Voice For Liberty

Category: Quick takes

  • Kansas and Wichita quick takes: Monday October 24, 2011

    Wichita City Council. This week is the fourth Tuesday of the month, so the Wichita City Council meeting is largely confined to consent agenda items plus workshops. An item on the Council agenda is titled “Approval of travel expenses for Mayor Carl Brewer and Vice Mayor Lavonta Williams to attend, by invitation, the African Global Sister Cities Foundation Governmental, Business, Education, Cultural Arts and Sister City exploration in Ghana, West Africa, November 14-23, 2011, for possible international trade and twinning city relations. Airfare expenses will be paid by Mayor Brewer and Vice Mayor Williams.” Although the agenda report doesn’t state so, for these trips generally the lodging and meals are paid for by the host city or some other organization, not by the City of Wichita. But if these trips are truly good for the city, the city should pay expenses for those who go, just as companies pay legitimate travel expenses for their employees. But the city has no products of its own to sell, and the city isn’t authorized to negotiate international trade agreements. According to the Economic Freedom of the World report, Ghana ranks 70th of the 141 rated countries, so I hope we’re not planning to import ideas on governance from this country. It seems these trips are just junkets and not truly productive, so maybe it’s best the city doesn’t pay for airfare. … The workshop topic is concealed carry in Wichita city buildings. … As always, the agenda packet is available at Wichita city council agendas.

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

    Rep. Huelskamp to speak in Wichita. This week’s meeting (October 28th) of the Wichita Pachyderm Club features U.S. Representative Tim Huelskamp, who is in his first term representing the Kansas first district, speaking on “Spending battles in Washington, D.C.” The public is welcome and encouraged to attend Wichita Pachyderm meetings. For more information click on Wichita Pachyderm Club … Upcoming speakers: On November 4th: Chris Spencer, Vice President, Regional Sales Manager Oppenheimer Funds, speaking on “Goliath vs Goliath — The global battle of economic superpowers.” … On November 11th: Sedgwick County Commission Members Richard Ranzau and Jim Skelton, speaking on “What its like to be a new member of the Sedgwick County Board of County commissioners?” … On November 18th: Delores Craig-Moreland, Ph.D., Wichita State University, speaking on “Systemic reasons why our country has one of the highest jail and prison incarceration rates in the world? Are all criminals created equal?” … On November 25th there will be no meeting.

    Kansas tax reform. Citizens for Tax Justice has warned Kansas about possibly bad effects of tax reform in Kansas. In particular, the organization warns that eliminating the Kansas income tax (the article doesn’t specify individual, corporate, or both) and replacing it with a sales tax would result in a sales tax rate of 13.5 percent. Calculations like this are usually made in a vacuum and ignore the dynamic effects of people making adjustments. For example, the state might — wisely — decide to spend less, and therefore less revenue would be needed. Plus, the reason for reducing income taxes is to generate a more favorable business climate so that Kansas stops losing people and instead attracts people and business. This would lead to increased tax revenues. … The article also warns that Kansas doesn’t want to be more like Texas, citing statistics such as Texas being last in the country in the percent of adults with a high school diploma. The organization that collected these statistics, the Brookings Institution, explains that Texas’ low ranking is due to its large immigrant population, which arrived as adults with no diploma. CTJ didn’t mention that.

    The debt of the states. Most states, Kansas included, have a balanced budget requirement. So it comes as somewhat of a surprise that collectively, the states hold about $4 trillion in debt. This figure comes from a new report by State Budget Solutions (Report reveals aggregate state debt exceeds $4 trillion). By way of comparison, the federal government holds about $14.8 trillion in debt. Bob Williams, President of State Budget Solutions, said: “These deficit numbers are staggering and should be frightening to the American public. Due to budget gimmicks, many states fail to give an adequate picture of how much trouble they are really in. This report makes it clear that if legislators don’t act immediately and decisively, our country will be facing a budget crisis that we have never seen before.” … According to figures gathered by SBS, the per capita debt in Kansas is $2,009, which ranks Kansas at 34th in the nation. Figures for some of our neighboring states include Colorado at $1,068, Iowa at $1,026, Missouri at $813, Nebraska at $21 (!), Oklahoma at $595, and Texas at $1,568. … Ominously for Kansas, the report includes separate figures that place our unfunded pension liability at $21.8 billion, well over twice as high as the numbers used by most official sources. The difference: “The AEI figures estimate how large public pension liabilities would be if states used private sector market-valuation methods.” In other words, the real world.

    Freedom of the press. One of the assertions in the statement made by the Occupy Wall Street movement is “They have used the military and police force to prevent freedom of the press.” Really? I wasn’t aware this was going on. I would think that with the internet, that freedom of the press is thriving in the U.S. Perhaps OWS was thinking of China.

    Student loans. One of the ideas tossed about by the Occupy Wall Street group is forgiveness of student loans. This debt is a problem, no doubt, especially when graduates can’t find work. Some fear that student loans will be the next great bubble — a government-caused problem that requires a government solution. In reality, easy government loans and grants have fueled the rapid rise in college costs, another government-caused problem that requires a government solution. Kansas Watchdog has more at Student Loan Racket Enables Higher Education Bubble .

    Obama makes a great appointment. Malcolm Harris lets us know that it seems that President Barack Obama has made a wise appointment. This example is Tom Hoenig to serve at the FDIC. See Tom Hoenig Nominated to Be the Vice Chair of the FDIC.

    Libertarianism works both ways. Dr. Jeffrey Miron explains the two “flavors” of libertarian thought and explains that they’re really not different at all. In his recent book Libertarianism, from A to Z, described as an “encyclopedic exposition of libertarian thought”, Miron explains: “Libertarianism comes in two flavors: consequential and philosophical (also known as rights-based). The two variants offer similar policy conclusions but utilize seemingly different arguments to arrive at these conclusions. Consequentialism — the path followed in this book — argues that most government interventions are undesirable because they fail to achieve their stated goals or because they generate costs that are worse than the problems they purport to fix. Consequentialism emphasizes that many policies have unintended consequences the consequentialist approach is thus just a cost-benefit calculation, albeit one with a broad view of costs and benefits. In particular, the consequentialist approach recognizes that policies have intangible and non-monetary effects, not just tangible or monetary effects. Philosophical libertarians hold that government should never infringe individual rights or freedoms.” … Miron goes on to explain that the two different versions of libertarianism are not really different, and that the explicitly consequentialist approach is the “better language” for explaining libertarianism. His video A Cost-Benefit Approach to Public Policy explains. Another interview with Miron by Reason.tv’s Nick Gillespie is at Libertarianism From A to Z With Jeffrey Miron.

  • Kansas and Wichita quick takes: Monday October 17, 2011

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

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

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

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

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

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

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

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

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

  • Kansas and Wichita quick takes: Friday October 14, 2011

    Kansas school reform. Kansas Governor Sam Brownback is preparing to release a plan for reform of Kansas school finance. The reform plans, however, appear to do nothing to actually improve Kansas schools. Missing is any plan to introduce school choice to Kansas, whether in the form of charter schools, vouchers, or tax credit scholarships. While the school spending establishment says that these programs rob the existing public schools of money, the reverse is true: school choice programs cost less. An example: “Pennsylvania’s tax-credit program had saved Keystone State residents $144 million since 2001.” … It’s unfortunate for Kansas schoolchildren that the governor will not introduce these programs, as many other states are introducing or expanding choice programs.

    Occupy Wall Street vs. Jobs. Steve Jobs, that is. After contrasting the behaviors of the Occupy Wall Street protests with the business accomplishments of Apple’s Jobs and how the products Apple developed have lead to better lives, Michael D. Tanner draws a line between government and the private sector: “The Occupy Wall Street crowd, and for that matter President Obama, see government as the center of our existence. It is government that makes for a better society, while the rich, businessmen, and entrepreneurs are ‘takers’ who don’t ‘pay their fair share.’ But would we really have been better off if we had taken more of Jobs’s wealth and given it to the government? Would President Obama really have used it better than Jobs did? Would the government have given us all that Jobs did? Government has spent trillions on schools that don’t educate, anti-poverty programs that don’t lift people out of poverty, stimulus programs that don’t stimulate, and health-care programs that don’t control the cost of health care. Compare Apple or Pixar’s record of success with the failures of government. For that matter, what government jobs program has created as many net new jobs as Jobs? In fact, the next time someone suggests that what we need is more taxes, more regulation, more class warfare, more government programs, we should instead suggest that what we really need are policies that encourages a poor boy from San Francisco to become rich and thereby make the rest of us a little richer as well.” … The complete article is Occupy Wall Street vs. Jobs.

    OWS and Tea Party united? Are the Occupy Wall Street protesters and the Tea Party political allies? Maybe, or maybe not, explains Fred Smith of Competitive Enterprise Institute, writing in USA Today: “The problems we face come not from capitalism, Wall Street variety or any other, but rather from crony-capitalism. Tea Partiers distinguish capitalism from crony-capitalism. Occupiers confuse them. In fact, some Occupiers seek their own form of cronyism — an expanded government that will help the ‘right’ beneficiaries, such as students and homeowners, instead of bankers and automakers. … The economist Joseph Schumpeter, in his essay “Can Capitalism Survive?”, warned long ago that too many business leaders would seek success through politics rather than competition, and that this would destroy true capitalism. Certainly, too many in Wall Street have succumbed to that temptation, and capitalism has suffered accordingly. But it suggests that Occupiers and the Tea Partiers share at least one common enemy. The Solyndra scandal illustrates that crony-capitalists are found far beyond Wall Street. Thus, instead of focusing on one small part of Manhattan Island, shouldn’t we liberate the whole American economy?” … It should be noted that the economic development policies of Wichita are firmly rooted in crony capitalism.

  • Kansas and Wichita quick takes: Thursday October 13, 2011

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

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

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

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

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

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

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

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

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

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

  • Kansas and Wichita quick takes: Monday October 10, 2011

    AFP meeting features former Congressman Tiahrt. Tonight’s (October 10th) meeting of Americans for Prosperity, Kansas features former United States Representative Todd Tiahrt speaking on “How regulations affect our economy.” There will be a presentation followed by a group discussion. Tiahrt represented the fourth district of Kansas from 1995 to 2011. He is presently our states Republican National Committeeman. … This free meeting is from 7:00 pm to 8:30 pm at the Lionel D. Alford Library located at 3447 S. Meridian in Wichita. The library is just north of the I-235 exit on Meridian. The event’s sponsor is Americans for Prosperity, Kansas. For more information on this event contact John Todd at john@johntodd.net or 316-312-7335, or Susan Estes, AFP Field Director at sestes@afphq.org or 316-681-4415.

    Government planning. In an address from 1995, Gerald P. O’Driscoll Jr. spoke on Friedrich Hayek and his ideas on government interventionism. His conclusion should be a caution to those — such as Wichita City Council members and city hall bureaucrats — who believe they can guide the economic future of Wichita through interventions such as TIF districts, grants, forgivable loans, tax credits, tax abatements, sweetheart lease deals, eminent domain, zoning, and other measures: “In all his work, Hayek focused on the self-ordering forces in society. Hayek’s fellow Nobel laureate Kenneth Arrow has suggested that ‘the notion that through the workings of an entire system effects may be very different from, and even opposed to, intentions is surely the most important intellectual contribution that economic thought has made to the general understanding of social processes.’ The Arrovian formulation echoes Adam Smith’s observation that, as a consequence of the interaction of conflicting interests, man is ‘led by an invisible hand to promote an end which was no part of his intention.’ The classic Hayekian statement visualizes economics as analyzing ‘the results of human action but not of human design.’ The economic conception of society is an affront to the conceit of those who would impose order from above. Economic forces defy the will of authoritarians seeking to mold social outcomes. Human beings respond to each government intervention by rearranging their lives so as to minimize its disruptive effects. The resulting outcome may thus be different from and even opposed to the intention of the intervention.” The full lecture is at The Meaning of Hayek.

    Longwell joins Democrats to defeat Republicans. While Wichita city council members are officially non-partisan — meaning they don’t run for election as members of political parties — most members are closely identified with a party. Some, like Jeff Longwell (district 5, west and northwest Wichita), see themselves as leaders in their parties, the Republican Party in this case. Last week, however, Longwell joined with the three Democrats on the Wichita City Council to oppose the votes of three Republicans. (There was a nuance to that vote, but nonetheless Longwell voted with the Democrats.) On Sunday he teamed with left-wing Council Member Janet Miller (district 6, north central Wichita) to write an op-ed that appeared in The Wichita Eagle (Grant helps region). The piece approved increased federal government spending, increased federal government control, and increased centralized planning.

    Optimal size of government. Is government too large? Yes, and trying to determine an optimum size for government is impossible. So says a new policy briefing paper from the Center for Global Liberty and Prosperity, a project of the Cato Institute.

    Can We Determine the Optimal Size of Government? by James A. Kahn. In the executive summary, we can read this: “The massive spending programs and new regulations adopted by many countries around the world in response to the economic crisis of 2008 have drawn renewed attention to the role of government in the economy. Studies of the relationship between government size and economic growth have come up with a wide range of estimates of the ‘optimal’ or growth-maximizing size of government, ranging anywhere between 15 and 30 percent of gross domestic product (GDP).

    This paper argues that such an exercise is ill conceived. Modern growth economics suggests, first, that government policies leave their long-term impact primarily on the level of economic activity, not the growth rate; and, second, that the sources of this impact are multi-dimensional and not necessarily well measured by conventional measures of ‘size,’ such as the share of government spending in GDP.

    In fact, measures of economic freedom more closely relate to per capita GDP than do simple measures of government spending. The evidence shows that governments are generally larger than optimal, but because the available data include primarily countries whose governments are too large, it cannot plausibly say what the ideal size of government is. The data can realistically only say that smaller governments are better, and suggest that the optimal size of government is smaller than what we observe today.”

    Steve Jobs. What is his legacy? From Richard A. Viguerie: “Steve Jobs, Apple Computer’s late founder and CEO, gave the vast majority of his hundreds of thousands of dollars in political contributions to liberal Democrats, such as Nancy Pelosi, Ted Kennedy and California Governor Jerry Brown. Yet it is hard to think of a 21st Century entrepreneur who has done more to empower individuals and free them from the demands of the liberal collective than Steve Jobs did through the invention of the iPod, and iPad and the popularization of personal computing. Through the innovative products Apple brought to market, Jobs proved the collectivist premise of John Kenneth Galbraith’s The Affluent Society to be both absolutely true and utterly wrong.” … More at Steve Jobs’ Conservative Legacy.

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

    When governments cut spending. Advocates of government spending argue that if it is cut, the economy will suffer. Is this true? Is government spending necessary to keep the economy functioning? “There is no historical credence to this very popular idea that cutting spending now will actually slow down the economy and actually lead to a double dip recession or an increase in economic stagnation.” This is the conclusion of Dr. Stephen Davies in a short video. As one example — he cites others — Davies explains that there was fear in the United States that the end to massive government spending during World War II would lead to a return of the Great Depression. “In fact, as we know, exactly the opposite happened. As the defense spending of the war years was wound down, and as government was pulled back in other ways as well under the Truman and Eisenhower administrations, the result was an enormous period of sustained growth in the United States and other countries that went through a similar process.” Davies says that economic growth accelerates when government reduces its spending. Reasons include the greater productivity of private sector spending as compared to government spending, and increased confidence of private sector investors. … The video is from LearnLiberty.org, a project of Institute for Humane Studies.

  • Kansas and Wichita quick takes: Wednesday October 5, 2011

    Green energy in Kansas. Kansas Representative Charlotte O’Hara of Overland Park issues a cautionary note on Kansas energy policy. Commenting on Kansas Governor Sam Brownback’s recent energy policy forum, she writes: “I applaud the governor’s energy summit, however with the recent events and controversy swirling around the issue of renewable/green energy initiatives at the federal level (Solyndra), we in Kansas need to step back and analyze whether our current tax incentive packages for green energy is based on sound economic principles or rather an attempt to embrace ‘green’ energy for politically correct reasons. Here’s the question that begs to be asked, are incentive programs offered in Kansas useful economic development tools or are we throwing money at failed public policy? Among those incentives: Up to $5 million in bond financing for wind the solar manufacturers; a 10 percent corporate income tax credit for new capital investment; a tax abatement on real property for up to 10 years (subject to community approval); no franchise or inventory tax; the ability to retain payroll and withholding taxes for five to 10 years depending on the number of jobs created in Kansas.” … She references a recent op-ed written by the governor (Wind energy offers clean path to economic growth) and cites the rebuttal by Paul Chesser of American Tradition Institute. That may be read at ATI Release: Kansas Gov., Former Sen. Brownback Incorrect on Promise, Economics of Renewable Energy. More coverage at Kansas Governor Sam Brownback on wind energy.

    Economic development in Wichita. Events yesterday in Wichita City Hall and today at the Sedgwick County Commission indicate that most city leaders are firmly committed to rent seeking, corporate welfare, and large-scale government interventionism as the way to create propensity for our city and county. Here are a few articles with a different perspective: Wichita’s economic development strategy: rent seeking: “So what is rent seeking? Wikipedia defines it like this: ‘In economics, rent seeking occurs when an individual, organization or firm seeks to earn income by capturing economic rent through manipulation or exploitation of the economic environment, rather than by earning profits through economic transactions and the production of added wealth.’ … The private returns of rent seekers come from the redistribution of wealth, not from wealth creation. The tax that rent seeking imposes on the productive sector reduces the output growth rate by reducing the incentives of entrepreneurs to produce and innovate.” … Wichita again to bet on corporate welfare as economic development: “This week the Wichita City Council will consider three measures that, if adopted, will further establish corporate welfare and rent-seeking as Wichita’s economic development strategy. … When people are living on welfare, we usually see that as a sad state of affairs. We view it as a failure, both for the individual and for the country. We seek ways to help people get off welfare so that they become self-sufficient. We want to help them contribute to society rather than being a drain on its resources. But Wichita’s leaders don’t see corporate welfare as a bad thing. Instead, as these three measures — all of which will likely pass unanimously — illustrate, welfare is good when you’re a business in Wichita. Especially if you can raise speculation that your company might move out of Wichita.” … The ‘active investor’ role that the city of Wichita is about to take with regard to these three companies is precisely the wrong role to take. These actions increase the cost of government for the dynamic small companies we need to nurture. Instead these efforts concentrate and focus our economic development efforts in an unproductive way.”

    The first rough draft of the Solyndra story. As compiled by David Boaz, it’s a story that “just keeps getting more discouraging.” The headlines tell the story in his compilation at The First Rough Draft of the Solyndra Story.

    Tax increment financing. From Randal O’Toole: “Tax-increment financing (TIF) costs taxpayers around $10 billion per year and is growing as fast as 10 percent per year, according to a new report, Crony Capitalism and Social Engineering: The Case against Tax-Increment Financing published by the Cato Institute. Though originally created to help renew “blighted” neighborhoods, TIF today is used primarily as an economic development tool for areas that are often far from blighted. The report argues that TIF does not actually generate economic development. At best, it moves development that would have taken place somewhere else in a community to the TIF district. That means it generates no net tax revenues, so the TIF district effectively takes taxes from schools and other tax entities. At worst, TIF actually slows economic development, both by putting a larger burden on taxpayers and by discouraging other developers from making investments unless they are also supported by TIF.” … Tax increment financing — TIF districts — are expected to be a major source of revenue for the revitalization of downtown Wichita — and the accompanying social engineering directed from Wichita city hall. Wichita has also shown itself to be totally incapable of turning away from crony capitalism.

    Democrats Anonymous. “The first step is admitting you have a problem.”

  • Kansas and Wichita quick takes: Monday October 3, 2011

    Wichita City Council. Tomorrow the Wichita City Council considers these items: First, the council will have a do-over of a public hearing it held on September 21st. The need for this arises from a mistake regarding proper notification. Mistakes like this are not uncommon at Wichita city hall. … Then the council considers revising the development agreement for the Ken-Mar TIF district. More about that at Ken-Mar TIF district, the bailouts. … The council will be asked to approve an agreement with Service Employees International Union (SEIU) Local 513 providing for pay raises of 2.5 percent per year for the next two years. … As always, the agenda packet is available at Wichita city council agendas.

    What if the NFL Played by Teachers’ Rules? Writing in the Wall Street Journal, former NFL quarterback Fran Tarkenton explains the harm of teachers unions (What if the NFL Played by Teachers’ Rules? Imagine a league where players who make it through three seasons could never be cut from the roster.): “Teachers’ salaries have no relation to whether teachers are actually good at their job — excellence isn’t rewarded, and neither is extra effort. Pay is almost solely determined by how many years they’ve been teaching. That’s it. After a teacher earns tenure, which is often essentially automatic, firing him or her becomes almost impossible, no matter how bad the performance might be. And if you criticize the system, you’re demonized for hating teachers and not believing in our nation’s children. … Perhaps no other sector of American society so demonstrates the failure of government spending and interference. We’ve destroyed individual initiative, individual innovation and personal achievement, and marginalized anyone willing to point it out.”

    Do-nothing Hoover? A new briefing paper from the Cato Institute (Herbert Hoover: Father of the New Deal) challenges the commonly-held view of President Herbert Hoover as doing nothing to prevent or fix the Great Depression. “Politicians and pundits portray Herbert Hoover as a defender of laissez faire governance whose dogmatic commitment to small government led him to stand by and do nothing while the economy collapsed in the wake of the stock market crash in 1929. In fact, Hoover had long been a critic of laissez faire. As president, he doubled federal spending in real terms in four years. He also used government to prop up wages, restricted immigration, signed the Smoot-Hawley tariff, raised taxes, and created the Reconstruction Finance Corporation — all interventionist measures and not laissez faire. Unlike many Democrats today, President Franklin D. Roosevelt’s advisers knew that Hoover had started the New Deal. One of them wrote, ‘When we all burst into Washington … we found every essential idea [of the New Deal] enacted in the 100-day Congress in the Hoover administration itself.’ Hoover’s big-spending, interventionist policies prolonged the Great Depression, and similar policies today could do similar damage. Dismantling the mythical presentation of Hoover as a ‘do-nothing’ president is crucial if we wish to have a proper understanding of what did and did not work in the Great Depression so that we do not repeat Hoover’s mistakes today.” … Well worth reading.

    Kansas school cash. “A new report this month shows that cash reserves in Kansas’ 286 school districts grew 9 percent during the year ending June 30, even as schools statewide made plans to trim staff and cut programs because of reductions in basic state aid to education. The cash reserve increase is the sixth in as many years.” See Kansas Reporter, “Lawmakers question Kansas schools’ stashes of cash.”

    John Locke to appear in Wichita. This week’s meeting (October 7th) of the Wichita Pachyderm Club presents John Locke — reincarnated through the miracle of modern technology — speaking on “Life, Liberty, and Property.” This promises to be informative and entertaining. The public is welcome and encouraged to attend Wichita Pachyderm meetings. For more information click on Wichita Pachyderm Club … Upcoming speakers: On October 14th, Lieutenant Governor Jeff Colyer, M.D. Speaking on “An update on the Brownback Administration’s ‘Roadmap for Kansas’ — Medicaid Reform” … On October 21st, N. Trip Shawver, Attorney/Mediator, on “The magic of mediation, its uses and benefits.” … On October 28th, U.S. Representative Tim Huelskamp, who is in his first term representing the Kansas first district, speaking on “Spending battles in Washington, D.C.”

  • Kansas and Wichita quick takes: Wednesday September 28, 2011

    Obama’s intercontinental railroad. Burton Folsom notices a recent speech by President Barack Obama that mentioned how America built the “intercontinental railroad.” Folsom grants Obama some slack for the gaffe — we all make them, after all — and explains to readers the most important lesson that should be learned from our experience building the transcontinental railroad: “… the story of the transcontinental railroads really is a great teaching tool for today. If we study the Union Pacific, the Central Pacific, and the Northern Pacific Railroads, we learn they all went broke after receiving a combined total of 61 million acres of land. And they ran the nation deep into debt, too. … federal spending on transcontinentals meant corruption, land grabs, and wasted taxpayer dollars. But wait. The Great Northern Railroad, which went from St. Paul to Seattle, never went bankrupt and was one of the best-built railroads in the United States. Why did the Great Northern succeed when the others failed? Because James J. Hill, the president, built his railroad with no federal subsidies. He built the Great Northern slowly and made each part profitable before expanding it further. … Hill made profits and never went bankrupt. Here is the lesson: that which is privately owned is properly cared for and is best positioned to create jobs and profits. When the government gets involved, profits vanish and quality declines. Therefore, the president is right. Let’s discuss railroad history and apply what we learn to the present day.” The article is Interfacing with Obama’s Intercontinental Railroad.

    Alain festival starts. Today marks the first day of Jehan Alain, 1911-1940 — The American Festival, a three-day event celebrating the music of the French organist and composer, who died at the age of 29 fighting for his country against Germany in World War II. This three-day event is organized by Lynne Davis of Wichita State University. If you can attend only one event, I would suggest the opening recital to be performed by Davis at 7:30 pm tonight. The location is Wiedemann Recital Hall (map) on the campus of Wichita State University. … For more about Davis and WSU’s Great Marcussen Organ including photographs I took while climbing around the interior of the massive instrument, see my story from last year.

    How business loves regulation and hates markets. In a chapter of the book Back on the Road to Serfdom: The Resurgence of Statism edited by Thomas E. Woods Jr., Timothy P. Carney writes about the cultural costs of corporatism: “Despite the widespread assumption that a free market is the ideal economy for big business, and that regulation checks the power of big business, more often the opposite is true. Regulation, by adding to the cost of doing business, disproportionately hurt smaller business and acts as a barrier to entry, keeping out new competitors. Likewise, government subsidies can be far more valuable, or at least more reliable, then income for consumers, for which businesses must continually fight with competitors. The dynamics of the lobbying game are crucial here. Bigger companies enjoy a greater advantage in Washington than they do in the market. Not only can bigger companies hire the better lobbyists — former lawmakers are top administration aides — and handout more in campaign contributions, but they also matter more to lawmakers. The more workers you employ and the more taxes you pay, the more lawmakers care about your well-being, desires, and wishes.” … Carney goes on to explain that big government enables political entrepreneurs to succeed over market entrepreneurs. And big companies are better equipped to be political entrepreneurs. So while the standard account is that Walmart kills small-town retailers, the reality is that Walmart is effective at political entrepreneurship in ways that mom-and-pop retailers can’t be. “An unbridled free market isn’t killing Mom and Pop; an untethered state is.” The effect of this is, he writes: “And so reading the market is no longer as valuable as reading the polls. Research and development is not as good an investment as political connections. A good lobbyist is now worth more than a good idea.” … While Carney is writing about the situation at the federal level, we see the same dynamic at work in Wichita, where the city Council and its surrogates such as the Wichita Downtown Development Corporation and Greater Wichita Economic Development Coalition have large power over the granting of government favors. Connections to the politicians and bureaucrats that control these organizations replaces market allocation and market decisions.

    The Buffet rule won’t work. In a Cato daily podcast, Cato Institute Senior Fellow Alan Reynolds says “It doesn’t work. We tried it.” He’s referring to raising tax rates to collect more revenue from high-income earners. Reynolds explains that starting in 1986 and for the next 10 years the capital gains tax rate was 28 percent. But then President Bill Clinton lowered the rate to 20 percent, and Reynolds said that the stock market soared and the government was flush with cash. This, he said, was an example of lower tax rates increasing tax revenue. … Reynolds also explained that Berkshire Hathaway — the company Warren Buffet formed — was a tax avoidance device until 2003. As a holding company, it purchased companies that paid dividends, but Berkshire didn’t pay dividends itself. This practice avoided the higher dividends tax by converting dividends into capital gains. (Prior to 2003, dividends were taxed as ordinary income, which for most taxpayers was higher than the capital gains tax rate. Plus, capital gains can be deferred.) This purposeful design by Buffet belies his current contention that the wealthy should pay higher taxes.

  • Kansas and Wichita quick takes: Monday September 26, 2011

    Who creates jobs? Paul Jacob of Citizens in Charge Foundation knows that it’s not government that creates jobs. It’s people that do. And, there is one presidential candidate who knows this too. This candidate said during a recent debate “The fact is I can unequivocally say that I did not create a single job while I was governor.” Read more at Who Creates Jobs?

    Pompeo to address Pachyderms. This week’s meeting (September 30th) of the Wichita Pachyderm Club presents U.S. Representative Mike Pompeo of Wichita on “An update from Washington.” … The public is welcome and encouraged to attend Wichita Pachyderm meetings. For more information click on Wichita Pachyderm Club … Upcoming speakers: On October 7, John Locke — reincarnated through the miracle of modern technology — speaking on “Life, Liberty, and Property.” … On October 14, Sedgwick County Commission Members Richard Ranzau and James Skelton, speaking on “What its like to be a new member of the Sedgwick County Board of County commissioners?” … On October 21, N. Trip Shawver, Attorney/Mediator, on “The magic of mediation, its uses and benefits.”

    Supremes to make road trip. This week the Kansas Supreme Court will conduct sessions in Greensburg and Wichita. On Wednesday September 28th, the court will meet in the Kiowa County Courthouse beginning at 9 am. The next day the court will meet in the Wichita City Council chambers, starting at 9:00 am. Details about the cases the justices will hear may be read here: Greensburg Appeal Summaries, Wichita Appeal Summaries.

    March for the chicken. The recent visit to Wichita by economist Walter E. Williams produced many memorable moments, such as when Williams explained how private property works to save animal species from extinction: “I was listening to NPR, a number of years ago, and people were picketing the UN because they were concerned about the extinction of the giraffe, the gorilla, and the lion. So I wrote down a list of animals that people were in a tizzy over the possibility of their becoming extinct. … Then I wrote down another list of animals, very valuable to us, but people are not worried about them. I said ‘How come people are not marching for the chicken? Why are people not forming save the pig clubs?’ … What’s the difference between these two lists of animals? The essential difference is that with this list of animals — cows, chickens, and pigs — they belong to somebody. Somebody’s personal private interest is at stake. But this other list of animals — they don’t belong to anybody. Nobody’s personal private wealth is at stake. If you’re concerned about the extinction of various animals, I would recommend trying to privatize them.”

    Economic freedom. In a short video, Professor Aeon Skoble explains the linkage between economic freedom and personal liberty. Often the two are portrayed as competing forces, but this is not true at all. In the video, Skoble explains: “The truth is, there’s no real distinction between civil liberties and economic liberties. They’re one and the same, and it’s a mistake to separate them out and defend one at the expense of the other.” Economic freedom, explains Skoble, provides the means to express civil liberties, such as the right to publish your thoughts, and the right of someone else to read them: “When we make transactions in the economic realm, we are putting into physical reality in the social setting the choices we make. So if I don’t have the freedom to transact then my freedom of choice is hollow — an abstraction. … Economic liberties simply are the physical, social manifestations of the freedom of choice or freedom of conscience that we take so seriously.” The video is from LearnLiberty.org, a project of Institute for Humane Studies.