Voice For Liberty

Tag: Politics

  • Wichita City Council can’t judge airport contract

    On Tuesday the Wichita City Council will conduct a hearing for review of the award of a contract for the construction of the new Wichita Airport terminal. But because of relationships between nearly all council members — especially Wichita Mayor Carl Brewer — and one of the parties to the dispute, the city council should not participate in this decision.

    The contract, worth about $100 million, was awarded to Dondlinger and Sons and its partner. Dondlinger has built many large projects, including INTRUST Bank Arena. But the city then ruled that Dondliger’s bid is “unresponsive.” The reason is that Dondlinger may not have met bid requirements regarding disadvantaged and minority business enterprises.

    The firm next in line to receive the contract is Key Construction of Wichita. If the city council finds against Dondllinger, Key gets the contract, presumably. That’s the source of the problem the city council faces, as Key is heavily involved in politics, with its executives and their spouses often making the maximum allowed campaign contributions to nearly all members of the council. Personal relationships may play a role, too.

    For the mayor and current council members, here is my tabulation of how much Key-associated persons made to each member’s most recent campaign:

    Carl Brewer: $4,500
    Jeff Longwell (district 5, west and northwest Wichita): $4,000
    Lavonta Williams (district 1, northeast Wichita): $3,000
    Pete Meitzner (district 2, east Wichita): $2,500
    Janet Miller (district 6, north central Wichita): $1,500
    James Clendenin (district 3, southeast and south Wichita): $1,000
    Michael O’Donnell (district 4, south and southwest Wichita): $0

    Is there a pattern to these contributions? That is, does Key make contributions to candidates with a specific political philosophy, such as conservatism or liberalism? Of the top three contributors, two have distinctly liberal ideas about taxation and spending, while the other is touting conservative credentials as he campaigns for another office. Patterns like this suggest that the contributions are made to gain access to officeholders, or for favorable consideration when the donor asks the council to vote to give it money or contracts. Key Construction does that a lot.

    Wichita mayor Carl Brewer with major campaign donor Dave Wells of Key Construction.

    The political influence of Key Construction extends beyond campaign contributions, too. Mayor Brewer’s personal Facebook profile has a photo album holding pictures of him on a fishing trip with Dave Wells of Key Construction.

    These political investments have paid off for Key Construction, as it has received a number of no-bid contracts over the years. Last August the council decided to award Key a no-bid contract to build the parking garage that is part of the Ambassador Hotel project. The no-bid cost of the garage was to be $6 million, according to a letter of intent. All council members except Michael O’Donnell (district 4, south and southwest Wichita) voted for the no-bid contract to Key Construction, although Mayor Carl Brewer was absent. It is likely that he would have voted with the majority, however.

    Later the city decided to place the contract for bid. Key Construction won the bidding, but for a price some $1.3 million less.

    What citizens need to know is that the city council, except O’Donnell, was willing to spend an extra $1.3 million on a project awarded to a politically-connected construction firm.

    So should the Wichita City Council make the decision on the airport contract? City documents don’t indicate whether Tuesday’s hearing is of a quasi-judicial nature, as it is sometimes when the council rules on certain matters involving appeal of decisions made by city authorities. But the council is being asked to make decisions involving whether discretion was abused or whether laws were improperly applied.

    That sounds a lot like the role of judges. In 2009 the U.S. Supreme Court ruled that, in the words of legal watchdog group Judicial Watch, “… significant campaign contributions or other electoral assistance pose a risk of actual bias. Writing for the majority, Justice Anthony Kennedy said: ‘Just as no man is allowed to be a judge in his own cause so too can fears of bias arise when a man chooses the judge in his own cause.’”

    Judicial Watch also noted “The ruling will likely affect judges in 39 states that elect them — including Washington, Texas and California — from presiding over cases in which their campaign contributions could create a conflict of interest. The nation’s judicial code has long said that judges should disqualify themselves from proceedings in which impartiality might reasonably be questioned, but the Supreme Court ruling is the first to address hefty election spending.”

    The mayor and council members are not judges. But they’re being asked to make a judge-like decision. If held to the same standards as the U.S. Supreme Court says judges must follow, Mayor Brewer and the five council members who accepted campaign contributions from Key Construction need to recuse themselves from Tuesday’s decision on the Wichita Airport construction contract. A similar argument can be made for city manager Robert Layton and all city employees. Directly or indirectly they serve at the pleasure of the council.

    Finally, this episode is another example of why Wichita and Kansas need pay-to-play laws.

  • SWATing a threat to political speech

    Conservative bloggers are being targeted with an illegal and dangerous tactic with the aim of silencing or moderating their voices. The tactic is SWATing (from the police special forces often named Special Weapons and Tactics). The perpetrator makes a telephone call to police falsely reporting that a crime — usually a violent crime — has been committed or is in progress at a blogger’s home.

    Erick Erickson of the prominent conservative blog RedState relates the story of his SWATing: “Sunday night as my family and sister’s family were around the dinner table and playing outside, sheriff’s deputies pulled into my driveway responding to an accidental shooting at my home. One deputy was in the driveway. Another blocked the end of the driveway with his car. A neighbor tells me another was up the hill from the house. There was no shooting at my home. Someone called 911, claimed to be at my home, and claimed to witness a shooting at my home.”

    Besides the illegality of making a false police report, the tactic is dangerous to both police officers and people at or nearby the targeted address.

    U.S. Senator Saxby Chambliss of Georgia has written to Attorney General Eric Holder expressing his concern regarding the SWATing attacks. In his letter he wrote “Any potentially criminal action that incites fear, seeks to silence a dissenting opinion, and collaterally wastes the resources of law enforcement should be given close scrutiny at all levels.”

    Later he added “The perpetrators appear to be targeting individuals who are vigorously exercising their First Amendment rights to political speech. As you know, these reported efforts to intimidate those who choose to enter the political forum and express their opinions are in conflict with the founding principles of our nation. Regardless of any potential political differences that may exist, threats and intimidation have no place in our national political discourse. Those who choose to enter into that political discourse should not have to worry about potential threats to their or their family’s safety.”

    The purpose of SWATing is to, as Chambliss explained, silence conservative bloggers, or make them less likely to write posts and articles. Besides the attempt to tamp down civil debate and discourse, the SWATing technique is illegal and potentially deadly. It goes beyond bullying. Those who use it are domestic terrorists.

    The use of SWATing against conservatives stands in contrast to a recent New York Times column by Charles M. Blow. In the column, Blow uses the bullying of an elderly bus monitor to draw a larger conclusion: Republicans are bullies. “… bullying has become boilerplate. Hiss and taunt. Tease and intimidate. Target your enemies and torture them mercilessly. Maintain primacy through predation.”

    Later Blow wrote “But bullying is always about power — projecting more than you have in order to accrue more than your share.” That describes SWATing: Illegally summoning police power to target and intimidate your enemies.

  • KNEA email a window into teachers union

    An email from an official of Kansas National Education Association (KNEA) asks union members to switch their voter registration party in order to vote in Republican party primaries.

    The fear of the teachers union is that control of the Kansas Senate may fall into hands of conservative members instead of the coalition of Democrats and liberal Republicans that forms the working majority in that chamber. If that happens, it would not be good for union members’ “professional interests,” says the email.

    The email, printed in its entirety below, is from Tony White, Director of UniServ Southeast. UniServs are regional offices that provide services to teachers union members.

    In the email, White tells union members that state revenues will be reduced by 40 to 50 percent as a result of the recent Kansas tax reform legislation. This is a great exaggeration. Projections by Kansas Legislative Research indicate a decline of revenue of about 12 percent from 2013 to 2014. After that year revenue rises each year, and by 2018 revenue is projected to rise to nearly the level of 2012.

    White also writes that due process — tenure, in other words — and bargaining for salaries may be lost. While both of these reforms would be good for Kansas schoolchildren and taxpayers, they don’t seem likely very soon in Kansas.

    Surprisingly, the email never mentions what the Kansas school establishment and the teachers union fears most: accountability through market-based competition. This could happen through charter schools, vouchers, or tax credit scholarships. It is this accountability that teachers unions fear most. So far Governor Sam Brownback has not forcefully advocated for these reforms that would greatly help Kansas children.

    The tone of the email, overall, is that it is teachers that are important. Never once are schoolchildren mentioned. This email is another example of how the Kansas school spending establishment, of which KNEA is a prime member and political force, exists for the benefit of adults, not children and parents.

    Subject: KNEA Email
    Tony.White@KNEA.ORG 6/16/2012 6:13 PM
    Although this might seem like a rather personal request, I’d like you to register to vote, and more specifically, to register to vote as a Republican.

    That way you can vote for a supporter of public schools in the August 7 primary in either Senate 13 (Marshall v LaTurner) or new Senate 15 (Umbarger v King). The winner of those primaries will undoubtedly be the winner in November, and if you’re not a registered Republican, you don’t get to help make that decision.

    Here’s the email I sent to our members, and the links to change one’s registration.

    AND TELL ANYONE ELSE YOU KNOW THAT CAN HELP OUT. It’s no time for being shy. We’ll regret losing this next election for a long, long time.

    Subject: Registration and Voting

    I am sending this information (and a few opinions, too) to you as a KNEA member in SEK.

    I realize about every election we tell you how important this one is. Those elections sure did seem important at the time. But this summer in the Republican primary Senate races and then this fall in some of the House races, the stakes simply could not be higher for teachers and for schools.

    And right out of the gate, when I talk elections and politics, I means our Kansas races for Kansas House and especially the Kansas Senate.

    With the electoral college system and our current Congresswoman, there’s no point spending any time or energy on the national level. It’s a lost cause. But when it comes to teachers and schools, it matters more what happens in Topeka anyway, and we can affect those!

    If we don’t retain the moderate majority in the State Senate, we will be in a world of hurt. The tax cuts signed this spring by Governor Brownback – if unchecked — will reduce state revenue by 40-50%, and the deep cuts to schools and every other state service or function — will inevitably follow. Teacher protections like due process and the right to bargain salaries will probably be lost. Our current public school system will be unrecognizable.

    That’s if we lose this election. So, let’s win it.

    How can you help?

    Vote in the Republican primary on Tuesday August 7. Vote for our moderate Republican incumbent friends, for 4-term Senator Dwayne Umbarger and for Senator Bob Marshall. They have supported us, and it’s time to step up and help them.

    1. If you’re already a registered Republican, you’re ready to go. Make sure you vote.

    2. If you’re registered to vote, but not registered as a Republican, you need to switch. Otherwise, you can’t vote in the primary, and frankly, these two critical races will be settled in the primary in
    August. The primary winner will cruise in November.

    3. If you’re now a Democrat, you need to switch to a Republican. I know, I know, but otherwise you can’t vote in the election that counts, and that’s the Republican primary. I did it today, just like we have over the years to vote for Jana Shaver or Val DeFever for State Board. You can switch right back after the election, and we promise not to tease you about it.

    How does one register in the first place? Or change registration to a Republican? It’s the same form, and you can even do it online. Here’s the online link: https://www.kdor.org/voterregistration/Default.aspx

    You use your driver’s license. I just tried the link and it worked fine. It’s submitted to the Clerk in Crawford County and they’ll mail me a confirmation. I’m a Republican!

    But if the site gives you trouble, there is also the old-fashioned paper form: http://www.kssos.org/forms/elections/voterregistration.pdf

    One prints it, fills it out and takes it in to the county clerk or mails it in. The addresses for all 105 counties are right there on the back of the form.

    Registration has to be done by July 17 – or you’re locked out of the primary. So get your paperwork right so you can vote to protect our profession and our schools.

    And print off extra copies of the form for spouses, adult kids, neighbors, friends, or kindred spirits. If they will vote to support public schools, we want them and need them on August 7. It’s the same form all across Kansas – it just goes to the appropriate clerk of the county where the person lives. Or use the online link.

    And if you want to get involved in either the Umbarger or Marshall campaign, from planting yard signs to letters to the editor to walking with the candidates – just let me know. They both are clearly better for our professional interests than their primary opponent.

  • In Kansas, redistricting went well, after all

    The Kansas political class is upset because a federal court drew new districts they way they should be drawn — compactly and contiguously, and also considering communities of interest.

    The court, in its opinion, explained: “we have developed new legislative maps that distribute population as evenly as practicable between districts, while also considering to a much lesser degree the state’s legislative policies guiding redistricting.”

    In drawing Congressional districts the court took into consideration the Roeck score, a measure of compactness.

    What the court has done is to ignore the desires of the political class. The legislature’s consideration when attempting redistricting was all politics, all the time. Incumbents were protected and not pitted against each other. The residencies of potential challengers to incumbents were considered. The infighting was so protracted that the legislature failed to produce new districts, and is said to have affceted progress on other important legislation.

    It’s good the court didn’t consider the entrenched political class, because they don’t count. The legislature should not be run as a club. Said the court: “We have subordinated protection of incumbents to other state policy factors and, of course, to the constitutional requirement of one person, one vote. … any efforts to protect incumbents would require our choosing among incumbents, an inherently political exercise that we are neither able nor inclined undertake.”

    In creating the new districts for the Kansas House and Senate, the court — unintentionally — imposed a rough and not complete one-time implementation of term limits. In the House, there are 48 districts with more than one incumbent and 25 districts with no incumbent. This means a lot of turnover, which is good. We need fewer professional politicians and more citizens in legislatures. This is not as large a problem in Kansas as in the U.S. Congress, as our legislature meets for four months each year, and legislators are pretty much regular citizens the remainder of the year. But still, the redistricting battle has reminded us that there is indeed a political class in Kansas that believes it is entitled to office, term after term.

    Further evidence of an entrenched political class is the number — five at current count — of incumbents who moved their residence in order to run.

    I believe that Kansans will appreciate the large number of new members that are likely to take office next January. Hopefully the new members will realize the benefit themselves and implement term limits in Kansas. That would require an amendment to the constitution, which requires a two-thirds vote of each chamber of the legislature. Then, the people would have to pass the amendment by a simple majority. It’s quite likely that voters would approve term limits, as they are consistently popular with voters.

    Kansas Governor Sam Brownback does not play a formal role in passing constitutional amendments. His involvement would be to exercise his influence. Brownback, when elected to the U.S. Senate, imposed a two-term limit in himself, and he held true to that pledge. He has spoken in favor of term limits for members of Congress.

  • Regulation for the sake of business

    There are many examples of how the conventional wisdom regarding regulation is wrong, That wisdom being Republicans and conservatives are in bed with government, seeking to unshackle business from the burden of government regulation. Democrats and liberals, on the other hand, are busily crafting regulations to protect the middle class from the evils of big business. As it turns out, both Democrats and Republicans love creating regulations, and big business loves these regulations. Business often uses government regulation as way to harm its competitors or gain advantage for itself, which is contrary to the principles of free markets and capitalism.

    Holman W. Jenkins., Jr. explains how regulation works in the real world: “When some hear the word “regulation,” they imagine government rushing to the defense of consumers. In the real world, government serves up regulation to those who ask for it, which usually means organized interests seeking to block a competitive threat. This insight, by the way, originated with the left, with historians who went back and reconstructed how railroads in the U.S. concocted federal regulation to protect themselves from price competition. We should also notice that an astonishingly large part of the world has experienced an astonishing degree of stagnation for an astonishingly long time for exactly such reasons.” (Let’s Restart the Green Revolution, Wall Street Journal.)

    Another example of a big business using regulation as a competitive weapon comes from 2005 when Walmart came out in favor of raising the national minimum wage. Providing an example of how regulation is pitched as needed for the common good, Walmart’s CEO said that he was concerned for the plight of working families, and that he thought the minimum wage level of $5.15 per hour was too low. If Walmart — a company the political left loves to hate as much as any other — can be in favor of increased regulation of the workplace, can regulation be a good thing? Had Walmart discovered the joys of big government?

    The answer is yes. Walmart discovered a way of using government regulation as a competitive weapon. This is often the motivation for business support of regulation. In the case of Walmart, it was already paying its employees well over the current minimum wage. At the time, some sources thought that the minimum wage could be raised as much as 50 percent and not cause Walmart any additional cost — its employees already made that much.

    But its competitors didn’t pay wages that high. If the minimum wage rose very much, these competitors to Walmart would be forced to increase their wages. Their costs would rise. Their ability to compete with Walmart would be harmed.

    In short, Walmart supported government regulation as a way to impose higher costs on its competitors. It found a way to compete outside the marketplace. It abandoned principles of free markets and capitalism, and provided a lesson as to the difference between capitalism and business. And it did it while appearing noble.

    Many, particularly liberals and progresives, make no distinction between business and capitalism. But we need to learn to recognize the difference if we are to have a thriving economy based on free-wheeling, competitive markets that foster innovation, or continue our decline into unproductive crony capitalism.

    In the following excerpt from his book The Big Ripoff: How Big Business and Big Government Steal Your Money, author Timothy P. Carney explains that big business is able to use regulation as a blunt and powerful tool against competitors, and also as a way to improve its image, just like Walmart asking for a higher minimum wage.

    How does regulation help big business?

    Excerpt from The Big Ripoff: How Big Business and Big Government Steal Your Money, by Timothy P. Carney

    If regulation is costly, why would big business favor it? Precisely because it is costly.

    Regulation adds to the basic cost of doing business, thus heightening barriers to entry and reducing the number of competitors. Thinning out the competition allows surviving firms to charge higher prices to customers and demand lower prices from suppliers. Overall regulation adds to overhead and is a net boon to those who can afford it — big business.

    Put another way, regulation can stultify the market. If you’re already at the top, stultification is better than the robust dynamism of the free market. And according to Nobel Laureate economist Milton Friedman:

    The great virtue of free enterprise is that it forces existing businesses to meet the test of the market continuously, to produce products that meet consumer demands at lowest cost, or else be driven from the market. It is a profit-and-loss system. Naturally, existing businesses prefer to keep out competitors in other ways. That is why the business community, despite its rhetoric, has so often been a major enemy of truly free enterprise.

    There is an additional systemic reason why regulation will help big business. Congress passes the laws that order new regulations, and executive branch agencies actually construct the regulations. The politicians and government lawyers who write these rules rarely do so without input. Often the rule makers ask for advice and information from labor unions, consumer groups, environmental groups, and industry itself. Among industry the stakeholders (beltway parlance to describe affected parties) who have the most input are those who can hire the most effective and most connective lobbyists. You can guess this isn’t Mom and Pop.

    As a result, the details of the regulation are often carefully crafted to benefit, or at least not hurt, big business. If something does not hurt you, or hurts you a little while seriously hindering your competition, it is a boon, on balance.

    Another reason big business often cries “regulate me!” is the goodwill factor. If a politician or bureaucrat wants to play a role in some industry, and some executive says, “get lost,” he runs the risk of offending this powerful person. That’s bad diplomacy. Bureaucrats, by their nature, do not like to be told to mind their own business. Supporting the idea of regulation but lobbying for particular details is usually better politics.

  • Attacks on ALEC hypocritical and unfair

    By Steven Greenhut

    SACRAMENTO — A cadre of liberal groups has decided the scourge of the nation is a little-known conservative organization that provides model legislation to state legislators across the country.

    Overheated criticisms of the American Legislative Exchange Council have been echoed throughout the media following the Trayvon Martin shooting in Sanford, Fla., because ALEC had advocated the “Stand Your Ground” laws that anti-gun-rights activists blame for the tragic shooting.

    The public rap against ALEC is that, as the Atlantic magazine recently explained, “[I]t’s a shadowy back-room arrangement where corporations pay good money to get friendly legislators to introduce pre-packaged bills in state houses across the country.”

    Atlantic highlights ALEC Exposed, a group run by a former Justice Department official who created a wiki site spotlighting more than 800 bills that emanated from the supposed ALEC star chamber. Other groups, including a conspiracy-minded outfit that claims ALEC’s efforts to battle voter fraud are designed to keep black people from voting, have been strong-arming corporate sponsors into abandoning ALEC. Given the backbone-challenged nature of corporate America when it comes to political matters, it’s no surprise the scare tactics are working.

    Even ALEC this week announced it is backing away from gun rights and social issues and focusing entirely on free-market economic and business issues. I agree with that decision and personally find “Stand Your Ground” laws to be misguided despite my strong support for gun rights, but it’s too bad these reasonable changes — ones that will bolster the organization in the long run — came across as capitulation. That will only embolden ALEC’s enemies. And those enemies have few good arguments, which is why they spin their conspiratorial yarns and try to make it seem as if ALEC is doing something unethical or unconventional. These leftist critics don’t like ALEC simply because ALEC advocates policies they oppose.

    ALEC’s structure isn’t that different from the one taken by “mainstream” organizations such as the National Conference of State Legislatures, whose foundation includes donors of at least $25,000 that’s a who’s who of corporate America: AT&T, Walmart, Visa, Time Warner Cable, AstraZeneca Pharmaceuticals. These donors include the National Education Association, which is a prominent labor union.

    Even worse, NCSL uses taxpayer dollars to fund many of its activities, which is something ALEC most definitely does not use. NCSL takes positions on issues. It champions itself as a nonpartisan forum for legislators to debate issues, but many critics recognize its left-of-center tilt.

    “A number of Utah lawmakers are so upset at the liberal tendencies of the National Conference of State Legislatures they are thinking of picking up their marbles and going home,” wrote the Salt-Lake Tribune’s Paul Rolly in a 2009 column. Delegations from other states expressed similar concerns.

    “Between the Senate and the House, the Utah Legislature pays about $100,000 in dues annually to the NCSL,” Rolly added. “Some lawmakers now are saying that money could be better spent. They’re also taking a harder look at the American Legislative Exchange Council (ALEC), as an alternative national association for legislators who traditionally takes conservative and pro-business stands on most issues.”

    ALEC clearly has grown as an alternative to this group. As is often the case, so-called mainstream trade associations and organizations almost always tilt in a liberal direction, even while claiming to be fair-minded and nonpartisan. It’s not surprising that government-funded organizations end up promoting more government funding and rarely push for reforms to roll back the size of government.

    I find this so often in so many spheres. The National League of Cities and its state chapters instantly jump to mind. They dominate the urban-related agenda in most capitols, but that group’s priorities are skewed hard to the left, as the group favors bigger government, controversial urban redevelopment policies and allowed the massive pension increases of the past decade to explode without complaint. I know of more conservative city officials who have talked about coming up with an alternative that researches and advances free-market-friendly issues rather than jumping on board the big-government status quo. What’s wrong with that? Isn’t that how our system is designed to operate?

    Since when is it awful to create a privately funded organization that advances constructive policy ideas? It’s far better to have corporate sponsors voluntarily pay for the group than to force the rest of us to pay for it through our tax dollars, which is how NCSL and many other organizations operate. Why aren’t activists targeting agenda-driven groups that live off of taxpayer dollars? We know the answer — they agree with those groups’ agenda and disagree with the agenda of conservative alternative organizations such as ALEC.

    By the way, Atlantic and other critics can complain about “pre-packaged conservative legislation,” but interest groups from the left and right often promote model legislation. It’s a good way to get policy preferences in play. This isn’t nefarious. Consider also that lobbyists often write bills on behalf of legislators. We know that members of Congress rarely read the bills they vote upon, even on hugely significant matters such as national health-care policy. What ALEC does is far less nefarious than the standard operating procedure in the U.S. Capitol and state capitols.

    Leftists don’t like the policies ALEC promotes, so they are using intimidation tactics to shut it down. It’s that simple. They are within their rights to do this, but let’s at least recognize that it flows not from any problem with how ALEC operates, but from the most transparent political motives.

    Steven Greenhut is vice president of journalism at the Franklin Center for Government and Public Integrity. He is based in Sacramento, Calif.

  • ALEC should resist liberal pressure groups

    Today’s Wall Street Journal explains how left-wing activists are using fear of the racism label to shut down free speech and debate. The target of their current smear campaign is American Legislative Exchange Council, or ALEC.

    Liberals can’t stand ALEC because it is a strong and influential advocate for free market and limited government principals in state legislatures. Liberals accuse ALEC of supplying model legislation which may influence the writing of actual state law, or even become state law in some cases. Of course, liberal advocacy groups do this too, but they don’t let that get in the way of their criticism of ALEC.

    The reality is that all sorts of people and special interest groups seek to influence the writing of laws. But for laws to take effect — no matter who proposes them — they must be passed by legislatures and signed by the chief executive (or a veto must be overturned).

    The false charges of racism are particularly troubling, as no one wants to be labeled as such. That’s why scoundrels demonize their opponents with charges of racism, writes the Journal, and it’s become a powerful weapon for left-wing activists: “The ugly, race-baiting anti-ALEC campaign is typical of today’s liberal activism. It’s akin to the campaigns to smear libertarian donors Charles and David Koch and to exploit shareholder proxies to stop companies from giving to political campaigns or even the Chamber of Commerce. The left these days isn’t content merely to fight on the merits in legislatures or during elections. If they lose, they resort to demonizing opponents and trying to shut them down. The business community had better understand that ALEC won’t be the last target.”

    As it turns out, the motivations of some contributors to ALEC are quite narrow. Coca-Cola wanted help from ALEC only in the opposition to soft drink taxes: “So Coke executives are happy to get ALEC’s help in their self-interest but head for the tall grass when ALEC needs a friend.”

    Liberals accuse ALEC of being a front group for corporations, promoting only legislation that advances the interests of corporations or business at the expense of others. When you examine specific examples of these charges, the proposals being criticized often reduce taxes for everyone or reduce harmful and unnecessary regulations. If ALEC does promote legislation that caters to special interest groups, it should stop doing so.

    Besides services to legislators, ALEC provides a valuable service to the public: The Rich States, Poor States publication that examines why some states perform better in economic growth and opportunity than others. The fifth edition was released last week.

    Recently a city council member from a small town asked me if there were resources to help city council or county commission members understand and apply the principals of free markets and limited government to city and county governments. I looked and asked a few people. The answer is no, there appears to be no such resource. This seems like a growth opportunity for ALEC or a new organization. There are several well-known organizations that strive to advance the size and scope of city and county governments, and these need a counter-balance.

    Shutting Down ALEC

    Playing the race card to silence a free-market policy voice

    Is it suddenly disreputable to advocate free-market policies? That’s the question raised by a remarkable political assault on the American Legislative Exchange Council (ALEC), which promotes reform in the 50 states. Led by former White House aide Van Jones, various left-wing activists and media are bullying big business to cut off ALEC’s funding. So much for free and open debate.

    Founded in 1973, ALEC is a group of state lawmakers who meet to share and spread conservative policy ideas. ALEC’s main focus is fiscal and economic policy, notably at the moment pension and lawsuit reform, tax and spending limitation, and school choice. For years it labored in obscurity, its influence rising or falling with the public mood. But after conservatives made record gains in state legislatures in 2010, the left began to target ALEC for destruction.

    Continue reading at the Wall Street Journal (no subscription required)

  • Thinking beyond stage one in economic development for Wichita

    Critics of the economic development policies in use by the City of Wichita are often portrayed as not being able to see and appreciate the good things these policies are producing, even though they are unfolding right before our very eyes. The difference is that some look beyond the immediate — what is seen — and ask “And then what will happen?” — looking for the unseen.

    Thomas Sowell explains the problem in a passage from the first chapter of Applied economics: thinking beyond stage one:

    When we are talking about applied economic policies, we are no longer talking about pure economic principles, but about the interactions of politics and economics. The principles of economics remain the same, but the likelihood of those principles being applied unchanged is considerably reduced, because politics has its own principles and imperatives. It is not just that politicians’ top priority is getting elected and re-elected, or that their time horizon seldom extends beyond the next election. The general public as well behaves differently when making political decisions rather than economic decisions. Virtually no one puts as much time and close attention into deciding whether to vote for one candidate rather than another as is usually put into deciding whether to buy one house rather than another — or perhaps even one car rather than another.

    The voter’s political decisions involve having a minute influence on policies which affect many other people, while economic decision-making is about having a major effect on one’s own personal well-being. It should not be surprising that the quantity and quality of thinking going into these very different kinds of decisions differ correspondingly. One of the ways in which these decisions differ is in not thinking through political decisions beyond the immediate consequences. When most voters do not think beyond stage one, many elected officials have no incentive to weigh what the consequences will be in later stages — and considerable incentives to avoid getting beyond what their constituents think and understand, for fear that rival politicians can drive a wedge between them and their constituents by catering to public misconceptions.

    The economic decisions made by governing bodies like the Wichita City Council have a large impact on the lives of Wichitans. But as Sowell explains, these decisions are made by politicians for political reasons.

    Sowell goes on to explain the danger of stopping the thinking process at stage one:

    When I was an undergraduate studying economics under Professor Arthur Smithies of Harvard, he asked me in class one day what policy I favored on a particular issue of the times. Since I had strong feelings on that issue, I proceeded to answer him with enthusiasm, explaining what beneficial consequences I expected from the policy I advocated.

    “And then what will happen?” he asked.

    The question caught me off guard. However, as I thought about it, it became clear that the situation I described would lead to other economic consequences, which I then began to consider and to spell out.

    “And what will happen after that?” Professor Smithies asked.

    As I analyzed how the further economic reactions to the policy would unfold, I began to realize that these reactions would lead to consequences much less desirable than those at the first stage, and I began to waver somewhat.

    “And then what will happen?” Smithies persisted.

    By now I was beginning to see that the economic reverberations of the policy I advocated were likely to be pretty disastrous — and, in fact, much worse than the initial situation that it was designed to improve.

    Simple as this little exercise may sound, it goes further than most economic discussions about policies on a wide range of issues. Most thinking stops at stage one.

    We see stage one thinking all the time when looking at government. In Wichita, for example, a favorite question of city council members seeking to justify their support for government intervention such as a tax increment financing (TIF) district or some other form of subsidy is “How much more tax does the building pay now?” Or perhaps “How many jobs will (or did) the project create?”

    These questions, and the answers to them, are examples of stage one thinking. The answers are easily obtained and cited as evidence of the success of the government program.

    But driving by a store or hotel in a TIF district and noticing a building or people working at jobs does not tell the entire story. Using the existence of a building, or the payment of taxes, or jobs created, is stage one thinking, and no more than that.

    Fortunately, there are people who have thought beyond stage one, and some concerning local economic development and TIF districts. And what they’ve found should spur politicians and bureaucrats to find ways to move beyond stage one in their thinking.

    An example are economists Richard F. Dye and David F. Merriman, who have studied tax increment financing extensively. Their article Tax Increment Financing: A Tool for Local Economic Development states in its conclusion:

    TIF districts grow much faster than other areas in their host municipalities. TIF boosters or naive analysts might point to this as evidence of the success of tax increment financing, but they would be wrong. Observing high growth in an area targeted for development is unremarkable.

    So TIFs are good for the favored development that receives the subsidy — not a surprising finding. What about the rest of the city? Continuing from the same study:

    If the use of tax increment financing stimulates economic development, there should be a positive relationship between TIF adoption and overall growth in municipalities. This did not occur. If, on the other hand, TIF merely moves capital around within a municipality, there should be no relationship between TIF adoption and growth. What we find, however, is a negative relationship. Municipalities that use TIF do worse.

    We find evidence that the non-TIF areas of municipalities that use TIF grow no more rapidly, and perhaps more slowly, than similar municipalities that do not use TIF.

    In a different paper (The Effects of Tax Increment Financing on Economic Development), the same economists wrote “We find clear and consistent evidence that municipalities that adopt TIF grow more slowly after adoption than those that do not. … These findings suggest that TIF trades off higher growth in the TIF district for lower growth elsewhere. This hypothesis is bolstered by other empirical findings.”

    Here we have an example of thinking beyond stage one. The results are opposite of what one-stage thinking produces.

    Some city council members are concerned about creating jobs, and are swayed by the promises of developers that their establishments will employ a certain number of workers. Again, this thinking stops at stage one. But others have looked farther, as has Paul F. Byrne of Washburn University. The title of his recent report is Does Tax Increment Financing Deliver on Its Promise of Jobs? The Impact of Tax Increment Financing on Municipal Employment Growth, and in its abstract we find this conclusion regarding the impact of TIF on jobs:

    Increasingly, municipal leaders justify their use of tax increment financing (TIF) by touting its role in improving municipal employment. However, empirical studies on TIF have primarily examined TIF’s impact on property values, ignoring the claim that serves as the primary justification for its use. This article addresses the claim by examining the impact of TIF adoption on municipal employment growth in Illinois, looking for both general impact and impact specific to the type of development supported. Results find no general impact of TIF use on employment. However, findings suggest that TIF districts supporting industrial development may have a positive effect on municipal employment, whereas TIF districts supporting retail development have a negative effect on municipal employment. These results are consistent with industrial TIF districts capturing employment that would have otherwise occurred outside of the adopting municipality and retail TIF districts shifting employment within the municipality to more labor-efficient retailers within the TIF district.

    While this research might be used to support a TIF district for industrial development, TIF in Wichita is primarily used for retail development. And, when thinking beyond stage one, the effect on employment — considering the entire city — is negative.

    It’s hard to think beyond stage one. It requires considering not only the seen, but also the unseen, as Frederic Bastiat taught us in his famous parable of the broken window. But over and over we see how politicians at all levels of government stop thinking at stage one. This is one of the many reasons why we need to return as much decision-making as possible to the private sector, and drastically limit the powers of politicians and governments.

  • For Koch critics, facts aren’t part of the equation

    A Saturday op-ed in the Lawrence Journal-World begins with: “What is it, or why is it, that the name Koch, particularly here in Lawrence and Kansas, seems to trigger such angry, passionate and negative responses from a certain segment of the community, particularly among some at Kansas University?”

    It’s a good question. When people insert themselves into politics, there will be debate and criticism. I don’t think Charles and David Koch expect a free pass. But some of the online comments written in reaction to this op-ed show, however, that facts and reason won’t stand in the way of those who use demonization of Charles G. Koch and David H. Koch, principals of Wichita-based Koch Industries, to advance their political agendas.

    Simons’ op-ed is generally accurate in its depiction of Charles and David Koch, although the company says Koch has not contributed to FreedomWorks, as is reported. But the reader comments — that’s where things really go off the mark.

    Here’s a comment that is representative of many: “They would use their wealth to suppress innovation and competition. It’s another case of ‘I’ve got mine, and I want to make sure you don’t get yours.’ Why don’t they set up a loan company to encourage small businesses? Why don’t they hire more workers and give their present workers more benefits? Instead they want to buy the government, so they can control things instead of empowering others.”

    As to suppressing innovation and competition: For decades the Kochs have supported free markets and competition through capitalism, which are the engines of innovation, not barriers. Last year Charles Koch, in the Wall Street Journal, strongly advocated for capitalism over cronyism. On the relationship between government and business, he wrote that too many business firms have practiced “crony capitalism”: lobbying for special favors, subsidies, and regulations to keep competitors — who may be more efficient — out of the way.

    While it’s more difficult than practicing cronyism, competing in open markets assures that firms that efficiently provide goods and services that consumers demand are the companies that thrive, Koch added. It is these efficient firms that raise our standard of living. When politically-favored firms are propped up and bailed out, our economy is weakened: “Subsidizing inefficient jobs is costly, wastes resources, and weakens our economy.”

    In the introduction to The Morality of Capitalism, Tom G. Palmer explains further how genuine capitalism is a system of innovation and creativity:

    The term ‘capitalism’ refers not just to markets for the exchange of goods and services, which have existed since time immemorial, but to the system of innovation, wealth creation, and social change that has brought to billions of people prosperity that was unimaginable to earlier generations of human beings. Capitalism refers to a legal, social, economic, and cultural system that embraces equality of rights and ‘careers open to talent’ and that energizes decentralized innovation and processes of trial and error. … Capitalist culture celebrates the entrepreneur, the scientist, the risk-taker, the innovator, the creator. … Far from being an amoral arena for the clash of interests, as capitalism is often portrayed by those who seek to undermine or destroy it, capitalist interaction is highly structured by ethical norms and rules. Indeed, capitalism rests on a rejection of the ethics of loot and grab. … Capitalism puts human creativity to the service of humanity by respecting and encouraging entrepreneurial innovation, that elusive factor that explains the difference between the way we live now and how generation after generation after generation of our ancestors lived prior to the nineteenth century.

    The charge of “I’ve got mine, and I want to make sure you don’t get yours” is often leveled against the wealthy, and for some, that may drive their policies. It’s important to know, though, that the policies of economic freedom that the Kochs have promoted are more important to poor people than the wealthy. A glance at the Economic Freedom of the World reports confirms what history has taught us: Countries with market-based and free, or relatively free, economies become wealthy. Poor countries generally do not have market-based economies and therefore little economic freedom, although the ruling class usually lives well.

    There is concern that economic freedom is on the decline in America, and that our future is threatened by this.

    When the writer asks “Why don’t they set up a loan company to encourage small businesses?” I wold refer them to Koch Ventures and Koch Genesis, two companies that do this.

    Finally — for this writer — comes the allegation that Charles and David Koch want to buy government “so they can control things instead of empowering others.” This charge is not supported by facts and what the Kochs have actually done for decades. Institutions founded or supported by the Kochs such as Cato Institute, Mercatus Center at George Mason University, and Americans for Prosperity Foundation are dedicated to limited government and personal liberty. This, along with their support of capitalism — which, as Palmer explained above, leads to freedom, creativity, and individual empowerment for everyone.

    Another comment contained “In their ‘ideal’ libertarian world they could do what they want and pollute whenever they want.” This is yet another ridiculous charge.

    A statement on the KochFacts website states “recent critics have also claimed that Koch is one of the nation’s top 10 polluters. This study confuses pollution with permitted emissions, which are carefully regulated by the U.S. EPA and other agencies. The index labels as ‘polluters’ Ford Motor, General Motors, GE, Pfizer, Eastman Kodak, Sony, Honeywell, Berkshire Hathaway, Kimberly Clark, Anheuser Busch and Goodyear — corporations, like Koch companies, with significant manufacturing in the U.S. Emissions, a necessary by-product of manufacturing, are strictly monitored and legally permitted by federal, state and local governments.”

    Wait a minute: Didn’t the federal government take over General Motors? And GE and Berkshire Hathaway: Aren’t those run by personal friends of Barack Obama?

    The reality is that if we want the things these companies make for us, we must accept some emissions — pollution, if you will. The good news, however, is that manufacturing has become much more efficient with regards to emissions, and Koch Industries companies have lead the way. One report from the company illustrates such progress: “Over the last three years, Koch Carbon has spent $10 million to enhance environmental performance, including $5 million for dust abatement at one of its petroleum coke handling facilities. These investments have paid off. In 2008, Koch Carbon’s reportable emissions were 6.5 percent less than in 2000, while throughput increased 10.4 percent.”

    Even when Koch Industries does not agree with the need for specific regulations, the company, nonetheless, complies. Writing about an increase in regulation in the 2007 book The Science of Success: How Market-Based Management Built the World’s Largest Private Company, Charles Koch explained the importance of regulatory compliance: “This reality required is to make a cultural change. We needed to be uncompromising, to expect 100 percent of our employees to comply 100 percent of the time with complex and ever-changing government mandates. Striving to comply with every law does not mean agreeing with every law. But, even when faced with laws we think are counter-productive, we must first comply. Only then, from a credible position, can we enter into a dialogue with regulatory agencies to determine alternatives that are more beneficial. If these efforts fail, we can then join with others in using education and/or political efforts to change the law.”

    Koch companies have taken leadership roles in environmental compliance, explains another KochFacts page: “In 2000, EPA recognized Koch Petroleum Group for being ‘the first petroleum company to step forward’ to reach a comprehensive Clean Air Act agreement involving EPA and state regulatory agencies in Minnesota and Texas. Despite fundamental policy disagreements, then-EPA Administrator Carol Browner acknowledged Koch’s cooperation. She characterized the agreement as ‘innovative and comprehensive’ and praised the ‘unprecedented cooperation’ of Koch in stepping forward ahead of its industry peers.” Browner was no friend of industry, and had a “record as a strict enforcer of environmental laws during the Clinton years,” according to the New York Times.

    These types of facts are not relevant to many of those who left comments to the Journal-World piece. To the political left, the facts must not be allowed get in the way of a useful political narrative.

    Koch Industries and Koch brothers are assets to state

    By Dolph C. Simons, Jr., Lawrence Journal-World.

    What is it, or why is it, that the name Koch, particularly here in Lawrence and Kansas, seems to trigger such angry, passionate and negative responses from a certain segment of the community, particularly among some at Kansas University?

    … The answer to the question at the beginning of this column is that the Kochs are conservatives, some would say “ultra conservatives.” They support organizations such as the Cato Institute, Citizens for a Sound Economy, Americans for Prosperity and Freedom Works. Their critics have been quick to try to fault them for supposedly funneling money to the tea party movement. Some say the brothers have given more than $100 million to these conservative organizations.

    Charles and David Koch have been the lightning rods for liberal, anti-conservative forces in this country, and it is that likely liberal-leaning faculty members and administrators at KU, as well as at many other universities, have been critical of the Kochs in order to keep peace with their staffs.

    The sad, phony or hard-to-understand part of this situation is that the two Koch brothers attribute the success of their family-owned business to the guiding principles espoused by their market-based management philosophy.

    … Charles and David Koch have championed limited government, economic freedom and personal liberty and they have challenged excessive government spending. Their financial giving efforts — political and charitable, both personal and through their company and foundations — all have been lawful.

    This being the case, it would seem KU officials, as well as other state officials, should be trying to work with Koch Industries, Charles and David Koch and their foundations on ways to benefit the university and the state. They should be trying to embrace the Kochs rather than acting as if they were pariahs.

    Continue reading at Koch Industries and Koch brothers are assets to state.