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  • Greenpeace report aims to stifle debate on climate science

    Wichita’s Koch Industries has come under attack from an environmental extremist organization for its support of open debate and dialog about the science of climate change.

    A report issued by Greenpeace uses inflammatory language and a one-sided view of the facts surrounding climate change in order to attack those it disagrees with. This comes at a time when scientists and the public are becoming increasingly skeptical of the claims of extremist organizations like Greenpeace — and with good reason, too.

    Revelations such as the emails from the East Anglia Climate Research Unit, for example, have peeled back the veneer and revealed extremists who have more than the pure pursuit of science as their agenda. This Greenpeace report is another example.

    As an example of the way the report presents facts in an attempt to make its case, here is the report’s criticism of one public policy foundation that received Koch funding: “… [it] has hosted Bjorn Lomborg twice in the last two years. Lomborg is a prominent media spokesperson who challenges and attacks policy measures to address climate change.”

    To thinking people who value open discussion of issues — rather than wholesale and uncritical acceptance of environmental extremism — providing a forum for Lomborg (author of The Skeptical Environmentalist: Measuring the Real State of the World and Cool It: The Skeptical Environmentalist’s Guide to Global Warming) is a good thing to have done. We need institutions such as Americans for Prosperity, The Cato Institute, and The Heritage Foundation to provide balance to mainstream media that has bought in — emphatically and largely uncritically — to global warming alarmism.

    There are those who have broken free from groups like Greenpeace, and the remarks of one give us insight into the true nature of these groups. Patrick Moore, who at one time was President of Greenpeace Foundation in Canada, has said this on the environmental extremists’ need to continually invent disasters: “At the beginning, the environmental movement had reason to say that the end of the world is nigh, but most of the really serious problems have been dealt with. Now it’s almost as though the environmental movement has to invent doom and gloom scenarios.”

    Moore shows that he totally understands the harm of radical environmental groups like Greenpeace: “The environmental movement has evolved into the strongest force there is for preventing development in the developing countries. I think it’s legitimate for me to call them anti-human.”

    This reveals the true anti-human, anti-progress agenda of environmental extremist groups like Greenpeace. They deny the tremendous progress and benefit to humans that industrialization — propelled by capitalism wherever it is allowed to thrive — has produced. They don’t want to let the debate and discussion proceed.

    Koch Industries has provided this response to the Greenpeace report:

    In a consistent, principled effort for more than 50 years — long before climate change was a key policy issue — Koch companies and Koch foundations have worked to advance economic freedom and market-based policy solutions to challenges faced by society. These efforts are about creating more opportunity and prosperity for all, as it’s a historical fact that economic freedom best fosters innovation, environmental protection and improved quality of life in a society.

    The Greenpeace report mischaracterizes these efforts and distorts the environmental record of our companies. Koch companies have long supported science-based inquiry and dialogue about climate change and proposed responses to it. Koch companies have put tremendous effort into discovering and adopting innovative practices that reduce energy use and emissions in the manufacture and distribution of our products.

    We believe the political response to climate issues should be based on sound science. Both a free society and the scientific method require an open and honest airing of all sides, not demonizing and silencing those with whom you disagree. We’ve strived to encourage an intellectually honest debate on the scientific basis for claims of harm from greenhouse gases. We have tried to help bring out the facts of the potential effectiveness and costs of policies proposed to deal with climate, as it’s crucial to understand whether proposed initiatives to reduce greenhouse gases will achieve desired environmental goals and what effects they would likely have on the global economy.

  • Kansas fourth district Congressional candidate forum

    Last night the candidates for the Republican Party nomination for United States Congress from the fourth district of Kansas squared off in a ninety-minute forum at the Orpheum Theater in downtown Wichita.

    The candidates for this nomination (and their campaign websites) are Wichita businessman Jim Anderson, Wichita businessman Wink Hartman, Wichita businessman Mike Pompeo, and Kansas Senator Jean Schodorf. Election filing records maintained by the Kansas Secretary of State indicate that Paij Rutschman of Latham has filed for the Republican Party nomination, but little is known about this candidate at this time, and Rutschman did not appear at this event.

    Former television new anchor Anita Cochran was the moderator. The event was broadcast live on radio station KQAM 1410, “The Big Talker.”

    The forum started with opening statements by the candidates.

    Mike Pompeo, June 16, 2010Mike Pompeo

    Pompeo said, as he often does, that “Washington DC has fundamentally lost its way. There are elected officials there no longer connected to Kansas in the way we all know they need to be.” He traced his biography: Growing up in Southern California, attending West Point and serving in the Army, then attending Harvard Law School and working three years as a lawyer. He came to Wichita to start an aerospace company that he said grew to one of the five largest aircraft subcontracting companies. Today he runs Sentry International, a company that services the oilfield industry.

    He told the audience that “the candidates sometimes sound like they’re saying about the same thing. But listen closely — we could not be more different.”

    Wink Hartman, June 16, 2010Wink Hartman

    Hartman that he is the “only Kansan in the race.” He said he was born and raised in Wichita, graduating from Southeast High School and working his way through Wichita State University. He said he had a “multitude of jobs” including painting houses, selling trashcans door-to-door, and repossessing cars.

    Hartman told the audience “I am a businessman. I am not a politician. I’m not trying to build a political resume.” He said he has learned to balance a budget, meet a payroll, and how to work with increasing government regulation and taxes. He said he has created thousands of jobs in this community for over four decades. He promoted his business success as a key qualification.

    Jim Anderson, June 16, 2010Jim Anderson

    In his opening remarks Anderson said “I am an American.” He said he has been an airline pilot for 25 years, bringing both commercial and corporate aviation experience and business management experience to this race. “I am the leader out in front to reform government with a Fair Tax, a balanced budget amendment, term limits — the only one fighting for term limits — and a pledge to this community, to this district, for no earmarks.”

    He told the inaudible that the Constitution begins with “We the people,” not “We the government.” The government has no right to confiscate our money, dictate morals, and decide on health care. He said he is the tea party candidate.

    Jean Schodorf, June 16, 2010Jean Schodorf

    Schodorf told the audience that she and her opponents are all Republicans, working to get the nomination. She held up as sign reading “JOBS!” and said that the fourth district has the highest unemployment rate in the state. People are hurting in both urban and rural districts, she said, and she wants to go to Congress to end the recession. She want to work with state and local government to bring back economic development and recovery.

    She said she is a native of Independence, although she was born on a military base in North Carolina. She said she wants to bring the tanker contract back, and wants to bring back jobs from Mexico. Her experience in the Kansas Senate and background in education will help her “hit the ground running,” she said.

    The first question directed at all candidates had to do with the oil spill in the Gulf of Mexico. Has it changed your view on drilling in deep waters in the Gulf? The need for energy independence was stressed by all candidates except Schodorf. She recommended that all oil companies voluntarily stop drilling until safety plans are reviewed and approved.

    The second question asked about policies that should be changed or implemented to increase the creation of private sector jobs.

    Answering first, Hartman said he has experience in this area. He said the current income tax structure limits the ability of business to grow and that the Fair Tax should be discussed. He added that regulation places a burden on business, and that regulation must be reduced.

    Anderson said that the Fair Tax is the “bottom line,” adding that government controls us through the tax code.

    Schodorf said she is the only candidate who has voted on taxes, listing several business tax cuts she had voted for in the Kansas Senate over the years. She supports keeping the Bush tax cuts in place. She said that our representative in Congress and the state need to work together to create incentives for business to locate in Kansas, saying that we will be competing with other states for jobs.

    Pompeo pointed to his manufacturing experience and how government works to discourage jobs. Government bureaucrats, he said, are not interested in seeing that we are competitive. He criticized the statewide sales tax increase in Kansas. He said that the U.S. has the second-highest corporate income tax rate in the world, which discourages job creation.

    Another question: Are there any parts of the recently-passed health care law that you agree with and want to see implemented?

    Answering first, Anderson said we should repeal the law because it is unconstitutional, adding that nowhere does the Constitution give government the right to mandate the purchase of health care. Nothing in the plan benefits citizens, he said, adding that tort reform along with the ability to purchase health insurance across state lines is needed. “Let the free market drive the product, and you’ll get a good product at a low price.”

    Schodorf said that she liked the portion of the law that prohibits companies to refuse insurance to those with per-existing conditions. The ability of people to stay on their parents’ insurance plans until the age of 26 would keep a pool of healthy people in the insurance pool.

    Pompeo said we don’t know what’s in the bill, and that it was a “travesty” the people voted for the bill without knowing. He said it was “radically undemocratic” and rejected the will of the people. Competition always drives improvement in quality and price, and this factor needs to be introduced into the health insurance marketplace.

    Hartman said the bill will limit access to quality health care, pointing to poor quality health care in Canada. He recommended tort reform and personal ownership of health insurance policies.

    On a foreign policy question relating to the recent incident involving a Turkish ship, candidates agreed that Israel is a friend of America and deserves our support. Pompeo said that Obama’s policies “make our enemies closer” and pushes our friends away, adding that we need to make sure people know America will protect its national security interests. Hartman said Israel is a stabilizing force and has the right, as does America, to defend itself against all enemies. Anderson said the American President should send a message that this behavior will not be tolerated, and that Israel is our friend.

    A question asked about the honesty of politicians.

    Answering first, Pompeo said that not all politicians are dishonest, but that too many go to Washington and become corrupted by the power. He said that voters should realize that politicians will behave in office like they run their campaigns, so we should ask candidates to tell the truth. If candidates say things that do not match the facts, voters should “call them on it at every turn.”

    Hartman said he can’t answer that question, as he’s not a politician. He said that when you elect the same people, you should not expect different results. Politicians drink the Kool-aid when they “go across the river,” saying that they no longer represent you,instead representing personal and special interest groups that have supported them.

    Anderson said we need to look closely at who we are electing, noting that some candidates have accepted money from political action committees and from lobbyists. He echoed Hartman in saying that we shouldn’t send “the same people” back to Washington.

    Schodorf said she has worked for the people of Kansas in her job in the Kansas Senate. She added that voters should look at what candidates believe in, and who they work for.

    During a break for radio commercials, moderator Cochran stood behind each candidate to give their supporters a chance to show their support. Pompeo supporters cheered the loudest.

    After the break, candidates answered a question directed to them individually. These questions will be covered in another story.

    A question asked about whether the recession has changed the candidates’ personal or public spending on credit. Answering first, Anderson said the federal government must balance its budget and that its spending habits must change, starting with an overhaul of the tax system.

    Schodorf said that personally she has been saving money and paying off bills. She said the federal government needs a balanced budget amendment to force it to balance its budget as the state of Kansas must. She supports a bi-partisan commission to find ways to cut spending and cut the deficit.

    Pompeo said the problems we have today have been caused in large part by bad government decision-making, using Fannie Mae and Freddie Mac as examples. He said that regulators are telling banks that they want them to make loans, but the regulators behave differently.

    Hartman said we need to do something about our $13 trillion in debt. More spending will not create prosperity and solve problems, he said, citing the failure of the stimulus program and “cash for clunkers.” He added that we need to shrink the size of government and take a look at the Fair Tax. He said that the amount of federal government debt held by China is a problem.

    The candidates each made a closing statement of up to one minute. Going first, Schodorf said she is running for Congress to bring back jobs and economic development. She said she believes in helping senior citizens, the disabled, and our kids. She said the Republican Party needs to be a big tent party, and a party of solutions, not the party of “no.” She said we need to bring sense to government.

    Anderson referred to Ronald Reagan’s contention that freedom is never more than one generation away from extinction, and that it must be fought for by each generation. Our country is in trouble, he told the audience, and he said that he is the common sense conservative candidate.

    Hartman said that can show something that no one else can: his record of success in the community in creating good-paying jobs.

    Pompeo said that we live in the greatest nation in history, but we are on the brink of losing that. He said it is immoral and wrong for Washington to spend the money of the next generation. The federal government has just a few tasks, such as keeping us safe and protecting every human life. Then, he said government should get out of the way.

    Notes

    The event was well-attended, with almost 400 tickets collected. Many more may have gained entrance without a ticket. Candidates had tables in the lobby with literature.

    While Cochran did a good job keeping the event on schedule, not all in the audience were pleased with her demeanor. There was one gaffe in particular that was offensive: Schodorf was answering a question and remarked as her time ran out that she forgot something she meant to say. Cochran interjected “Sometimes Alzheimer’s kicks in right at the right time,” adding that she was “not kidding, that Alzheimer’s is horrible.”

    During the intermission for radio commercials moderator Cochran let the crowd indicate its support for each candidate by cheering. Pompeo seemed to be the crowd favorite by a large margin. This was not a scientific poll, but an indication of the sentiment of those in the audience.

    During the forum, Schodorf twice held up a sign reading “JOBS!” saying she’d just been to a rally. That rally was sponsored by union members, and its purpose was protesting the outsourcing of jobs by Wichita manufacturers (See Aviation workers rally to protest outsourcing.) During this forum Schodorf mentioned returning jobs from Mexico.

    The issue of job creation is important to two of the candidates who promote their business experience as qualifications for this position. Two remarks should be noted: First, business and government are two very different fields. The businessman is motivated by profit; indeed, profit is the measure of success. But government has no ability to profit, and thereby no such yardstick.

    Second, to a business, jobs are are a cost that is to be minimized. There are not many businessmen who create jobs just for the sake of creating jobs. Instead, they hire workers because there is work to be done, and if that work is done, profit will be (hopefully) generated. This is not to minimize the accomplishments of Hartman and Pompeo, as both have been successful in business and are to be commended for that. But claims that job creation is the reason for a business’s existence must be questioned.

    While Anderson has not had the same type of business management and entrepreneurial experience as Hartman and Pompeo, the responsibility of being the captain of a jet airliner with several hundred passengers on board is not a trivial experience.

    Additional coverage from State of the State KS is at Anderson, Hartman, Pompeo and Schodorf Answer Tough Questions in Debate at Wichita’s Orpheum Theatre.

  • Inspector General evaluates Obamacare website

    Inspector General evaluates Obamacare website

    The HHS Inspector General has released an evaluation of the Obamacare website HealthCare.gov, shedding light on the performance of former Kansas Governor Kathleen Sebelius.

    The Office of Inspector General for the Department of Health and Human Services has released a report titled HealthCare.gov: Case Study of CMS Management of the Federal Marketplace. An excerpt from the executive summary holds the main points:

    What We Found

    The development of HealthCare.gov faced a high risk of failure, given the technical complexity required, the fixed deadline, and a high degree of uncertainty about mission, scope, and funding. Still, we found that HHS and CMS made many missteps throughout development and implementation that led to the poor launch. Most critical was the absence of clear leadership, which caused delays in decisionmaking, lack of clarity in project tasks, and the inability of CMS to recognize the magnitude of problems as the project deteriorated. Additional HHS and CMS missteps included devoting too much time to developing policy, which left too little time for developing the website; making poor technical decisions; and failing to properly manage its key website development contract. CMS’s organizational structure and culture also hampered progress, including poor coordination between policy and technical work, resistance to communicating and heeding warnings of “bad news,” and reluctance to alter plans in the face of problems. CMS continued on a failing path to developing HealthCare.gov despite signs of trouble, making rushed corrections shortly before the launch that proved insufficient. These structural, cultural, and tactical deficiencies were particularly problematic for HealthCare.gov given the significant challenges of implementing a new program involving multiple stakeholders and a large technology build.

    The problems are not solved. Challenges remain, the report says, including “contract oversight, the accuracy of payments and eligibility determinations, and information security controls.”

    Who is responsible for the debacle? In a hearing before Congress, HHS Secretary and former Kansas Governor Kathleen Sebelius said “hold me accountable.” View a video clip below, or click here to view at C-SPAN.

  • Liberal “Moderates” Unite In Governor’s Ticket

    Thank you to Karl Peterjohn of the Kansas Taxpayers Network for this fine piece.

    For the record, here’s how the Associated Press quoted Mark Parkinson in 2002:

    “I would say that any Republican who supports Kathleen Sebelius for governor is either insincere or uninformed,” Parkinson said. “She is a left-wing liberal Democrat and no Republican in good conscience can support her.”

    It is hardly surprising to me that two politicians, Mark Parkinson and Governor Kathleen Sebelius in this case, could have such a dramatic change of heart. I think we can reasonably conclude that these two politicians are so hungry for power that either will do anything that is necessary to gain or keep their office.

    There is a simple solution. Reduce the power of government. If government was limited to performing only those very few functions that only government can do, politics would be so boring that few would be so attracted to political offices. Private life would be much better, however, as we regain the liberties that government has taken from us.

    Liberal “Moderates” Unite In Governor’s Ticket
    Karl Peterjohn, Kansas Taxpayers Network

    Over 40 years ago the Conservative Party candidate for Mayor of New York City provided the perfect response to describe his liberal Democratic and Republican opponents in that 1965 election, “Their differences are biological, not political,” said William F. Buckley. Kansas statehouse observers would not be cynical for having the same feeling about the self-described “moderates” in both the Republican and Democrat parties. This became vividly clear as Governor Sebelius made her selection of former GOP state chairman and former Johnson County legislator Mark Parkinson as her 2006 Lieutenant Governor running mate official May 31.

    Naturally conservative Republicans were quick to point out the liberal positions on taxes, on judicial dominance over state school spending, on a variety of hot button social issues from illegal immigration subsidies for state college tuition, drivers licenses, expanding gambling, late term abortions, and the governor’s unsuccessful veto of conceal carry legislation in criticizing Kathleen Sebelius. Many self described GOP “moderates” in the legislature have voting records that reflect many of these positions along with their Democratic colleagues. For many average Kansans, if not the bulk of the Kansas news media establishment, these are left-wing, not “moderate” positions on key state issues.

    Kansas GOP state party chairman, Tim Shallenburger, the unsuccessful GOP gubernatorial candidate in 2002, described Parkinson as, “…want to raise taxes, want to spend more, want to give their friends jobs.” The irony is that Parkinson’s comments in 2002 as state party chairman sound utterly prescient today, “Clearly, she’s (Sebelius) worried about her record which puts her squarely in the liberal camp. No running mate can disguise that.” In 1994, then Sen. Parkinson had joined with then Rep. Sebelius and a majority of the Kansas legislature to raise the statewide property tax from 33 to 35 mills or over six percent.

    In 2002 then candidate Sebelius kept making fiscally conservative claims about opposing tax hikes before that gubernatorial election. Kansans now know from the last four years that Governor Sebelius supports tax hikes, expanding state gaming to raise revenues, as well as other revenue “enhancements” to help grow Kansas government. Recent polling indicates that will not go over well with the average Kansan.

    Rasmussen Reports conducted a Kansas survey between April 3 and May 4 this year. This scientific poll asked 500 Kansans if tax increases helped or hurt the economy. By a better than 3-to-1 majority, Kansans said tax hikes hurt 59 percent-to-19 percent. When asked if tax cuts helped or hurt the state’s economy, a similar 3-to-1 majority said tax cuts helped. The figures here were 58-to-18. On a third question a narrow plurality said they would rank tax preparation worse than visiting the dentist 43 percent to 41 percent.

    The conventional statehouse wisdom is that Governor Sebelius was going to win easy reelection against a weak GOP opponent coming out of the August primary in November. Actually, despite her hefty campaign treasury and all of the advantages of incumbency, Governor Sebelius is struggling with voters. Her poll numbers in a heads up match up with any of the likely GOP challengers has her stuck in the high 40’s despite the fact that none of her challengers even has 50 percent name recognition statewide.

    There is a huge vulnerability to the governor from the activist and Democrat dominated Kansas Supreme Court that has forced the rest of the state government to submit to their specific fiscal demands. The average Kansan is not comfortable with judicial appropriation of state spending, an oligarchy of black robed lawyers steering state government, state subsidies for illegal aliens receiving everything from drivers licenses, in-state college tuition, as well as various forms of welfare. Throwing billions of more tax dollars at the government school structure in Kansas seems like a dismal repetition of the fiscal and educational failure that occurred in a Kansas City, Missouri courtroom 20 years ago.

    Kansans view this judicial spending spree as left wing judicial activism but all practical Kansans want to see success in government and not a repetition of very expensive past failures. That’s why Governor Sebelius along with her activist and ethically challenged liberal Supreme Court are in political trouble in 2006. Mark Parkinson’s selection won’t solve that primary problem facing the governor since she must defend her record during the last four years.

  • Raj Goyle is not moderate or conservative, even for a Democrat

    In its article 10 to watch in 2010, the Wichita Eagle included short profiles of the candidates in the race for the Kansas fourth district Congressional seat.

    For Democrat Raj Goyle, the article describes Goyle as a “blue dog Democrat.”

    That’s pretty funny. Maybe it’s the Eagle’s attempt at branching out into comedy.

    The term “blue dog Democrat” describes a moderate or conservative Democrat. This doesn’t describe Goyle. He may talk that way, but we need to look at his actions.

    For example, consider his voting record in the Kansas House of Representatives. The Kansas Taxpayer Network published ratings of Kansas legislators based on their votes on key issues. For the 2008 session (the last session with ratings), Goyle’s rating was 38%. Only 11 of 125 members had a lower score. This places Goyle at the liberal end of the spectrum in the Kansas House.

    Then, what about his work history? Goyle’s campaign website doesn’t mention this, but he worked for the American Civil Liberties Union, one of the political left’s favorite organizations.

    Goyle’s site also omits that he was Senior Policy Analyst for Domestic Policy at the Center for American Progress. This organization is one of the most prominent left-wing think tanks in America and advocates for more and larger government. It was initially funded by sub-prime mortgage pioneers Herbert and Marion Sandler, who were tagged by Time Magazine in 2009 as some of 25 people to blame for the financial crisis. Other CAP funders include convicted inside trader George Soros.

    To talk of Goyle as a moderate or conservative Democrat overlooks his actions. We may have to rely on news outlets other than the Wichita Eagle for this type of information.

  • KPERS report sparks backlash from Wichita SEIU

    Recently Kansas University professor Art Hall, along with a co-author, published a study explaining the funding crisis in KPERS, the Kansas Public Employee Retirement system. In summary, the report states: “The key finding of the study is that the KPERS system will not be in actuarial balance over the thirty year amortization period set in GASB standards. This means that KPERS will continue to accumulate unfunded liabilities for the foreseeable future. It is highly likely that KPERS will continue to impose a heavy tax burden on future generations.”

    This finding has raised quite a protest from those who expect to receive a benefit from KPERS in retirement. It may be the school districts and teachers that are protesting the loudest. What’s really strange is that they’re protesting what appear to be facts based on solid research.

    An example of the blowback to this report is when Harold Schlechtweg, business representative of Service Employees International Union Local (SEIU) 513 in Wichita, addressed the board of USD 259, the Wichita public school district regarding the KPERS report. He advocated for raising taxes earlier this year in front of the Wichita City Council so that employees he represents wouldn’t lose their jobs to less expensive outsourcing.

    To the school board, he said that when “people make a political intervention — and that’s exactly what that report was — I think that some requirement should be placed on them that they consider the impact of that.”

    This is a puzzling statement. Is Schlechtweg asking for some sort of censorship or approval to be obtained before think tanks or advocacy groups publish their articles? I don’t think he would consent to this requirement being placed on himself, as many of his arguments wouldn’t pass any sort of sanity test.

    For example, in a Wichita Eagle op-ed earlier this year, Schlechtweg said that if wages and benefits paid to Wichita parks workers were cut, the community would suffer. Let’s remind him who pays the wages and benefits he tried to protect: the taxpayers of the city of Wichita. The interests of the workers he represents are in direct opposition to that of the Wichita taxpayer.

    Schlechtweg (and others) object to use of the word bankrupt, but if that accurately describes the financial condition of KPERS, why should we gloss over it?

    He also mentioned the large losses in 401k plans. That’s not true for everyone. If a person’s funds were invested in, say, money market funds, there would have been no losses.

    Employing the tactics often used by the left when faced with issues not favorable to their cause, Schlechtweg attacks personalities. He slams the authors of the study as “not friends of public education,” naming Americans for Prosperity, the tea party groups, and the Kochs specifically.

    He praised the Kansas National Education Association or KNEA, the teachers union), for their work in providing information on this issue. Mr. Schlechtweg, if you’re going to discount the arguments of certain advocacy groups, can we agree that the teachers union is one of the most single-sided, uncompromising, and untruthful advocacy groups?

    And while bashing the political motives of others, doesn’t Schlechtweg realize that the KNEA is all about politics, if about anything at all?

    The fix for KPERS, he said, is to fund it. A problem, of course, is that taxes will likely have to be raised, and people don’t like to pay taxes. But to advocates like Schlechtweg and the SEIU, that’s not a problem. The taxpayer, it seems, is both their source of funds and focus of their scorn.

  • The Fallacy of “Green Jobs”

    Does climate change offer an opportunity to spend ourselves out of a possible recession? John Stossel doesn’t think so, and in his piece The Fallacy of “Green Jobs” he lays out the case.

    Key points:

    “The fallacy is the same in every case: Even if the program creates jobs building bridges or windmills, it necessarily prevents other jobs from being created. This is because government spending merely diverts money from private projects to government projects.” Stossel relies on Frederic Bastiat and his explanation of the broken window fallacy for support. This fallacy is expertfully explained by Henry Hazlitt, and I quote him extensively in my post Henry Hazlitt Explains Frederic Bastiat, or, A Broken Window Really Hurts No Matter What the New York Times Says. Hazlitt also has much to say about the folly of creating jobs through public works projects.

    “Governments create no wealth. They only move it around while taking a cut for their trouble. So any jobs created over here come at the expense of jobs that would have been created over there.” Advocates of government allocation of jobs usually claim that this control is necessary because of market failure. In other words, left to their own, investors can’t figure out where investment is most valued. Government “wisdom” is required.

    “Politicians have a lousy record trying to make ‘strategic investments.’ President Jimmy Carter’s Synthetic Fuels Corporation cost taxpayers at least $19 billion but failed to give us alternative fuels.”

    And this very important point:

    One reason decentralized markets are preferable to government central planning is that human beings are fallible. Mistakes are inevitable. Some investments will be errors. Mistakes in the market tend to be on a comparatively small scale. If one company invests in plug-in hybrids and it goes bust, only a relatively few people suffer. The assets of the bankrupt firm pass into more capable hands.

    But decisions by government, especially the federal government, affect all of us. When government makes a mistake, the bureaucracy can’t go bankrupt. Instead, it will use its failure to justify increased appropriations in the next budget.

    This is perhaps the most important insight in this article. Government programs tend to be monolithic, and once started are difficult to modify in light of changing conditions or things learned. We need entrepreneurs with their dynamic discovery process rather than government bureaucrats and politicians to guide this process.

  • Kansas sales tax exemptions mischaracterized in Kansas City Star

    A recent editorial in one of Kansas’ leading newspapers may lead readers to believe that eliminating sales tax exemptions holds the key to solving the state’s budget problems. But following the advice of the editorial would place Kansas at a severe disadvantage to other states in manufacturing.

    The Kansas City Star editorial, titled Education should trump tax breaks in Kansas, holds this paragraph: “For every penny of sales tax collected in Kansas, the state exempts 2 cents. Brownback should be looking at ways to spread, not increase, the tax burden more fairly so everyday Kansans aren’t asked to prop up breaks for businesses.”

    While the numbers the editorial cites are correct, they are used in a misleading way, as we can easily see.

    In 2009, the retail sales tax brought in $2,286.7 million. According to a study by the Kansas Legislative Division of Post Audit is titled Kansas Tax Revenues, Part II: Reviewing Sales Tax Exemptions, Kansas has 99 sales tax exemptions that cost the state an estimated $4.2 billion in 2009. That’s pretty close to the two-to-one ratio of exemptions to collections that the Star editorial mentions.

    But if the Star had cared to look any farther, they would have realized that this number is an illusion. The audit report noted: “Six of those exemptions, accounting for $3.4 billion, relate primarily to taxing goods at the final point of sale, and not taxing government entities.”

    An example of an exemption that contributes toward the $3.4 billion figure is exemption 79-3606 (m), described as “Ingredient/Component parts: Of items manufactured or produced for sale at retail.” The audit report estimates that for 2009, this exemption cost the state $2,248.1 million in lost sales tax revenue.

    This exemption isn’t really an “exemption,” at least if the sales tax is thought of as a retail sales tax designed to be levied as the final tax on consumption. That’s because these goods aren’t being sold at retail. They’re sold to manufacturers who use them as inputs to products that, when finished, will be sold at retail.

    An example would be an aircraft manufacturer purchasing a jet engine to be installed in an airplane that is being built. Most states don’t tax this type of sales. If Kansas decided to tax these transactions, it would place our state’s manufacturers at a severe and crippling disadvantage compared to almost all other states.

    There are two other exemptions that fall in this category of inputs to to production processes, totaling an estimated $461 million in lost revenue. When we consider these numbers, the premise of the Star’s editorial — that there are untold riches to be collected if we close tax breaks — isn’t true. That is, unless the Star really believes we should be taxing these type of intermediate business transactions. I wouldn’t be surprised if it thinks we should.

    I agree with the Star that we should be looking for ways to spread the tax burden. Then, let’s lower the rates.

  • Voice for Liberty Radio: David Boaz of Cato Institute

    Voice for Liberty logo with microphone 150In this episode of WichitaLiberty Radio: David Boaz spoke at the annual Kansas Policy Institute Dinner. David Boaz is the executive vice president of the Cato Institute and has played a key role in the development of the Cato Institute and the libertarian movement. He is a provocative commentator and a leading authority on domestic issues such as education choice, drug legalization, the growth of government, and the rise of libertarianism. Boaz is the former editor of New Guard magazine and was executive director of the Council for a Competitive Economy prior to joining Cato in 1981. He is the author of Libertarianism: A Primer, described by the Los Angeles Times as “a well-researched manifesto of libertarian ideas,” the editor of The Libertarian Reader, and coeditor of the Cato Handbook For Policymakers. His articles have been published in the Wall Street Journal, the New York Times, the Washington Post, the Los Angeles Times, National Review, and Slate. He is a frequent guest on national television and radio shows, and has appeared on ABC’s Politically Incorrect with Bill Maher, CNN’s Crossfire, NPR’s Talk of the Nation and All Things Considered, John McLaughlin’s One on One, Fox News Channel, BBC, Voice of America, Radio Free Europe, and other media. His latest book is The Politics of Freedom.

    This is an excerpt of David Boaz speaking in Wichita, October 15, 2013.

    Shownotes

    Cato Institute
    David Boaz at Cato Institute
    David Boaz: Independent Thinking in a Red-Blue Town
    Books by David Boaz
    Kansas Policy Institute

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