Voice For Liberty

Tag: Economics

  • Wichita economic forecast to be presented

    This Friday (August 27) the Wichita Pachyderm Club will feature a presentation titled “Economic Forecast for the Wichita Area.” The presenter will be Debra Franklin, Regional Labor Force Analyst at the Center for Economic Development and Business Research at Wichita State University.

    All are welcome to attend Wichita Pachyderm Club meetings. The program costs $10, which includes a delicious buffet lunch including salad, soup, two main dishes, and ice tea and coffee. The meeting starts at noon, although it’s recommended to arrive fifteen minutes early to get your lunch before the program starts.

    The Wichita Petroleum Club is on the ninth floor of the Bank of America Building at 100 N. Broadway (north side of Douglas between Topeka and Broadway) in Wichita, Kansas (click for a map and directions). You may park in the garage (enter west side of Broadway between Douglas and First Streets) and use the sky walk to enter the Bank of America building. The Petroleum Club will stamp your parking ticket and the fee will be $1.00. Or, there is usually some metered and free street parking nearby.

  • How does Kansas rank in economic freedom?

    In measures of economic and personal freedom, Kansas ranks relatively well among the states, but lags behind some neighboring states. Recent actions by the Kansas legislature might drive its ranking down.

    Last year the Mercatus Center at George Mason University published a paper that ranks the states in several areas regarding freedom. According to the authors, “This paper presents the first-ever comprehensive ranking of the American states on their public policies affecting individual freedoms in the economic, social, and personal spheres.”

    What is the philosophical basis for measuring or determining freedom? Here’s an explanation from the introduction:

    We explicitly ground our conception of freedom on an individual rights framework. In our view, individuals should be allowed to dispose of their lives, liberties, and property as they see fit, so long as they do not infringe on the rights of others. This understanding of freedom follows from the natural-rights liberal thought of John Locke, Immanuel Kant, and Robert Nozick, but it is also consistent with the rights-generating rule-utilitarianism of Herbert Spencer and others.

    According to the authors, “No current studies exist that measure both economic and personal freedom in the fifty states.” So this is a ground-breaking work.

    How does Kansas do? Surprisingly, not too badly. Not outstanding, but not as bad as I might have thought.

    For the four areas measured, here’s how we did: In fiscal policy, Kansas is 28. In regulatory policy, 4. In economic freedom, 18. In personal freedom, 15. (In all cases, a ranking of 1 means the most freedom.)

    Our overall ranking is 12.

    Some of the remarks the authors made about Kansas include noting our large public employee payroll, even though state employees are not paid as well as private sector workers. Also: “The area of spending that could most stand to be cut is education, while the taxes that should have priority for cutting are individual income and property taxes.”

    Some of our neighbors do pretty well in the overall ranking. Colorado is 2, Texas is 5, Missouri is 6, and Oklahoma is 18. Nebraska is not as good at 28.

    Colorado undoubtedly benefited from its taxpayer bill of rights (TABOR) law, which places limits on the rate of growth of government spending, although it had been suspended for several years. Those in Kansas who favor government spending over private sector spending use Colorado as an example of a state that TABOR has destroyed, but in terms of economic freedom, it does very well.

    In case you’re wondering, for overall ranking, New Hampshire is best. The worst? It’s no surprise that it’s New York by a wide margin, with New Jersey, Rhode Island, California, and Maryland rounding out the bottom five.

    If this index were to be recomputed this year, Kansas might fall in rankings due to outgoing Governor Mark Parkinson‘s two landmark achievements — the increase in the statewide sales tax and the statewide smoking ban. Some of the other enacted laws detailed in the article In Kansas Legislature, a bad year for freedom and liberty would push Kansas’ ranking down, too.

    But since rankings are relative and consider what happened in other states, Kansas might not have changed much, as many states have passed tax increases and other freedom-killing legislation and regulations.

    The full study contains discussion of the politics surrounding these rankings, and a narrative discussion of the factors present in each state.

    You may read the entire study by clicking on Freedom in the 50 States: An Index of Personal and Economic Freedom.

  • Investment strategies to be discussed in Wichita

    This Friday (August 13) the Wichita Pachyderm Club features a program titled “Could any investment strategy be successful in today’s economic climate?” The presenter will be Dr. Malcolm Harris, who is Professor of Finance at Friends University. His blog is Mammon Among Friends, and he is regularly quoted in Wichita news media regarding financial and economic matters.

    All are welcome to attend Wichita Pachyderm Club meetings. The program costs $10, which includes a delicious buffet lunch including salad, soup, two main dishes, and ice tea and coffee. The meeting starts at noon, although it’s recommended to arrive fifteen minutes early to get your lunch before the program starts.

    The Wichita Petroleum Club is on the ninth floor of the Bank of America Building at 100 N. Broadway (north side of Douglas between Topeka and Broadway) in Wichita, Kansas (click for a map and directions). You may park in the garage (enter west side of Broadway between Douglas and First Streets) and use the sky walk to enter the Bank of America building. The Petroleum Club will stamp your parking ticket and the fee will be $1.00. Or, there is usually some metered and free street parking nearby.

  • Avoiding bad decisions in good times

    By Dave Trabert, Kansas Policy Institute.

    An associate of mine once said, “Some of the worst decisions are made in the best of times.” His observation pertained to negotiating agreements with labor unions but I was reminded of it by a news report saying local governments may eliminate 500,000 jobs across the country if Congress doesn’t pony up more federal tax dollars. The story was based on a survey released by the National League of Cities, the National Association of Counties and United States Conference of Mayors.

    Here’s the taxpayer perspective.

    According to the US Census Bureau and the Bureau of Economic Analysis, the country’s population grew 34.4% between 1980 and 2008 but local government employment jumped 51.3%. If local government employment had simply kept pace with population gains, there would be 1.6 million fewer local government jobs today. Instead, we’ve seen runaway property taxes (93% over the last twelve years in Kansas) and higher local sales taxes. Governments chose to add extra employees when revenues were flowing (instead of reducing taxes and improving the economy), and now face the painful task of backing off some of their excess employment.

    Local government job growth outpaced population growth in most states but some were extreme, including Kansas, which had 65% local government job growth but only an 18% population increase. In 2008 Kansas had 65.7 local government employees for every thousand residents; that’s 39% above the national average and the second-worst state ratio in the country.

    No one wants to see someone lose their job, but using tax dollars to subsidize employment is bad policy to begin with and spending federal dollars on local government employment destroys the Constitutional protections of state sovereignty. Governments have no money of their own; they simply take money from taxpayers and redistribute it. Raising federal taxes to maintain a bloated local government workforce will only make an already weak economy even worse.

  • Hayek vs. Keynes to be discussed in Wichita

    This Friday (July 30) the Wichita Pachyderm Club features “A celebration of Milton Friedman’s birthday featuring a discussion of the Friedrich Hayek and the John Maynard Keynes economic schools of thought.”

    Presenters will be Karl Peterjohn, Sedgwick County Commissioner, for Hayek, and Bill Miles, WSU Assoc. Professor of Economics For Keynes.

    All are welcome to attend Wichita Pachyderm Club meetings. The program costs $10, which includes a delicious buffet lunch including salad, soup, two main dishes, and ice tea and coffee. The meeting starts at noon, although it’s recommended to arrive fifteen minutes early to get your lunch before the program starts.

    The Wichita Petroleum Club is on the ninth floor of the Bank of America Building at 100 N. Broadway (north side of Douglas between Topeka and Broadway) in Wichita, Kansas (click for a map and directions). You may park in the garage (enter west side of Broadway between Douglas and First Streets) and use the sky walk to enter the Bank of America building. The Petroleum Club will stamp your parking ticket and the fee will be $1.00. Or, there is usually some metered and free street parking nearby.

  • The ‘tax expenditure’ solution for our national debt

    While most critics of government spending focus on entitlements, regular appropriations, and earmarks, there is a category of spending that not many pay much attention to. The spending is called “tax expenditures.”

    It’s a big issue. As economist Martin Feldstein writes in the Wall Street Journal, tax expenditures will increase the federal budget deficit by $1 trillion this year.

    Tax expenditures are implemented through the tax system. It’s usually the income tax system, especially at the federal level. Taxpayers may receive tax credits, which reduce the tax that must be paid dollar for dollar. Many credits are refundable, meaning that if the taxpayer has no tax liability, the government will send the recipient a check. Examples cited by Feldstein include “$500 million annual subsidy for the rehabilitation of historic structures and a $4 billion annual subsidy of employer-paid transportation benefits.”

    While supporters of many of these programs portray them as not costing the government anything, Feldstein writes that they do: “These tax rules — because they result in the loss of revenue that would otherwise be collected by the government — are equivalent to direct government expenditures.”

    I argued this in testimony I presented to a committee in the Kansas Legislature this year, when it was considering restoring and expanding the Kansas historic preservation tax credit program. I told committee members: “We must recognize that a tax credit is an appropriation of Kansans’ money made through the tax system. If the legislature is not comfortable with writing a developer a check for over $1,000,000 — as in the case with one Wichita developer — it should not make a roundabout contribution through the tax system that has the same economic impact on the state’s finances.”

    In that committee, not one member voted against this program, even though the committee has some members who consider themselves very fiscally conservative and hawks on spending.

    Here in Wichita, the city council regularly steers spending to certain companies through the tax system by granting property tax exemptions and tax increment financing.

    Feldstein describes problems with spending implemented through the tax system:

    • Politicians use tax expenditures to grow the welfare state. While proposing a freeze on discretionary spending, President Obama at the same time proposed an expansion of a tax credit program for child or elderly care.
    • Once enshrined in the tax law, these appropriations don’t have to be reauthorized each year. They’re on auto-pilot, so to speak.
    • Eliminating tax expenditures is looked on by Republicans as a tax increase, so they are reluctant to support their elimination. Felstein counters: “But eliminating tax expenditures does not increase marginal tax rates or reduce the reward for saving, investment or risk-taking.”
    • Tax expenditures distort the economy in harmful ways: “[Eliminating tax expenditures] would also increase overall economic efficiency by removing incentives that distort private spending decisions.”

    Feldstein concludes: “Cutting tax expenditures is really the best way to reduce government spending. And to be politically acceptable, the cuts in tax expenditures must be widespread, requiring most taxpayers to give up something so that the fiscal deficits can decline.”

    The ‘Tax Expenditure’ Solution for Our National Debt

    The credits and subsidies that make the tax code so complicated cost big bucks. Reduce them by third and the debt will be 72% of GDP in 2020 instead of 90%.

    By Martin Feldstein

    When it comes to spending cuts, Congress is looking in the wrong place. Most federal nondefense spending, other than Social Security and Medicare, is now done through special tax rules rather than by direct cash outlays. The rules are used to subsidize a wide range of spending including education, child care, health insurance, and a myriad of other congressional favorites.

    These tax rules — because they result in the loss of revenue that would otherwise be collected by the government — are equivalent to direct government expenditures. That’s why tax and budget experts refer to them as “tax expenditures.” This year tax expenditures will raise the federal deficit by about $1 trillion, according to estimates by the congressional Joint Committee on Taxation. If Congress is serious about cutting government spending, it has to go after many of them.

    Continue reading at the Wall Street Journal (subscription required)

  • Economic principles to be applied at event in Wichita

    The Americans for Prosperity Foundation announces a meeting with the title “Applying Economic Principles to Current Events and International Issues.”

    The special guest presenters at this meeting are Gabriella Megyesi and Gregory Rehmke. These two speakers are also presenting at the Free the World Seminar 2010. This evening event allows people who are unable to attend the three-day seminar a chance to hear from these presenters.

    The event will be held on Tuesday, July 27, 2010, from 7:00 pm to 8:30 pm at the Wichita Downtown Public Library at 223 S. Main, on the third floor.

    Gabriella Megyesi taught economics at the Britannica International School in Budapest, Hungary, and earlier taught economics (in English) at Alternaltív Kôzgazdásgi Gimnázium, a Hungary’s first private school after the fall of communism. She currently develops course materials on economics and entrepreneurship, as well as speaking regularly for Economic Thinking and the Foundation for Teaching Economics seminars.

    Gregory Rehmke directs programs for Economic Thinking and lectures at seminars for the Foundation for Economic Education, the Independent Institute, and the Institute for Economic Studies-Europe. He is coauthor of The Complete Idiot’s Guide to Global Economics.

    For more information contact John Todd at john@johntodd.net or 316-312-7335, or Susan Estes, AFP Field Director at sestes@afphq.org or 316-681-4415.

  • Charles and David Koch, supporters of free markets and economic freedom

    Economic freedom and market-based policies create the most opportunity and prosperity for everyone, including the poor and the environment, says Richard Fink, and that’s why Charles and David Koch of Wichita-based Koch Industries, Inc. support these principles and public policy organizations that work to advance them.

    In the following article, Mark Tapscott of The Washington Examiner interviews Richard Fink, president of the Charles G. Koch Charitable Foundation and an executive vice president of Koch Industries, Inc.

    In the article, Tapscott explains that economic freedom and free markets are not the same as big business. Fink explains the role of the Kochs in supporting institutions that promote economic freedom and free markets. He says that the tea party is a positive development of citizens concerned about government growth and spending, and that accusations that it is an “astroturf” movement controlled by corporate sponsorship is nonsense.

    What if all businessmen were as dedicated to free markets as the Kochs?

    By Mark Tapscott

    Among the biggest obstacles to restoring American freedom and prosperity is the fact too many corporate executives are all too happy to play footsie with government bureaucrats, usually in an attempt to gain a competitive advantage over competitors.

    Consumers — and taxpayers — are always the biggest losers when Big Government and Big Business get in bed together.

    One result is that instead of having to put consumers first, the corporations put the bureaucrats first. Prices go up, the quality of service goes down, and not infrequently corruption eventually results (See Enron and cap-and-trade, for example).

    But there are honest leaders in the corporate world who go a different way. Charles and David Koch of the Wichita-based Koch Industries are among the preeminent examples of such men and women.

    They’ve built one of the world’s largest private corporations based on the principles of free markets and competition.

    For more than 40 years, the Kochs have also been aggressive supporters of those principles in the public policy arena, a fact that always flusters critics of economic freedom.

    Continue reading at The Washington Examiner.

  • Free the World Seminar 2010 in Wichita

    As a recent Wichita Eagle Op-Ed article expressed, today’s students are not financially literate, but when given this background, their opportunities in life are unlimited: Jim Graham: Kansas youths need to be financially literate.

    After so many decades of prosperity in the U.S., Europe, and Japan, why are so many people in Latin America and Africa still poor? What lessons can we learn from recent rapid economic growth in China and India? Can U.S. firms and workers compete with low-wage workers in China, India, and other countries? Sessions apply economic principles to current events and international issues, and are designed for teachers, students, and others interested in economics, geography, and history.

    Presentations will include video clips, handouts, and some active learning simulations led by Gabriella Megyesi. Click to read more about Gabriella Megyesi and this seminar in this flyer.

    Register and reserve your spot with our Summer Adventures in Learning Director, Khristi Bates, at 316-686-0152 ext. 160 or email her at Khristi.Bates@TheIndependentSchool.com.

    Please feel free to spread the word!

    Thank you,

    Mrs. Jean Garvey

    Event details: July 26 to 28, from 9:00 am to 4:00 pm, at The Independent Upper School in Room 201. The cost is $75 for adults, $50 student. The event has limited space.