Voice For Liberty

Tag: Free markets

  • At Americans for Prosperity, George Will is optimistic

    Friday night’s dinner at the Americans for Prosperity Foundation fourth annual Defending the American Dream summit featured Pulitzer Prize-winning journalist George Will as keynote speaker.

    Will’s message was that while progress in limiting the growth of government has been reversed, this can be overcome, and he believes that a restoration of liberty and economic freedom will happen.

    As the dinner was a tribute to former President Ronald Reagan, Will told the audience one of his favorite lines from Reagan during the 1980 campaign: “A recession is when your neighbor loses his job. A depression is when you lose your job. Recovery is when Jimmy Carter loses his job.”

    Continuing, he said that “Barack Obama is Jimmy Carter 2.0 and it is time to hit the delete button.”

    Will told the audience that the “retreat of the state” that started with the election of Margaret Thatcher in 1979 and the election of Ronald Reagan has been reversed. This should be reversed again, he said.

    On the federal stimulus, Will said that the downward revision of GDP from a bad number to an even worse number is evidence that the stimulus is not working.

    There are two things that the administration is saying that are “funny,” Will said. One is that our current crisis was brought on because there was too little government regulation and administration. The second is that the problem with the stimulus is that Republicans made it too small. “The government is dangerously frugal at the moment,” he said to laughter from the audience.

    But Will said that the government controls the money supply and interest rates, leading to control of home mortgages. He traced the edicts of government that increasing percentages of mortgages must be given to those with poor credit. These expansions of the federal government, along with the No Child Left Behind education law, happened under Republican administrations, evidence that not only Democrats are too blame.

    Government is dominating the energy sector too. He said that matters because “no less of an authority of energy” than Speaker Nancy Pelosi said that “America should use more natural gas rather than fossil fuels.”

    In health care, half of spending is already government money, and that will increase, as will the 138,000 pages of health care regulations.

    As to the alleged dangerous frugality of the government, Will said we are “marching into the most predictable financial crisis the world has ever seen.” This crisis is self-inflicted, he said.

    Illustrating the size of government, he said that at the time of the first world war, when federal government spending exploded, the richest man in American could have personally retired the federal debt. But today’s richest man could pay for only two month’s interest on the deficit.

    The administration’s planned spending program will result in a situation ten years from now when federal entitlement programs (Social Security, Medicare, Medicaid) plus the interest on the federal debt will consume 93 percent of federal revenue. The debt will be one hundred percent of GDP. This will crowd out private borrowing and investment. As a nation, he said we don’t save enough to fund both government and the investment needs of the private sector economy.

    Will noted the remarkable progress of American medicine during his lifetime. But both presidential candidates campaigned against the pharmaceutical industry in 2008, which Will said was “shocking.” “It is time to quit stigmatizing those who create wealth, those who extend life, those who reduce pain. Get the government out of the way, and let them get on.”

    The economy is fragile, Will said, and we need not burden it more with taxes. He referred to Congressman Paul Ryan, who said we have a nation with “too many takers and not enough makers.”

    On education, he said we need an education system that “equips people to compete in a free society.” He criticized the short school year in the U.S., as compared to other countries. He told the audience that a major problem with schools is the teachers unions. The increased spending on schools has not worked. 90 percent of the difference between schools can be explained by characteristics of the students’ families, he said. “Don’t tell me the pupil-teacher ratio, tell me the parent-pupil ratio.”

    Even with as many problems as there are, he said that an “aroused citizenry” like that in the room tonight can fix the problems. He’s not pessimistic, he said, because Obama has stimulated a “new clarity” from the American people.

    There is a tension today between freedom and equality, two polar values. Liberals today stress equality of outcomes, and believe that the multiplication of entitlement programs to produce this equality serves the public good. But conservatives stress freedom, and that multiplication of entitlement programs is “subversive of the attitudes and aptitudes essential for a free society of self-reliant, far-sighted, thrifty and industrious people.”

    The Obama presidency has passed its apogee, Will told the audience. Quoting Winston Churchill, he said that “The American people invariably do the right thing, after they have exhausted all the alternatives.” Will said he believes that Americans believe that “a benevolent government is not always a benefactor, capitalism doesn’t just make us better off, it makes us better.”

    Will told the audience that “Americans for Prosperity exists on the principle that when you change the nation’s economy, you change the national character in the process.” Urging the citizen activists to get involved, he echoed a remark made by Minnesota Congresswoman Michele Bachmann, who had spoken earlier: “You are the point of the lance. Go to work.”

    Before his speech, Americans for Prosperity Foundation Chairman David H. Koch awarded Will the George Washington award. This is AFP’s highest award, given to Will for his work in defending and advancing economic freedom.

    Koch also spoke about the goals of Americans for Prosperity Foundation, which he said are to advance economic freedom and prosperity by limiting government growth, spending, and taxation. It is a grassroots movement that holds political leaders of every party accountable. AFP advocates for the free market economy, which he said improves lives and created the greatest nation on the face of the Earth.

  • Americans for Prosperity summit starts today

    Today in Washington, Americans for Prosperity Foundation starts its fourth annual Defending the American Dream summit. The event is expected to be attended by 2,300 citizen grassroots activists from around the country.

    AFP has recently been criticized by President Barack Obama, which many interpret as evidence of AFP’s growing influence and effectiveness.

    AFP Foundation president Tim Phillips said “never before have grassroots Americans been so interested in the challenges facing our nation. We have a sharp lineup of speakers on the most pressing issues — energy, spending,net neutrality, to name a few — and we’re excited to give people information they can share with friends and neighbors as they examine these important policies being discussed in Congress right now.”

    Speakers at this year’s event include Pulitzer Prize-winning journalist George Will, Minnesota Congresswoman Michele Bachmann, author and Fox New contributor Dick Morris, Herman Cain, and AFP President Tim Phillips. Breakout sessions throughout the day will provide a variety of learning opportunities for citizens.

  • Social Security: A good and moral deal?

    Social Security and its future have been in the news lately. Supporters promote it as one of the best examples of successful government programs, and denigrate its critics as pessimists.

    Locally in the campaign for United States Congress from the fourth district of Kansas, one candidate promises to defend the current system, while another has spoken approvingly of Wisconsin Congressman Paul Ryan and the reforms recommend in his Roadmap for America’s future.

    Many of the arguments in favor of Social Security and strengthening the system revolve around the issue of fairness, even casting a moral tone. So what about the fairness of the Social Security system?

    In Slaying Leviathan: The Moral Case for Tax Reform, author Leslie Carbone looks at the economic impact of Social Security and its payroll taxes on middle income people:

    Payroll taxes actually have the bizarre effect of leaving families less able to ensure what they are specifically purported to provide — security in old age. According to The Heritage Foundation, Social Security’s inflation-adjusted rate of return is a paltry 1.2 percent for an average household of two 30-year-old earners, each making just under $26,000, with children. This family will pay about $320,000 in Social Security taxes (including their employers’ share) and can expect to receive about $450,000 back in payments (1997 dollars, before taxes, assuming that they begin collecting at age 67). Had this typical family allocated the same amount to conservative private investment vehicles, such as traditional retirement accounts, they could expect to enjoy a real rate of more than 5 percent per year before taxes, or $975,000 (1997 dollars). Social Security taxes of $320,000 cost this family $525,000.

    Social Security is not a very good investment, as we now see. It’s even worse — cruel and unfair, we might say — when workers pay into the system for years and then die shortly after starting to receive benefits. If people owned their own retirement savings, they could pass these assets on to their heirs or anyone else they choose.

    An argument often used against privatizing the Social Security system is that people will have to make investments in stocks and bonds. Securities markets sometimes go down, as they have recently, and sometimes do not perform very well for long periods. So the Social Security supporters ask: Do we want Americans’ retirement security dependent on such uncertain investments?

    It’s true that markets go up and down. But over the long term, the direction has been up. Young workers do not need to be concerned about the performance of the market over the next few years. Their time horizon is measured in decades.

    Furthermore, over long periods of time, the performance of securities markets is closely tied to the performance of the American and world economies. If markets do not perform well over time, it is almost certain that the economy is underperforming too. Such a poor economy makes it even more difficult for young workers to pay the taxes necessary to pay the Social Security benefits that retirees will demand. Those young workers will have to pay, as there is no Social Security trust fund that can be drawn upon, despite the claims of its backers.

    It’s contrary to economic freedom and personal liberty for the government to force Americans to participate in a retirement program. Forcing us to participate in one that performs as poorly as Social Security is a tragedy, not a mark of kindness and moral superiority.

  • AFP responds to Obama attack

    Attacks by President Barack Obama on Americans for Prosperity for its promotion of limited government and free markets are a signal that these principles are resonating with Americans.

    Now AFP has formulated a video response to the president.

    While some characterize the president’s remarks as a personal insult to each of AFP’s 1.2 million citizen members, I see it as evidence that AFP has grown to become “America’s leading conservative grassroots organization,” as described in a recent article penned by Richard Viguerie. Obama wouldn’t even bother to mention the name Americans for Prosperity if he wasn’t concerned about the group’s effectiveness.

    In his remarks, the president attacked AFP for spending millions on television advertisements against Democratic Party candidates. The president didn’t note that every dollar given to AFP is a voluntary contribution.

    This is in contrast to the way the Democrats operate. The Wall Street Journal has noted, for example, that the recent spending bill passed earlier this month is a boon for Democrat campaign funds: “The National Education Association and other unions will thus get as much as $100 million in additional dues from this bill, much of which will flow immediately to endangered Democratic candidates in competitive House and Senate races this year.”

    This week AFP is holding its annual Defending the American Dream Summit in Washington. I’ll be there along with probably two thousand other citizen activists from across the country.

  • More intervention for Wichita proposed

    Tomorrow the Wichita City Council will consider accepting petitions for the formation of another Community Improvement District. In this case the applicant is the Broadview Hotel in downtown Wichita.

    This hotel is already the recipient of potentially $4.75 million in Kansas historic preservation tax credits. Despite the name of the program, the tax credits are in effect a grant of money to the developers.

    Now the hotel seeks permission to charge extra sales tax for its own benefit.

    The action the council may take tomorrow is on the consent agenda, as noticed by the Wichita Eagle’s Brent Wistrom. The consent agenda is usually reserved for non-controversial items. It’s likely that many more CIDs will be proposed, so many that accepting petitions requesting their formation is now considered a routine item of business.

    Each CID, however, must have a public hearing. But already council members have indicated they are ready to approve all CIDs, and council members are not receptive to opposition, if a televised overheard whispered remark by one council member is any indication.

    Separately a proposed downtown Wichita grocery store gets government assistance. Announced by the Kansas Department of Commerce, the Exchange Market & Deli in downtown Wichita can receive $2.5 million in government stimulus financing. The bonds are exempt from federal income taxes, and the federal government pays 45 percent of the interest. It’s part of President Obama’s stimulus program.

    The project this grocery store is attached to — Exchange Place — is the beneficiary of over $10 million in Wichita tax increment financing. That is, if the developers, Real Development, can close on their financing of a nearby project. That financing has been delayed several times.

    Each of these projects is another example of increasing government intervention in the future of downtown Wichita. Each represents a loss of economic freedom to Wichitans, as the city council uses taxes to override the decisions that thousands of Wichitans have made as to where to live and locate their business. Some of the city council members that consistently vote for these interventions describe themselves as conservative.

  • Wasteful government spending must stop

    As part of its campaign against wasteful government spending, Americans for Prosperity Foundation has started a television advertising campaign and companion website to help Americans learn more about the harmful effects of the stimulus plan promoted by President Barack Obama, Speaker of the House Nancy Pelosi, and Senate Majority Leader Harry Reid.

    In just a handful of years, AFPF has grown to become “America’s leading conservative grassroots organization,” according to a recent article penned by Richard Viguerie. The recent attacks on AFPF by President Obama are evidence of this.

    According to AFPF President Tim Phillips, “This first ad called ‘Hollywood’ details how the failed $862 billion Obama/Pelosi/Reid ‘Stimulus’ bill was wasted on pet political projects, how it cost every American family an average of $10,000 and how it in reality killed genuine private sector jobs.”

    The companion website at SpendingCrisis.org has useful information that citizens can tap to learn more about the stimulus spending, as well as government spending in general. The site carries the headline “Washington, we’ve got a problem.”

    In particular, an issues page gives some reasons as to why high government spending is bad for America.

    As an example, under the heading “Government Spending is Inherently Wasteful,” we find “It’s regarded as a virtual truism that no one spends someone else’s money as well as they spend their own. The only people who seem to disagree are politicians.”

    Other facts highlighted include:

    • This year, the federal government will borrow about $12,500 per household to pay for its spending.
    • Despite claiming that the $862 billion stimulus package would keep unemployment below 8 percent, it is hovering around 9.5 percent with few signs of improving.
    • Public employees earned more than $120,000 per year in salary and benefits on average, compared to about $60,000 in the private sector.
    • From anti-poverty spending programs to defense and education, the federal government now spends a record $30,543 per household.

  • Star Parker campaigns in Wichita

    In a campaign stop yesterday in Wichita noted conservative figure Star Parker told an audience that she works for market-based solutions to fight poverty, and that the answer to poverty is freedom and personal responsibility, not a welfare state.

    Parker appeared in Wichita at a fundraising event hosted by Wichita businessman Johnny Stevens. Parker is running for Congress as a Republican from the 37th district of California, which includes the cities of Compton, Long Beach, and Carson, south of the City of Los Angeles. Her campaign website is Star Parker for Congress.

    Parker described her efforts working on welfare reform at the federal level during the 1990s, which she described as successful in terms of helping poor people recover their lives. But the momentum that was started — moving poor people from socialism towards capitalism and economic freedom — has not continued, she said. What we have today, she told the audience, is moving in the opposite direction.

    Parker said that a critical factor in helping her to decide whether to run for Congress was when President Barack Obama chose to use Abraham Lincoln’s Bible as part of the swearing-in ceremony during his inauguration. Lincoln — although a complicated man and her hero, Parker said — confronted the moral problem of his day by deciding that the country should remain together and with everyone as free people. She contrasted this with Obama, who avoided a moral question by saying it was “above his pay grade.”

    Then when she saw bankers and Wall Street executives lining up to go on welfare she was furious, and seriously considered responding positively when asked to run for Congress.

    Democrat Laura Richardson, the two-term incumbent in the district Parker is seeking to represent in Congress, has had trouble with homes she owns falling into foreclosure, even being criticized by the Los Angeles Times for that and for falling behind on property tax payments. Richardson had been charged with an ethics violation in conjunction one of her three homes that has been in foreclosure. In July the House Ethics Committee cleared her of misconduct in that matter.

    Parker said that Richardson’s main accomplishment has been bringing stimulus money into the district. She described it as a union district, and that unions do not want to see this seat in conservative hands.

    Parker criticized campaign finance laws that allow those with personal wealth to spend all they want on their campaigns — we saw this in the Kansas fourth district with one candidate spending about $2 million of his own funds — but limit outside contributions to $2,400 per election cycle. This limits the ability of challengers to mount effective campaigns against incumbents, she said.

    Parker said it is critical to take Congress back from the control of Democrats, and that for a black conservative to win a seat currently held by the Congressional Black Caucus would be “extremely sweet.”

    She told the audience that if we fail to take Congress this fall, “you think you’ve seen arrogance now, you think you’ve seen elitism, you think you’ve seen how aggressively they can spend other peoples’ money and how close to the edge of danger they will allow us to go — we’ve seen nothing if on November third we wake up and they still have the Congress.”

    Even if Republicans take Congress, she said since over half of them are not conservative, there will still be a challenge.

    She mentioned that she will be part of an upcoming John Stossel feature on Fox News Network.

    Parker spoke about the importance of schools and described the difficulties that parents face trying to get their children in good schools. Answering a question about the lack of reform such as charter schools and school choice in Kansas, Parker said that lack of these limits the opportunity for the underclass to get a quality education. In public schools, Parker said that children are taught secular humanism, and the cycle of the entitlement mentality is passed down from one generation to the next. School choice is the way to break this cycle and give schoolchildren an opportunity to attend schools that have a moral framework.

    Answering another question about what caused the transformation in her thinking — Parker is not shy about talking about her past life living on welfare — she said that she “just got born again” and decided to adopt a Biblical world view.

    As to what spurred her to become a free-market activist and adopting a libertarian economic thought, she said that it was her experience in business. “Government is harsh,” she said, with many agencies that stand in the way of prosperity.

    The ideas of socialism are inconsistent with a free country, she said, telling them that the rules of welfare are “don’t work, don’t save, and don’t get married.” These rules work against people breaking out of poverty.

    Parker has been endorsed by many national conservative figures, including Sarah Palin, Newt Gingrich, Michele Bachmann, and Mike Huckabee.

  • Internet regulation, or net neutrality, would harm investment, says former official

    At a luncheon event in Wichita, Bruce Mehlman of the Internet Innovation Alliance told an audience that increased regulation of the internet — the principle known as “net neutrality” — would harm capital investment in broadband internet service.

    Mehlman was formerly Assistant Secretary of Commerce for Technology Policy and now serves as co-chairman of the Internet Innovation Alliance and as partner in a Washington lobbying firm.

    Mehlman laid out some of the facts of broadband internet: all the varied things businesses and people do with the high-speed transmission of data, the fact that broadband internet has been rapidly adopted, and the rapid growth of digital content.

    Today, 66 percent of American adults have a broadband internet connection at home. 95 percent have access to at least one broadband service offering, if they chose to subscribe.

    He cited a just-released Pew Internet & American Life project which found that 21 percent of American adults do not use the internet. Of these non-users, 48 percent indicated lack of relevance, 21 percent cited price as the reason, 18 percent said it was usability that kept them offline, and only six percent said access was the reason why they don’t use the internet.

    Mehlman said that these measurements are an indicator of the success of broadband internet adoption.

    The big policy battle for 2010, Mehlman said, is net neutrality. The basic principle of net neutrality is that “companies providing Internet service should treat all sources of data equally,” according to the New York Times. Internet Service Providers (ISPs) would not be able to manage their networks in terms of providing faster service to those who agree to pay, and they would not be able to block any content.

    Some of the things that net neutrality would do, Mehlman said, include the following: ISPs would have to be transparent with rules and policies, they would not block or degrade certain types of internet traffic, there would be government-defined “reasonable” network management, there would be no “express lanes,” and there would be limits on service tiers and pricing plans. These concepts would also be applied to wireless broadband service.

    Advocates of net neutrality are particularly concerned that ISPs may block or slow service for some types of traffic. Mehlman provided three examples of attempts at this. In each case customers objected, and the ISP quickly reversed course.

    He noted the irony of Google — a company that has been a leading advocate of net neutrality — objecting to the creation of preferred classes of internet traffic, when a major component of Google’s business model is customers paying for preferential treatment of their advertisements placed on Google.

    Mehlman asked the audience to note the contrast between two heavily-regulated industries — telecommunications and cable TV — and a lightly regulated industry — information technology, which is the category that broadband internet and most information services fall into. Telecommunications and cable TV, throughout their history, have evolved slowly, and had exhibited little of the innovation that is characterized the internet and other information services.

    A recent court decision ruled that the FCC had no authority to regulate information services. So the FCC now has two choices. One would be to persuade Congress to let the FCC regulate the internet. The other would be to redefine the internet from an information service to a telecommunication service, reclassifying it as a “Title II” service.

    This last option has been described by industry analyst Craig Moffett as the “nuclear option.” The additional regulation that Title II designation brings would fuel investor uncertainty, and probably lead to a dramatic reduction in capital investment in broadband internet. Innovation would likely suffer.

    The event was sponsored by Americans for Prosperity-Kansas, Mid-American Communications Alliance, Wichita Independent Business Association, and Kansas Policy Institute.

  • Wichita Community Improvement District approvals signal increased interventionism

    Yesterday’s action by the Wichita City Council in approving two Community Improvement Districts signals a new era in increased intervention in free markets by Wichita politicians and bureaucrats.

    CIDs are a creation of the Kansas Legislature from the 2009 session. They allow merchants in a district to collect additional sales tax of up to two cents per dollar. The extra sales tax is used for the exclusive benefit of the CID.

    Although at past city council meetings some members seemed as though they might view the districts with skepticism, there was little meaningful discussion, and no council members voted against the formation of the districts.

    The mayor and city council members are unable — or unwilling — to consider the harmful effects of their interventions in creating special tax districts.

    Or, it might be that some strategic campaign contributions helped city council members make up their minds. While I believe that Council Member Lavonta Williams is an honest and honorable council member, we have to be concerned when campaign contributions are made by people who know they will be asking the council for special treatment and favor, as Christian Ablah did yesterday.

    He got what he wanted from the council. Wichita taxpayers lost.

    The city looks silly when it jumps through hoops to conform to laws that shape the way it conducts economic development. As I urged the council:

    Let’s stop distinguishing between “eligible costs” and other costs. When we use a term like “eligible costs” it makes this process seem benign. It makes it seem as though we’re not really supplying corporate welfare and subsidy to the developers.

    As long as the developer has to spend money on what we call “eligible costs,” the fact that the city subsidy is restricted to these costs has no economic meaning.

    Suppose I gave you $10 with the stipulation that you could spend it only on next Monday. Would you deny that I had enriched you by $10? As long as you were planning to spend $10 next Monday, or could shift your spending, this restriction has no economic meaning.

    The issue of high-tax districts being a consumer protection issue didn’t resonate with the council, either. There are several council members who normally would be in favor of exposing greedy merchants who overcharge people, but not in this case. Maybe it’s the campaign contributions again.

    Even pointing out how the city works at cross-purposes with itself doesn’t work. We spend millions every year subsidizing airlines so that airfares to Wichita are low. Then we turn around and add extra tax to visitors’ hotel bills, with Vice Mayor Jeff Longwell and the Wichita Eagle editorial board approving this as a wise strategy.

    People remember high taxes. I don’t think it’s a good strategy to establish high-tax districts designed to capture extra tax revenue from visitors to our city.

    But perhaps the simplest public policy issue is this: If merchants feel they need to collect additional revenue from their customers, why don’t they simply raise their prices? Why the roundabout process of the state collecting extra sales tax, only to ship it back to the merchants in the CID?

    No one at Wichita city hall wants to talk about this, at least in public.

    Next month the city will hold public hearings for three proposed CIDs in addition to the two approved yesterday. I suspect that the next year will see many more proposed.

    With each intervention like this — not to mention each TIF district, STAR bond, industrial revenue bond with accompanying tax abatement, forgivable loan, EDX property tax exemption, historic preservation income tax credit, and other programs — Wichita and Kansas move farther away from the principles of economic freedom that have created prosperity, and move closer to a centrally planned economy. Those have not worked out well.