Voice For Liberty

Tag: Politics

  • 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.

  • Who has the economic power?

    Though there is often much focus on the richest private individuals in the United States, the U.S. Congress actually has far more economic power.

    In this video, economist Robert Lawson compares the economic power of the 535 most wealthy private citizens with the spending power of the 535 members of Congress. You might be surprised by what you find out.

    As Congress continues to spend and government continues to increase in size, our economic freedom will continue to decrease. And as our economic freedom decreases, our economic opportunities and quality of life are threatened.

  • The Democrats continue unjustified attacks on taxpayers and job creators

    The following article by U.S. Representative Mike Pompeo, a Republican who represents the Kansas fourth district, including the Wichita metropolitan area, explains — yet again — how ridiculous it is for President Barack Obama and others to attack Wichita-based Koch Industries on the Keystone XL pipeline issue. Pompeo explains that Koch has no financial interest in the pipeline, what “intervenor” status means, and who really stands to benefit if the pipeline is not built. Pompeo hints at who it is, but I’ll be more direct: Warren Buffet. A news article that explains how Warren will personally benefit from blocking the Keystone XL pipeline is Buffett’s Burlington Northern Among Pipeline Winners.

    The Democrats continue unjustified attacks on taxpayers and job creators

    By U.S. Representative Mike Pompeo

    The President and his allies, including those in Congress, have shown what a nasty, personal, and abusive re-election campaign we are about to experience. A recent sideshow in my committee in Congress provides yet another clear and shocking example.

    A recent letter from Representatives Henry Waxman and Bobby Rush, both Democrats, demanded a live witness and testimony from “a representative of Koch Industries” at a hearing on the Keystone XL pipeline, scheduled to be held just two days later. The frivolous nature of the request is proven by that plainly unreasonable deadline. But the partisan tactics go far beyond that.

    Even if Koch Industries had a financial interest in the Keystone XL pipeline, what possibly could be wrong with that? Perhaps more importantly, under what circumstances would such an interest be worthy of a congressional inquisition? Charles Koch and David Koch, co-owners of Koch Industries, are citizens, taxpayers, entrepreneurs, and employers. Their companies employ nearly 50,000 people in the U.S. alone. The company maintains its headquarters in the district I represent, employing 2,600 great Kansans. The company and its employees are among the most hard-working and generous in our community. The company has never been bailed out by the American taxpayers. And given that Americans are desperate for jobs, we should be begging entrepreneurs to look for new opportunities, not attacking them simply because their companies might make a profit.

    The facts are clear: Koch Industries does not have a financial stake in the pipeline — why, therefore, should its officials become part of the all-too-familiar congressional committee circus? The facts are straightforward and a matter of public record. Koch Industries has repeatedly stated that it does not have a financial stake in the pipeline: It does not own the pipeline, it has no role in the pipeline’s design, it is not one of the shippers who have signed contracts to use the pipeline, and it will not build the pipeline.

    Democrats dug deep for some excuse to attempt to haul Koch officials in for a public flogging. What did they find? A 2009 attempt by a Koch subsidiary to obtain “intervenor” status in a Canadian legal proceeding, in order to track the approval process for the pipeline. Wishing to know the fate of the pipeline, and having an interest in whether or not the pipeline is built — as thousands of frustrated American workers and consumers do — obviously does not amount to a financial interest in the pipeline’s construction. Indeed, the Sierra Club of Canada applied to “intervene” in the same proceeding. Notably, no one has alleged that Congress should investigate the Sierra Club’s interest in the pipeline project. So the “intervenor” ploy is a patent sham, and provides no basis for harassing Koch Industries.

    It is also difficult to believe that Members of Congress really think that a particular company’s asserted financial interest in a project is, or should be, relevant to the merits of that project. It becomes still harder to believe, given the decision to target only Koch Industries and the Kochs — and no other company or individual. Doubtless many companies and individuals stand to benefit, or to be harmed, depending on whether President Obama’s decision to delay the pipeline is allowed to stand. News accounts have mentioned a number of those who might reap financial windfalls from the pipeline’s demise, including at least one of President Obama’s most prominent supporters and donors. (Hint: His secretary was the President’s highly visible prop at the State of the Union address.) But two congressmen directed their attention exclusively toward the Kochs, who — as successful businessmen and outspoken critics of the President’s job-killing, statist programs — have been targets for the Administration and its allies for many months.

    Indeed, the very first line of President Obama’s very first campaign advertisement for the 2012 election attacks the Koch brothers. And liberal blogs and publications have published countless slanted pieces on Koch Industries, heavy on innuendo and light on facts. The Obama Administration has long been criticized for maintaining a de facto “enemies list” of its perceived political opponents, whether they are respected Supreme Court Justices, disfavored reporters, or private citizens who just want to keep their own doctors. The Democrats’ obsession with the Kochs as a political target is, indeed, additional evidence of a truly Nixonian approach to politics. That the Obama Administration and its allies use private citizens as symbols to be attacked and vilified is both unfair and deeply threatening to our civic life and the rule of law.

    America deserves better from its elected officials. To be sure, the serious challenges facing the country often generate heated discussion and disagreement. But there is no justification for Democrats who want to haul American citizens before Congress for the exclusive purpose of political abuse. Congressional hearings should not be hijacked by naked political opportunism; legitimate business creators should not be vilified; and Congress should focus on the many policy questions before it, rather than wasting time in an illegitimate pursuit of the Administration’s perceived “enemies.”

    Mr. Pompeo represents the Fourth Congressional District of Kansas. He serves on the House Committee on Energy and Commerce, as well as the Subcommittee on Energy and Power. A version of this article appeared at Politico.

  • End the Economic Development Administration — Now

    Following in an article from U.S. Representative Mike Pompeo, a Republican who represents the Kansas fourth district, including the Wichita metropolitan area. It provides an example of how hard it is to reduce the size of government. The legislation that is mentioned in the article is H.R. 3090: EDA Elimination Act of 2011, which would shut down the Economic Development Administration.

    End the Economic Development Administration — Now

    By U.S. Representative Mike Pompeo
    As part of my efforts to reduce the size of government, I have proposed to eliminate the Economic Development Administration (EDA), a politically motivated federal wealth redistribution agency. Unsurprisingly, the current leader of that agency, Assistant Secretary of Commerce for Economic Development John Fernandez, has taken acute personal interest in my bill to shutter his agency.

    Last week, Secretary Fernandez invited himself to Wichita at taxpayer expense and met with the Wichita Eagle’s editorial board. Afterwards, the paper accurately noted I am advocating eliminating the EDA even though that agency occasionally awards grant money to projects in South Central Kansas. They just don’t get it. Thanks to decades of this flawed “You take yours, I’ll take mine” Washington logic, our nation now faces a crippling $16 trillion national debt.

    I first learned about the EDA when Secretary Fernandez testified in front of my subcommittee that the benefits of EDA projects exceed the costs and cited the absurd example of a $1.4 million award for “infrastructure” that allegedly helped a Minnesota town secure a new $1.6 billion steel mill. As a former CEO, I knew there is no way that a taxpayer subsidy equal to less than one-tenth of one percent (0.1%) of the total capital needed made a difference in launching the project. That mill was getting built whether EDA’s grant came through or not. So, I decided to dig further.

    I discovered that the EDA is a federal agency we can do without. Similar to earmarks that gave us the infamous “Bridge to Nowhere” or the Department of Energy loan guarantee scandal that produced Solyndra, the EDA advances local projects that narrowly benefit a particular company or community. To be sure, the EDA occasionally supports a local project here in Kansas. But it takes our tax money every year for projects in 400-plus other congressional districts, many if not most of which are boondoggles. For example: EDA gave $2 million to help construct UNLV’s Harry Reid Research and Technology Park; $2 million for a “culinary amphitheater,” tasting room, and gift shop at a Washington state winery; and $500,000 to construct (never-completed) replicas of the Great Pyramids in rural Indiana.

    Several times in recent decades, the Government Accountability Office has questioned the value and efficacy of the EDA. Good-government groups like Citizens Against Government Waste have called for dismantling the agency. In addition, eliminating the EDA was listed among the recommendations of President Obama’s own bipartisan Simpson-Bowles Deficit Reduction Commission.

    So why hasn’t it been shut down already? Politics. The EDA spreads taxpayer-funded project money far and wide and attacks congressmen who fail to support EDA grants. Soon after that initial hearing, Secretary Fernandez flew in his regional director — again at taxpayer expense — to show me “all the great things we are doing in your home district” and handed me a list of recent and pending local grants. Hint, hint. You can’t say I wasn’t warned to back off. Indeed, Eagle editors missed the real story here: Secretary Fernandez flew to Wichita because he is a bureaucrat trying to save his high-paying gig. The bureaucracy strikes back when conservatives take on bloated, out-of-control, public spending, so I guess I’m making progress.

    Please don’t misunderstand. I am not faulting cities, universities, or companies for having sought “free” federal money from the EDA. The fault lies squarely with a Washington culture that insists every program is sacred and there is no spending left to cut.

    A federal agency run at the Assistant Secretary level has not been eliminated in decades. Now is the time. My bill to eliminate the EDA (HR 3090) would take one small step toward restoring fiscal sanity and constitutional government.

  • Kansas and Wichita quick takes: Wednesday January 11, 2012

    A legislator would do this? In his At The Rail column, Kansas statehouse reporter Martin Hawver speculates that even routine procedural votes, as well as votes in committee, may be material for campaign ads and mailers in this election year. “You’ve seen the mailings in election years, you know, the ones with a photo of a few lines apparently ripped from the official journal of the House or Senate. The scrap is always tilted a bit to make it more visually interesting. And, by gosh, that bit of an official document almost always shows — usually with a swipe of yellow highlighter — that a candidate voted for or against something that the rest of the brochure deems politically or fiscally or culturally important. … So, we’re going to be watching closely, to see whether a vote in a committee on something relatively unimportant becomes the theme of a campaign or two out there, and whether the public will be much moved by a vote even when it is dramatically presented as a fact ‘ripped from the official record’ of some committee or another. Key might be that it’s the final votes, not necessarily some little acting-out behavior in a committee, that is the real indication of just where a legislator is on legislation that you care about.” … I should tell you this: I’m more than a little shocked to learn this goes on in Topeka.

    Where to see, listen to State of State Address. Tonight’s 6:30 pm address by Kansas Governor Sam Brownback can see seen on television by tuning in to KTPS (Wichita), KTWU (Topeka), or Smoky Hills Public Television. Radio coverage is on Kansas Information Network, KSAL-Salina 1150 AM, KANU-Lawrence/Topeka/Kansas City FM 91.5, KANH-Emporia FM 89.7, KANV-Olsburg/Junction City FM 91.3 and in Manhattan on FM 99.5, KANZ- Garden City FM 91.1, KZNA-Hill City FM 90.5, KHCC-Hutchinson/Wichita FM 90.1, KHCD-Salina/Manhattan FM 89.5, KHCT-Great Bend/Hays FM 90.9, KMUW-Wichita FM 89.1, KRPS-Pittsburg KS FM 89.9, KCUR-Kansas City Missouri FM 89.3, and online at www.KWCH.com, kslegislature.org, www.khi.org, and www.am580wibw.com.

    Kansas Policy Institute launches blog. In its newsletter, the Kansas Policy Institute announces the start of a blog: “We believe this will be a venue to have an open discussion on the challenges facing our state and advancing liberty and freedom. Of course, we will continue the work we’ve been doing, but this is an opportunity to provide more real time analysis, share videos and stories from around the web, and allow concerned Kansans can debate the issues of the day.” The blog is located at KPI Blog. … KPI’s primary communications with Kansans have been through policy analysis and reports, and through newspaper op-ed columns. The blog should make KPI a more familiar source of news and information.

    Kansas House Speaker criticized. “Continuous abuse of power and nepotism” along with his role in a lawsuit against the State of Kansas are the charges leveled against Speaker of the Kansas House of Representatives Mike O’Neal. The writer of the letter with the charges is Kansas Representative Owen Donohoe of the 39th district, which covers parts of Johnson, Leavenworth, and Wyandotte counties. … In 2010 O’Neal faced an legislative ethics panel investigation into his role as attorney for clients suing the state. The panel decided that O’Neal broke no rules, but that the legislature’s ethics rules should prohibit what O’Neal was doing, citing the “appearance of impropriety” such actions create. … In 2009, O’Neal faced a complaint relating to nepotism, and a panel found there was insufficient evidence to support the charges. … Last year O’Neal made several committee reassignments that were seen as motivated by a desire to silence critics of policies that O’Neal supported. These included Rep. Charlotte O’Hara for her position on health care issues, Rep. Kasha Kelly for her position on state spending, and Donohoe himself. Coverage is at More trouble brewing for House Speaker O’Neal and Kansas Republican legislator blasts House Speaker Mike O’Neal. … The public policy issue is this: Does legislative leadership — Speaker of the House, Senate President, Committee Chairs — have too much power? From my observation of the Kansas Legislature over the past few years, my answer is: Yes.

    Kansas presidential caucus. Kansas Republicans will hold their presidential nominating caucus on Saturday, March 10th. Participants must be registered as Republicans to participate, and the last day to register as such is February 17th. Photo ID will be required for admission.

    Democrats urged to help Republicans. In an email, Kansas National Education Association (KNEA), the teachers union, urges Kansas Democrats to help Republican select their nominees in the August primary elections. Writes the union to its minions: “Given the registration advantage that Republicans have over Democrats in Kansas, it is not surprising that many elections are decided in the August primaries. In many districts the Republican nominee will likely win. This means that unaffiliated and Democratic voters are very limited in the influence they can have on who will be their Representative or Senator. The reality is that, while it might feel good to register your disgust with both parties by registering as an unaffiliated voter, it dramatically reduces the influence of your vote in the election. … If you want your vote to have a greater influence this year, then we would urge you to consider your registration and participation in the primary election in August. If you live in a district that will likely elect a Republican in the general election, wouldn’t it be nice to have a say in which Republican that will be? If you want that voice, you will need to be a registered Republican by July 16, 2012.”

    Kansas health issues. The Kansas Health Institute News Service has identified the issues related to health that are important in this year’s legislative session. Medicaid reform and health care exchanges are the first two mentioned, with Medicaid reform a very large and important issue. The article is Health issues facing the 2012 Legislature.

    Separation of art and state. Kansas Governor Sam Brownback may be wavering on his opposition to state funding for the arts in Kansas, according to Lawrence Journal-World reporting. I recently urged legislators — borrowing a term from David Boaz — to respect the separation of art and state. In his book The Politics of Freedom: Taking on The Left, The Right and Threats to Our Liberties, Boaz explained why this is important: “It is precisely because art has power, because it deals with basic human truths, that it must be kept separate from government. Government, as I noted earlier, involves the organization of coercion. In a free society coercion should be reserved only for such essential functions of government as protecting rights and punishing criminals. People should not be forced to contribute money to artistic endeavors that they may not approve, nor should artists be forced to trim their sails to meet government standards. Government funding of anything involves government control.”

    Numbers trouble Americans. “Many Americans have strong opinions about policy issues shaping the presidential campaign, from immigration to Social Security. But their grasp of numbers that underlie those issues can be tenuous.” The Wall Street Journal article Americans Stumble on Math of Big Issues covers this topic. “‘It’s pretty apparent that Americans routinely don’t know objective facts about the government,’ says Joshua Clinton, a political scientist at Vanderbilt University. Americans’ numerical misapprehension can be traced to a range of factors, including where they live, the news they consume, the political rhetoric they hear and even the challenges of numbers themselves. And it isn’t even clear how much this matters: Telling people the right numbers often doesn’t change their views.”

    Capitalism. “The Occupy Wall Street movement expresses valid frustrations, but do the protesters aim their accusations in the wrong direction? Economics Professor Chris Coyne draws the distinction between crony capitalism and legitimate capitalism. Crony capitalism is government favoritism fueled by handouts and is responsible for the plight of the 99%. Legitimate capitalism, on the other hand, uses competition to align consumer and producer interests and serves to improve everyone’s standard of living. … Coyne says: “What we need is constraints on government … The minute you open the floodgates of government handouts, people are going to start lining up to grab them. And the people that are going to tend to get those handout are those that have money and political connections. So the solution to this is simple. Instead of spreading out losses, we need to do is to allow people to earn profits when they produce things that people value, and suffer losses when the fail to do so. When you have that type of system, the only way to earn wealth is to improve peoples’ standards of living.”… This video is from LearnLiberty.org, a project of Institute for Humane Studies, and many other informative videos are available.

  • Obama’s executive orders

    Americans for Limited Government has commented on President Barack Obama’s recent use of executive orders to step around the will of Congress:

    “These unilateral executive orders, whether on government-backed student loans and mortgages or FDA oversight, are intended to sidestep the consent of the governed, and as a result they overstep the President’s constitutional boundaries. Obama can rhetorically dress this up however he likes, but his actions are not predicated on the consent of the governed, they are fueled by his desire to maintain and expand power. This is not the rule of law, but the rule of man.

    “Obama is just following the playbook of the Center for American Progress, which had argued for the White House to use executive orders and other regulations to advance its agenda after Democrats lost control of the House of Representatives in the November elections. This is all designed to get around the political process, and has occurred repeatedly under Obama’s watch, whether with the EPA’s carbon endangerment finding or the unilateral implementation of management-labor forums for the federal civil service.”

    The full press release is at Obama’s executive orders overstep.

    Phil Kerpen’s recent book Democracy Denied: How Obama is Ignoring You and Bypassing Congress to Radically Transform America — and How to Stop Him holds other lessons of how presidents — from both political parties — overstep. In the introduction Kerpen gives us a history lesson on a topic that doesn’t receive much discussion in public: the grab for executive power by presidents through the use of “signing statements.”

    Elizabeth Drew made the case against Bush’s abuse of executive power in a lengthy New York Review of Books piece called “Power Grab.” She specifically highlighted Bush’s use of signing statements (a technique to object to elements of a law while signing it, and refusing to enforce those elements), the detention of foreign combatants at Guantanamo, and warrantless wiretaps. She concluded that Bush was a tyrant.

    Kerpen explains how the view from the oval office can make one forget campaign promises:

    Even the Bush practice that raised the most ire — the use of signing statements — was embraced by Obama just weeks after he took office, when he said: “it is a legitimate constitutional function, and one that promotes the value of transparency, to indicate when a bill that is presented for presidential signature includes provisions that are subject to well-founded constitutional objections.” Contrast that with what Obama had said about signing statements on the campaign trail: “This is part of the whole theory of George Bush that he can make laws as he is going along. I disagree with that. I taught the Constitution for 10 years. I believe in the Constitution and I will obey the Constitution of the United States. We are not going to use signing statements as a way of doing an end run around Congress.”

    Later in the chapter Kerpen describes another critic of Bush’s use of executive power and how things would change with the election of Obama:

    One of the harshest critics of executive power under Bush, Yale law professor Bruce Ackerman, dismissed the overly simple view of many on the left regarding Obama ending abuse of power. After a warning about an authoritarian takeover, he says:

    This grim prognosis depends on structures, not personalities, permitting us to move beyond knee-jerk reactions to the politics of the day. Most obviously, the election of President Obama has, for many, sufficed to dispatch any serious doubts about the system: Good-bye, imperial presidency; hello, Americas first black president, and the nation’s remarkable capacity for constitutional renewal!

    But a paragraph later he falls into the very trap he warned against, absurdly writing of Obama:

    He may be charismatic, but he is no extremist: there is little chance of his running roughshod over congressional prerogative, even those as indefensible as the filibuster. But the next insurgent president may not possess the same sense of constitutional restraint.

    Sadly, contrary to the ideologically blinded analysis of most observers from the left, all of the elements of excessive executive power that they feared from Bush have continued — or worsened — under Obama. On top of which he has used the financial crisis as an excuse to seize control — without Congress’s approval — of the energy supply, industrial activities, the Internet, and labor policy.

    Some of the loudest voices opposing Bush’s use of executive power are now cheering for Obama to push things much further. It’s different when its your guy in charge.

    Or: the more things change, the more they stay the same.

  • Wichita economic development: And then what will happen?

    Critics of the economic development policies in use by the City of Wichita are often portrayed as not being able to see and appreciate the good things these policies are producing, even though they are unfolding right before our very eyes. The difference is that some look beyond the immediate — what is seen — and ask “And then what will happen?” — looking for the unseen.

    Thomas Sowell explains the problem in a passage from the first chapter of Applied economics: thinking beyond stage one:

    When we are talking about applied economic policies, we are no longer talking about pure economic principles, but about the interactions of politics and economics. The principles of economics remain the same, but the likelihood of those principles being applied unchanged is considerably reduced, because politics has its own principles and imperatives. It is not just that politicians’ top priority is getting elected and re-elected, or that their time horizon seldom extends beyond the next election. The general public as well behaves differently when making political decisions rather than economic decisions. Virtually no one puts as much time and close attention into deciding whether to vote for one candidate rather than another as is usually put into deciding whether to buy one house rather than another — or perhaps even one car rather than another.

    The voter’s political decisions involve having a minute influence on policies which affect many other people, while economic decision-making is about having a major effect on one’s own personal well-being. It should not be surprising that the quantity and quality of thinking going into these very different kinds of decisions differ correspondingly. One of the ways in which these decisions differ is in not thinking through political decisions beyond the immediate consequences. When most voters do not think beyond stage one, many elected officials have no incentive to weigh what the consequences will be in later stages — and considerable incentives to avoid getting beyond what their constituents think and understand, for fear that rival politicians can drive a wedge between them and their constituents by catering to public misconceptions.

    The economic decisions made by governing bodies like the Wichita City Council have a large impact on the lives of Wichitans. But as Sowell explains, these decisions are made by politicians for political reasons.

    Sowell goes on to explain the danger of stopping the thinking process at stage one:

    When I was an undergraduate studying economics under Professor Arthur Smithies of Harvard, he asked me in class one day what policy I favored on a particular issue of the times. Since I had strong feelings on that issue, I proceeded to answer him with enthusiasm, explaining what beneficial consequences I expected from the policy I advocated.

    “And then what will happen?” he asked.

    The question caught me off guard. However, as I thought about it, it became clear that the situation I described would lead to other economic consequences, which I then began to consider and to spell out.

    “And what will happen after that?” Professor Smithies asked.

    As I analyzed how the further economic reactions to the policy would unfold, I began to realize that these reactions would lead to consequences much less desirable than those at the first stage, and I began to waver somewhat.

    “And then what will happen?” Smithies persisted.

    By now I was beginning to see that the economic reverberations of the policy I advocated were likely to be pretty disastrous — and, in fact, much worse than the initial situation that it was designed to improve.

    Simple as this little exercise may sound, it goes further than most economic discussions about policies on a wide range of issues. Most thinking stops at stage one.

    We see stage one thinking all the time when looking at government. In Wichita, for example, a favorite question of city council members seeking to justify their support for government intervention such as a tax increment financing (TIF) district or some other form of subsidy is “How much more tax does the building pay now?” Or perhaps “How many jobs will (or did) the project create?”

    These questions, and the answers to them, are examples of stage one thinking. The answers are easily obtained and cited as evidence of the success of the government program.

    But driving by a store or hotel in a TIF district and noticing a building or people working at jobs does not tell the entire story. Using the existence of a building, or the payment of taxes, or jobs created, is stage one thinking, and no more than that.

    Fortunately, there are people who have thought beyond stage one, and some concerning local economic development and TIF districts. And what they’ve found should spur politicians and bureaucrats to find ways to move beyond stage one in their thinking.

    An example are economists Richard F. Dye and David F. Merriman, who have studied tax increment financing extensively. Their article Tax Increment Financing: A Tool for Local Economic Development states in its conclusion:

    TIF districts grow much faster than other areas in their host municipalities. TIF boosters or naive analysts might point to this as evidence of the success of tax increment financing, but they would be wrong. Observing high growth in an area targeted for development is unremarkable.

    So TIFs are good for the favored development that receives the subsidy — not a surprising finding. What about the rest of the city? Continuing from the same study:

    If the use of tax increment financing stimulates economic development, there should be a positive relationship between TIF adoption and overall growth in municipalities. This did not occur. If, on the other hand, TIF merely moves capital around within a municipality, there should be no relationship between TIF adoption and growth. What we find, however, is a negative relationship. Municipalities that use TIF do worse.

    We find evidence that the non-TIF areas of municipalities that use TIF grow no more rapidly, and perhaps more slowly, than similar municipalities that do not use TIF.

    In a different paper (The Effects of Tax Increment Financing on Economic Development), the same economists wrote “We find clear and consistent evidence that municipalities that adopt TIF grow more slowly after adoption than those that do not. … These findings suggest that TIF trades off higher growth in the TIF district for lower growth elsewhere. This hypothesis is bolstered by other empirical findings.”

    Here we have an example of thinking beyond stage one. The results are opposite of what one-stage thinking produces.

    Some city council members are concerned about creating jobs, and are swayed by the promises of developers that their establishments will employ a certain number of workers. Again, this thinking stops at stage one. But others have looked farther, as has Paul F. Byrne of Washburn University. The title of his recent report is Does Tax Increment Financing Deliver on Its Promise of Jobs? The Impact of Tax Increment Financing on Municipal Employment Growth, and in its abstract we find this conclusion regarding the impact of TIF on jobs:

    Increasingly, municipal leaders justify their use of tax increment financing (TIF) by touting its role in improving municipal employment. However, empirical studies on TIF have primarily examined TIF’s impact on property values, ignoring the claim that serves as the primary justification for its use. This article addresses the claim by examining the impact of TIF adoption on municipal employment growth in Illinois, looking for both general impact and impact specific to the type of development supported. Results find no general impact of TIF use on employment. However, findings suggest that TIF districts supporting industrial development may have a positive effect on municipal employment, whereas TIF districts supporting retail development have a negative effect on municipal employment. These results are consistent with industrial TIF districts capturing employment that would have otherwise occurred outside of the adopting municipality and retail TIF districts shifting employment within the municipality to more labor-efficient retailers within the TIF district.

    While this research might be used to support a TIF district for industrial development, TIF in Wichita is primarily used for retail development. And, when thinking beyond stage one, the effect on employment — considering the entire city — is negative.

    It’s hard to think beyond stage one. It requires considering not only the seen, but also the unseen, as Frederic Bastiat taught us in his famous parable of the broken window. But over and over we see how politicians at all levels of government stop thinking at stage one. This is one of the many reasons why we need to return as much decision-making as possible to the private sector, and drastically limit the powers of politicians and governments.

  • Herman Cain: My interview

    In July 2010, some 15 months ago, I had a chance to interview Herman Cain, who is now at or near the top of the polls of Republican presidential candidates. At the time his name was starting to be seen on lists of possible presidential candidates. Following is what I wrote at the time.

    Herman Cain: Conservatives should dream, be united, informed, inspired

    Herman CainHerman Cain

    At this weekend’s RightOnline conference at The Venetian in Las Vegas, businessman and radio talk show host Herman Cain delivered an inspirational message to the audience of some 1,100 conservative activists from across the country.

    Cain has a nightly radio show and is a frequent guest host for the Neal Boortz show, which is heard in Wichita on KNSS radio. Cain has been an executive at several companies, including serving as president of Godfather’s Pizza, a unit of Pillsbury. He appears on Fox News, and WorldNet Daily carries his weekly column.

    He also runs The Hermanator PAC, which seeks to elect economically responsible conservatives to office. His name is mentioned in lists of presidential contenders for 2012, and he may launch a presidential exploratory committee.

    Speaking at Saturday’s general session at RightOnline, Cain told the audience “The tragedy in life does not lie in not reaching your goals; the tragedy lies in having no goals to reach for. It’s not a calamity to die with dreams unfulfilled, but it is a calamity to have no dreams.”

    Cain said that his dream is that we return to the principles that the Founding Fathers envisioned for what turned out to be the greatest country in the world: life, liberty, and the pursuit of happiness. “It didn’t say anything about a Department of Happy!” It is the pursuit of happiness that is mentioned.

    Cain told the audience there are three things the audience must do: First, conservatives and their citizen movements must stay united in their efforts take back our government.

    Second, conservatives must stay informed. “Stupid people are ruining this country,” he said, telling the audience that over half the people can be persuaded by a slick speech or a slick campaign ad.

    Third, conservatives must stay inspired. Telling the audience the story of his recovery from cancer, he said his inspiration for his work comes from God Almighty.

    He also related the story of the bumblebee, and how aerodynamic equations and computer models predict that the bumblebee should not be able to fly. “There’s only one reason the bumblebee flies: He didn’t get the memo that said he couldn’t. The bumblebee believes he can fly.”

    Telling the audience that they have “bumblebee power,” he believes that conservatives can take back the government in November 2010.

    Cain also mentioned what he calls the “SIN” tactics that liberals employ: First, they shift the subject, then they ignore the facts. “Liberals can’t handle the facts,” he told the audience, and that’s why they shift the subject and ignore the facts.

    Finally, liberals resort to name-calling, calling himself and other conservatives racists, a charge he said is ridiculous and has backfired.

    Later that day, I had an interview with Cain in his suite at Encore Las Vegas. Casually dressed and sipping a glass of wine, he was more relaxed than during his energetic speech earlier that day, although eventually his engaging enthusiasm broke out.

    Referring to his optimism for the chances of conservatives in the upcoming elections, I said I’m not so sure, even pessimistic. Why am I wrong, I asked?

    Cain said that callers — both to his Monday through Friday radio show and when he substitutes for Boortz and Sean Hannity — express their frustrations with the direction of the country, the stalled economy, and lack of private sector job creation. That makes him optimistic. Callers say they’ve been duped by the “hope and change” message, and they’re waking up.

    Another factor he cited is the ongoing Gallup poll showing conservatives outnumbering liberals two to one, and independents and moderates outnumbering liberals one-and-a-half to one. He said this tells him that the numbers are on our side.

    I asked Cain about the controversy about the Civil Rights Act of 1964: As a black man, who at age 64, growing up in the south, faced real and actual discrimination: Is our country better off for it?

    “Absolutely we are,” he said, for both the Civil Rights act of 1964 and the Voter Rights Act of 1965, adding that they had historical impact on our country.

    The Great Society programs and the rise of the modern welfare state: Are we better off for that? No, he said. He said that these programs didn’t provide enough incentives for people to help themselves. “That’s what’s wrong with most of the social programs today. That’s why they need to be modernized. When you provide incentives, and you provide help, but you also have requirements in there for people to help themselves: guess what? The programs will work.” But people have figured out how to game the system, and then the programs don’t work.

    “Look at systemic poverty, look at crime, look at the quality of education in our inner cities — it’s all worse than it was.” The welfare reform of the 1990s, which required people to do certain things in order to continue to receive a check, shows that when people have an incentive to help themselves, they will use assistance programs more effectively, he said.

    Since he mentioned education, I explained that in Kansas we have very few charter schools, and no school choice. What are we missing out on in Kansas? Are we behind the curve?

    Yes, he said. “Competition makes everything better.” He told about the success of the Washington DC school choice program, with over 90 percent of the students going on to college. But the Democrat-led Congress and the President would not re-authorize the program. The teachers unions don’t like competition, he said, and this was the reason why.

    I mentioned that often liberals are opposed to school choice because they say that poor uneducated parents are not equipped to make decisions regarding schools for their children. This is not true, Cain said. “It’s part of that whole attitude that government can make better decisions for a poor family then they can make for themselves.”

    A focus of this conference is that liberty and free markets are superior in creating prosperity for everyone. But many people believe that one person becomes rich only if others become poor. I asked: Why do people believe that? Why have we as conservatives not been successful in getting out that message? Why doesn’t the president seemed to believe that?

    Cain said that President Obama doesn’t believe this because he is “at least a socialist.” Republicans have not been good about managing “sharper, clearer messages about certain things.” He said and the Republican National Committee focuses on raising money, which is good, but they don’t do a good job of explaining what the Republican Party stands for. Cain said that while he supported current chairman Michael Steele for that job, he doesn’t know what Steele believes are the priorities or focal points for Republican candidates running for office in November.

    While we know that we have to do something about spending, taxes, and education, these are general, broad statements, he said. We even know how to fix most problems. “We just don’t have the political will or the leadership to fix some of these problems. That’s what America faces, that’s our biggest challenge.”

  • The politically-motivated attack on Koch Industries

    Investor’s Business Daily and The Atlantic have provided more context to the politically-motivated article in Bloomberg Markets criticizing Wichita-based Koch Industries. We find that the more scrutiny the Bloomberg article receives, the worse it looks.

    The Investor’s op-ed makes the observation that anyone who reads the article must come to: “Indeed, throughout the entire story you find the Kochs taking steps to bring corporate behavior back in line, not only with the law but with their own stringent ethical standards.”

    Later, the authors point out the politics behind the attack on Koch: “The long hit piece, as Daniel Indiviglio writes in the Atlantic, managed to find ‘eight instances of alleged misconduct by a giant multinational over the span of 63 years.’ In nearly every case, Koch itself took steps to correct the problems. Putting it in context, Indiviglio then Google-searched a comparable company, finding eight serious instances of misconduct — we’re talking fines and settlements for fraud and bribery — over 11 years. That company would be GE, whose CEO Jeffrey Immelt heads President Obama’s jobs council and seems to see regulation as opportunities for businesses to profit. We await that Bloomberg investigation.”

    In his piece for The Atlantic, Indiviglio writes: “According to Bloomberg, 14 reporters around the globe worked for six months on the story. What did they turn up? Really, shockingly little. And what’s worse: from the very outset, the reporters’ bias against the Koch brothers is utterly clear.”

    On the bias and lack of context, he writes: “To further attempt to sway the reader before explaining the facts, the reporters reveal the following fact that someone not familiar with politics and lobbying might find shocking: ‘Koch Industries has spent more than $50 million to lobby in Washington since 2006.’ My reaction to reading this was, ‘$50 million? That’s it?’ That might sound like a lot, but let’s compare that to, say, General Electric. Over the same period, GE has spent more than $136 million lobbying, according to the Center for Responsive Politics.”

    After running through the eight issues in the Bloomberg piece, Indiviglio concludes: “Obviously, Koch Industries did make mistakes. It likely regrets those mistakes: the penalties, fines, and lawsuits that resulted cost the firm many millions of dollars. This is more a problem with big multinational corporations than a problem specific to Koch, however. When you’ve got subsidiaries around the world, strong, flawless oversight is difficult and very expensive.”

    Underlying this article (and others like it) and its criticism is the advocacy of Charles Koch and David Koch for free markets and economic freedom — something the political left is opposed to.

    But it’s not only the political left — liberals and progressives — that oppose the positions that Charles and David Koch advocate. Much of the business community, like General Electric, thrive on the crony capitalism the Kochs oppose, and have opposed for many years. As Charles Koch wrote earlier this year in the Wall Street Journal: “Government spending on business only aggravates the problem. Too many businesses have successfully lobbied for special favors and treatment by seeking mandates for their products, subsidies (in the form of cash payments from the government), and regulations or tariffs to keep more efficient competitors at bay. Crony capitalism is much easier than competing in an open market. But it erodes our overall standard of living and stifles entrepreneurs by rewarding the politically favored rather than those who provide what consumers want.”