Voice For Liberty

Tag: Economics

  • Kansas minimum wage advocates now have a duty

    A higher Kansas minimum wage has passed both houses of the Kansas legislature and is waiting for the governor’s signature. Now minimum wage supporters have a duty to perform. It’s likely that as employers are required to pay their workers more, some will lose their job.

    Senator Dick Kelsey, originally opposed to raising the Kansas minimum wage, asked its supporters to introduce him to someone who actually earned that low wage. He never received such an introduction.

    It could be the case that everyone is already paid more than the new, higher minimum wage. If so, we wouldn’t expect to see any job loss. But if this is the case, what is the need for the law?

    Higher minimum wage advocates need to be on the watch for workers who lose their jobs because of the effects of a law they agitated for. They are responsible for the plight of those who lose their job.

    These unfortunate workers, unfortunate first because they don’t have skills that allow them fill jobs that pay good wages; unfortunate again in their role as sacrificial lambs for those who see social injustice through the fog of social liberalism; unfortunate again to lose their jobs during a recession — what are they to do?

    Will the newspaper editorialists who supported the minimum wage seek out these people?

    Will newspaper and television reporters feature their stories? It’s easy for reporters to find the workers who will be paid more when the new wage takes effect. Finding the newly jobless is more difficult. But their story is more important.

    The unions who supported the higher minimum wage: will they help the newly jobless?

    More background is at Kansas Minimum Wage and Kansas Minimum Wage At Issue Again.

  • Stimulus is theft

    In Theft In Name Of Stimulus Is Still Theft, economist Walter E. Williams makes a powerful argument for something that those who love liberty know: self-ownership is the foundation.

    “If we accept the idea of self-ownership, then certain acts are readily revealed as moral or immoral. Acts such as rape and murder are immoral because they violate one’s private property rights. Theft of the physical things that we own, such as cars, jewelry and money, also violates our ownership rights.”

    Why aren’t some people able to accept this?

    The reason why your college professor, politician or minister cannot give a simple yes or no answer to the question of whether one person should be used to serve the purposes of another is because they are sly enough to know that either answer would be troublesome for their agenda.

    A yes answer would put them firmly in the position of supporting some of mankind’s most horrible injustices such as slavery. After all, what is slavery but the forcible use of one person to serve the purposes of another?

    A no answer would put them on the spot as well because that would mean they would have to come out against taking the earnings of one American to give to another in the forms of farm and business handouts, Medicare, Medicaid, food stamps and thousands of similar programs that account for more than two-thirds of the federal budget. There is neither moral justification nor constitutional authority for what amounts to legalized theft.

    That’s it right there. It’s really very simple.

    I recently experienced how even some religious leaders don’t understand this when I wrote about Kansas Interfaith Power and Light. This organization has a plan, outlined in a Wichita Eagle op-ed written by Moti Rieber and Connie Pace-Adair, to provide programmable thermostats and weatherization rebates to people. How will these things be paid for?

    The op-ed doesn’t say so, but how can government give something to one person if it does not take something away from another?

    For making this argument, I was told by Rieber that my “philosophy is bankrupt, literally and figuratively.”

    (On Williams’ page at George Mason University, the article is titled Our Problem Is Immorality.)

  • Articles of Interest

    Wichita TIF development, Kansas coal, Carl Brewer on downtown, Dick Coe on crash and recovery, Fox’s Glenn Beck

    Parkstone hits milestone: Building almost complete on four townhouses (Wichita Eagle) Describes progress and plans for a Wichita real estate development project. Let’s hope this project sells well and quickly, as the taxpayers of Wichita are on the hook, due to this project’s use of tax increment financing.

    Parkinson firm against coal (Tim Carpenter in the Topeka Capital-Journal) Kansas Lieutenant Governor Mark Parkinson has promised to veto a bill that authorizes a coal-fired power plant if he is governor. The Speaker of the Kansas House of Representatives says he has enough votes to override a veto by either Parkinson or present governor Kathleen Sebelius. Sources in the House and Senate tell me that few members — Democrats or Republicans — trust Parkinson.

    Mayor asks Wichitans to dream about downtown’s future (Bill Wilson in the Wichita Eagle) Says Wichita Mayor Carl Brewer: “I want to provide everything you want to possibly imagine.” More evidence of local government’s desire to plan everything for us. I’m really surprised that young people are in favor of this.

    J. Richard Coe: U.S. Paying Price for Overindulging (Wichita Eagle) The head of a Wichita financial services firm provides analysis of how the United States got in its current mess, and what must happen to recover. What happened? “Largely as a result of the Federal Reserve keeping interest rates too low for too long, there was a huge increase in borrowing (credit). Individuals, businesses and governments responded to an incentive to borrow, but the incentive was a temporary illusion.” Coe sees problems with the measures the administration is taking: “Massive government spending and increased regulation will make it more difficult for the private sector to recover.” He gives free markets their due: “Markets are more reliable than governments, and markets are in the process of correcting for government-incentivized excessive borrowing.”

    Fox News’s Mad, Apocalyptic, Tearful Rising Star (New York Times) A profile of new Fox News television show host Glenn Beck. “Mr. Beck presents himself as a revivalist in a troubled land.” Some see “sinister meanings in his commentaries” and say he’s “stirring up a revolution.” “Let me be clear,” Mr. Beck said. “If someone tries to harm another person in the name of the Constitution or the ‘truth’ behind 9/11 or anything else, they are just as dangerous and crazy as those we don’t seem to recognize anymore, who kill in the name of Allah.”

  • Kansas ranks low in economic competitiveness, but is improving

    American Legislative Exchange Council has released a report titled Rich States, Poor States: ALEC-Laffer State Economic Competitiveness Index.

    In this report, states are ranked on 15 policy factors that influence economic growth and competitiveness. The difference between the good and bad states is shocking in some cases. For example, over the past ten years the ten highest-ranked states had population growth of 20.4%. The ten lowest-ranked states grew by 4.4%.

    In a table titled “ALEC-Laffer State Economic Performance Index: 1997-2007” Kansas ranks 42nd. It’s a historical measure, taking into account what’s happened in the past.

    Fortunately for Kansas, things are looking better. Our state’s “Economic Outlook Rank” is 24. That’s an increase from 29 the year before.

    Some of the factors that produced this relatively favorable rating include “remaining tax burden,” which seems to be the taxes to pay other than personal income tax, corporate income tax, property tax, and sales tax. Kansas ranks about average or worse than average on these factors, but well compared to other states on the remaining taxes.

    Also, “recently legislated tax changes” is a good measure for Kansas. This undoubtedly refers to some of the business taxes that are being phased out in Kansas. Spending lobbies such as the Kansas National Education Association want to eliminate or roll back these tax cuts, however.

    A measure where Kansas ranks very poorly is “public employees per 10,000 population.” Kansas ranks 48 among the states in this measure. We’ve known that during the Kathleen Sebelius administration that Kansas job growth has been greatest in the government sector, and here’s evidence of that.

    Besides the rankings, the report contains a useful section titled “The 10 Principles of Effective Taxation.”

    The report may be viewed by clicking on Rich States, Poor States:ALEC-Laffer State Economic Competitiveness Index. A press release announcing the report is at New Report Shows Path to Economic Recovery for States.

  • Myths of Roosevelt and the New Deal presented in Wichita

    Yesterday Burton W. Folsom, professor of history at Hillsdale College spoke to a capacity crowd at a luncheon sponsored by Americans for Prosperity-Kansas and the Flint Hills Center for Public Policy.

    His topic was three myths of the New Deal, based on his recent book
    New Deal or Raw Deal? How FDR’s Economic Legacy Has Damaged America.

    The first myth is that the New Deal got us out of the Great Depression, or at least made good headway. Massive spending and a doubling of the public debt, however, didn’t do much to cure unemployment, as admitted by Roosevelt’s treasury secretary Henry Morgenthau, Jr.

    Besides unemployment, other measures were bad. The arrest and murder rate was high throughout the 1930s. Life expectancy, which had increased rapidly in the decades before Roosevelt’s presidency, declined slightly during his first two terms.

    Why didn’t spending solve the problem and lift us out of the Great Depression? The money to support government spending has to come from somewhere. Even if the money is well spent — and there’s ample evidence it isn’t — it would have been spent in the private sector when it was in the hands of taxpayers. Government spending only shifts jobs from the private sector to the public sector.

    The second myth is that if the New Deal didn’t get us out of the Great Depression, it was at least a step in the right direction, a view commonly held today. A look at specific programs tells a different story.

    The Agricultural Adjustment Act (AAA) paid farmers to leave some of their land vacant, thereby reducing their production. Prices for crops, then, should go up. Some farmers, however, took the money, and then planted on the land that was to remain vacant. So Roosevelt sent inspectors. Farmers bribed the inspectors, so Roosevelt had inspectors inspect the inspectors. Then aerial surveillance started.

    Then, in 1935 there were shortages of farm products. We imported 11 million bushels of wheat, 34 million bushels of corn, and 36 million pounds of cotton — at the same time we were paying farmers to not produce these products.

    The National Recovery Act (NRA), another of Roosevelt’s programs, lasted for 2.5 years before it was unanimously ruled unconstitutional by the Supreme Court.

    Folsom told how Massachusetts — back then a conservative state with a free-market orientation — took care of their own hungry people. But after seeing what other states (Illinois in particular) did to get federal funds, Massachusetts decided to take federal money.

    The third myth is that Roosevelt had good intentions. His actual goal was to put together a political coalition so he could remain in office. The WPA, in particular, served to reward loyal Democrats with jobs, and to do actual campaigning for Roosevelt. He was also the first to use the IRS as a weapon against his political opponents.

    Concluding, Folsom gave his recommendation for today: “We need to remember that massive spending did not work well back then. It carries with it a host of unintended consequences. Cutting taxes can often liberate people, produce more freedom, and turning the American economy loose with lower tax rates and more individual liberty would provide more of an opportunity to get us out of the current recession.”

  • Articles of Interest

    Stimulus, invisible hand, Kansas wind.

    Stimulus Delusions (T. Norman Van Cott at the Foundation for Economic Education) More argument that the economic stimulus is harmful to the future of our economy. “Does it matter whether the dollars come from taxes, government borrowing, or the government’s printing press?” No, of course it doesn’t.

    Stinson Morrison forms stimulus practice (Wichita Business Journal) A law firm with a Wichita office (Stinson Morrison Hecker LLP) establishes a “Stimulus Strike Force.” No, it’s not an effort to save the taxpayers from having to pay for a harmful, pork-laden spending program that will permanently expand the size of government and is unlikely to solve the problem it’s meant to fix. Instead, this group will “help businesses analyze, understand and access federal stimulus funds and programs. Specifically, team will focus on legislative and executive branch lobbying, government procurement and compliance advice related to the stimulus.”

    Adam Smith and the invisible hand (Helen Joyce in Plus Magazine) This is a very nice explanation of Adam Smith’s invisible hand concept, with explanations of how the Prisoner’s Dilemma applies to subsidy-seeking. Also, Arrow’s Theorem — “there is no consistent way to aggregate the preferences of individuals to give a single preference which can be regarded as the preference of society” — is explained.

    Topeka media outlets cutting employee pay (Lawrence Journal-World) More bad news for newspapers, and in this case, radio too. Hopefully journalism will find a way to survive.

    Kansas wind industry booming (Lawrence Journal-World) “Kansas has tripled its wind generating capacity in the last 15 months, and wind power supporters are hoping that is just the beginning.” One of the comments left to the story reads “Hey hows business going? Its booming!!! Sounds great. Yeah but I don’t make any money and it cost taxpayers a fortune.”

  • Free to Choose

    Milton Friedman’s best-selling book Free to Choose: A Personal Statement is based on a television series by the same name. This book, and the television episodes, are important works that explain the importance of economic and political freedom.

    You can view the television episodes at IdeaChannel.tv by clicking here.

  • Articles of Interest

    Journalism, crime alerts, war on drugs, minimum wage, stimulus and education

    The State of the Fourth Estate (Jordan Ballor at the Acton Institute) What will happen to journalism in the digital age? The article describes its importance to a free society, with reflection from a Christian view.

    Alert system tells you when a crime occurs (Stan Finger in the Wichita Eagle) Receive email or text messages alerts concerning crime in your area by signing up at www.citizenobserver.com. Maybe criminals will start using Twitter to tweet about their escapes, making it easier for police to capture them. While email and text messages are fine, this is a good application for Twitter, and I wouldn’t be surprised to see this service expanded to include Twitter.

    From the Trenches of the Drug War: A Street Cop’s Perspective (The Future of Freedom Foundation) Speaking of crime … what is the true cost of the war on drugs? Lessons from the front.

    Raising BC’s minimum wage: Good intentions, bad policy (The Frazer Institute) As we in Kansas appear ready to raise our state’s minimum wage — with good intentions (I wonder about that sometimes) — consider the well-known unintended consequences: “The most damaging consequence of minimum wage increases is that employers respond by reducing the number of workers they employ and/or the number of hours their employees work. In other words, minimum wage increases result in higher unemployment for low-skilled workers and young people. This unpleasant reality is well documented in the research.”

    Spec. Ed. Stimulus Money Raising Cautions (Education Week) Managing the use of stimulus money may be tricky: “Within the next few weeks, though, the federal tap will open up, releasing an extra $6.1 billion for districts to use for special education, with another $6.1 billion to come later this year. … Though grateful for the largess, school leaders face restrictions with that money. The rules governing the use of federal special education money mean that it’s unwise for districts to use the added funding to start new programs or hire new teachers. If they were to do so, districts would have to continue to pay for those costs in two years, when the federal infusion goes away, under a provision in the IDEA that requires districts to avoid making large cuts in programs from year to year.” What should the money be spent on? Professional development is one recommendation mentioned.

  • Academic Study Challenges Projections of Green Jobs

    Global warming alarmists often argue that transforming our economy to reliance on “green” sources of energy is good because millions of jobs will be created. These new green jobs, it is claimed, will drive our economy forward and create wealth.

    In Kansas, our governor believes in green jobs. She was a keynote speaker at a recent “Good jobs, green jobs” conference. Our likely incoming governor Mark Parkinson speaks the same language.

    A just-released study from the University of Illinois adds to the critical body of evidence that shows that many of the claims made about green jobs aren’t true. From the press release announcing this study:

    While acknowledging the importance of energy conservation and ongoing research and investment into new technologies, the authors set out to evaluate the fundamental soundness of green job claims. In aggregate, the academic team’s study concludes that a lack of sound research methods, erroneous economic assumptions and technological omissions have routinely been utilized to lend support, rather than provide legitimate analysis, to major public policies and government spending initiatives. Furthermore, the reports that were reviewed have been issued without the benefit of peer-reviewed analysis or transparency of their models and calculations. (emphasis added)

    Furthermore:

    Key findings of the study show that no definition for green jobs exists causing great discrepancy in how numbers are counted; that green job estimates often include huge numbers of clerical, bureaucratic and administrative positions that do not produce goods or services for consumption; and that problematic assumptions are made about economic predictions, prices and technology advancements leading some to ultimately favor mandates over free market realities. These serious flaws, as well as the failure to include technical data, render the prevailing green job estimates virtually unreliable.

    These are the myths identified by the authors:

    • Everyone understands what a “green job” is.
    • Creating green jobs will boost productive employment.
    • Green jobs forecasts are reliable.
    • Green jobs promote employment growth.
    • The world economy can be remade by reducing trade and relying on local production and reduced consumption without dramatically decreasing our standard of living.
    • Government mandates are a substitute for free markets.
    • Imposing technological progress by regulation is desirable.

    The study comes out of the University of Illinois College of Law. An article about the study with an easy-to-read (short) summary of the myths may be read by clicking on 7 Myths About Green Jobs. The full study is at Green Jobs Myths.