Voice For Liberty

Category: Economics

  • In search of a level playing field

    In search of a level playing field

    A national survey finds that small business leaders overwhelmingly believe that state economic development incentives favor big businesses, that states are overspending on large individual deals, and that state incentive programs are not effectively meeting the needs of small businesses seeking to grow. From Good Jobs First.

    Survey: Small Business Group Leaders Say States Favor Big Businesses at the Expense of Small Firms Seeking to Grow

    Washington, DC, September 29, 2015 — A national survey of 41 leaders of small business organizations representing 24,000 member businesses in 25 states reveals that they overwhelmingly believe that state economic development incentives favor big businesses, that states are overspending on large individual deals, and that state incentive programs are not effectively meeting the needs of small businesses seeking to grow.

    In Search of a Level Playing Field coverA large majority also say small businesses interests in economic development are not well represented in their state capitols. The credit crunch is a critical problem, and many also emphasize that public goods that benefit all employers-such as job training, education, and transportation-deserve to be a higher priority.

    The study was funded by the Ewing Marion Kauffman Foundation. It is available on the Good Jobs First website here.

    “Our findings are absolutely consistent with what we have heard for years from small business leaders,” said Good Jobs First executive director Greg LeRoy. “Despite their pro-small business rhetoric, state officials’ programs are perceived as biased in favor of large companies that receive big tax-break packages.”

    Specifically:

    • 92 percent believe that the spending balance on incentives between small and large businesses in their state is biased toward big businesses (69 percent strongly believe).
    • 79 percent believe that their state is overspending on big incentive deals, hurting state finances (56 percent strongly).
    • 87 percent say that small business interests in economic development issues are not effectively represented in their state’s capital (36 percent strongly).
    • 85 percent believe that economic development incentives in their state are not effectively addressing the current needs of small businesses that are seeking to grow (36 percent strongly).
    • 72 percent do not believe their state’s current incentive policies are effective in promoting economic growth (23 percent strongly).

    The respondents lead groups from 25 states, including all but one of the 15 most-populous. They belong to networks formed in the past 15 years, many with economic development missions. None is contracted by state or local governments to perform economic development functions such as outside-firm recruitment.

    “Our next study will examine in great detail how well or poorly state incentive programs treat small, local and/or entrepreneurial businesses versus large, multistate companies” added LeRoy.

    Good Jobs First is a non-profit, non-partisan resource center on economic development. Founded in 1998, it is based in Washington DC.

  • James Chung in Wichita, September 23, 2015

    James Chung in Wichita, September 23, 2015.

  • Kansas private nonfarm employment by county

    Kansas private nonfarm employment by county

    Here is an interactive visualization of private nonfarm employment in Kansas, for each county. Data is from Bureau of Economic Analysis, part of the U.S. Department of Commerce. Click here to open the visualization.

    The sample below shows job growth for the state as a whole, along with the five largest counties. Click it for a larger version.

    Kansas private nonfarm employment by county, five largest counties, 2015-09

  • Introduction to Austrian Economics

    Introduction to Austrian Economics

    “For Austrians, on the other hand, man is a purposeful being. … He has spirit and will.” The author of these remarks, Dr. Richard Ebeling, delivered a lecture on Austrian Economics to an audience in Wichita.

    Austrian Economics focuses on man as a human actor, rather than as a cog in a system of equations. Dr. Richard Ebeling delivered an introductory lecture on Austrian Economics to an audience in Wichita on September 10, 2015.

    A companion article to the lecture is Austrian Economics and the Political Economy of Freedom, in which Dr. Ebeling explains: “The Austrian view of man refutes the positivist, historicist, and neoclassical conceptions of man as a mere physical, quantitative object, or as a passive subject controlled by the dark forces of history, or as a ‘dependent variable’ in a system of mathematical equations. … For Austrians, on the other hand, man is a purposeful being. He thinks, plans, and acts. Man may be made up of matter, but he possesses consciousness. He has the capacity to imagine, create, and initiate. His mind is not simply reducible to lifeless matter. He has spirit and will.”

    View video of the lecture below, or click here to view at YouTube in high definition (recommended). Videography by Paul Soutar.

  • Austrian economics to be explained

    Austrian economics to be explained

    Voice for Liberty presents Richard M. Ebeling, Ph.D. for an informative breakfast event. Ebeling is BB&T Distinguished Professor of Ethics and Free Enterprise Leadership at The Citadel in Charleston, South Carolina. His topic will be “An Introduction to Austrian Economics.”

    Richard M. Ebeling, Ph.D.
    Richard M. Ebeling, Ph.D.
    This meeting is Thursday September 10, 2015, from 7:30 am to 9:00 am. It will be at the Petroleum Club, 9th floor of the Ruffin Building at 100 N. Broadway in Wichita.

    The cost is $15, which includes a delicious breakfast. RSVP is not required, but if you plan to attend, would you please let me know by email at bob.weeks@gmail.com? This will help with planning. But please attend even if you can’t RSVP.

    About the speaker
    Dr. Richard M. Ebeling is the recently appointed BB&T Distinguished Professor of Ethics and Free Enterprise Leadership at The Citadel. He will be conducting courses such as “Leadership, Entrepreneurship, and Capitalist Ethics” as well as “The Morality and Economics of Capitalist Society.” Dr. Ebeling is recognized as one of the leading members of the Austrian School of Economics and the author of Political Economy, Public Policy, and Monetary Economics: Ludwig von Mises and the Austrian Tradition (Routledge 2010). He is currently editing a forthcoming volume in the Collected Works of F.A. Hayek (Univ. of Chicago Press), the noted Austrian economist and Nobel Laureate. Prior to his appointment at The Citadel, Dr. Ebeling was professor of Economics at Northwood University in Midland, Michigan (2009-2014). He served as president of the Foundation for Economic Education (2003-2008), was the Ludwig von Mises Professor of Economics at Hillside College in Hillsdale, Michigan (1988-2003), and Assistant Professor of Economics at the University of Dallas in Texas (1984-1988). He lives with his wife Anna and their dog “Fritzie” in Mt. Pleasant, South Carolina.

    Ludwig von Mises, a giant in the field of Austrian Economics, and economics in general.
    Ludwig von Mises, a giant in the field of Austrian Economics, and economics in general.
    Austrian economics
    From Austrian Economics and the Political Economy of Freedom by Richard Ebeling:

    The Austrian view of man refutes the positivist, historicist, and neoclassical conceptions of man as a mere physical, quantitative object, or as a passive subject controlled by the dark forces of history, or as a “dependent variable” in a system of mathematical equations. Positivism tried to reduce man and his mind to mere magnitudes to be studied and manipulated like the inanimate matter experimented on in the natural sciences. Historicism claimed that man is determined and molded by external laws of history that shape his thoughts, actions, and destiny, with little latitude for the individual to design and guide his own future. Neoclassical economics treats man like a mathematical function possessing given tastes and preferences, which are themselves induced by his surroundings and on the basis of which he responds in predictable ways when confronted with various constraining and objective tradeoffs in the form of market prices.

    For Austrians, on the other hand, man is a purposeful being. He thinks, plans, and acts. Man may be made up of matter, but he possesses consciousness. He has the capacity to imagine, create, and initiate. His mind is not simply reducible to lifeless matter. He has spirit and will. Man reflects on the circumstances in which he finds himself. He judges aspects of his physical and social surroundings less than satisfactory. He imagines states of affairs that would be more to his liking. He creates in his mind plans of action that would bring those preferred states of affairs into existence. He discovers that the things he can use as means to achieve some of his ends are insufficient to achieve all of his ends. He has to weigh the alternatives and decide which he prefers more, since some of them, in the face of scarcity, will have be forgone today or forever. He therefore has to decide the tradeoffs he is willing to make, and as a result he determines the costs of his own choices in the form of goals he is willing to give up in order to pursue others that he considers more important.

  • Quarterly gross domestic product by state

    Quarterly gross domestic product by state

    Today the Bureau of Economic Analysis released a new series of statistics. From the accompanying press release:

    Today, the U.S. Bureau of Economic Analysis (BEA) is releasing prototype quarterly gross domestic product (GDP) by state statistics for 2005–2014. The quarterly GDP by state statistics are released for 21 industry sectors and are in both current and inflation-adjusted chained (2009) dollars.

    The new data are intended to provide a fuller description of the accelerations, decelerations, and turning points in economic growth at the state level, including key information about the impact of industry composition differences across states. Relative to the August 2014 release, the new prototype statistics incorporate new and revised source data and cover an additional year of economic activity.

    Statistics for the first quarter of 2015 are not being released as BEA continues to evaluate its methodology based on data users’ comments and evaluations received after the first release of prototype quarterly GDP by state statistics last September.

    I’ve gathered a subset of the data and present it in an interactive visualization. In this subset, I include only these industries: All industry, Private industry, and Government. Click here to open the visualization in a new window.

    Quarterly GDP by state and industry, new prototype 2015-09 instructions

  • Some good news on federal spending

    According to Dan Mitchell, “First, we made a lot of fiscal progress between 2009 and 2014 because various battles over debt limits, shutdowns, and sequestration actually did result in real spending discipline.” Couple that with some (slow) growth in the economy, and as a result, federal spending as a percentage of GDP has declined.

    Federal Net Outlays as Percent of Gross Domestic Product 2015-08

  • Michael Tanner: Going for Broke: Deficits, Debt and the Entitlement Crisis

    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.

    Tanner’s appearance on Wichitaliberty.TV is here.

  • Friedman: The fallacy of the welfare state

    Friedman: The fallacy of the welfare state

    As we approach another birthday of Milton Friedman, here’s an insightful passage from the book he wrote with his wife Rose: Free to Choose: A Personal Statement. It explains why government spending is wasteful, how it leads to corruption, how it often does not benefit the people it was intended, and how the pressure for more spending is always present.

    A simple classification of spending shows why that process leads to undesirable results. When you spend, you may spend your own money or someone else’s; and you may spend for the benefit of yourself or someone else. Combining these two pairs of alternatives gives four possibilities summarized in the following simple table:

    friedman-spending-categories-2013-07

    Category I in the table refers to your spending your own money on yourself. You shop in a supermarket, for example. You clearly have a strong incentive both to economize and to get as much value as you can for each dollar you do spend.

    Category II refers to your spending your own money on someone else. You shop for Christmas or birthday presents. You have the same incentive to economize as in Category I but not the same incentive to get full value for your money, at least as judged by the tastes of the recipient. You will, of course, want to get something the recipient will like — provided that it also makes the right impression and does not take too much time and effort. (If, indeed, your main objective were to enable the recipient to get as much value as possible per dollar, you would give him cash, converting your Category II spending to Category I spending by him.)

    Category III refers to your spending someone else’s money on yourself — lunching on an expense account, for instance. You have no strong incentive to keep down the cost of the lunch, but you do have a strong incentive to get your money’s worth.

    Category IV refers to your spending someone else’s money on still another person. You are paying for someone else’s lunch out of an expense account. You have little incentive either to economize or to try to get your guest the lunch that he will value most highly. However, if you are having lunch with him, so that the lunch is a mixture of Category III and Category IV, you do have a strong incentive to satisfy your own tastes at the sacrifice of his, if necessary.

    All welfare programs fall into either Category III — for example, Social Security which involves cash payments that the recipient is free to spend as he may wish; or Category IV — for example, public housing; except that even Category IV programs share one feature of Category III, namely, that the bureaucrats administering the program partake of the lunch; and all Category III programs have bureaucrats among their recipients.

    In our opinion these characteristics of welfare spending are the main source of their defects.

    (more…)