In this episode of WichitaLiberty.TV: Congressman Mike Pompeo talks about passing legislation like the Safe and Accurate Food Labeling Act, the Iran nuclear deal and his role in discovering the secret side deals, and other topics. View below, or click here to view at YouTube. Episode 94, broadcast August 30, 2015.
In this episode of WichitaLiberty.TV: As Sedgwick County proposes small spending cuts, those who benefit are vocal in their displeasure. Then, two more episodes from “Love Gov” covering health care and the housing market. View below, or click here to view at YouTube. Episode 91, broadcast August 9, 2015.
An often unappreciated mechanism throughout the Kansas budget severely limits the ability of legislators and governors to adapt to changing state priorities. A new paper from Kansas Policy Institute explains.
Federal Rules Serve as “Worms” Buried in Promises of “Free Money”
Mandates remove state control of budgets, exemplify increasing federal overreach
July 30, 2015 — Wichita — An often unappreciated mechanism throughout the Kansas budget severely limits the ability of legislators and governors to adapt to changing state priorities. These Maintenance of Effort (MOE) requirements are highlighted in a new paper by Kansas Policy Institute and is authored by former state budget director Steve Anderson. MOE stipulations force state and local governments to maintain a constant level of funding for several federal grant programs, most notably Medicaid and the Elementary and Secondary Education Act, two major components of Lyndon Johnson’s “Great Society;” in FY 2014 these two programs accounted for over two-thirds of Kansas general fund expenditures.
Dave Trabert, president of Kansas Policy Institute, offered the following in conjunction with the release of the paper, “Maintenance of Effort requirements are an end-run on the U.S. Constitution, which prohibits the federal government from dictating how states operate. The feds use MOE to create contractual obligations that effectively control large chunks of states’ budgets and limit legislators’ ability to make appropriate decisions for their constituents.”
Unfortunately, policy makers are bound by MOEs regardless of the state’s budget situation, changing priorities, or new-found efficiencies. A previous legislature can effectively tie the hands of future elected officials. Sometimes it is even agency bureaucrats who sign up for “free federal dollars” apart from the normal appropriations process with little legislative input.
Steve Anderson, author of the “Maintenance of Effort: The Federal Takeover of State Budgets” and current Senior Fiscal Policy Fellow with KPI, said, “The constitutional right of a state to control the appropriation of their citizens’ tax dollars is too often being abrogated by the federal government’s MOE requirements. This takeover of the state budgets is like an addictive drug from which withdrawal is painful. Unlike a drug, this addiction can be created by prior legislatures, governors or even bureaucrats. The pervasiveness of MOE goes to almost every function of state government.”
The report outlines several strategies that can be utilized by state governments to mitigate the negative effects of MOEs. One proposal may prove difficult with existing programs but brings some common sense to policy making moving forward — avoid federal funds as much as possible. Conversely, a similar recommendation would be that all new grant programs be approved by the state legislature.
In conclusion KPI President Trabert said, “MOE requirements are not about improving outcomes, but dictating how states operate. Until Congress puts a stop to this practice state legislators must say no to the promise of ‘free money’ from the feds and avoid the problems brought by MOEs.”
Cato Institute Senior Fellow Michael Tanner speaks about his new book, “Going for Broke: Deficits, Debt and the Entitlement Crisis,” at a luncheon of the Wichita Pachyderm Club, July 31, 2014. View below, or click here to view at YouTube. Video production by Paul Soutar.
As we approach another birthday of Milton Friedman, here’s his article where he clears up the authorship of a famous aphorism, and explains how to really get a free lunch. Based on remarks at the banquet celebrating the opening of the Cato Institute’s new building, Washington, May 1993.
I am delighted to be here on the occasion of the opening of the Cato headquarters. It is a beautiful building and a real tribute to the intellectual influence of Ed Crane and his associates.
I have sometimes been associated with the aphorism “There’s no such thing as a free lunch,” which I did not invent. I wish more attention were paid to one that I did invent, and that I think is particularly appropriate in this city, “Nobody spends somebody else’s money as carefully as he spends his own.” But all aphorisms are half-truths. One of our favorite family pursuits on long drives is to try to find the opposites of aphorisms. For example, “History never repeats itself,” but “There’s nothing new under the sun.” Or “Look before you leap,” but “He who hesitates is lost.” The opposite of “There’s no such thing as a free lunch” is clearly “The best things in life are free.”
And in the real economic world, there is a free lunch, an extraordinary free lunch, and that free lunch is free markets and private property. Why is it that on one side of an arbitrary line there was East Germany and on the other side there was West Germany with such a different level of prosperity? It was because West Germany had a system of largely free, private markets — a free lunch. The same free lunch explains the difference between Hong Kong and mainland China, and the prosperity of the United States and Great Britain. These free lunches have been the product of a set of invisible institutions that, as F. A. Hayek emphasized, are a product of human action but not of human intention.
A RESOLUTION OPPOSING $152 MILLION ELECTRIC RATE HIKE
WHEREAS, electricity is a key utility needed for life and a strong, functioning economy in the 21st century; and
WHEREAS, the Consumer Price Index (CPI) as measured by the federal government’s measurement is well under two percent a year; and
WHEREAS, the $152 million dollar rate hike proposed by Westar would average an increase of almost 8 percent for rate payers; and
WHEREAS, between 2009 and 2014 Westar has received 22 electric rate hikes that have totaled $536.9 million (this is the net that also includes two rate reductions that totaled $6 million during that same period of time) at a time when the Sedgwick County economy was struggling and with almost no growth in the assessed value of the taxable property base; and
WHEREAS, residential rates would see another dramatic increase of 12.1 percent if this request is approved as requested according to the Citizens Utility Rate Board (CURB); and
WHEREAS, further electric rate hikes of $24 million are either pending or projected within the next year according to CURB; and
WHEREAS, the competitiveness of this region is dependent upon having competitive rates for basic utility functions, with electricity production a vital key; and
WHEREAS, we are aware that the federal government is opposing carbon based energy production and intent on raising costs, while limiting low cost energy production.
NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OF SEDGWICK COUNTY, KANSAS, that:
1. Sedgwick County opposes this proposed $152 million rate hike by Westar. This opposition also extends to any other rate hikes sought by Westar this year.
2. Sedgwick County opposes unfunded federal mandates onto energy production that would raise costs, inhibit production, and make Kansas and the rest of the U.S. less energy competitive with foreign competition and does so without significant environmental benefits.
“Overcoming obstacles can be a difficult challenge even on a level playing field. We need to change the rigged system that favors the politically connected over the hardworking, honest citizen,” writes Charles Koch in a recent edition of Perspectives.
Overcoming Obstacles
By Charles Koch
July 13, 2015
America’s founding fathers had a unique vision for the United States. As the Declaration of Independence famously put it, this country was conceived as a place where people could enjoy “unalienable Rights,” including “Life, Liberty and the pursuit of Happiness.”
These concepts are much more than just words to me. I believe the greatest gift we can receive or pass on is the opportunity to find and pursue our passion, and, in doing so, make a difference by helping others improve their lives.
It seems to me we’re now losing much of the vision our founders fought so hard to establish. Time and time again, government policies have made it tougher for people to realize their potential.
This change creates some serious consequences, especially for the least-advantaged Americans, who now face more obstacles than ever in their struggle to develop and apply their unique talents and abilities.
To remove these obstacles, we need to revise poverty-creating regulations and abolish corporate welfare, reform our approach to education and enact criminal justice reform.
OVERCOMING OBSTACLES
Consider the challenges of starting a small business. Most would be entrepreneurs have very little capital. To raise money, many will pledge or mortgage whatever assets they have; others will ask for a small business loan.
In the past, community banks usually made such loans. But the Dodd-Frank Wall Street Reform and Consumer Protection Act, signed into law in 2010, put a particular burden on local lenders.
Community banks now face higher compliance costs, more complicated regulations and some strong disincentives to make traditional loans. As Forbes bluntly put it: “Dodd-Frank is killing community banks.”
When small borrowers have no local options, they are forced to turn to bigger banks for help, where they have even less of a chance of getting a loan.
Regressive and anti-competitive regulations are also stalling progress. In particular, licensure requirements (especially at the state and local level) have become a huge obstacle.
Millions are now denied jobs in more than 100 lower-income occupations because of unnecessary licensing requirements, months of mandated training and unaffordable fees.
At the corporate level, excessive permitting requirements (such as a decade-long approval process for a new facility) are very anticompetitive. Such requirements not only prevent the creation of jobs, they protect existing businesses from competition and keep out new entrants, which is a form of corporate welfare.
CORPORATE WELFARE
Even as the little guy is getting stiff-armed, the government has opened its arms to corporate cronyism by subsidizing big banks and corporations through the tax code, mandates, protective tariffs and so on.
I believe this corporate welfare has created a two-tier system with far more “have-nots” than “haves.”
Too many CEOs owe their profits to government “gimmes” rather than the creation of real value by helping others improve their lives. This is the major cause of so much profit being bad rather than good (the subject of my upcoming book).
Speaking of books, another troubling area is education, which should be a path for overcoming obstacles.
Having an effective education that imparts the skills and values needed to make a contribution in society is essential for success.
But that doesn’t mean we should try to push almost all high school graduates into a four-year liberal arts program where they may collect a lot of debt without getting any usable skills.
Educational choices should reflect aptitude. Many kids with mechanical aptitudes will be much more successful by learning a skilled trade or craft.
RENEWED VISION
America should be a place that encourages and enables people to find opportunities to contribute and succeed, and have meaning and fulfillment in their lives.
Instead, it appears that America has become a two-tiered system, in which those with political connections get favors while obstacles are placed in front of those who are left behind.
A great nation does not treat people according to some group classification, whether it be race, religion, gender or age, instead of on their individual merits.
We need to reform our legal and regulatory system so that it treats everyone equally and doesn’t discriminate against the least-advantaged in our society.
Overcoming obstacles can be a difficult challenge even on a level playing field. We need to change the rigged system that favors the politically connected over the hardworking, honest citizen.
As we approach another birthday of Milton Friedman, here’s his column from Newsweek in 1982 that explains that despite good intentions, the result of government intervention often harms those it is intended to help.
There is a sure-fire way to predict the consequences of a government social program adopted to achieve worthy ends. Find out what the well-meaning, public-interested persons who advocated its adoption expected it to accomplish. Then reverse those expectations. You will have an accurate prediction of actual results.
To illustrate on the broadest level, idealists from Marx to Lenin and the subsequent fellow travelers claimed that communism would enhance both freedom and prosperity and lead to the “withering away of the state.” We all know the results in the Soviet Union and the People’s Republic of China: misery, slavery and a more powerful and all-encompassing government than the world had ever seen.
As our electric utility asks for a rate increase, let’s first ask that it stop blatant waste.
Westar, our state-regulated electric utility, is asking for a rate increase. As part of any increase, we ought to insist that the utility do a better job of controlling blatant waste.
The problem may not be solved soon. No one has much motivation to solve the problem. The city pays Westar a fixed fee for each streetlight. The use of electricity is not metered, at least as far as the city’s bill is concerned. So if the city notices the lights wasting electricity during the middle of the day, well, it’s of no cost to the city. The city is concerned that working with Westar to turn off street lights during the day may not be cost-effective, according to Ken Evans, the city’s director of strategic communications. That’s the attitude he expressed in a recent City of Wichita Facebook dialog with citizens. But the city has run a campaign asking people to turn off appliances like microwave ovens and alarm clocks when not in use. This saves a vanishingly small amount of electricity, and at a large cost in convenience.
Downtown Wichita, July 17, 2015, 11:18 am. At least five burning street lights can be seen.Westar, on the other hand, is a highly-regulated utility that operates much like a governmental agency. How strong is the profit motive to Westar? Not strong, it seems. Most individuals or private business firms would seek to reduce the waste that Westar seems unconcerned about.
But before granting Westar a rate increase, its regulators ought to insist that the utility work to control blatant waste. This may be the only way to get attention to this problem.
Dave Trabert, president of Kansas Policy Institute, offered the following in conjunction with the release of the paper, “Maintenance of Effort requirements are an end-run on the U.S. Constitution, which prohibits the federal government from dictating how states operate. The feds use MOE to create contractual obligations that effectively control large chunks of states’ budgets and limit legislators’ ability to make appropriate decisions for their constituents.”
