Voice For Liberty

Tag: Economic freedom

Economic freedom means property rights are protected under an impartial rule of law, people are free to trade with others, both within and outside the country, there is a sound national currency, so that peoples’ money keeps its value, and government stays small, relative to the size of the economy.

  • Kansas and Wichita quick takes: Tuesday April 3, 2012

    Arts funding. For a view of government arts funding from an actual artist, please read The Government, art funding and Sam Brownback in KS by Christopher Allen. He makes an important point: “The government not paying for you to make something is NOT censorship.” I haven’t heard government arts funding advocates use the “censorship” word yet, but you can tell it’s on the minds of those who feel they should be receiving taxpayer money to support their work. … Allen also draws attention the incredible freedoms we in America and the free world enjoy regarding art: “If you want to make art, nobody’s stopping you. In some countries of the world, you get beheaded for making art that others disapprove of.”

    Arts censorship. I thought that no one in Kansas had used the “Censorship” word regarding government funding of arts, but I now realize I spoke too soon. Reporting on a recent visit by Rocco Landesman, National Endowment for the Arts Chairman, the Lawrence Journal-World reported: “Kevin Willmott, a KU film professor, asked Landesman if he was concerned about what Willmott called ‘corporate censorship’ of the arts, saying if a movie he created wasn’t perceived as being able to make money it wouldn’t get seen. Landesman replied with a line that drew applause from the audience. ‘The reason we have public funding of the arts, and the reason we have the NEA at all, is so the marketplace is not the sole determinant of what is seen and what is excellent,’ he said.” … I think Wilmott ought to be more concerned that the people of Kansas will continue to fund university film departments at the same time our universities are having trouble producing graduates equipped for a modern economy.

    Comparison of state comparisons. There are a number of studies that have ranked the states based on economic competitiveness. Emily Washington of the has looked at three reports produced by organizations that favor free markets and reports on the differences. Included are State Business Tax Climate Index by Kail M. Padgitt of The Tax Foundation, Rich States, Poor States: ALEC-Laffer State Economic Competitiveness Index from American Legislative Exchange Council, and Freedom in the Fifty States: An Index of Personal and Economic Freedom from Mercatus Center at George Mason University. Washington’s report is at A Comparison of Indices that Rank State Economic Competitiveness.

    Ryan tax plan. Cato Institute’s Chris Edwards comments: “The goal is to simplify the tax code and spur economic growth, and you can do that without changing the total revenue raised or who it is raised from. Ryan’s strategy is to eliminate tax deductions and credits while replacing the current six-rate income tax structure with two rates of 10 and 25 percent. The result would be less tax paperwork, more jobs and more investment, which would be good for everybody. Liberals rail against the idea of cutting the top income tax rate from the current 35 percent, but Ryan’s lower 25 percent rate was not picked out of thin air. IRS data show that taxpayers with the highest incomes currently pay an average of about 25 percent of their income in income taxes. At the same time, middle-income taxpayers pay an average of roughly 10 percent. That is why Ryan’s two-rate tax structure of 10 and 25 percent would collect about the same amount of money from the same income groups as the current code if we got rid of the deductions and credits.” See The Truth about Paul Ryan’s Tax Plan.

    Are earmarks returning? “After just 14 months at the levers of power of the House, it appears that some House Republicans are ready to admit that they have been unsuccessful in kicking their spending addictions. Rep. Mike Rogers (R-AL) is suggesting to House Republicans that the ban on earmarking be lifted so that members of Congress could ‘grease the wheels’ of legislation in an effort to pass bills faster. The ban was put in place shortly after Republicans, backed heavily by Tea Party conservatives calling for more fiscal responsibility in Congress, won the majority in the House during the Fall 2010 midterm elections. The ban is set to automatically expire at the end of this session of Congress at the end of the year. Bill Wilson, President of Americans for Limited Government, said, ‘This is an open acknowledgement that earmarks are nothing more than legislative bribery to buy votes. But what it represents is a further repudiation by leadership of the principles that got them in power in the first place. In 2010, Republicans pledged to ‘put us on a path to balance the budget and pay down the debt.’” See Are earmarks returning?

  • For Koch critics, facts aren’t part of the equation

    A Saturday op-ed in the Lawrence Journal-World begins with: “What is it, or why is it, that the name Koch, particularly here in Lawrence and Kansas, seems to trigger such angry, passionate and negative responses from a certain segment of the community, particularly among some at Kansas University?”

    It’s a good question. When people insert themselves into politics, there will be debate and criticism. I don’t think Charles and David Koch expect a free pass. But some of the online comments written in reaction to this op-ed show, however, that facts and reason won’t stand in the way of those who use demonization of Charles G. Koch and David H. Koch, principals of Wichita-based Koch Industries, to advance their political agendas.

    Simons’ op-ed is generally accurate in its depiction of Charles and David Koch, although the company says Koch has not contributed to FreedomWorks, as is reported. But the reader comments — that’s where things really go off the mark.

    Here’s a comment that is representative of many: “They would use their wealth to suppress innovation and competition. It’s another case of ‘I’ve got mine, and I want to make sure you don’t get yours.’ Why don’t they set up a loan company to encourage small businesses? Why don’t they hire more workers and give their present workers more benefits? Instead they want to buy the government, so they can control things instead of empowering others.”

    As to suppressing innovation and competition: For decades the Kochs have supported free markets and competition through capitalism, which are the engines of innovation, not barriers. Last year Charles Koch, in the Wall Street Journal, strongly advocated for capitalism over cronyism. On the relationship between government and business, he wrote that too many business firms have practiced “crony capitalism”: lobbying for special favors, subsidies, and regulations to keep competitors — who may be more efficient — out of the way.

    While it’s more difficult than practicing cronyism, competing in open markets assures that firms that efficiently provide goods and services that consumers demand are the companies that thrive, Koch added. It is these efficient firms that raise our standard of living. When politically-favored firms are propped up and bailed out, our economy is weakened: “Subsidizing inefficient jobs is costly, wastes resources, and weakens our economy.”

    In the introduction to The Morality of Capitalism, Tom G. Palmer explains further how genuine capitalism is a system of innovation and creativity:

    The term ‘capitalism’ refers not just to markets for the exchange of goods and services, which have existed since time immemorial, but to the system of innovation, wealth creation, and social change that has brought to billions of people prosperity that was unimaginable to earlier generations of human beings. Capitalism refers to a legal, social, economic, and cultural system that embraces equality of rights and ‘careers open to talent’ and that energizes decentralized innovation and processes of trial and error. … Capitalist culture celebrates the entrepreneur, the scientist, the risk-taker, the innovator, the creator. … Far from being an amoral arena for the clash of interests, as capitalism is often portrayed by those who seek to undermine or destroy it, capitalist interaction is highly structured by ethical norms and rules. Indeed, capitalism rests on a rejection of the ethics of loot and grab. … Capitalism puts human creativity to the service of humanity by respecting and encouraging entrepreneurial innovation, that elusive factor that explains the difference between the way we live now and how generation after generation after generation of our ancestors lived prior to the nineteenth century.

    The charge of “I’ve got mine, and I want to make sure you don’t get yours” is often leveled against the wealthy, and for some, that may drive their policies. It’s important to know, though, that the policies of economic freedom that the Kochs have promoted are more important to poor people than the wealthy. A glance at the Economic Freedom of the World reports confirms what history has taught us: Countries with market-based and free, or relatively free, economies become wealthy. Poor countries generally do not have market-based economies and therefore little economic freedom, although the ruling class usually lives well.

    There is concern that economic freedom is on the decline in America, and that our future is threatened by this.

    When the writer asks “Why don’t they set up a loan company to encourage small businesses?” I wold refer them to Koch Ventures and Koch Genesis, two companies that do this.

    Finally — for this writer — comes the allegation that Charles and David Koch want to buy government “so they can control things instead of empowering others.” This charge is not supported by facts and what the Kochs have actually done for decades. Institutions founded or supported by the Kochs such as Cato Institute, Mercatus Center at George Mason University, and Americans for Prosperity Foundation are dedicated to limited government and personal liberty. This, along with their support of capitalism — which, as Palmer explained above, leads to freedom, creativity, and individual empowerment for everyone.

    Another comment contained “In their ‘ideal’ libertarian world they could do what they want and pollute whenever they want.” This is yet another ridiculous charge.

    A statement on the KochFacts website states “recent critics have also claimed that Koch is one of the nation’s top 10 polluters. This study confuses pollution with permitted emissions, which are carefully regulated by the U.S. EPA and other agencies. The index labels as ‘polluters’ Ford Motor, General Motors, GE, Pfizer, Eastman Kodak, Sony, Honeywell, Berkshire Hathaway, Kimberly Clark, Anheuser Busch and Goodyear — corporations, like Koch companies, with significant manufacturing in the U.S. Emissions, a necessary by-product of manufacturing, are strictly monitored and legally permitted by federal, state and local governments.”

    Wait a minute: Didn’t the federal government take over General Motors? And GE and Berkshire Hathaway: Aren’t those run by personal friends of Barack Obama?

    The reality is that if we want the things these companies make for us, we must accept some emissions — pollution, if you will. The good news, however, is that manufacturing has become much more efficient with regards to emissions, and Koch Industries companies have lead the way. One report from the company illustrates such progress: “Over the last three years, Koch Carbon has spent $10 million to enhance environmental performance, including $5 million for dust abatement at one of its petroleum coke handling facilities. These investments have paid off. In 2008, Koch Carbon’s reportable emissions were 6.5 percent less than in 2000, while throughput increased 10.4 percent.”

    Even when Koch Industries does not agree with the need for specific regulations, the company, nonetheless, complies. Writing about an increase in regulation in the 2007 book The Science of Success: How Market-Based Management Built the World’s Largest Private Company, Charles Koch explained the importance of regulatory compliance: “This reality required is to make a cultural change. We needed to be uncompromising, to expect 100 percent of our employees to comply 100 percent of the time with complex and ever-changing government mandates. Striving to comply with every law does not mean agreeing with every law. But, even when faced with laws we think are counter-productive, we must first comply. Only then, from a credible position, can we enter into a dialogue with regulatory agencies to determine alternatives that are more beneficial. If these efforts fail, we can then join with others in using education and/or political efforts to change the law.”

    Koch companies have taken leadership roles in environmental compliance, explains another KochFacts page: “In 2000, EPA recognized Koch Petroleum Group for being ‘the first petroleum company to step forward’ to reach a comprehensive Clean Air Act agreement involving EPA and state regulatory agencies in Minnesota and Texas. Despite fundamental policy disagreements, then-EPA Administrator Carol Browner acknowledged Koch’s cooperation. She characterized the agreement as ‘innovative and comprehensive’ and praised the ‘unprecedented cooperation’ of Koch in stepping forward ahead of its industry peers.” Browner was no friend of industry, and had a “record as a strict enforcer of environmental laws during the Clinton years,” according to the New York Times.

    These types of facts are not relevant to many of those who left comments to the Journal-World piece. To the political left, the facts must not be allowed get in the way of a useful political narrative.

    Koch Industries and Koch brothers are assets to state

    By Dolph C. Simons, Jr., Lawrence Journal-World.

    What is it, or why is it, that the name Koch, particularly here in Lawrence and Kansas, seems to trigger such angry, passionate and negative responses from a certain segment of the community, particularly among some at Kansas University?

    … The answer to the question at the beginning of this column is that the Kochs are conservatives, some would say “ultra conservatives.” They support organizations such as the Cato Institute, Citizens for a Sound Economy, Americans for Prosperity and Freedom Works. Their critics have been quick to try to fault them for supposedly funneling money to the tea party movement. Some say the brothers have given more than $100 million to these conservative organizations.

    Charles and David Koch have been the lightning rods for liberal, anti-conservative forces in this country, and it is that likely liberal-leaning faculty members and administrators at KU, as well as at many other universities, have been critical of the Kochs in order to keep peace with their staffs.

    The sad, phony or hard-to-understand part of this situation is that the two Koch brothers attribute the success of their family-owned business to the guiding principles espoused by their market-based management philosophy.

    … Charles and David Koch have championed limited government, economic freedom and personal liberty and they have challenged excessive government spending. Their financial giving efforts — political and charitable, both personal and through their company and foundations — all have been lawful.

    This being the case, it would seem KU officials, as well as other state officials, should be trying to work with Koch Industries, Charles and David Koch and their foundations on ways to benefit the university and the state. They should be trying to embrace the Kochs rather than acting as if they were pariahs.

    Continue reading at Koch Industries and Koch brothers are assets to state.

  • Kansas STAR bonds vote a test for capitalism

    Update: The bill passed in the House of Representatives 92 to 31. A similar bill passed in the Senate 27 to 13.

    An upcoming vote in the Kansas House of Representatives will let Kansans know who is truly in favor of economic freedom, limited government, and free market capitalism — and who favors crony capitalism instead.

    The bill is HR 2561: Extension of the STAR bonds financing act sunset provision regarding STAR bond projects. Under current law, the Kansas STAR bonds program will expire on July 1, 2012. This bill extends the program’s life for five years.

    The STAR bonds program allows increases in sales tax revenue to be directed to private interests rather than feeding the state treasury. The mechanism is that local governments like cities can sell bonds and give the proceeds to developers. Then, increments in sales tax revenues are used to make bond payments.

    In economic impact and effect, the STAR bonds program is a government spending program. Except: Like many spending programs implemented through the tax system, legislative appropriations are not required. No one has to vote to spend on a specific project. Can you imagine the legislature voting to grant $50 million over a period of years to a proposed development in northeast Wichita? That doesn’t seem likely. Few members would want to withstand the scrutiny of having voted in favor of such blatant cronyism.

    But under tax expenditure programs like STAR bonds, that’s exactly what happens — except for the legislative voting part.

    Government spending programs like STAR bonds are sold to legislators as jobs programs. Development, it is said, will not happen unless project developers receive incentives through these spending programs. Since no legislator wants to be seen voting against jobs, many are susceptible to the seductive promise of jobs.

    But often these same legislators are in favor of tax cuts to create jobs. This is the case in the Kansas House, where many Republican members are in favor of reducing the state’s income tax as a way of creating economic growth and jobs. On this issue, these members are correct.

    But many of the same members are, I am told, in favor of tax expenditure programs like the STAR bonds program. These two positions cannot be reconciled. If government taxing and spending is bad, it is especially bad when part of tax expenditure programs like STAR bonds. And there’s plenty of evidence that government spending and taxation is a drag on the economy.

    It’s not just legislators that are holding these incongruous views. Secretary of Commerce Pat George is promoting the STAR bonds program to legislators. He wouldn’t do that unless Governor Sam Brownback supported the program.

    Last year at the time Brownback and a new, purportedly more conservative Kansas House took office, I wondered whether Kansas would pursue a business-friendly or capitalism-friendly path: “Plans for the Kansas Republican Party to make Kansas government more friendly to business run the risk of creating false, or crony capitalism instead of an environment of genuine growth opportunity for all business.” I quoted John Stossel:

    The word “capitalism” is used in two contradictory ways. Sometimes it’s used to mean the free market, or laissez faire. Other times it’s used to mean today’s government-guided economy. Logically, “capitalism” can’t be both things. Either markets are free or government controls them. We can’t have it both ways.

    The truth is that we don’t have a free market — government regulation and management are pervasive — so it’s misleading to say that “capitalism” caused today’s problems. The free market is innocent.

    But it’s fair to say that crony capitalism created the economic mess.

    But wait, you may say: Isn’t business and free-market capitalism the same thing? Not at all. Here’s what Milton Friedman had to say: “There’s a widespread belief and common conception that somehow or other business and economics are the same, that those people who are in favor of a free market are also in favor of everything that big business does. And those of us who have defended a free market have, over a long period of time, become accustomed to being called apologists for big business. But nothing could be farther from the truth. There’s a real distinction between being in favor of free markets and being in favor of whatever business does.” (emphasis added.)

    Friedman also knew very well of the discipline of free markets and how business will try to avoid it: “The great virtue of free enterprise is that it forces existing businesses to meet the test of the market continuously, to produce products that meet consumer demands at lowest cost, or else be driven from the market. It is a profit-and-loss system. Naturally, existing businesses generally prefer to keep out competitors in other ways. That is why the business community, despite its rhetoric, has so often been a major enemy of truly free enterprise.”

    The danger of Kansas government having a friendly relationship with Kansas business is that the state will circumvent free markets and promote crony, or false, capitalism in Kansas. It’s something that we need to be on the watch for. The vote on the STAR bonds project will let us know how our state is proceeding. If the vote goes as sources tell me, the verdict is clear: Kansas legislators — including many purported fiscal conservatives — prefer crony capitalism over free enterprise and genuine capitalism.

    The problem

    Government bureaucrats and politicians promote programs like STAR bonds as targeted investment in our economic future. They believe that they have the ability to select which companies are worthy of public investment, and which are not. It’s a form of centralized planning by the state that shapes the future direction of the Kansas economy.

    Arnold King has written about the ability of government experts to decide what investments should be made with public funds. There’s a problem with knowledge and power:

    As Hayek pointed out, knowledge that is important in the economy is dispersed. Consumers understand their own wants and business managers understand their technological opportunities and constraints to a greater degree than they can articulate and to a far greater degree than experts can understand and absorb.

    When knowledge is dispersed but power is concentrated, I call this the knowledge-power discrepancy. Such discrepancies can arise in large firms, where CEOs can fail to appreciate the significance of what is known by some of their subordinates. … With government experts, the knowledge-power discrepancy is particularly acute.

    Despite this knowledge problem, Kansas legislators are willing to give power to bureaucrats in the Department of Commerce who feel they have the necessary knowledge to direct the investment of public funds. One thing is for sure: the state and its bureaucrats have the power to make these investments. They just don’t have — they can’t have — the knowledge as to whether these are wise.

    What to do

    The STAR bonds program is an “active investor” approach to economic development. Its government spending on business leads to taxes that others have to pay. That has a harmful effect on other business, both existing and those that wish to form.

    Professor Art Hall of the Center for Applied Economics at the Kansas University School of Business is critical of this approach to economic development. In his paper Embracing Dynamism: The Next Phase in Kansas Economic Development Policy, Hall quotes Alan Peters and Peter Fisher: “The most fundamental problem is that many public officials appear to believe that they can influence the course of their state and local economies through incentives and subsidies to a degree far beyond anything supported by even the most optimistic evidence. We need to begin by lowering expectations about their ability to micro-manage economic growth and making the case for a more sensible view of the role of government — providing foundations for growth through sound fiscal practices, quality public infrastructure, and good education systems — and then letting the economy take care of itself.”

    In the same paper, Hall writes this regarding “benchmarking” — the bidding wars for large employers that Kansas and many of its cities employ: “Kansas can break out of the benchmarking race by developing a strategy built on embracing dynamism. Such a strategy, far from losing opportunity, can distinguish itself by building unique capabilities that create a different mix of value that can enhance the probability of long-term economic success through enhanced opportunity. Embracing dynamism can change how Kansas plays the game.”

    In making his argument, Hall cites research on the futility of chasing large employers as an economic development strategy: “Large-employer businesses have no measurable net economic effect on local economies when properly measured. To quote from the most comprehensive study: ‘The primary finding is that the location of a large firm has no measurable net economic effect on local economies when the entire dynamic of location effects is taken into account. Thus, the siting of large firms that are the target of aggressive recruitment efforts fails to create positive private sector gains and likely does not generate significant public revenue gains either.’”

    There is also substantial research that is it young firms — distinguished from small business in general — that are the engine of economic growth for the future. We can’t detect which of the young firms will blossom into major success — or even small-scale successes. The only way to nurture them is through economic policies that all companies can benefit from. Reducing tax rates is an example of such a policy. Government spending on specific companies through programs like STAR bonds is an example of precisely the wrong policy.

    We need to move away from economic development based on this active investor approach. We need to advocate for policies at all levels of government that lead to sustainable economic development. We need political leaders who have the wisdom to realize this, and the courage to act appropriately. Which is to say, to not act in most circumstances.

  • Kansas and Wichita quick takes: Monday March 26, 2012

    Pachyderms to feature talk on sustainable development. This Friday (March 30rd) the Wichita Pachyderm Club features Tom DeWeese, President, American Policy Center, speaking on U.N. Agenda 21: Sustainable Development. Tom DeWeese is one of the nation’s leading advocates of individual liberty, free enterprise, private property rights, personal privacy, back-to-basics education and American sovereignty and independence. … The public is welcome and encouraged to attend Wichita Pachyderm meetings. For more information click on Wichita Pachyderm Club. … The club has an exceptional lineup of future speakers as follows: On April 6th: Jordan A. Poland, who will discuss his Master of Arts thesis in Public History at Wichita State University, titled “A case study of Populism in Kansas. The election of Populist Governor Lorenzo Lewelling from Wichita, and the Legislative War of 1893.” … On April 13th: Alvin Sarachek, Ph.D., Geneticist, Distinguished Professor Emeritus of Natural Sciences at Wichita State University, speaking on “Human Genetic Individuality and Confused Public Policy Making.” … On April 20th: Senator Steve Morris, President of the Kansas Senate, speaking on “Legislative update.” … On April 27th: Dr. Malcolm C. Harris, Sr., Professor of Finance, Friends University, speaking on “The Open Minded Roots of American Exceptionalism, and the Decline of America’s Greatness.”

    PPACAction. That is, where should you go to keep up with action surrounding PPACA, commonly known as Obamacare, as the legislation is argued before the U.S. Supreme Court this week? Try PPACAction, a project of Texas Public Policy Foundation. Also featured on the site is Experts’ Guide to the Issues.

    The seven rules of bureaucracy. In this article, authors Loyd S. Pettegrew and Carol A. Vance quote Thomas Sowell: “When the government creates some new program, nothing is easier than to show whatever benefits that program produces. … But it is virtually impossible to trace the taxes that paid for the program back to their sources and to show the alternative uses of that same money that could have been far more beneficial.” In order to understand the foundation of America’s morass, we must examine bureaucracy. At the root of this growing evil is the very nature of bureaucracy, especially political bureaucracy. French economist Frédéric Bastiat offered an early warning in 1850 that laws, institutions, and acts — the stuff of political bureaucracy — produce economic effects that can be seen immediately, but that other, unforeseen effects happen much later. He claimed that bad economists look only at the immediate, seeable effects and ignore effects that come later, while good economists are able to look at the immediate effects and foresee effects, both good and bad, that come later. … Both the seen and the unseen have become a necessary condition of modern bureaucracy. (Bastiat: That Which Is Seen, and That Which Is Not Seen.) The first rule? “Maintain the problem at all costs!”

    Civil society. Edward H. Crane, speaking nearly twenty years ago. I think things have become worse since then: “In a civil society you make the choices about your life. In a political society someone else makes those choices. And because it is not the natural order of things for someone other than you to make those decisions about your life, the political society is of necessity based on coercion. … Civil society, on the other hand, is based on voluntarism and predicated on giving the widest possible latitude to the individual so that he has sovereignty over his own life, so long as he respects the equal rights of others in society. It’s a simple concept, really, but a radical one nevertheless. It’s the concept on which this great nation of ours was founded and which was so revolutionary that it motivated tens of millions of people from around the globe to come here, often giving up everything, just to live in the ‘land of the free.’ … It does seem ironic that so many politicians in this country hold this curiously benign view of government as some kind of giant nanny, that will make everything okay if we just give it more money. Because as we enter the 21st century, government activities beyond its legitimate function of the protection of life, liberty, and property have pretty much been exposed as one of the great failures of civilization. Coercive, political society simply doesn’t work very well. Most people, whether they’re willing to admit it or not, know that now. There is a reason why East Germany produced the smoke- belching bucket-of-bolts Trabant, and West Germany produced the Mercedes, the BMW, the Porsche, the Audi, and the Volkswagen. Same people, same culture, different political system. Civil society worked; political society didn’t. Yet politicians in America continue to give credence to the idea that the political society can address our problems better than the institutions of the civil society. As Milton Friedman has observed, we seem to be saying that we know that socialism is a failure and that capitalism is a success, therefore we need more socialism.”

    One down, 48 to go. “‘Building better communities’ was the slogan of the California Redevelopment Association. But the critics charged that redevelopment agencies ‘deprived tens of thousands of working and lower-income residents of their homes and livelihoods while granting vast subsidies to billionaires.’ In the end, the social justice questions didn’t matter, but the subsidies did, so to save the state billions of dollars a year, California redevelopment agencies shut down for good last week. … California invented TIF in 1952. Since then, 48 other states have passed similar laws. Now a pioneer in ending such crony capitalism, the Antiplanner hopes the other 48 states will soon follow California’s example. Good riddance to a waste of money that benefited few people other than a few politicians and developers.” More from Randal O’Toole at One Down, 48 to Go. O’Toole also authored the Cato Institute Policy Analysis Crony Capitalism and Social Engineering: The Case against Tax-Increment Financing.”

    Economic freedom in America: The decline, and what it means. “The U.S.’s gains in economic freedom made over 20 years have been completely erased in just nine.” Furthermore, our economic freedom is still dropping, to the point where we now rank below Canada. The result is slow growth in the private sector economy and persistent high unemployment. This is perhaps the most important takeaway from a short new video from Economic Freedom Project, which is a project of the Charles Koch Institute. The video explains that faster growth in government spending causes slower growth in the private economy. This in turn has lead to the persistent high unemployment that we are experiencing today. … To view the video at the Economic Freedom Project site, click on Episode Two: Economic Freedom in America Today. Or, click on the YouTube video below.

  • If government ordered your lunch, would you get what you want?

    Speaking on government making decisions for us, Professor Antony Davies of Duquesne University concludes “Even if it’s benevolent, it fails because it lacks the necessary information to make those decision correctly.”

    The motivation of government officials coupled with their lack of information: These are two reasons why we need to remove as much decision-making as possible from the public sphere. Yet we see the rush to do the opposite. From federal government officials making health care decisions to local officials deciding when, how, and where economic development should take place, the benevolence and knowledge of these officials must be questioned.

    Some believe that if we only had more altruistic leaders or smarter politicians and bureaucrats, all would be well. But there is simply no way that government can replace the collective wisdom of free people voluntarily trading in free markets, their activities coordinated by something so simple as a price system left free from government interference.

    This is the essence of economic freedom as defined at EconomicFreedom.org, the producer of this video. “Economic freedom is the key to greater opportunity and an improved quality of life. It’s the freedom to choose how to produce, sell, and use your own resources, while respecting others’ rights to do the same. … Economic freedom is the key to greater opportunity and an improved quality of life. … While a simple concept, economic freedom is an engine that drives prosperity in the world and is the difference between why some societies thrive while others do not.”

  • Rebuilding Joplin

    Economic Freedom has a story about the rebuilding of Joplin, Missouri after last year’s devastating tornado.

    Daniel J. Smith, economics professor at Troy University, studied the rebuilding of Joplin, Missouri in the months following the tornado. The following video discusses how economic freedom can help areas recover from natural disasters. Says Smith:

    I think one of the key factors in the recovery process in Joplin, from the tornado, is that the government officials allowed the community to start rebuilding itself. I think Joplin is a great example of the power of people — free people — coming together and both using profit motive, in the businesses, using religious reasons for faith-based organizations, and just concern for your fellow man, in the community-based organizations, to rebuild a disaster stricken community.

    In the video, Smith explains that rising wages — sometimes increasing over 500 percent — were strong market signals that certain types of labor were needed in Joplin. If these prices for labor were controlled through government regulation, the price signals would not be heard by the needed laborers. Yes, governments and news media might let the country know that these types of workers are needed in Joplin. But unless workers can earn high wages in Joplin, what motive do they have to leave their current homes and travel to Joplin?

    The price system — operating in markets free from government regulation — proves again to be the most efficient way to allocate resources to where they are most urgently needed and valued.

  • Kansas and Wichita quick takes: Thursday March 8, 2012

    Candidate representatives at Pachyderm. This Friday’s meeting (March 9th) of the Wichita Pachyderm Club features Republican presidential candidate spokespersons. In addition, Lora Cox, Executive Director of the Sedgwick County Republican Party will be on hand to answer questions regarding the mechanics of Saturday’s Republican Party Caucus. … The public is welcome and encouraged to attend Wichita Pachyderm meetings. For more information click on Wichita Pachyderm Club.

    Sedgwick County pre-caucus rally. Friday afternoon (March 9th) Kansans for Liberty is producing a pre-caucus rally at Century II. Ron Paul is scheduled to appear. There will be other speakers and live entertainment, say event organizers. Tickets are $25. For more information, see Kansans for Liberty.

    Libertarian ideals. The Winfield Courier criticizes U.S. Representative Mike Pompeo for his bill that would eliminate all tax credits for energy, writing “This is a case of putting libertarian ideals ahead — far ahead — of the interests of our region and our state.” But the libertarian ideals of personal liberty, economic freedom, and free markets ought to be all that government concerns itself with. … This is not the only way this op-ed is misinformed on facts. The anonymous author writes: “New, life-changing technologies, from the railroads to the Internet, have long had the active support of our national government.” But: Consider the railroads. The government-subsidized railroads involved in the transcontinental project went bankrupt. Only The Great Northern Railroad, which was built without government subsidy, was profitable and not a burden on the national treasury. (See Interfacing with Obama’s Intercontinental Railroad). Shame on the Winfield Courier so being so misinformed on U.S. history and the proper role of a limited government.

    High Kansas taxes. Kansas Reporter covers more of the Tax Foundation’s report on the high cost of Kansas business taxes: “A new national study says Kansas business owners pay some of the highest taxes in the country. … Kansas businesses that are 3 or fewer years old pay the third-highest total taxes in the nation among all 50 states and Washington, D.C., the study found. Older businesses, such as Midway Wholesale, pay the fourth-highest totals. The findings contrast sharply with previous surveys, including some by the Tax Foundation, that put Kansas closer to the midpoint in regard to tax burden. As recently as January, for example, the foundation released its latest compilation of its Business Tax Climate Index, which put Kansas almost dead center — in 25th place — among lightest- to heaviest-taxed states. ‘Those surveys focus on tax policies, such as what types of taxes do states have or what are their tax rates,’ said Scott Hodge, the foundation’s president. ‘This new study looks at the issue from a business’ viewpoint and what they actually pay.’” … More at New study finds KS tax loads worse than reported.

    Harm of individual mandate explained. In the following short video, Elizabeth Price Foley of the Institute for Justice explains the harm of the individual mandate that is the centerpiece of the Patient Protection and Affordable Care Act (Obamacare). She explains that if the U.S. Supreme Court fails to strike down the individual mandate, there will be nothing to stop Congress from forcing people into other contracts against their will — employment contracts or union membership, for example. If we still have a constitutional republic in which the federal government’s powers are limited, then the Court should strike down this law. More information on IJ’s brief is contained in this press release.

  • In Wichita, pushing back against political cronyism

    A message from Bob Weeks, campaign chair of Tax Fairness for All Wichitans, upon the campaign’s victory of 62 percent to 38 percent in an election regarding a tax rebate to the Ambassador Hotel:

    First, I’d like to thank my campaign leadership team and all the volunteers. Many started working in October by carrying the petition and gathering signatures, sometimes in cold and windy winter weather. My job as campaign chair was made much easier through the efforts of dedicated people like Susan Estes, John Todd, Derrick Sontag, and the many others who helped.

    Usually, winning an election is a happy time. In most elections the winning side is happy because they elected a candidate to office who they feel has the better ideas.

    I’m glad we won. But my happiness is tempered by the realization that we simply prevented something bad from happening in Wichita.

    I’m proud that the electorate responded positively to our accurate and truthful campaign. When citizens have the facts, they make the right decision.

    Going forward, I’d like to remind Wichitans that the Ambassador Hotel is receiving assistance from eight taxpayer-funded government programs with costs of $15.4 million up-front and several hundred thousand annually. None of these were affected by the election. Wichita city hall and its allies are ready, willing, and able to use these incentive programs in the future for other hotels and businesses.

    So to the extent that these economic development programs actually help Wichita, they are still available, and will likely be used.

    But we feel these programs are not wise. Often, we’ve found that they’re not needed. And when used, they direct public investment to where politicians and bureaucrats want it, not where people want it.

    The best way to create jobs is to get government out of the way. Instead of entrepreneurs spending resources applying for grants, finding government programs and taking handouts, we would be much better off if they could directly invest those resources in job creation. That is what the voters said tonight.

    We need to reform our economic development efforts. Our present methods, which are just about the same as most other cities, are not working. We need to realize that there are several long-serving politicians and bureaucrats that have presided over this failure.

    These people have presided over the system of political cronyism that passes for economic development in Wichita. Politicians like Mayor Carl Brewer and most members of the Wichita City Council pocket thousands in campaign contributions from opportunists like David Burk and David Wells, who are partners in the Ambassador Hotel project. These people make contributions to those they know are in a position to vote to give them money.

    This is such a foul system that we need pay-to-play laws to reform it. I’m suggesting that Kansas pass such a law, and name it “Davids’ Law.”

    I hope that Wichita City Hall, the economic development machinery in our city, and the Wichita Eagle editorial board will be more receptive to the message of economic freedom, free markets, and limited government that was expressed in the results of this election.

  • Obama fundraising on anti-Koch obsession

    Are Americans tired of hearing that this year’s election is all about an obsession with defeating President Barack Obama? For those who know that Obama took a bad economic situation and implemented policies that made it worse — yes, we want to defeat the current president. The president’s election campaign, however, turns that concern for the future of our country into “obsession” and uses it to raise money. As is often the case, the target of a recent fundraising letter is Charles G. Koch and David H. Koch, who are principals of Wichita-based Koch Industries. While the letter attacks the Kochs for “jacking up prices at the pump” the real reason why liberals don’t care for them is for their unwavering support for the causes of economic freedom, free markets, and limited government that Charles and David Koch have advocated for very many years.

    By the way, I’ve never heard an answer to this question: If oil companies have the power to “jack up” gasoline prices, why do they let the price go down, as it often does? And why is the price not higher than it is?

    Fortunately for America, the Koch brothers and Koch Industries do not back down from these attacks. Following, the company responds.

    Mr. Jim Messina
    Campaign Manager
    Obama for America

    Dear Mr. Messina:

    Because every American has the right to take part in the public discourse on matters that affect the future of our country, I feel compelled to respond directly about a fundraising letter you sent out on February 24 denouncing Koch. It is both surprising and disappointing that the President would allow his re-election team to send such an irresponsible and misleading letter to his supporters.

    For example, it is false that our “business model is to make millions by jacking up prices at the pump.” Our business vision begins and ends with value creation — real, long-term value for customers and for society. We own no gasoline stations and the part of our business you allude to, oil and gas refining, actually lowers the price of gasoline by increasing supply. Either you simply misunderstand the way commodities markets work or you are misleading your supporters and the rest of the American people.

    Contrary to your assertion that we have “committed $200 million to try to destroy President Obama,” we havestated publicly and repeatedly since last November that we have never made any such claim or pledge. It is hard to imagine that the campaign is unaware of our publicly stated position on that point. Similarly, Americans for Prosperity is not simply “funded by the Koch brothers,” as you state — rather it has tens of thousands of members and contributors from across the country and from all walks of life. Further, our opposition to this President’s policies is not based on partisan politics but on principles. Charles Koch and David Koch have been outspoken advocates of the free-market for over 50 years and they have consistently opposed policies that frustrate or subvert free markets, regardless of whether a Democrat or a Republican was President.

    f the President’s campaign has some principled disagreement with the arguments we are making publicly about the staggering debt the President and previous administrations have imposed on the country, the regulations that are stifling business growth and innovation, the increasing intrusion of government into nearly every aspect of American life, we would be eager to hear them. But it is an abuse of the President’s position and does a disservice to our nation for the President and his campaign to criticize private citizens simply for the act of engaging in their constitutional right of free speech about important matters of public policy. The implication in that sort of attack is obvious: dare to criticize the President’s policies and you will be singled out and personally maligned by the President and his campaign in an effort to chill free speech and squelch dissent.

    This is not the first time that the President and his Administration have engaged in this sort of disturbing behavior. As far back as August, 2010, Austan Goolsbee, then the President’s chief economic advisor, made public comments concerning Koch’s tax status and falsely stated that the company did not pay income tax, which triggered a federal investigation into Mr. Goolsbee’s conduct that potentially implicated federal law against improper disclosure of taxpayer information. Last June, your colleagues sent fundraising letters disparaging us as “plotting oil men” bent on “misleading people” with “disinformation” in order to “smear” the President’s record. Those accusations were baseless and were made at the very same time the president was publicly calling for a more “civil conversation” in the country.

    It is understandable that the President and his campaign may be “tired of hearing” that many Americans would rather not see the president re-elected. However, the inference is that you would prefer that citizens who disagree with the President and his policies refrain from voicing their own viewpoint. Clearly, that’s not the way a free society should operate.

    We agree with the President that civil discourse is an American strength. That is why it is troubling to see a national political campaign apparently target individual citizens and private companies for some perceived political advantage. I also hope the President will reflect on how the approach the campaign is using is at odds with our national values and the constitutional right to free speech.

    Sincerely,
    Philip Ellender
    President, Government & Public Affairs
    Koch Companies Public Sector, LLC

    This letter was originally published at KochFacts.com.