important gains in teaching quality in the first year of experience and smaller gains over the next few career years. However, there is little evidence that improvements continue after the first three years.” … Identifying effective teachers is something that many school districts have trouble doing, to the point where it makes one wonder if they are really interested in knowing. Kansas, as a state, has poor policies on evaluating teacher effectiveness. … The work rules that prevent school districts from dismissing ineffective teachers first are courtesy of the teachers unions, and are another reason why these institutions are harmful to the children they purport to serve.

    Real estate to be topic at Pachyderm, followed by tours. This Friday (May 13) the Wichita Pachyderm Club features Craig Burns and Glenn Edwards of Security 1st Title Company speaking on the topic “Real Estate Transactions, Ownership, Title, and Tales From the Trenches.” Following the event will be optional tours at the Sedgwick County Courthouse for presentations by Bill Meek, Register of Deeds from 2:00 pm to 2:25 pm, Kelly Arnold, County Clerk from 2:30 pm to 2:55 pm, and Linda Kizzire, County Treasurer from 3:00 pm to 3:30 pm. … The public is welcome and encouraged to attend Wichita Pachyderm meetings. For more information click on Wichita Pachyderm Club. … Upcoming speakers: On May 20, Rob Siedleckie, Secretary, Kansas Social Rehabilitation Services (SRS) on the topic “The SRS and Initiatives.” On May 27, Todd Tiahrt, Former 4th District Congressman on the topic “Outsourcing our National Security — How the Pentagon is Working Against Us”.

    Immigration. From LearnLiberty.org, a project of Institute for Humane Studies: “Is it true that immigration raises the U.S. unemployment rate? Is it true that immigration affects U.S. income distribution? The conventional wisdom says that both of these things are true. However, economist Antony Davies says there is evidence to suggest that they are not. Looking at the data, there is no relationship between the rate of immigration and the unemployment rate, nor is there a relationship between the rate of immigration and income inequality. Further, there is evidence to suggest that immigrants actually create more American jobs.”

  • Kansas and Wichita quick takes: Monday May 9, 2011

    Airfares down in Wichita. A city press release announces: “Wichita Mid-Continent Airport had the country’s 11th largest airline fare decrease since 2000 and now ranks 43rd in average fare of the 100 busiest airports, according to research by the federal Bureau of Transportation Statistics (BTS).” The program’s major source of funding is $5 million per year from the state. Currently, it is not known whether this funding will be in the budget the legislature is working on. … The program is controversial for claims of economic benefit that appear overstated. There is a way to pay for the program that shouldn’t be controversial. When government provides services that benefit everyone, such as police protection, most people agree that taxes to pay for these services should be broad-based. But we can precisely identify the people who benefit from cheap airfares: the people who buy tickets. Wichita could easily add a charge to tickets for this purpose. The mechanism is already in place.

    Wichita City Council this week. A speaker on the public agenda will speak about restoring Joyland. Undoubtedly, the goal of the speaker will be to obtain public funds for this project. … City staff is recommending that the council deny a request for Industrial Revenue Bond financing by Pixius Communications LLC. As always, the benefit of the IRB financing to the applicant is the property tax and possible sales tax abatements that accompany the program. The city does not lend money, and does not guarantee that the applicant will repay the bonds. The reason staff is recommending not to approve the application is that Pixius is a service business, and under current policy, a service business must generate a majority of its revenues from outside the Wichita area. Pixius does not, and is asking the city to waive this policy for their benefit. … Separately, Pixius is applying for low-cost financing of renovations to the same building though the facade improvement program. The city has performed its “gap” analysis and has “determined a financial need for incentives based on the current market rates for economic rents.” This is another example of government investing in money-losing businesses. … Then The Golf Warehouse in northeast Wichita asks for a forgivable loan from the city as part of a larger package of incentives and subsidy. This item will prove to be a test for several council members who campaigned against these loans. … Council members will receive a quarterly financial report and view an “artistic concept” for WaterWalk.

    Joyland topic of British tabloid. The British tabloid newspaper Daily Mail, in its online version, has a story and video about Wichita’s closed Joyland amusement park. For those who remember the park in its heyday, this is a fascinating — if not bittersweet — look at the park’s current condition. The headline of the article (“New images of an abandoned theme park reveal desolation in America’s heartland”) makes a connection between the deterioration of Joyland and the economic condition of America, a false impression which several comment writers corrected. … I don’t think the closing of Joyland has anything to do with public policy. Businesses come and go all the time as tastes and generations change.

    Educational freedom to be discussed in Wichita. This week Kansas Policy Institute and The Friedman Foundation for Educational Choice will be discussing what other states have done to increase student achievement through reforms based on educational freedom and creating a student-centric focus. KPI and FFEC recently launched the “Why Not Kansas” initiative to educate Kansans on the need to reform the state’s K-12 educational system to allow Kansas schools to continue to improve. Speakers at the event will be Dave Trabert, president of Kansas Policy Institute, and Leslie Hiner, vice president of programs and state relations at The Foundation for Educational Choice. The event is Thursday, May 12 at 10:30 am, at the Central Wichita Public Library Auditorium. RSVP is requested by email to James Franko or by calling 316-634-0218.

    Do you want to live in the world of Atlas Shrugged? From LearnLiberty.org, a project of Institute for Humane Studies: “In her masterpiece of fiction, Atlas Shrugged, Ayn Rand emphasizes three key classical liberal themes: individualism, suspicion of centralized power, and the importance of free markets. In this video, Prof. Jennifer Burns shows how Rand’s plot and characters demonstrate these themes, principally through innovative entrepreneurs who are stifled by laws and regulations instituted by their competitors. In the world of Atlas Shrugged, free markets and individual liberty have been traded away for equality and security enforced by the government. Burns ends by reviving Rand’s critical question: do you want to live in this kind of world?” … The video is six minutes in length.

    Who are the real robber barons? In summarizing a chapter from his book How Capitalism Saved America: The Untold History of Our Country, From the Pilgrims to the Present, Thomas J. DiLorenzo explains the false lessons of capitalism and government that we have been taught:

    “The lesson here is that most historians are hopelessly confused about the rise of capitalism in America. They usually fail to adequately appreciate the entrepreneurial genius of men like James J. Hill, John D. Rockefeller, and Cornelius Vanderbilt, and more often than not they lump these men (and other market entrepreneurs) in with genuine “robber barons” or political entrepreneurs.

    Most historians also uncritically repeat the claim that government subsidies were necessary to building America’s transcontinental railroad industry, steamship industry, steel industry, and other industries. But while clinging to this “market failure” argument, they ignore (or at least are unaware of) the fact that market entrepreneurs performed quite well without government subsidies. They also ignore the fact that the subsidies themselves were a great source of inefficiency and business failure, even though they enriched the direct recipients of the subsidies and advanced the political careers of those who dished them out.

    Political entrepreneurs and their governmental patrons are the real villains of American business history and should be portrayed as such. They are the real robber barons.

    At the same time, the market entrepreneurs who practiced genuine capitalism, whose genius and energy fueled extraordinary economic achievement and also brought tremendous benefits to Americans, should be recognized for their achievements rather than demonized, as they so often are. Men like James J. Hill, John D. Rockefeller, and Cornelius Vanderbilt were heroes who improved the lives of millions of consumers; employed thousands and enabled them to support their families and educate their children; created entire cities because of the success of their enterprises (for example, Scranton, Pennsylvania); pioneered efficient management techniques that are still employed today; and donated hundreds of millions of dollars to charities and nonprofit organizations of all kinds, from libraries to hospitals to symphonies, public parks, and zoos. It is absolutely perverse that historians usually look at these men as crooks or cheaters while praising and advocating “business/government partnerships,” which can only lead to corruption and economic decline.

  • Kansas and Wichita quick takes: Friday May 6, 2011

    Wichita downtown sites draw little interest. Wichita Business Journal: “Interest from developers in eight city-owned “catalyst” sites in downtown Wichita was minimal — unexpectedly so. ‘I was a little bit surprised how light the response was,’ says Scott Knebel, downtown revitalization manager for the city of Wichita.” With the city soliciting informal proposals for eight sites, only two proposals were received.

    KPERS. It appears that the Kansas Legislature will pass a pension “reform” bill that does not include a shift to a defined-contribution plan for new employees. Instead, the tough decisions that need to be made about the Kansas Public Employees Retirement System have been placed in the hands of a study committee. More information about the seriousness of the KPERS problem is at Economist: KPERS must undergo serious reform and KPERS problems must be confronted. Video is here, with two parts following.

    More flexibility for school funds. Kansas Watchdog reports that Kansas schools will now have more flexibility to spend funds that are presently stashed away in various funds. Of interest in the article is a chart showing the growth in these fund balances. School spending advocates protest that these funds are needed to because revenue doesn’t arrvie at the same time bills do, which is true. But these fund balances have been growing, because schools have not been spending all the money they’ve been given. While this bill is a good idea, schools have always been able to tap into these funds by simply contributing less to them, thereby spending down the balances. But schools have not wanted to to do this.

    Growth in Kansas spendingGrowth in Kansas spending. Click for a larger view.

    Despite “cuts,” spending grows. For all the talk in Kansas of budget cuts, state spending still manages to grow year after year. Kansas Watchdog is again on top of this topic, noting “Each year various adjustments push state spending above the approved budget, but in 2010 that extra spending took a big jump that will require even more spending in the future.” Of particular interest is the chart showing spending rising every year.

    Sandy Springs a model. Common Sense with Paul Jacob: “Local governments suffer from a big problem: bigness. Too often they expand their scope of services, and, in so doing, progressively fail to cover even the old, core set of services. You know, like fire and police and roads and such. The solution is obvious. Mimic Sandy Springs. This suburban community north of Atlanta, Georgia, had been ill-served by Fulton County. So a few years ago the area incorporated. And, to fend off all the problems associated with the ‘do-it-all-ourselves’ mentality, the city didn’t hire on a huge staff of civil servants. Instead, it contracted out the bulk of those services in chunks. Now, the roads get paved and the streets are cleaned and the waste is removed better as well as cheaper than ever. Reason Foundation, a think tank known for its privatization emphasis, has been on the story from the beginning. A 2005 appraisal predicted that the town would become a ‘model city.’ That prophecy seems to have been on the money, and a Reason TV video emphasizes this with the shocking fact that the town ‘has no long-term liabilities.’ As the rest of the nation’s cities, counties and states lurch into insolvency, Sandy Springs shows a way out.” … The City of Wichita has had success in outsourcing the mowing of parks. Currently, the city has several dozen pieces of commercial mowing equipment at auction.

    States’ war for jobs. Bloomberg Businesweek: “State and local governments eager to recover some of the more than 8 million jobs lost during the recession are giving away $70 billion in annual subsidies to companies, according to calculations by Kenneth Thomas, a political scientist at the University of Missouri-St. Louis. States have long relied on fiscal incentives to lure businesses, or keep existing employers from decamping to other locales. Such largesse is coming under renewed scrutiny during this time of strapped budgets. State deficits could reach a combined $112 billion in the fiscal year starting July 1. ‘The tragic irony of it is that in order to pay for these things, they’re cutting other areas that really are the building blocks of jobs and economic growth,’ says Jon Shure, director of state fiscal strategies for the Washington-based Center on Budget and Policy Priorities. … With the national unemployment rate at 8.8 percent, the threat of a company pulling up stakes is enough to open states’ wallets. ‘States and communities are afraid to play chicken,’ says Jeff Finkle, who heads the International Economic Development Council. … Kansas has offered movie theater chain AMC Entertainment a generous incentives package to move away from Kansas City, Mo., The New York Times reported in April. Officials in Missouri are considering making a counteroffer. Neither the company nor state officials would comment. The bidding war helped prompt an Apr. 5 letter signed by 17 corporate executives asking the governors of the two states to quit offering inducements to lure businesses across state lines. ‘At a time of severe fiscal constraint the effect to the states is that one state loses tax revenue, while the other forgives it,’ the letter said. ‘The only real winner is the business who is ‘incentive shopping’ to reduce costs.’” … Governor Brownback’s economic development plan speaks of “A more uniform business tax policy that treats all businesses equally rather than the current set of rules and laws that give great benefit to a few (through heavily bureaucratic programs) and zero benefit to many.” It will be a while before we know if the state is able to stick to this plan.

    Shale gas to be topic in Wichita. This Friday (may 6) the Wichita Pachyderm Club features Malcolm C. Harris, Sr., Ph.D., Professor of Finance, Division of Business and Information Technology, Friends University, speaking on the topic: “Shale gas: Our energy future?” Harris also blogs at Mammon Among Friends. … “Shale gas” refers to a relatively new method of extracting natural gas, as reported in the Wall Street Journal: “We’ve always known the potential of shale; we just didn’t have the technology to get to it at a low enough cost. Now new techniques have driven down the price tag — and set the stage for shale gas to become what will be the game-changing resource of the decade. I have been studying the energy markets for 30 years, and I am convinced that shale gas will revolutionize the industry — and change the world — in the coming decades. It will prevent the rise of any new cartels. It will alter geopolitics. And it will slow the transition to renewable energy.” … Critics like the Center for American Progress warn of the dangers: “The process, which involves injecting huge volumes of water mixed with sand and chemicals deep underground to fracture rock formations and release trapped gas, is becoming increasingly controversial, with concerns about possible contamination of underground drinking water supplies alongside revelations of surface water contamination by the wastewater that is a byproduct of drilling.”

    Economics in one lesson this Monday. On Monday (May 9), four videos based on Henry Hazlitt’s classic work Economics in One Lesson will be shown in Wichita. The four topics included in Monday’s presentation will be The Curse of Machinery, Disbanding Troops & Bureaucrats, Who’s “Protected” by Tariffs?, and “Parity” Prices. The event is Monday (May 9) at 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.

    Voters favor cuts, not tax increases to balance budget. “A survey of Kansas voters conducted on behalf of the Kansas Chamber of Commerce found widespread support for cutting spending rather than raising taxes as the way to balance the Kansas budget. Support was also found for cutting state worker salaries, or reducing the number of state employees.” More at Kansas Chamber finds voters favor cuts, not tax increases to balance budget.

    Here’s the Kansas data. “KansasOpenGov.org provides a repository of data about Kansas state and local governments, giving citizens the data they need to hold officials accountable.” More at Kansas OpenGov: Here’s the Kansas data.

  • Kansas and Wichita quick takes: Wednesday May 4, 2011

    Stripper bill III Ric Anderson of the Topeka Capital-Journal looks at some of the issues surrounding the “Community Defense Act,” which applies broad regulation to strip clubs. This year the serious issue of human trafficking has been used to promote this bill as necessary. Anderson pokes some large holes in that argument, most notably: “But if authorities know the problem [underage girls stripping] is happening and also know where it’s taking place, why haven’t they been able to stop it?” … The bill has passed the House but not the Senate. … Beside regulation of behavior inside strip clubs, the bill regulates everyone in a way that is unacceptable: “No person shall establish a sexually oriented business within 1,000 feet of any preexisting accredited public or private elementary or secondary school, house of worship, state-licensed day care facility, public library, public park, residence or other sexually oriented business.” These entities don’t have, and should not be given, the right to choose their neighbors. … House Republicans bucking leadership and voting — correctly — against this bill include Clay Aurand, Mike Burgess, Lana Gordon, Willie Prescott, Charles Roth, Sharon Schwartz, Tom Sloan, Kay Wolf, and Ron Worley.

    Arts Commission funding in. It appears that funding for the Kansas Arts Commission will make its way into the budget that will be presented to Kansas Governor Sam Brownback. Now the governor faces a test: will he use his line-item veto power to cancel this funding? Brownback issued an Executive Reorganization Order that would have killed the commission, but the Kansas Senate, using its power to do so, overrode the order. But with the veto pen, the governor can still accomplish the same effect. See Kansas governor should veto arts commission funding.

    Sunshine needed on public pensions and benefits. Investor’s Business Daily: As debates heat up in states across the country over budget shortfalls, more and more focus is being placed upon the runaway growth in health and pension benefits for state and local government workers. These excessive benefits are a major factor behind the exploding costs of government in many states. It is time to bring these costs under control before they completely overwhelm state and local budgets. … negotiations between governments and public sector unions lack transparency and accountability. Taxpayers are rarely made aware of the costly promises that public-sector unions are able to extract from state and local governments. Politicians often find it easier to reward unions with deferred payments for pensions and health care instead of offering salary or wage increases that appear immediately on the budget. Thus they are able to buy peace today by selling out the future.” … In Kansas, news media and editorial writers don’t help citizens learn the full magnitude of the problem, as few refer to the actual unfunded balance in KPERS, the Kansas Public Employees Retirement System.

    Beyond the debt ceiling headlines. Will the country default on its debt if its ability to borrow more is not extended? Bankrupting America looks at the issue in the video Beyond the debt ceiling headlines. … Cutting spending is the key to avoiding default.

  • Kansas and Wichita quick takes: Tuesday May 3, 2011

    Why not school choice in Kansas? WhyNotKansas.com is a website that holds information about the benefits of giving families the freedom of school choice. The site is new this week, and is a project of Kansas Policy Institute and Foundation for Educational Choice. Innovation in school choice programs is common in many states. Kansas, however, still grants the education bureaucracy a monopoly on the use of public dollars in education.

    Economics in one lesson this Monday. On Monday (May 9), four videos based on Henry Hazlitt’s classic work Economics in One Lesson will be shown in Wichita. The four topics included in Monday’s presentation will be The Curse of Machinery, Disbanding Troops & Bureaucrats, Who’s “Protected” by Tariffs?, and “Parity” Prices. The event is Monday (May 9) at 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.

    Sowell on government intervention. Must government intervene to fix the economy? Politicians face tremendous pressure to be seen as active, writes Thomas Sowell: “It is not politically possible for either the Federal Reserve or the Obama administration to leave the economy alone and let it recover on its own. Both are under pressure to ‘do something.’ If one thing doesn’t work, then they have to try something else. And if that doesn’t work, they have to come up with yet another gimmick. … The idea that the federal government has to step in whenever there is a downturn in the economy is an economic dogma that ignores much of the history of the United States. During the first hundred years of the United States, there was no Federal Reserve. During the first one hundred and fifty years, the federal government did not engage in massive intervention when the economy turned down. No economic downturn in all those years ever lasted as long as the Great Depression of the 1930s, when both the Federal Reserve and the administrations of Hoover and of FDR intervened. The myth that has come down to us says that the government had to intervene when there was mass unemployment in the 1930s. But the hard data show that there was no mass unemployment until after the federal government intervened. Yet, once having intervened, it was politically impossible to stop and let the economy recover on its own. That was the fundamental problem then — and now.”

    Salina’s first TIF district. The Salina Journal looks at issues surrounding that city’s first TIF district. Of note: “TIF districts are prevalent in other cities and states. For instance, Manhattan uses TIF districts so much that it no longer considers it an incentive, [Dennis Lauver, president and CEO of the Salina Area Chamber of Commerce] said.”

    Charles on energy and stuff. “We are making it cool to use less stuff,” says Charles, Prince of Wales, KG KT GCB OM AK QSO CD SOM PC AdC(P) FRS. Irish documentary film makers Ann McElhinney and Phelim McAleer have a new short film that looks at the activities of England’s Prince Charles as compared to what he wants the rest of us to do. Write the documentariasts: “Prince Charles is the latest to be exposed as an eco-Hypocrite in our short film series. The Prince is coming to the US this week to speak at Georgetown University about ‘sustainability’ so we decided to see just how he lives up to his own standards. We’ve made a short film that exposes just how hypocritical the Prince is as he lives a fabulous, luxury life whilst lecturing the rest of us that we have to live with less. Prince Charles — Hypocrite exposes the double standard that is at the center of so much environmentalism. … He is coming to the US to lecture on sustainability and tells people they must live with less in order to save the planet but tells us we must end our ‘age of convenience.’ He wants to make our lives more inconvenient to save the planet from alleged climate change but the Prince refuses to make any changes in his own life.”

    Government and entrepreneurship. From an essay by Dane Stangler titled Entrepreneurship and Government, contained in Back on the Road to Serfdom: The Resurgence of Statism, edited by Thomas E. Woods, Jr.: “The third way in which the state can intrude on entrepreneurship is through distorted incentives: either with misguided regulations or unintended consequences, the government could end up creating the wrong incentives for entrepreneurs. Will Baumol discussed such institutional incentives in a famous article in which he argued. ‘How the entrepreneur acts at a given time and place depends heavily on the rules of the game — the reward structure in the economy — that happen to prevail.’ Problems arise when these rules of the game encourage ‘unproductive’ entrepreneurial behavior. The principal example of such unproductive behavior is rent seeking, which occurs when companies pursue a bigger slick of economic activity by means other than market competition — that is, when they graduate to seeking favors from Washington rather than seeking a competitive edge by means of innovation. A company’s entreaties to government for protective action often indicate a returns curve that has already turned negative.” … While the article mentions “favors from Washington,” we can easily substitute state capitols, city halls, or county courthouses. For example, Wichita’s economic development policy is firmly rooted in the belief that the city can direct entrepreneurial activity with no wrong incentives or ill consequences. Listening to the recent summit of aviation industry leaders with Kansas Governor Sam Brownback, it is apparent that this industry thrives on, and will continue to expect, large doses of incentives and special treatment and favor from government. But is the aviation industry best for the future of Wichita? While government leaders across Kansas pledge not to lose most important industry, we know it can happen (see Detroit). We have to be careful to make sure that our government policies don’t hasten this loss.

  • Kansas and Wichita quick takes: Monday May 2, 2011

    Shale gas to be topic in Wichita. This Friday (May 6) the Wichita Pachyderm Club features Malcolm C. Harris, Sr., Ph.D., Professor of Finance, Division of Business and Information Technology, Friends University, speaking on the topic: “Shale gas: Our energy future?” Harris also blogs at Mammon Among Friends. … “Shale gas” refers to a relatively new method of extracting natural gas, as reported in the Wall Street Journal: “We’ve always known the potential of shale; we just didn’t have the technology to get to it at a low enough cost. Now new techniques have driven down the price tag — and set the stage for shale gas to become what will be the game-changing resource of the decade. I have been studying the energy markets for 30 years, and I am convinced that shale gas will revolutionize the industry — and change the world — in the coming decades. It will prevent the rise of any new cartels. It will alter geopolitics. And it will slow the transition to renewable energy.” … Critics like the Center for American Progress warn of the dangers: “The process, which involves injecting huge volumes of water mixed with sand and chemicals deep underground to fracture rock formations and release trapped gas, is becoming increasingly controversial, with concerns about possible contamination of underground drinking water supplies alongside revelations of surface water contamination by the wastewater that is a byproduct of drilling.” … Upcoming speakers: On May 13, Craig Burns and Glenn Edwards of Security 1st Title Co. on the topic “Real Estate Transactions, Ownership, Title, and Tales From the Trenches.” On May 20, Rob Siedleckie, Secretary, Kansas Social Rehabilitation Services (SRS) on the topic “The SRS and Initiatives.” On May 27, Todd Tiahrt, Former 4th District Congressman on the topic “Outsourcing our National Security — How the Pentagon is Working Against Us”.

    Wichita City Council this week. On Tuesday the Wichita City Council will decide whether to spend $316,000 on capital improvements to the Wichita Ice Center. Improvements will include “HVAC system upgrades, new flooring, signage, interior and exterior painting, upgrades to the locker room facilities, ice skates, and a new point of sale system that will track program revenues and attendance.” This spending was already agreed to in a contract with the new managers of the facility, so approval seems certain. … On the consent agendas one item proposes to spend $36,087 on study, design and bid services to replace the passenger loading bridges at the Wichita airport. In 2003 the city budgeted $4 million for this project, but it was put on hold due to plans for a new terminal building. Now the city wants to go ahead and replace the existing bridges. Being on a consent agenda, this item will receive no discussion unless a council members wants to “pull” it for individual discussion.

    Williams on the role of race in economics. Thomas Sowell reviewing a new book by Walter E. Williams, Race and Economics: How Much Can Be Blamed on Discrimination?: “Walter Williams fans are in for a treat — and people who are not Walter Williams fans are in for a shock – when they read his latest book, Race and Economics. It is a demolition derby on paper, as Professor Williams destroys one after another of the popular fallacies about the role of race in the American economy. … In recent times, we have gotten so used to young blacks having sky-high unemployment rates that it will be a shock to many readers of Walter Williams’ Race and Economics to discover that the unemployment rate of young blacks was once only a fraction of what it has been in recent decades. And, in earlier times, it was not very different from the unemployment rate of young whites. The factors that cause the most noise in the media are not the ones that have the most impact on minorities. This book will be eye-opening for those who want their eyes opened. But those with the liberal vision of the world are unlikely to read it at all.” … An interview with the author is available at Lew Rockwell interviews Walter Williams on his two new books.

    Spending cuts preferred to taxes. A survey of Kansas voters conducted on behalf of the Kansas Chamber of Commerce found widespread support for cutting spending rather than raising taxes as the way to balance the Kansas budget. Support was also found for cutting state worker salaries, or reducing the number of state employees. See Kansas Chamber finds voters favor cuts, not tax increases to balance budget.

    Except some prefer taxes. A coalition of groups is advocating for more revenue so that Kansas government can spend more. Some of the groups in the coalition advocate for those who truly can’t help themselves. But it’s no coincidence that the spokesman for the group is Mark Desetti, who is the lobbyist for Kansas National Education Association (KNEA), the state’s teachers union. Other school spending advocacy groups are prominent members of this coalition. Fortunately, many are starting to realize that the aims of school spending advocates like the teachers unions are not in the best interest of students, as shown below.

    Teacher evaluation systems. Brookings Institution: “Of all the things that are under the control of policymakers and schools, teacher quality is at the top of the list in terms of impact on student achievement, and so there is a great interest in evaluating teacher performance.” Says Russ Whitehurst, director of the Brown Center on Education Policy: “If you’re unlucky enough to get a bad teacher three years in a row, you’re basically ruined — that’s 30 percentile points, it’s hard to recover from that. So we know that teachers are important, and we know that for the first time for reasons other than intuition.” Brookings is working on systems to evaluate the systems that school districts use to evaluate teachers, so that state and federal money can be distributed fairly, as a way to incentivize good teacher evaluation systems. … According to National Council on Teacher Quality, Kansas ranks very low among the states in policies relating to teacher effectiveness. For example, the report states: “Fails to make evidence of student learning the preponderant criterion in teacher evaluations.” … The prospects for reform in teacher evaluation and quality in Kansas are not good. Proposals that would improve Kansas in this regard have not been discussed — at least meaningfully — in this year’s session of the Kansas legislature. For example, this year the Legislature spent quite a bit of time on a policy where the period before teachers are awarded tenure could be increased from three to five years in certain circumstances. This is what qualifies as “school reform” in Kansas. Remember, Kansas ranks very low in policies that promote teacher quality. Tinkering with the policy on teacher tenure is not going to improve our teacher quality, as tenure is a system that ought to be eliminated. In Kansas the teachers union is Kansas National Education Association (KNEA), and it works overtime to block meaningful reform of our state’s schools.

    Misguided efforts to improve capitalism. From Eamonn Butler: Ludwig von Mises — A Primer on how efforts by government to intervene in markets fail: Indeed, our efforts to manipulate the market economy, and make it conform to a particular vision, are invariably damaging. Capitalism is superbly good at boosting the general standard of living by encouraging people to specialise and build up the capital goods that raise the productivity of human effort. But when we tax or regulate this system, and make it less worthwhile to invest in and own capital goods, then capitalism can falter. But that is not a “crisis of capitalism,” explains Mises. It is a crisis of interventionism: a failure of policies that are intended to “improve” capitalism but in fact strangle it. One common political ideal, for example, is “economic democracy” — the idea that everyone should count in the production and allocation of economic goods, not just a few capitalist producers. But according to Mises, we already have economic democracy. In competitive markets, producers are necessarily ruled by the wishes of consumers. Unless they satisfy the demands of consumers, they will lose trade and go out of business. If we interfere in this popular choice, we will end up satisfying only the agenda of some particular political group. A more modest notion is that producers’ profits should be taxed so that they can be distributed more widely throughout the population. But while this shares out the rewards of success, says Mises, it leaves business burdened with the whole cost of failure. That is an imbalance that can only depress people’s willingness to take business risks and must thereby depress economic life itself.

  • Kansas and Wichita quick takes: Friday April 29, 2011

    George Soros: Not just sinister; also stupid. Thomas E. Woods, Jr. gives us another reason to ignore George Soros. Commenting upon an article in which Soros placed Friedrich Hayek in the “Chicago school” of economists, Woods wrote: “If you think Hayek was a member of the Chicago School, you are not entitled to an opinion on matters of economic thought, period. Hayek was of course an Austrian [economist]. The Austrians are not the same as the Chicago economists, differing in method, capital theory, monopoly theory, monetary theory, policy implications, and quite a bit more. … That is a freshman mistake, one that nobody who knew anything about Hayek or either of the relevant schools would have come within a million miles of making.” … An introduction to Austrian economics is Economics for Real People: An Introduction to the Austrian School by Gene Callahan, available to read at no cost.

    Legislators at work for you 372 days a year. At least according to the way their annualized pay is calculated for the purpose of Kansas Public Employees Retirement System (KPERS). Mary Clarkin of the Hutchinson News reports on a method of calculating KPERS benefits for legislators that goes out of its way to calculate a large benefit for legislators. For example, legislators, when calculating their salaries for the purposes of KPERS, are treated as through they receive their daily legislative pay every day of the year, and then a few on top of that. Also, their subsistence pay, which is intended to cover the expenses of being in Topeka, is also included in salary calculations.

    Kansas doesn’t benefit from alternative certification. This excerpt from Death Grip: Loosening the Law’s Stranglehold over Economic Liberty by Clint Bolick illustrates the harm that excessive regulation of occupational licensure works against economic freedom and the public schoolchildren of Kansas. “Equally pernicious are teacher certification schemes. As a certified teacher, I can attest that none of my required classroom instruction (all of which was state-required) enhanced my core subject-matter competence. Despite the fact that they often turn out ill-trained teachers, schools of education fiercely defend their monopoly status over teacher certification, resisting alternative certification and entry into teacher ranks by professionals who are demonstrably competent in their subject matter. The scheme ensures that many bad teachers enter the school system while many good teachers are kept out. Licensing is not a proxy for competence, neither in teaching nor in many other professions. However, because licensing typically requires many hours of prescribed training, it is an effective means of limiting entry into professions. Licensing requirements are lucrative for schools that teach the prescribed courses and insulate licensed practitioners from competition. But they result in higher prices and fewer choices for consumers and destroy economic opportunities.” … According to National Council on Teacher Quality, alternative teacher certification policy in Kansas is among the most restrictive in the nation. These policies, as Bolick writes, give the state’s low-functioning schools of education a monopoly over the production of teachers, and deprives schoolchildren of many excellent would-be teachers.

  • Kansas and Wichita quick takes: Monday April 25, 2011

    American exceptionalism. This Friday (April 29) the Wichita Pachyderm Club features Kenneth N. Ciboski, Ph.D, Associate Professor of Political Science at Wichita State University. He will speak on the topic “American Exceptionalism: How and Why Are We Different From Europe?” The public is welcome and encouraged to attend Wichita Pachyderm meetings. For more information click on Wichita Pachyderm Club. … Upcoming speakers: On May 6, Dr. Malcolm C. Harris, Sr., Professor of Finance, Friends University on the topic “Shale gas: Our energy future?” On May 13, Craig Burns and Glenn Edwards of Security 1st Title Co. on the topic “Real Estate Transactions, Ownership, Title, and Tales From the Trenches.” On May 20, Rob Siedleckie, Secretary, Kansas Social Rehabilitation Services (SRS) on the topic “The SRS and Initiatives.” On May 27, Todd Tiahrt, Former 4th District Congressman on the topic “Outsourcing our National Security — How the Pentagon is Working Against Us”.

    Wichita City Council this week. As this week is the fourth Tuesday of the month, the Wichita City Council considers only consent agenda items. This agenda has two acquisition of property by eminent domain, one for improvements to East 13th Street, and another for land involved in the aquifer recharge project in Harvey County. … There will also be council member appointments, and with three new council members on board, there could be a number of these. … A workshop will follow to present updates to the downtown Wichita public incentive policy. A Wichita Eagle story reported on this, but raised more confusion than answers. For example, the story reports the proposal will include “A private-to-public capital investment ration [sic] of 2-to-1.” This differs from the Goody Clancy plan for downtown Wichita, which calls for a five to one ratio.

    The Great American Bailout. Tim Huelskamp, a new member of the United States Congress from the Kansas first district, warns of the seriousness of the problem the country faces with the budget and debt: “This past Monday, Standard & Poor’s (S&P) announced that it was cutting its outlook on the U.S. from “stable” to “negative,” increasing the likelihood of a potential downgrade of America’s credit rating. This should be a dire wake-up call to Washington that the time is now to address federal red ink. For all of America’s greatness, it is embarrassing that the United States may become a credit risk.” He details the rising amount of national debt, and also the increasing percentage that is held by foreign countries. … Soon we will be faced with the decision to raise our national debt limit. Huelskamp says the only way he could support increasing the ceiling is there is also a “serious and meaningful compromise that makes substantial and real cuts to the deficit and debt.” He also supports a balanced budget amendment to the Constitution.

    “Not yours to give rally” in Topeka. Next Thursday (April 28) a coalition of groups is holding a rally at the Kansas Capitol building. The event starts at 10:00 am and lasts until 2:00 pm. The lineup of speakers and topics includes Rep. Charlotte O’Hara: “Federal control of the state through the state budget,” Larry Halloran (Wichita South Central 9-12 Group): “Government Charity, the Constitution and the Rule of Law,” Dave Trabert (Kansas Policy Institute): “Kansas Budget Policy and Spending Habits,” Rep. Kasha Kelley: “House Budget,” Richard D. Fry (Patriots Coalition ): “Govt. Lawlessness and Implementing Obama Care,”Angelo Mino (Born in Ecuador – MADE in America): “Reason to Become a New Born American,” Derrick Sontag (Americans for Prosperity): “History of a Growing Kansas Budget,” and Rep. Lance Kinzer: “Court of Appeals Legislation.” … AFP is sponsoring a free bus trip from Wichita for this event. The bus will leave Wichita at 7:00 am, and should be back by 6:00 pm. The bus trip is free but reservations are required. For more information on the bus trip 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.

    Kansas Bioscience Authority benefits from exemptions. The Kansas Bioscience Authority has benefited from exceptions to the Kansas Open Records Act written for its own benefit. Kansas Watchdog reports.

    The presidency in liberal society. Eighteen months before the election, presidential politics consumes a lot of energy. Conservatives complain that President Obama is already in full campaign mode. Liberals poke fun at Republicans for, well, for a lot of reasons. But with a properly limited government, we should care very little who is our president. Lew Rockwell explains in this excerpt from a speech titled “An American Classical Liberalism”: Every four years, as the November presidential election draws near, I have the same daydream: that I don’t know or care who the president of the United States is. More importantly, I don’t need to know or care. I don’t have to vote or even pay attention to debates. I can ignore all campaign commercials. There are no high stakes for my family or my country. My liberty and property are so secure that, frankly, it doesn’t matter who wins. I don’t even need to know his name. In my daydream, the president is mostly a figurehead and a symbol, almost invisible to myself and my community. He has no public wealth at his disposal. He administers no regulatory departments. He cannot tax us, send our children into foreign wars, pass out welfare to the rich or the poor, appoint judges to take away our rights of self-government, control a central bank that inflates the money supply and brings on the business cycle, or change the laws willy-nilly according to the special interests he likes or seeks to punish. His job is simply to oversee a tiny government with virtually no power except to arbitrate disputes among the states, which are the primary governmental units. He is head of state, though never head of government. His position, in fact, is one of constant subordination to the office holders around him and the thousands of statesmen on the state and local level. He adheres to a strict rule of law and is always aware that anytime he transgresses by trying to expand his power, he will be impeached as a criminal.