Voice For Liberty

Search results for: “historic tax credits”

  • Wind power: look at costs of “boom”

    There’s been a lot of investment in Nolan County, Texas. Things are booming.

    That’s pretty much the entire point of an op-ed piece in the Wichita Eagle by Scott Allegrucci. (Money Blowing in the Wind in Texas, January 16, 2009)

    He’s the director of the Great Plains Alliance for Clean Energy, based in Topeka. This organization’s website states that “GPACE seeks to correct an imbalance in the information citizens and their elected representatives have received regarding the critical and complex energy policy decisions facing our state.”

    If that’s really GPACE’s goal, Mr. Allegrucci didn’t advance it in this piece. That’s because he promotes the benefits of spending on wind energy without considering the true cost of wind energy. Further, he ignores the tremendous subsidy poured into wind energy production.

    Last year the Texas Public Policy Foundation released a report titled Texas Wind Energy: Past, Present, and Future. This report contains information about the realities of wind power. It provides the balance that GPACE says it seeks to provide but fails to deliver in Mr. Allegrucci’s op-ed.

    For example, did you know that every bit of wind power that’s produced receives a subsidy? Last year, as the subsidy was about to expire, wind power advocates warned that without the subsidy, wind power production would cease. No new plants would be built. It’s these subsidies that have created the growth in Nolan County that Allegrucci writes about. These subsidies produce some peculiar incentives. From page 25 of TPPF’s report:

    The financial handouts available to wind developers are so generous that, in Texas, many wind-energy producers “will offer wind power at no cost or even pay to have their electricity moved on the grid, a response commonly referred to as ‘negative pricing.’ Wind providers have an incentive to sell power even at negative prices because they still receive the federal production tax (PTC) credit and renewable energy credits.”

    Directing subsidies of any type into a concentrated area produces the results described by Allegrucci in this county. There’s nothing remarkable about that. But what about the rest of Texas? From the executive summary of the TPPF report:

    The distinction between wind and wind energy is critical. The wind itself is free, but wind energy is anything but. Cost estimates for wind-energy generation typically include only turbine construction and maintenance. Left out are many of wind energy’s costs — transmission, grid connection and management, and backup generation — that ultimately will be borne by Texas’ electric ratepayers. Direct subsidies, tax breaks, and increased production and ancillary costs associated with wind energy could cost Texas more than $4 billion per year and at least $60 billion through 2025.

    It’s a common error, assuming that since no one owns the wind, wind power is free once the turbines are built. That’s far from the case, though. Page 23 tells us this:

    The true cost of electricity from wind is much higher than wind advocates admit. Wind energy advocates ignore key elements of the true cost of electricity from wind, including: (i) The cost of tax breaks and subsidies which shift tax burden and costs from “wind farm” owners to ordinary taxpayers and electricity customers. (ii) The cost of providing backup power to balance the intermittent and volatile output from wind turbines. (iii) The full, true cost of transmitting electricity from “wind farms” to electricity customers and the extra burden on grid management.

    The reality is that the boom in Nolan County is being paid for by electricity customers throughout Texas. Not by their choice, too.

    When considering wind power, balance requires us to consider these factors. The illustration that a concentrated area experiences a boom from a subsidized, expensive, and unreliable source of power doesn’t paint a picture of sound public policy.

  • Kansas news digest

    News from alternative media around Kansas for March 5, 2010.

    Teacher Tenure Under Review In Effort to Reduce School Costs

    (State of the State KS) “A House committee heard testimony on a bill Wednesday that would lengthen the period of time public school teachers must work to five years before eligible for tenure.”

    KPERS Committee Considers Early Retirement for Employees To Save Money

    (State of the State KS) “The House KPERS committee considered a bill Tuesday that would encourage early retirement for some government workers to save costs.”

    Kansas Democrats Focus on 2010 Elections at Washington Days

    (State of the State KS) “Kansas Democrats gathered to celebrate and campaign at Friday and Saturday’s Washington Days in Topeka.”

    Smoking ban proponents pull out bag of tricks to get bill passed, casino exemption included

    (Kansas Liberty) “In the near future, Kansas residents will be forced to comply with a statewide smoking ban, which has received the support of both chambers of the Kansas Legislature. Today, the House voted 68-54 to concur with the conference committee agreement reached between select members of the House and the Senate.”

    Day-care bill puts too much government in the home, opponents say

    (Kansas Liberty) “Tammi Hill, owner of the Peace of Mind Home Child Care Center in Olathe, has been brought to tears of frustration over a new piece of legislation which is currently in the Senate Public Health and Welfare Committee. Senate Bill 447 would create several new restrictions for day care providers, including regulations on how long children can take using the bathroom, how long a provider can speak with a parent, and how long a provider can spend with any inspector that may drop by the ensure the care center is in compliance with regulations.”

    Cigarette tax increases reported to bring negative outcomes

    (Kansas Liberty) “Americans for Prosperity-Kansas has launched a new web page dedicated to informing Kansas residents about how an increased cigarette tax could cost the state revenue, instead of bringing in additional revenue as suggested by the Democrats.”

    Wichita School Board Attempts to Explain Budget, Seeks Priorities

    (Kansas Watchdog) “About 400 people attended a Board Night Out at Wichita’s West High School Monday evening. A similar number attended another forum at Wichita’s Southeast High School. USD259 Wichita Board of Education President Barbara Fuller, board member Lanora Nolan and Superintendent John Allison attended the West High gathering and offered their assessments of the decisions facing the district because of the ongoing state budget crisis.”

    Tiahrt, Others Exonerated in Ethics Probe

    (Kansas Watchdog) “The Associated Press is reporting that Kansas Congressman Todd Tiahrt has been exonerated in an ethics probe of his connections with defense lobbying firm PMA and its clients. The probe found no violations by Tiahrt or five other members of the House Defense Appropriations Subcommittee. The late John Murtha (D-Pa.) topped the list of who received large donations from PMA Group and its clients and steered earmarks to PMA clients.”

    Kansas revenues sag deeper into crisis territory

    (Kansas Reporter) “TOPEKA, Kan. – February’s $71 million tax collection shortfall dropped Kansas revenues for the month deeper into budget crisis territory, legislative researchers reported Thursday.”

    Kansas’ bid for federal school money rejected

    (Kansas Reporter) “TOPEKA, Kan. – Kansas’ first round application for a slice of $4.35 billion in new federal education stimulus money has been rejected, but education officials say they plan to try again in a second round next June. The Kansas State Department of Education said it learned Thursday that it is not among 16 finalists selected to receive grants under the Obama administration’s Race to the Top plan for educational reform.”

    Kansas tax committee sends $169 million increase to House

    (Kansas Reporter) “TOPEKA, Kan. – Kansas House Taxation Committee members reluctantly voted Tuesday to raise $169 million in new taxes by requiring homeowners and renters to a pay 5.3 percent sales tax on their water, electric and natural gas bills that are now tax-exempt.”

    Costly Kansas tax credit needs more money, panel told

    (Kansas Reporter) “TOPEKA, Kan. – A controversial business tax credit once flagged as a drain on Kansas’ budget needs more money to help create jobs in Kansas, backers told a Kansas House Taxation committee Wednesday. Opponents, however, argued that removing a state lid on Kansas Historical Preservation tax credits, which last year were lopped by more than half their previous levels, would perpetuate the inefficient use of taxpayer money and give the recipients an unfair advantage over competitors who aren’t similarly subsidized.”

    Foster care system criticized, defended

    (Kansas Health Institute News Service) “Sadie Carpenter said no one ever told her why she and her husband weren’t allowed to adopt their great granddaughter. Marilyn Dilley said she and her husband were never told why they couldn’t adopt a boy they’d cared for as foster parents.”

  • Kansas and Wichita quick takes: Monday April 4, 2011

    Google announces Gmail motion. Google announced on Friday: “The mouse and keyboard were invented before the Internet even existed. Since then, countless technological advancements have allowed for much more efficient human computer interaction. Why then do we continue to use outdated technology? Introducing Gmail Motion — now you can control Gmail with your body.” See Gmail motion for more.

    Local elections tomorrow. On Tuesday April 5 voters across Kansas will vote in city and school board elections. For those who haven’t yet voted and haven’t decided who to vote for, here’s the Wichita Eagle voter guide. You can get a list of the candidates, along with their responses to questions, customized for your address.

    Wichita City Council this week. On Tuesday, the Wichita City Council has these items on its agenda: Under the city’s Economic Development Tax Exemption (EDX) program, Cox Machine Inc. seeks forgiveness from paying property taxes on a building addition. … The YMCA seeks permission to issue Industrial Revenue Bonds to finance its new downtown facility. Normally these bonds are used as a vehicle for granting tax exemptions, but as an institution that is already tax exempt, this consideration doesn’t apply in this case. … Pixius, LLC files petitions seeking special assessment financing under the city’s facade improvement program for a downtown building. While this financing is a loan that must be repaid, city documents indicate this is just the first time Pixius will ask the city for money. City documents note that Pixius emerged from bankruptcy in 2006. These documents don’t say that Pixius used bankruptcy to avoid paying back millions to the U.S. Government. … Rupert Investments, LP files petitions seeking to use the same special assessment financing for facade improvements at the buildings occupied by J.P. Weigand & Sons on Market Street. … Two housing developments seek housing tax credits.

    Public defender to present. This Friday’s meeting of the Wichita Pachyderm Club features Jama Mitchell, Deputy Public Defender, 18th Judicial District, speaking on the topic “Justice in Sedgwick County From a Defense Perspective.” The public is welcome and encouraged to attend Wichita Pachyderm meetings. For more information click on Wichita Pachyderm Club. … Upcoming speakers include Kansas Senator Chris Steineger on April 15, Friends University Associate Professor of Political Science Russell Arben Fox on April 22, and Wichita State University Political Scientist Ken Ciboski on April 29.

    What it means to be a libertarian. A video from LearnLiberty.org: “What does it mean to be a libertarian? According to Dr. Jeffrey Miron, libertarians have respect for individual decisions. Libertarians are different from Republicans and Democrats, because both of those groups attempt to use government to advance their ideas of how people should act or behave, while libertarians think that individuals should be able to live their own lives as they see fit.” … Miron’s most recent book is Libertarianism, from A to Z, described as an “encyclopedic exposition of libertarian thought.” An interview with Miron by Reason.tv’s Nick Gillespie is at Libertarianism From A to Z With Jeffrey Miron. This video is available on YouTube through LearnLiberty.org, a site which has many other informative videos.

    Profits and prices. In the June 1963 issue of The Freeman, Leonard E. Read explains the role of profits and prices: Let us reduce this debate to manageable proportions and reflect on what, for example, motivates a person to put his savings into a hamburger stand. The answer comes clear: to make as good a living as possible. We know from daily observations that it is the hope of profit, not humanitarian concern about the meatless diet of the population, which is responsible for the venture. Observe, however, that a large profit — the enterpriser’s aim — signifies customer approval. By keeping his eye on his own gain, he assures that others are well served. Their repeated purchases, leading to the enterpriser’s profit, prove this. Imagine how different this situation would be were the hamburger man to concentrate not on his own gain but only on the good of others! … Humanitarian? Yes, indeed: Assume that a surgeon has discovered how to do a brain surgery, that he can do only one a month that 1,000 persons a year need such an operation if they are to survive. How is the surgeon’s scarce resource to be allocated? Charge whatever price is necessary to adjust supply to demand, say $50,000! “For shame,” some will cry. “Your market system will save only wealthy people.” For the moment, yes. But soon there will be hundreds of surgeons who will acquire the same skill; and, as in the case of the once scarce and expensive “miracle drugs,” the price then will be within the reach of all. … Look to the improvement of your own position if you would be most considerate of others! And this is sound advice whether one’s business consists of earning profit or doing basic research or practicing medicine or saving souls or whatever. The best charity is to set an example by which others may learn to help themselves.

  • Kansas and Wichita quick takes: Thursday November 3, 2011

    Energy bill to be introduced today. According to a press release, U.S. Representative Mike Pompeo of Wichita will introduce the “Energy Freedom and Economic Prosperity Act.” This bill would eliminate all tax credits related to energy production. For more, see Pompeo to introduce ‘Energy Freedom and Economic Prosperity Act.’

    Crony capitalism disputed. At yesterday’s meeting of the Sedgwick County Commission, chair Dave Unruh objected to my use of the term “crony capitalism” on the basis of the term having a pejorative connotation. A dictionary definition of “crony” is a “close friend especially of long standing.” Applied to government, the implication is that jobs or favoritism is given based on friendship or patronage. But when talking about capitalism, the term “crony capitalism” the definition is “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.” This is the description given by Charles G. Koch in his Wall Street Journal piece Why Koch Industries Is Speaking Out: Crony capitalism and bloated government prevent entrepreneurs from producing the products and services that make people’s lives better. It precisely describes what happened when the county granted a forgivable loan to Johnson Controls. More about this issue is available here.

    Kansans For No Income Tax. The new group Kansans for No Income Tax is, according to its website, “a nonprofit working to educate Kansas taxpayers about the benefits of eliminating the state income tax.” The problem, as the group sees it: “Kansas has the 19th highest state and local tax burden in the country and our economic outlook is ranked 37th in the nation. With this economic environment, it is no surprise that Kansas continues to lose businesses, revenue and its citizens. We cannot continue down the path of reckless spending and policy that includes one year fixes to get us by. We must instead focus on a long-term path to prosperity for our state. This path includes the regulation of our tax base with less volatile taxes paired with a more business friendly regulation environment.” … The groups is conducting a bus trip across Kansas this Friday and Saturday. More information, including locations and times, is in this press release.

    Misguided efforts to improve capitalism. From Eamonn Butler: Ludwig von Mises — A Primer on how efforts by government to intervene in markets fail: Indeed, our efforts to manipulate the market economy, and make it conform to a particular vision, are invariably damaging. Capitalism is superbly good at boosting the general standard of living by encouraging people to specialise and build up the capital goods that raise the productivity of human effort. But when we tax or regulate this system, and make it less worthwhile to invest in and own capital goods, then capitalism can falter. But that is not a “crisis of capitalism,” explains Mises. It is a crisis of interventionism: a failure of policies that are intended to “improve” capitalism but in fact strangle it. One common political ideal, for example, is “economic democracy” — the idea that everyone should count in the production and allocation of economic goods, not just a few capitalist producers. But according to Mises, we already have economic democracy. In competitive markets, producers are necessarily ruled by the wishes of consumers. Unless they satisfy the demands of consumers, they will lose trade and go out of business. If we interfere in this popular choice, we will end up satisfying only the agenda of some particular political group. A more modest notion is that producers’ profits should be taxed so that they can be distributed more widely throughout the population. But while this shares out the rewards of success, says Mises, it leaves business burdened with the whole cost of failure. That is an imbalance that can only depress people’s willingness to take business risks and must thereby depress economic life itself.

    Markets: exploitation or empowerment? Do markets lead to a centralization of political and economic power, or do markets decentralize and disseminate wealth? In an eight-minute video from LearnLiberty.org, a project of Institute for Humane Studies, Antony Davies presents evidence and concludes that markets and free trade empower individuals rather than exploit them.

  • In Central-Northeast Wichita, government is cause of problem, not solution

    An article in The Wichita Eagle “Plan offers hope for city’s troubled heart” (November 14, 2007) reports on the development of a plan named New Communities Initiative, its goal being the revitalizing of a depressed neighborhood in Wichita. The saddest thing in this article is the realization that there is consideration of a plan for large-scale government intervention to solve problems that are, to a large extent, caused by government itself.

    The article laments low high school graduation rates and the low proficiency in math and reading. We should make sure we remember that almost all these children have gone to public schools, that is, schools owned and run by government. Plans to improve public schools almost always call for more spending. While education bureaucrats do not like to admit this, spending on government schools in Kansas has been increasing rapidly in recent years. The results of these huge spending increases are just being learned, but it is unlikely that it will produce the dramatic results that are needed.

    There is a simple solution to improving schools that won’t cost more than what is already spent, and should cost even less: school choice. In parts of our country where there is school choice through vouchers — or better, through tax credits — it is low-income parents who are most appreciative of the chance for their children to escape the terrible public schools. Further, there is persuasive evidence that when faced with viable competition, the public schools themselves improve.

    In Kansas, however, there is little hope that meaningful school choice will be implemented soon. Although Winston Brooks, superintendent of Wichita schools, says he is open to competition and accountability, it is a false bravado. The political climate in Kansas is such that it is nearly impossible to get even a charter school application approved, much less any form of school choice with real teeth. (See “What’s the Matter With Kansas,” January 3, 2007 Wall Street Journal.) As the government schools consume increasing resources, parents find it even harder to pay taxes and private school tuition. So the government schools, responsible for graduates who can’t read and calculate, extend their monopoly.

    A continual problem in depressed areas of cities is low employment. Government again contributes to this problem by creating barriers to employment, most prominently through the minimum wage law. People have jobs because their employers value the work the employees perform more than what they pay them in wages and benefits. When government says you must pay a higher wage than what the potential employees can contribute through their labors, these low-productivity workers won’t be hired. As the minimum wage rises, which it is on the federal level, it becomes even more difficult for the least productive workers to find jobs.

    The reason that some young people find it difficult to get jobs is that they don’t have the education, training, or experience to be very productive at a job. While no one likes to work for only, say $3 or $4 per hour, working for that wage is preferable to being unemployed when the minimum wage is $6 per hour. While working for $4 per hour the worker gains experience at a specific job, and experience at holding any job in general. Soon, as workers become more productive, their wages will rise. Sitting on the sidelines not working or wasting time in a government job-training program does the workers no good.

    The article mentions the plight of children whose parents are in prison. More generally, this neighborhood is plagued by crime and gangs. While I do not know the proportion of these people that are in prison for crimes related to drugs, it most surely is high. Gangs exist almost solely because of the trade in illegal drugs. The government’s prohibition of drugs, then, plays a huge role in the problem of crime.

    The solution is to legalize drugs. Legalize all drugs, without exception. This should not be interpreted as an endorsement of drug use, as drug abuse is a serious health problem for many people. The health problems that drug abuse causes might even increase after legalization. But the crime problem would cease to exist. No longer would people be in prison simply because they are drug addicts. With legalization, the price of drugs would rapidly decline to perhaps the cost of a pack of cigarettes or a few cocktails each day. No longer would drug addicts have to raise several hundred dollars per day through crime. No longer would gangs find selling drugs profitable, and they would likely disappear. Do the owners of liquor stores shoot each other over turf wars, and do their customers engage in crime each day to pay for their fix of cheap alcohol?

    The alternative to legalization of drugs is more law enforcement aimed at decreasing the supply of illegal drugs. This government action, if successful, has this consequence: by reducing the supply of drugs, it increases their price, thereby making it even more lucrative to deal in illegal drugs.

    Then there is the government’s war on poverty. The economist Walter Williams recently wrote this:

    Since President Johnson’s War on Poverty, controlling for inflation, the nation has spent $9 trillion on about 80 anti-poverty programs. To put that figure in perspective, last year’s U.S. GDP was $11 trillion; $9 trillion exceeds the GDP of any nation except the U.S. Hurricanes Katrina and Rita uncovered the result of the War on Poverty — dependency and self-destructive behavior.

    In the same article:

    There’s one segment of the black population that suffers only a 9.9 percent poverty rate, and only 13.7 percent of its under-5-year-olds are poor. There’s another segment that suffers a 39.5 percent poverty rate, and 58.1 percent of its under-5-year-olds are poor. Among whites, one segment suffers a 6 percent poverty rate, and only 9.9 percent of its under-5-year-olds are poor. The other segment suffers a 26.4 percent poverty rate, and 52 percent of its under-5-year-olds are poor. What do you think distinguishes the high and low poverty populations among blacks? … The only distinction between both the black and white populations is marriage — lower poverty in married-couple families.

    In 1960, only 28 percent of black females ages 15 to 44 were never married and illegitimacy among blacks was 22 percent. Today, the never-married rate is 56 percent and illegitimacy stands at 70 percent. If today’s black family structure were what it was in 1960, the overall black poverty rate would be in or near single digits. The weakening of the black family structure, and its devastating consequences, have nothing to do with the history of slavery or racial discrimination.

    Williams and Thomas Sowell, who have studied the issue extensively, conclude that it is government anti-poverty programs that are the cause of a permanent underclass. These programs should be canceled.

    We see that government — through its poor schools, the raising of barriers to employment through minimum wage laws, the prohibition of drugs, and the culture of dependency and family disintegration supported by welfare — has been a contributing factor, probably the most important factor, in the decline of this neighborhood. It is foolhardy to believe that more government programs can reverse the damage already done by past and present government programs. While I’m sure that the intent of the New Communities Initiative and its coordinating members is noble, the reality is that government intervention is dangerous to the future of Wichita and to this neighborhood.

  • In Kansas, doctors may “learn” just by doing their jobs

    In Kansas, doctors may “learn” just by doing their jobs

    A proposed bill in Kansas should make us question the rationale of continuing medical education requirements for physicians.

    The bill is HB 2615, titled “Charitable healthcare providers; continuing education credits for gratuitous care of eligible patients.”

    The bill’s supplemental note explains the bill “… would allow charitable healthcare providers and dentists to fulfill one hour of continuing education credit for performance of two hours of gratuitous service to medically indigent persons.”

    In an op-ed published in the Wichita Eagle Representative Dan Hawkins explained “we believe that this system has the potential of generating more than $18 million in free care for the neediest Kansans.” (Rep. Dan Hawkins: Plan increases access to health care, reduces cost, March 7, 2016)

    Contrary to Hawkins, the care won’t be free. It may not cost the state anything, but it will have a cost to the doctors who supply the “free” care.

    Perhaps more importantly, this bill should make us question the purpose of continuing medical education requirements for physicians and dentists. In Kansas, physicians must participate in 50 hours of continuing medical education annually. This education requirement is satisfied by participating in “activity designed to maintain, develop, or increase the knowledge, skills, and professional performance of persons licensed to practice a branch of the healing arts.”

    But HB 2615 will let physicians satisfy 20 hours of this requirement by providing 40 hours of health care to needy people. Having doctors perform routine medical care — doing their daily job, in other words — doesn’t seem likely to advance the “knowledge, skills, and professional performance” of doctors, which is the stated goal of the regulation.

    We have, therefore, a regulation that seems reasonable — ensuring that doctors are up-to-date in professional knowledge — instead being used by the state to “encourage” doctors to provide free labor.

    Episodes like this should be a lesson in the powers and abuses of the regulatory state.

    The Kansas regulations

    According to the Kansas Board of Healing Arts, physicians must participate in continuing medical education each year, earning “50 hours with a minimum of 20 hours of Category I and a maximum of 30 hours of Category II.”

    In more detail, the regulations state the continuing education is “activity designed to maintain, develop, or increase the knowledge, skills, and professional performance of persons licensed to practice a branch of the healing arts.” 1 Category I continuing education is “presented by a person qualified by practical or academic experience” and may consist of lectures, panel discussions, workshops, seminars, symposiums, and other formal learning opportunities. 2 The requirements are 20 hours of this education annually.

    Category II continuing education comprises activities that are less formal, such as “clinical consultations with other healing arts practitioners that contribute to a practitioner’s education, participation in activities to review the quality of patient care, instructing healing arts and other health care practitioners, patient-centered discussions with other health care practitioners, participating in journal clubs, using searchable electronic databases in connection with patient care activities. and
    using self-instructional materials.” 3 The requirements are 30 hours of this education annually.

    Of note, HB 2615 doesn’t seem to specify into which category will fall the hours of continuing medical education earned by providing service to needy patients.

    —
    Notes

    1. K.A.R. 100-15. (2016). Ksbha.org. Available at: http://www.ksbha.org/regulations/article15.shtml#kar100154. ↩
    2. ibid. ↩
    3. ibid. ↩

  • In Central-Northeast Wichita, government is cause of problem, not solution

    From the November 2007 archives. Since then, the Wichita schools have a new superintendent, and Kansas has raised its minimum wage.

    An article in The Wichita Eagle “Plan offers hope for city’s troubled heart” (November 14, 2007) reports on the development of a plan named New Communities Initiative, its goal being the revitalizing of a depressed neighborhood in Wichita. The saddest thing in this article is the realization that there is consideration of a plan for large-scale government intervention to solve problems that are, to a large extent, caused by government itself.

    The article laments low high school graduation rates and the low proficiency in math and reading. We should make sure we remember that almost all these children have gone to public schools, that is, schools owned and run by government. Plans to improve public schools almost always call for more spending. While education bureaucrats do not like to admit this, spending on government schools in Kansas has been increasing rapidly in recent years. The results of these huge spending increases are just being learned, but it is unlikely that it will produce the dramatic results that are needed.

    There is a simple solution to improving schools that won’t cost more than what is already spent, and should cost even less: school choice. In parts of our country where there is school choice through vouchers — or better, through tax credits — it is low-income parents who are most appreciative of the chance for their children to escape the terrible public schools. Further, there is persuasive evidence that when faced with viable competition, the public schools themselves improve.

    In Kansas, however, there is little hope that meaningful school choice will be implemented soon. Although Winston Brooks, superintendent of Wichita schools, says he is open to competition and accountability, it is a false bravado. The political climate in Kansas is such that it is nearly impossible to get even a charter school application approved, much less any form of school choice with real teeth. (See What’s the Matter With Kansas, January 3, 2007 Wall Street Journal.) As the government schools consume increasing resources, parents find it even harder to pay taxes and private school tuition. So the government schools, responsible for graduates who can’t read and calculate, extend their monopoly.

    A continual problem in depressed areas of cities is low employment. Government again contributes to this problem by creating barriers to employment, most prominently through the minimum wage law. People have jobs because their employers value the work the employees perform more than what they pay them in wages and benefits. When government says you must pay a higher wage than what the potential employees can contribute through their labors, these low-productivity workers won’t be hired. As the minimum wage rises, which it is on the federal level, it becomes even more difficult for the least productive workers to find jobs.

    The reason that some young people find it difficult to get jobs is that they don’t have the education, training, or experience to be very productive at a job. While no one likes to work for only, say $3 or $4 per hour, working for that wage is preferable to being unemployed when the minimum wage is $6 per hour. While working for $4 per hour the worker gains experience at a specific job, and experience at holding any job in general. Soon, as workers become more productive, their wages will rise. Sitting on the sidelines not working or wasting time in a government job-training program does the workers no good.

    The article mentions the plight of children whose parents are in prison. More generally, this neighborhood is plagued by crime and gangs. While I do not know the proportion of these people that are in prison for crimes related to drugs, it most surely is high. Gangs exist almost solely because of the trade in illegal drugs. The government’s prohibition of drugs, then, plays a huge role in the problem of crime.

    The solution is to legalize drugs. Legalize all drugs, without exception. This should not be interpreted as an endorsement of drug use, as drug abuse is a serious health problem for many people. The health problems that drug abuse causes might even increase after legalization. But the crime problem would cease to exist. No longer would people be in prison simply because they are drug addicts. With legalization, the price of drugs would rapidly decline to perhaps the cost of a pack of cigarettes or a few cocktails each day. No longer would drug addicts have to raise several hundred dollars per day through crime. No longer would gangs find selling drugs profitable, and gangs would likely disappear, or at least move on to other endeavors. Do the owners of liquor stores shoot each other over turf wars, and do their customers engage in crime each day to pay for their fix of cheap alcohol?

    The alternative to legalization of drugs is more law enforcement aimed at decreasing the supply of illegal drugs. This government action, if successful, has this consequence: by reducing the supply of drugs, it increases their price, thereby making it even more lucrative to deal in illegal drugs.

    Then there is the government’s war on poverty. The economist Walter Williams recently wrote this:

    Since President Johnson’s War on Poverty, controlling for inflation, the nation has spent $9 trillion on about 80 anti-poverty programs. To put that figure in perspective, last year’s U.S. GDP was $11 trillion; $9 trillion exceeds the GDP of any nation except the U.S. Hurricanes Katrina and Rita uncovered the result of the War on Poverty — dependency and self-destructive behavior.

    In the same article:

    There’s one segment of the black population that suffers only a 9.9 percent poverty rate, and only 13.7 percent of its under-5-year-olds are poor. There’s another segment that suffers a 39.5 percent poverty rate, and 58.1 percent of its under-5-year-olds are poor. Among whites, one segment suffers a 6 percent poverty rate, and only 9.9 percent of its under-5-year-olds are poor. The other segment suffers a 26.4 percent poverty rate, and 52 percent of its under-5-year-olds are poor. What do you think distinguishes the high and low poverty populations among blacks? … The only distinction between both the black and white populations is marriage — lower poverty in married-couple families.

    In 1960, only 28 percent of black females ages 15 to 44 were never married and illegitimacy among blacks was 22 percent. Today, the never-married rate is 56 percent and illegitimacy stands at 70 percent. If today’s black family structure were what it was in 1960, the overall black poverty rate would be in or near single digits. The weakening of the black family structure, and its devastating consequences, have nothing to do with the history of slavery or racial discrimination.

    Williams and Thomas Sowell, who have studied the issue extensively, conclude that it is government anti-poverty programs that are the cause of a permanent underclass. These programs should be canceled.

    We see that government — through its poor schools, the raising of barriers to employment through minimum wage laws, the prohibition of drugs, and the culture of dependency and family disintegration supported by welfare — has been a contributing factor, probably the most important factor, in the decline of this neighborhood. It is foolhardy to believe that more government programs can reverse the damage already done by past and present government programs. While I’m sure that the intent of the New Communities Initiative and its coordinating members is noble, the reality is that government intervention is dangerous to the future of Wichita and to this neighborhood.

  • Wichita Chamber campaigns for higher taxes on those least able to pay

    This is the Wichita Metro Chamber of Commerce. It routinely advocates for special deals whereby businesses don’t have to pay taxes. Sometimes it arranges cash grants and tax credits for companies. But as you can see by the Yes Wichita sign in the window, the Wichita Chamber campaigns for low-income households to pay more sales tax on groceries.

    Wichita Metro Chamber of Commerce 10-26-2014 16'36'26

  • Why I shall caucus for Ron Paul in Kansas

    A common theme of the various candidates for the Republican Party nomination for the Presidency of the United States is Ronald Reagan. Candidates compete with each other to be the true heir of Reagan and his legacy.

    Ron Paul, however, looks back to an even earlier time in American politics when the word “conservative” had a different meaning.

    Most Republican candidates favor a muscular American foreign policy advocated by the neo-conservatives who advise our current president. This is a far cry from the foreign policy our nation once had.

    What do World War I, World War II, the Korean War, Vietnam, the Bay of Pigs, and our presence in Kosovo have in common? These wars or police actions were all started by big-government Democrats and opposed by conservatives. I don’t think that any of the current crop of Republican candidates would agree that these wars — by any stretch of the imagination — might have been unnecessary. Instead, these men argue at debates about who supported the surge in Iraq first and strongest.

    Ron Paul’s non-interventionist foreign policy is simply the policy that our party once had. Non-interventionist does not mean isolationist. It does not mean that we cower at home and hope that no one notices us and attacks us. Instead, it means that we honestly assess threats against us, and respond to those that are real. This is why Ron Paul was in favor of the efforts in Afghanistan to remove the Taliban, but against the war in Iraq. And we now know that the case for war in Iraq was fabricated largely from falsehoods.

    With regard to economic policy, most of the current Republican candidates admire Ronald Reagan because he cut taxes. That was the easy part. The more difficult thing to do, what Reagan couldn’t accomplish, is to drastically cut spending by government. This is something Ron Paul believes in and will do.

    As in foreign affairs, Ron Paul believes in an economic policy that is non-interventionist. You may be asking “Doesn’t someone need to manage the economy?” Well, there is someone managing — or at least attempting to manage — a large part of the economy: the Federal Reserve System. It is that system, though its policy of low interest rates, that is most directly responsible for the sub-prime mortgage crises we are now facing. Hundreds of billions have been lost in market value of securities and homes, and tens of thousands of families have lost their very homes. It is now believed that this crisis is leading our country into recession, and cries for even more intervention into and management of the economy are heard across the land, even from Republican presidential candidates.

    It is economic interventionism itself that harms the economy. The Federal Reserve System, which creates money from nothing with its printing presses and open market operations, creates the inflation — with its accompanying uncertainty — that harms our economy and prosperity.

    Further, the Federal Reserve System and its policy of inflationary money and credit creation provides extra income for government to spend without having to tax. That is quite lucrative, as printing hundred dollar bills is inexpensive, and creating money in computerized ledger entries costs even less. Even worse, he who prints the money gets to spend it first, before its value is diluted by inflation.

    Among Republican candidates, only Ron Paul recognizes this. Only Ron Paul calls for an end to the Federal Reserve System and its monopoly on the creation of money out of thin air.

    Non-interventionism in foreign affairs, non-interventionism in domestic economic policy — non-interventionism is a theme with Ron Paul.

    How so? In other ways:

    Stop government intervention in private property, through the taking of property from one party and giving it to another, more politically favored party through the process of eminent domain.

    Stop government intervention into the environment. Today, it seems as if environmental policy is written by those who are enemies to capitalism — the “watermelons” — green on the outside but red in the center. Instead, Ron Paul promotes reliance on property rights and markets to solve environmental problems.

    Stop ever-increasing government interventionism into education. Ron Paul supports freedom for parents to choose where and how to educate their children. That freedom should be backed up by tax credits, so that the freedom is a real choice that parents can exercise.

    Stop government intervention in the types of drugs people may use. The unwise war on drugs has created criminal gang empires that affect us all, as we have witnessed here in Wichita recently. The government response is more law enforcement, which only makes the drug trade more profitable and increases the violence on our streets.

    These policies of non-intervention that Ron Paul believes in may seem strange and incredible to some of you. That they may, however, is only an indication of how far we have strayed from the vision of freedom and liberty that this country was founded upon.

    If you believe in freedom, if you believe in liberty, if you believe that “we the people” can solve problems without the heavy-hand of government interventionism, you should cast your ballot for Ron Paul.

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