Voice For Liberty

Tag: Free markets

  • Cabela’s opening a reminder of failure in Wichita

    Yesterday’s opening of a Cabela’s store in Wichita was celebrated as a great success, but the circumstances of the store’s birth should remind us of the failure of Wichita’s economic development strategies and efforts.

    We have to ask why Wichita is not able to attract retailers like Cabela’s without offering some sort of subsidy. In the current example, we are allowing Cabela’s to add 1.2 cents per dollar extra sales tax. Cabela’s keeps one cent, and 0.2 cents will be used to build a new highway exit ramp — one not seriously contemplated until Cabela’s wanted it.

    This turnover of public taxation to private interests through the community improvement district (CID) program is contrary to good public policy. The power to tax is one of the most important — and harmful — functions of government. It ought to be used to pay for public goods, instead of being turned over to private benefit, as it has for Cabela’s.

    At the opening ceremony, I spoke with Kansas Governor Sam Brownback and reminded him that just two weeks ago Wichita voters spoke out against special tax deals similar to the deal Cabela’s received. What is the future of these special tax deals? “I think the better approach is broad tax reduction,” he said.

    While the governor was referring primarily to income taxes, there is strong evidence that Kansas needs to reduce all forms of business tax costs. The release of a report from the Tax Foundation ranking the states in business tax costs brought that into sharp focus two weeks ago. The news for Kansas is worse than merely bad, as our state couldn’t have performed much worse: Kansas ranks 47th among the states for tax costs for mature business firms, and 48th for new firms.

    This raises the question: Was the CID tax giveaway truly necessary for Cabela’s to open, or is Cabela’s business model so flimsy that it requires corporate welfare to survive, or is Cabela’s simply an opportunistic company, willing to feed off taxpayers as another source of profit?

    Community Improvement Districts

    CIDs allow merchants to apply a higher sales tax rate to sales. The money from shoppers is collected under the pretense of government authority, but it is earmarked for the exclusive benefit of the owners of property in the CID. This is perhaps the worst aspect of CIDs. Landlord and merchants already have a way to generate revenue from their customers under free exchange: through the prices posted or advertised for their products, plus consumers’ awareness of the sales tax rates that prevail in a state, county, and city.

    But most consumers may never be aware that they paid an extra tax for the exclusive benefit of the CID. If they happen to calculate the sales tax they paid, they may conclude that the high CID rate is charged all across Wichita — thereby staining our reputation.

    The Wichita city council had a chance to provide transparency to shoppers by requiring merchants in CIDs to post signs informing shoppers of the amount of extra tax to be changed in the store. But CID advocates got the city council to back down from that requirement. CID advocates know how powerful information is, and they along with their allies on the city council realized that signage with disclosure would harm CID merchants. Council Member Sue Schlapp succinctly summarized the subterfuge that must accompany the CID tax when she said: “This is very simple: If you vote to have the tool, and then you vote to put something in it that makes the tool useless, it’s not even any point in having the vote, in my opinion.” She voted against the signage requirement.

    Jeff Longwell (district 5, west and northwest Wichita), in explaining his vote against the signage requirement with the tax rate displayed, said he thought this information would be confusing to shoppers.

    Are incentives necessary?

    The age-old question is whether economic activity will occur without economic development incentives. Governor Brownback said it is a “legitimate question” as to whether Cabela’s would be here anyway.

    In the case of Cabela’s, the store might not be in Wichita without incentives, as the company has shown itself to be especially eager and adept at gathering corporate welfare paid for by taxpayers. One writer concluded “For its part, Cabela’s is unabashed about its dependence on corporate socialism, even declaring in its annual report that grabbing public money is key to its business plan.”

    We see elected officials and economic development bureaucracies eager to create jobs, so much so that they offer incentives that are not necessary. This leads to a cycle of dependency on city hall for economic development. That’s good for politicians and bureaucrats, but bad for everyone else.

    It would be one thing if our economic development activities were working. But there’s evidence that they’re not. Recently we learned that the job-creating activities of Greater Wichita Economic Development Coalition last year resulted in a number of jobs barely more than one-half of one percent of the labor force.

    That’s not a very good job. But keeping a website up to date ought to be easy. The GWEDC site, however, is terribly out of date. On a page titled Recent Relocations Highlights, the most recent item is from 2009. Have we not had any relocations since then, or does GWEDC simply not care to update and maintain its website?

    A recent Wichita Eagle article, (Why isn’t Wichita winning projects?, January 22, 2012 Wichita Eagle), after listing four items economic development professionals say Wichita needs but lacks, reported “The missing pieces have been obvious for years, but haven’t materialized for one reason or another.”

    If these pieces are truly needed and have been obviously missing for years: Isn’t that a startling assessment of failure of Wichita’s economic development regime?

  • Rebuilding Joplin

    Economic Freedom has a story about the rebuilding of Joplin, Missouri after last year’s devastating tornado.

    Daniel J. Smith, economics professor at Troy University, studied the rebuilding of Joplin, Missouri in the months following the tornado. The following video discusses how economic freedom can help areas recover from natural disasters. Says Smith:

    I think one of the key factors in the recovery process in Joplin, from the tornado, is that the government officials allowed the community to start rebuilding itself. I think Joplin is a great example of the power of people — free people — coming together and both using profit motive, in the businesses, using religious reasons for faith-based organizations, and just concern for your fellow man, in the community-based organizations, to rebuild a disaster stricken community.

    In the video, Smith explains that rising wages — sometimes increasing over 500 percent — were strong market signals that certain types of labor were needed in Joplin. If these prices for labor were controlled through government regulation, the price signals would not be heard by the needed laborers. Yes, governments and news media might let the country know that these types of workers are needed in Joplin. But unless workers can earn high wages in Joplin, what motive do they have to leave their current homes and travel to Joplin?

    The price system — operating in markets free from government regulation — proves again to be the most efficient way to allocate resources to where they are most urgently needed and valued.

  • A Wichita shocker

    “Local politicians like to get in bed with local business, and taxpayers are usually the losers. So three cheers for a voter revolt in Wichita, Kansas last week that shows such sweetheart deals can be defeated.” So starts today’s Wall Street Journal Review & Outlook editorial (subscription required), taking notice of the special election last week in Wichita.

    The editorial page of the Wall Street Journal is one of the most prominent voices for free markets and limited government in America. Over and over Journal editors expose crony capitalism and corporate welfare schemes, and they waste few words in condemning these harmful practices.

    The three Republican members of the Wichita City Council who consider themselves fiscal conservatives but nonetheless voted for the corporate welfare that voters rejected — Pete Meitzner (district 2, east Wichita), James Clendenin (district 3, southeast and south Wichita), and Jeff Longwell (district 5, west and northwest Wichita) — need to consider this a wake up call. These members, it should be noted, routinely vote in concert with the Democrats and liberals on the council.

    For good measure, we should note that Sedgwick County Commission Republicans Dave Unruh and Jim Skelton routinely — but not always — vote for these crony capitalist measures.

    The Wichita business community, headed by the Wichita Metro Chamber of Commerce endorsed this measure, too.

    Hopefully this election will convince Wichita’s political and bureaucratic leaders that our economic development policies are not working. Combined with the startling findings by a Tax Foundation and KMPG study that finds Kansas lags near the bottom of the states in tax costs to business, the need for reform of our spending and taxing practices couldn’t be more evident. It is now up to our leaders to find within themselves the capability to change — or we all shall suffer.

  • Mike Pompeo: We need capitalism, not cronyism

    In a guest column written for Americans for Prosperity, Kansas, U.S. Representative Mike Pompeo of Wichita explains why political cronyism, sometimes called crony capitalism, is wrong for our country. Pompeo coins a useful new term: “photo-op economics” to describe why some politicians support wasteful federal spending projects — as long as the spending is wasted in their districts. Then logrolling — the trading of legislative favors — applies, and those legislators who received votes from others to support wasteful spending must now reciprocate and support other wasteful spending.

    Pompeo touches on an important aspect of public policy that is not often mentioned: “Moreover, what about the jobs lost because everyone else’s taxes went up to pay for the subsidy and to pay for the high utility bills from wind-powered energy? There will be no ribbon-cuttings for those out-of-work families.” This describes the problem of the seen and unseen, as explained by Frederic Bastiat and Henry Hazlitt in the famous parable of the broken window.

    We Need Capitalism, not Cronyism

    By U.S. Representative Mike Pompeo

    The word “conservative” brings to mind family values, lower taxes, fiscal responsibility — and limited government. Limited government means a government limited in size, in its claim on national wealth, and — importantly — limited in the ends to which government’s power is used. It also means federal elected officials must act in the nation’s best interest and not allow their own parochial concerns to dominate their decision making. A big obstacle on the path to restoring limited government in America is cronyism.

    We all know the story. A flawed system has created incentives that make it easier for some companies to succeed by hiring a lobbyist rather than improving productivity or satisfying customers. Lobbyists for these businesses and the politicians who support them want the federal government picking winners and losers across our economy — so long as they are selected as “winners.” In my first term in Congress, we have eliminated earmarks that rewarded politically connected, rent-seeking advocates for federal largesse by tucking provisions into bills without adequate vetting or thorough review. But ever clever politicians have another tool — the tax code — to accomplish much the same outcome. This form of cronyism must stop too.

    “Tax earmarks” — be they deductions or credits — provide certain industries and businesses a means to gain financial advantage. Tax earmarks distort our free choices, waste tax dollars, and raise prices to provide goods and services that free markets provide more abundantly and more cheaply. They also force federal tax rates up, penalizing those who don’t receive them, because higher rates are required to capture the same revenue given all of the special interest tax earmarks now in effect. And, unlike standard earmarks, tax earmarks tend to be renewed year after year after year.

    One current fight against the insidious political tool of tax earmarks involves the energy sector. I am leading the charge to eliminate over two dozen energy tax credits tucked into the Internal Revenue Code. My proposed legislation would get rid of every single tax credit related to energy — ending tax favoritism that today goes to wind and solar, algae and electric vehicles and tax credits that go to the oil and gas industry as well. Tax subsidies miscast the role of the federal government. Energy sources are either viable without subsidies or else they do not make economic sense for taxpayers.

    Subsidies and giveaways redistribute wealth from productive, self-sustaining enterprises to unproductive, less efficient, albeit politically connected, ones. Although subsidies may have positive local effects, they penalize successful businesses — leading to less innovation, decreased productivity, fewer jobs, and higher prices for consumers. Cronyism also mistreats unsubsidized competitors, who wind up subsidizing their own competition to the detriment of their employees, consumers, and free-market competition.

    Together with tried-and-true conservative leaders like House Budget Committee Chairman Paul Ryan (WI), and Tea Party leaders like Sen. Jim DeMint (SC), and Sen. Mike Lee (UT), I am fighting to end this form of cronyism. Conservative groups including Americans for Prosperity, Americans for Tax Reform, Club for Growth, Council for Citizens Against Government Waste, Freedom Action, Heritage Action, National Taxpayers Union, and Taxpayers for Common Sense have all rallied to the side of limited government on this issue. They understand that picking winners and losers in the energy marketplace does not create long-term economic growth, and it harms our economic and political systems.

    One example of a tax earmark that should be eliminated is the Production Tax Credit (PTC) that goes to the wind industry. Yet, some Republican and Democrat members of Congress, not surprisingly from “wind states,” are pushing for yet another multi-year extension of the PTC, a multi-billion dollar handout to Big Wind. The PTC manipulates the energy market, drives up electricity bills for consumers and businesses, and creates a dangerous economic bubble. The PTC is a huge subsidy. Applied to oil companies, it would be the equivalent of giving $30 for every barrel of oil produced, according to the Heritage Foundation. The PTC has existed for the past 20 years, but it has not succeeded yet in making unsubsidized wind competitive. Politicians who pretend that a few more years of the PTC will make wind competitive could be right, but that is not a responsible bet to make with taxpayer dollars.

    Supporters of Big Wind, like President Obama, defend these enormous, multi-decade subsidies by saying they are fighting for jobs, but the facts tell a different story. Can you say “stimulus”? The PTC’s logic is almost identical to the President’s failed stimulus spending of $750 billion — redistribute wealth from hard-working taxpayers to politically favored industries and then visit the site and tell the employees that “without me as your elected leader funneling taxpayer dollars to your company, you’d be out of work.” I call this “photo-op economics.” We know better. If the industry is viable, those jobs would likely be there even without the handout. Moreover, what about the jobs lost because everyone else’s taxes went up to pay for the subsidy and to pay for the high utility bills from wind-powered energy? There will be no ribbon-cuttings for those out-of-work families.

    Here’s the data. The “green energy” 1603 grant program has given away $4.3 billion to 36 wind farms just since 2008. All together, these farms now employ 300 people. That’s $14 million per job. This is an unconscionable return on investment, especially for your tax dollars. Given that consumers also pay higher energy prices for electricity generated from wind, one has to wonder why some in Washington continue to push for Big Wind subsidies. Often the answer is that politicians care more about making good political investments than they do about making bad financial investments.

    In this respect, the PTC handout is virtually indistinguishable from the program that led to the Solyndra debacle. The Obama Administration gave 500 million taxpayer dollars to a private solar panel company to prop up a failed business model. As soon as government money ran out, the company folded. Solyndra could not attract sufficient private capital for financing because its solar panels could not compete in the consumer market. So it turned to its lobbyists in Washington and friends in the Obama Administration for its financing. The result was a skewed consumer marketplace and the waste of taxpayer dollars. Like the earmark for the Bridge to Nowhere, political allocation of your taxpayer dollars is failed policy.

    I get the game. Elected officials in Michigan want your money for electric cars. Those from California want your money for solar panels. And those from the Midwest want your money for wind turbines. In a country that has a $15 trillion national debt, annual deficits of over $1 trillion as far as the eye can see, and a $100 trillion unfunded liability in entitlement programs, this must stop.

    I believe that American ingenuity will eventually bring new energy sources to market successfully. It may be wind or algae, it may be biomass or solar. It may be the enormous natural gas and oil reservoirs that can now be reached affordably right here in North America. I also believe that American families making good choices for themselves will lead the way in deciding which new energy source or technology succeeds. Trying to pick that next great source from Washington, D.C. — and with your money — just leads to more cronyism, more debt, more bad decisions, more dependence on the Middle East and a much less limited federal government — outcomes that none of us can afford.

    Congressman Mike Pompeo represents Kansas’ 4th Congressional District.

  • In Wichita, pushing back against political cronyism

    A message from Bob Weeks, campaign chair of Tax Fairness for All Wichitans, upon the campaign’s victory of 62 percent to 38 percent in an election regarding a tax rebate to the Ambassador Hotel:

    First, I’d like to thank my campaign leadership team and all the volunteers. Many started working in October by carrying the petition and gathering signatures, sometimes in cold and windy winter weather. My job as campaign chair was made much easier through the efforts of dedicated people like Susan Estes, John Todd, Derrick Sontag, and the many others who helped.

    Usually, winning an election is a happy time. In most elections the winning side is happy because they elected a candidate to office who they feel has the better ideas.

    I’m glad we won. But my happiness is tempered by the realization that we simply prevented something bad from happening in Wichita.

    I’m proud that the electorate responded positively to our accurate and truthful campaign. When citizens have the facts, they make the right decision.

    Going forward, I’d like to remind Wichitans that the Ambassador Hotel is receiving assistance from eight taxpayer-funded government programs with costs of $15.4 million up-front and several hundred thousand annually. None of these were affected by the election. Wichita city hall and its allies are ready, willing, and able to use these incentive programs in the future for other hotels and businesses.

    So to the extent that these economic development programs actually help Wichita, they are still available, and will likely be used.

    But we feel these programs are not wise. Often, we’ve found that they’re not needed. And when used, they direct public investment to where politicians and bureaucrats want it, not where people want it.

    The best way to create jobs is to get government out of the way. Instead of entrepreneurs spending resources applying for grants, finding government programs and taking handouts, we would be much better off if they could directly invest those resources in job creation. That is what the voters said tonight.

    We need to reform our economic development efforts. Our present methods, which are just about the same as most other cities, are not working. We need to realize that there are several long-serving politicians and bureaucrats that have presided over this failure.

    These people have presided over the system of political cronyism that passes for economic development in Wichita. Politicians like Mayor Carl Brewer and most members of the Wichita City Council pocket thousands in campaign contributions from opportunists like David Burk and David Wells, who are partners in the Ambassador Hotel project. These people make contributions to those they know are in a position to vote to give them money.

    This is such a foul system that we need pay-to-play laws to reform it. I’m suggesting that Kansas pass such a law, and name it “Davids’ Law.”

    I hope that Wichita City Hall, the economic development machinery in our city, and the Wichita Eagle editorial board will be more receptive to the message of economic freedom, free markets, and limited government that was expressed in the results of this election.

  • Ambassador Hotel discussed on This Week in Kansas

    On Sunday Bob Weeks, chair of Tax Fairness for All Wichitans, discussed the Wichita Ambassador Hotel election on the KAKE Television public affairs program This Week in Kansas.

  • Obama fundraising on anti-Koch obsession

    Are Americans tired of hearing that this year’s election is all about an obsession with defeating President Barack Obama? For those who know that Obama took a bad economic situation and implemented policies that made it worse — yes, we want to defeat the current president. The president’s election campaign, however, turns that concern for the future of our country into “obsession” and uses it to raise money. As is often the case, the target of a recent fundraising letter is Charles G. Koch and David H. Koch, who are principals of Wichita-based Koch Industries. While the letter attacks the Kochs for “jacking up prices at the pump” the real reason why liberals don’t care for them is for their unwavering support for the causes of economic freedom, free markets, and limited government that Charles and David Koch have advocated for very many years.

    By the way, I’ve never heard an answer to this question: If oil companies have the power to “jack up” gasoline prices, why do they let the price go down, as it often does? And why is the price not higher than it is?

    Fortunately for America, the Koch brothers and Koch Industries do not back down from these attacks. Following, the company responds.

    Mr. Jim Messina
    Campaign Manager
    Obama for America

    Dear Mr. Messina:

    Because every American has the right to take part in the public discourse on matters that affect the future of our country, I feel compelled to respond directly about a fundraising letter you sent out on February 24 denouncing Koch. It is both surprising and disappointing that the President would allow his re-election team to send such an irresponsible and misleading letter to his supporters.

    For example, it is false that our “business model is to make millions by jacking up prices at the pump.” Our business vision begins and ends with value creation — real, long-term value for customers and for society. We own no gasoline stations and the part of our business you allude to, oil and gas refining, actually lowers the price of gasoline by increasing supply. Either you simply misunderstand the way commodities markets work or you are misleading your supporters and the rest of the American people.

    Contrary to your assertion that we have “committed $200 million to try to destroy President Obama,” we havestated publicly and repeatedly since last November that we have never made any such claim or pledge. It is hard to imagine that the campaign is unaware of our publicly stated position on that point. Similarly, Americans for Prosperity is not simply “funded by the Koch brothers,” as you state — rather it has tens of thousands of members and contributors from across the country and from all walks of life. Further, our opposition to this President’s policies is not based on partisan politics but on principles. Charles Koch and David Koch have been outspoken advocates of the free-market for over 50 years and they have consistently opposed policies that frustrate or subvert free markets, regardless of whether a Democrat or a Republican was President.

    f the President’s campaign has some principled disagreement with the arguments we are making publicly about the staggering debt the President and previous administrations have imposed on the country, the regulations that are stifling business growth and innovation, the increasing intrusion of government into nearly every aspect of American life, we would be eager to hear them. But it is an abuse of the President’s position and does a disservice to our nation for the President and his campaign to criticize private citizens simply for the act of engaging in their constitutional right of free speech about important matters of public policy. The implication in that sort of attack is obvious: dare to criticize the President’s policies and you will be singled out and personally maligned by the President and his campaign in an effort to chill free speech and squelch dissent.

    This is not the first time that the President and his Administration have engaged in this sort of disturbing behavior. As far back as August, 2010, Austan Goolsbee, then the President’s chief economic advisor, made public comments concerning Koch’s tax status and falsely stated that the company did not pay income tax, which triggered a federal investigation into Mr. Goolsbee’s conduct that potentially implicated federal law against improper disclosure of taxpayer information. Last June, your colleagues sent fundraising letters disparaging us as “plotting oil men” bent on “misleading people” with “disinformation” in order to “smear” the President’s record. Those accusations were baseless and were made at the very same time the president was publicly calling for a more “civil conversation” in the country.

    It is understandable that the President and his campaign may be “tired of hearing” that many Americans would rather not see the president re-elected. However, the inference is that you would prefer that citizens who disagree with the President and his policies refrain from voicing their own viewpoint. Clearly, that’s not the way a free society should operate.

    We agree with the President that civil discourse is an American strength. That is why it is troubling to see a national political campaign apparently target individual citizens and private companies for some perceived political advantage. I also hope the President will reflect on how the approach the campaign is using is at odds with our national values and the constitutional right to free speech.

    Sincerely,
    Philip Ellender
    President, Government & Public Affairs
    Koch Companies Public Sector, LLC

    This letter was originally published at KochFacts.com.

  • Market solutions best for Wichita

    As appearing in the Sunday Wichita Eagle.

    Market solutions best for Wichita

    By Bob Weeks

    In his “State of the City” address for 2012, Wichita Mayor Carl Brewer spoke on several topics that deserve discussion. As an example, several times he criticized those who act on “partisan agendas.” Partisan refers to following a party line, usually with a negative connotation.

    But the city council, even though it has four Republican members, almost always votes uniformly with Brewer (a Democrat). The only exception is Republican Michael O’Donnell (district 4, south and southwest Wichita). The other Republican members routinely vote in concert with the Democrats and liberals on the council.

    Also, consider the many members of the business community who appeal to the city for subsidies and increased government intervention: Many of these are Republicans — conservative Republicans, many have personally told me.

    This describes a lack of partisanship. Those such as myself who frequently oppose the mayor and his policies are more accurately characterized not as acting along party lines, but as acting on their belief in economic freedom, free markets, and limited government.

    The mayor said that the city’s efforts had created “almost 1000 jobs.” That’s just over one-half of one percent of Wichita’s labor force, a miniscule number that is dwarfed by the normal ebb and flow of other economic activity.

    Still, the mayor’s plan, in his words, is “We will incentivize new jobs.” But this active investor policy has produced only a small number of jobs, year after year. While the mayor repeatedly said that the city has been “courageous,” in reality, Wichita does about the same as other cities.

    Professor Art Hall of Kansas University School of Business makes a convincing case that Kansas needs to abandon its active investor approach to economic development, where government decides which companies will receive special treatment through various forms of subsidy. This is the approach of Wichita, and according to the mayor’s vision, this plan is to be stepped up.

    Hall cites research indicating that local officials believe they can influence local economies far more than evidence indicates. He also believes that we can break out of the bidding wars for large employers by employing a strategy of economic dynamism. Government would concentrate on the basics, building a platform where all businesses have a chance to thrive, instead of betting on just a few anointed winners as we presently do. This would truly distinguish Kansas and Wichita.

    The mayor criticized those who “provide simplistic answers to very complicated challenges.” He may be referring to those like myself who, like Hall, advocate for free market solutions. We are criticized for not having a plan for government to implement, but that’s precisely the point. Relying on economic freedom, free markets, and limited government for jobs and prosperity means trusting in free people, the energy of decentralized innovation, and spontaneous order. A government plan for economic development is the opposite of these principles.

    We need business and political leaders in Wichita and Kansas who can see beyond the simplistic imagery of a groundbreaking ceremony and who can assess the effect of our failing economic development policies. Unfortunately, we don’t have many of these — and Mayor Brewer leads in the wrong direction, preferring crony capitalism and corporate welfare instead.

  • Wichita Chamber of Commerce

    News that the Wichita Metro Chamber of Commerce has decided to support the “Vote Yes” campaign in the February 28th Wichita city election should disappoint those who believe in economic freedom, free markets, and limited government as the engine of job creation and prosperity.

    The subject of the election is a Wichita city charter ordinance that rebates 75 percent of the Ambassador Hotel’s guest tax collection back to the hotel. In January I made a presentation to a Chamber committee in an effort to persuade it to support the “Vote No” campaign, or to stay neutral.

    There was some hope that the Chamber would support free markets and limited government — instead of crony capitalism and corporate welfare — as sound policies for economic development. Many in Wichita thought that the Chamber had turned in this direction of economic freedom about two years ago.

    Now the Chamber’s decision lets us know it believes that eight government subsidy programs supporting the Ambassador Hotel are not enough: The Chamber says there must be a ninth.

    This decision reminds me of a piece in the Wall Street Journal by Stephen Moore that shows how very often, local chambers of commerce support principles of crony capitalism instead of pro-growth policies that support free enterprise and genuine capitalism.

    Most people probably think that local chambers of commerce, since their membership is mostly business firms, support pro-growth policies that embrace limited government and free markets. But that’s not always the case, as we can see in Wichita. Here, in an excerpt from his article “Tax Chambers” Moore explains:

    The Chamber of Commerce, long a supporter of limited government and low taxes, was part of the coalition backing the Reagan revolution in the 1980s. On the national level, the organization still follows a pro-growth agenda — but thanks to an astonishing political transformation, many chambers of commerce on the state and local level have been abandoning these goals. They’re becoming, in effect, lobbyists for big government.

    …

    In as many as half the states, state taxpayer organizations, free market think tanks and small business leaders now complain bitterly that, on a wide range of issues, chambers of commerce deploy their financial resources and lobbying clout to expand the taxing, spending and regulatory authorities of government. This behavior, they note, erodes the very pro-growth climate necessary for businesses — at least those not connected at the hip with government — to prosper. Journalist Tim Carney agrees: All too often, he notes in his recent book, “Rip-Off,” “state and local chambers have become corrupted by the lure of big dollar corporate welfare schemes.”

    …

    “I used to think that public employee unions like the NEA were the main enemy in the struggle for limited government, competition and private sector solutions,” says Mr. Caldera of the Independence Institute. “I was wrong. Our biggest adversary is the special interest business cartel that labels itself ‘the business community’ and its political machine run by chambers and other industry associations.”

    From Stephen Moore in the article “Tax Chambers” published in The Wall Street Journal, February 10, 2007. The full article can be found at Liberalism’s Echo Chambers.