Voice For Liberty

Tag: Regulation

  • The Four Loko challenge: not for me

    On Friday Wichita Eagle reporter Dion Lefler issued a challenge to me based on my criticism of FDA regulation of Four Loko, a beverage marketed to young people that contains lots of alcohol, the stimulant caffeine, and other energy-producing ingredients. See Will Voice for Liberty blogger Bob Weeks accept the Four Loko challenge?

    Dear Dion,

    The short answer is thank you for asking, but I won’t be accepting the challenge. After all, the can of Four Loko contains as much alcohol as a bottle of wine. Now I enjoy a cocktail or glass of beer now and then, but I don’t think I’d enjoy consuming that much alcohol quickly in a short time. (I think that’s what “shotgun” means.)

    Underlying this article is a serious public policy issue, described in Lefler’s reporting on the topic in the article Kansas scrutinizes alcoholic energy drink. Because the mix of caffeine and alcohol in this and similar beverages causes some people to consume more alcohol that they might realize, young people have been injured and hospitalized after consuming large quantities. The result is a call for banning the drink. Because I am not in favor of such regulation, I think I’m being accused of advocating the use of Four Loko by young people.

    The challenge faced by all who favor liberty over heavy-handed state regulation is that by not supporting — in this case — a law or regulation against Four Loko, critics accuse us of endorsing its use. Or, since we don’t support laws against these things, critics assume that we don’t care about the unfortunate people who have been, and may still be, harmed by use and abuse of Four Loko.

    I care. I’m sorry that young people have been harmed by this product. I don’t want anyone to be hurt or killed. But often regulation — no matter how well intended, no matter how sensible — doesn’t work. Sometimes regulation causes harmful unintended consequences.

    A recent example is the bans on texting while driving that have been passed in many states, including Kansas. Sounds like sensible regulation, doesn’t it? Who wants to see people harmed on our streets and highways because someone was pecking out a text message while speeding down the street?

    But as we learned a few months ago, the texting bans may not be working. According to the Highway Loss Data Institute: “… such bans are associated with a slight increase in the frequency of insurance claims filed under collision coverage for damage to vehicles in crashes.” Speculation is that the illegality of texting while driving causes people to attempt to disguise their texting, which increases the danger.

    Will banning Four Loko produced the desired result?

    There’s other ways to produce the effect that Four Loko and similar drinks provide, if people want that. One can simply drink coffee or consume caffeine in other forms while drinking alcohol. A popular cocktail in clubs (so I’m told) is Red Bull and vodka. Red Bull is a popular energy drink that contains a lot of caffeine and other ingredients designed to increase one’s energy level. Mixed with vodka, it’s pretty much the same recipe of active ingredients as Four Loko.

    But there’s not been much publicity about the negative effects of this cocktail, to the extent they exist. Perhaps it’s because the Red Bull/vodka drinkers may be an older group, while Four Loko is marketed towards young people.

    Now that the maker of Four Loko has announced a non-caffeinated version, how long will it be until people start mixing in or consuming NoDoz or other caffeine-containing products with this new version? Will this behavior be even more dangerous? The forbidden fruit is very tempting.

    The regulatory state

    In the Central Washington University incident that is often cited regarding Four Loko, the injured college students were “freshmen ranging in age from 17 to 19,” according to news reports. The legal drinking age in Washington is 21, so it was probably illegal for these young people to be possessing and consuming any type of alcoholic beverage.

    As Lefler reports, if Kansas wants to ban these products, it would probably take an act of the legislature. Assuming Kansas lawmakers would pass such a law and the governor would sign it — and it seems likely they would — the soonest it could be done in normal course is January, when the legislature starts its next session.

    This highlights a weakness in the state regulatory machinery. If we believe state regulation is the best way to deal with this product, what if the calendar says it’s May and the legislature has just adjourned, not to meet again until January? Shall the governor call a special session?

    At the federal level, the FDA news release from last week states: “FDA’s action today follows a November 2009 request to manufacturers to provide information on the safety of adding caffeine to their products.” Apparently this issue has had the attention of the FDA for a year, but only now is action being taken.

    But — regulation may work

    Because Four Loko is sold in stores that are already heavily regulated in most states, a ban on Four Loko and similar beverages will be relatively easy to enforce. Few liquor retailers will be willing to come under state sanction and possibly losing their licenses for selling these products. So regulation will likely be successful in getting rid of the product in legal sales outlets. But as mentioned above, the same recipe and effect can be had in a variety of ways, all legal.

    Which brings up a related point: What if there was a new variety of an already-illegal drug, perhaps marijuana, that caused harmful effects on the same level as Four Loko? How would we deal with that? Because sellers of marijuana already operate illegally in most states, they don’t have the same concerns about keeping their licenses as do liquor stores.

  • Kansas and Wichita quick takes: Thursday November 18, 2010

    But did he vote for him? The press release doesn’t say if he voted for the House Speaker Designee, but Congressman-in-waiting Mike Pompeo of the Kansas fourth district is pleased that John Boehner will be the next Speaker of the House of Representatives: “Congressman Boehner and I share the same vision for moving our nation in a new direction. Voters have made it clear they want smaller government, less spending and more individual freedom. The American people have directed us to put our country back on a course toward opportunity and economic prosperity. I look forward to working with Speaker Boehner and my colleagues in the 112th Congress as we work to meet the challenge before us.”

    Last call for Irish coffee? I’ve always thought that Irish coffee was the perfect food, providing four essential nutrients in one tasty beverage: alcohol, caffeine, sugar, and fat. But this beverage may soon be banned. A U.S. Food and Drug Administration news release states: “The U.S. Food and Drug Administration today warned four companies that the caffeine added to their malt alcoholic beverages is an ‘unsafe food additive’ and said that further action, including seizure of their products, is possible under federal law.” Coffee isn’t a “malt beverage,” I don’t believe, but what’s to stop the FDA from extending this prohibition?

    At least one will still earmark. Now that Lisa Murkowski has won reelection to the U.S. Senate, she “is in debt to nobody,” according to the Washington Examiner. And the seeming consensus on banning earmarks? “Murkowski has repeatedly said this week she will continue to request earmarks, justifying them because Alaska is a ‘young’ state (a ‘young state’ that takes five dollars in spending for every dollar in taxes it sends to Washington, according to the Cato Institute). Murkowksi points out that the Republican Senate Conference rule banning earmarks has no real enforcement mechanism, and says she’ll chose Alaska over the party. But Murkowski’s earmarking shows us that pork isn’t about helping out the home state as much as it’s about rewarding political donors and greasing the gears of the political patronage machine.”

  • Kansas and Wichita quick takes: Tuesday November 9, 2010

    Wichita city inspection staffing. Sunday’s Wichita Eagle carries a story detailing problems some southeast Wichita homeowners have with their homes. I’m not sure whether the story is being critical of the city inspection process, so I’ll quote the article: “[Central inspection superintendent Kurt] Schroeder said he can’t say for sure that the city did everything possible to prevent these problems. City inspectors granted building permits and conducted inspections at the houses at various stages of building. But he said the city has no records of final approvals for two houses in the neighborhood. It could be that the inspector signed off but didn’t enter it into the computer system, Schroeder said, but he can’t be sure.” … It’s not as though city inspectors are in short supply. In July, Wichita real estate developer Colby Sandlian spoke to the Wichita Pachyderm Club. As part of his talk, Sandlian said that during the 1950’s, when he started in the real estate business, Wichita was building about 2,600 to 3,000 houses per year, in what he described as some of the nicest neighborhoods in the city. At that time, there were three people in the city’s zoning department, and seven in the building inspection department. Today, Sandlian said Wichita added 1,568 houses in 2007, 1,032 in 2008, and 752 in 2009. Despite the small number of homes being built, staff has swelled: Sandlian said today there are seven in planning (up from three), and 61 in building inspection (up from seven). “Those people, in order to justify their existence, have to find problems with what you’re doing,” he said. But it appears that even with greatly increased numbers, inspectors may not have been looking hard enough, at least in the cases of these southeast Wichita homes.

    Kansas Prosperity Summit. This Friday (November 12) FairTaxKS is holding an event designed “to create a collaborative environment to create awareness, express support, offer solution, and launch the passing of the Kansas Jobs Plan 2011.” The main event is from noon to 4:00 pm at the Topeka Performing Arts Center (TPAC), 214 SE 8th Ave., and will feature speakers Kris Kobach (Kansas Secretary of State-Elect), Jonathan Williams (co author of “Rich States, Poor States“, Arlen Siegfreid (Speaker Pro Tem of the Kansas House of Representatives), and Dave Trabert (President, Kansas Policy Institute). An optional morning session will observe a meeting of the Special Committee on Assessment and Taxation. See Kansas Prosperity Summit 2011 for complete details.

    Government cheese. “When sales of Domino’s Pizza were lagging, a government agency stepped in with advice: more cheese. This is the same government that, for health reasons, is advising less cheese.” The New York Times continues in While Warning About Fat, U.S. Pushes Cheese Sales: “Domino’s Pizza was hurting early last year. … Then help arrived from an organization called Dairy Management. It teamed up with Domino’s to develop a new line of pizzas with 40 percent more cheese, and proceeded to devise and pay for a $12 million marketing campaign. … Dairy Management, which has made cheese its cause, is not a private business consultant. It is a marketing creation of the United States Department of Agriculture — the same agency at the center of a federal anti-obesity drive that discourages over-consumption of some of the very foods Dairy Management is vigorously promoting.” I’m starting to lose track of the contradictions here: Government promoting the very food it blames for health problems it often ends up paying for, and an agency partly funded by tax funds developing marketing programs for a private firm. When the New York Times complains that something is amiss with a government program, you know it’s really bad.

    Kansas budget profiled. John Hanna of Associated Press takes a look at the Kansas budget and issues surrounding. Key facts: For the next budget (fiscal year 2012, which starts July 1, 2011, and is the budget the legislature will work on during the upcoming session), there is no more federal stimulus money. That money was a key part in balancing the last two budgets. The deficit for FY 2012 is projected at $492 million. Tax collections are projected to grow by 4.3 percent in FY 2012. By transferring highway funds and gambling revenues to the general fund, the state could balance the budget without cutting services by much, but there will likely have to be some cuts.

    Kansas judicial selection. Foundation Watch, a publication of the Capital Research Center, features an article titled George Soros’s Plan to Seize State High Courts. Kansas is mentioned several times in this article. As readers may remember, Kansas judicial selection gives extreme power to members of the bar, more so than does any other state. The state’s elites — outgoing Kansas Governor Mark Parkinson, newspaper editorial writers, and of course the lawyers — are fine with this undemocratic system. But we should be cautious. The article’s summary is: “In some states supreme court judges are elected by the people. In others the governor appoints judges from a list of recommendations compiled by a commission composed mainly of lawyers. Arguments can be made for either process. But George Soros knows what he wants: appointed supreme court judges recommended by lawyer-driven commissions. Call us knee-jerk, but that may be one good reason why this is not a good idea.”

  • Kansas and Wichita quick takes: Friday November 5, 2010

    Political attacks on tap at Pachyderm. Wichita State University political science professor Mel Kahn will be the presenter at today’s (November 5) meeting of the Wichita Pachyderm Club. The always-interesting professor will speak on the topic “Do Political Attacks Help or Harm our Republic?” This seems like a timely topic given the recent general and primary elections. The public is welcome at Wichita Pachyderm meetings. For more information click on Wichita Pachyderm Club.

    Hold the celebration “A new Rasmussen Reports national telephone survey finds, in fact, that 59% of Likely U.S. Voters think it is at least somewhat likely that most voters will be disappointed with Republicans in Congress before the next national elections. That includes 38% who say it is Very Likely.” More at Most Voters Think House GOP Likely To Disappoint By 2012. Is this evidence of a deeply-ingrained cynicism by American voters? I hope not — but I can’t blame people for thinking so.

    We understand, that’s why we resist. The incredibly insightful George Will discusses in the Washington Post what he calls the “nationwide recoil against Barack Obama’s idea of unlimited government” and explains why progressives (the people who used to be called liberals) are so confused and unable to accept the political reality of the day: “The progressive agenda is actually legitimated by the incomprehension and anger it elicits: If the people do not resent and resist what is being done on their behalf, what is being done is not properly ambitious. If it is comprehensible to its intended beneficiaries, it is the work of insufficiently advanced thinkers.” I added the emphasis to make sure we grasp the essence of Will’s description of the progressive mindset: that we regular people are just not capable of understanding what is in our own best interests. That is the working belief of Obama and the progressives. As an aside, it’s amazing the the Post can have a columnist as good as Will and as corrupt as Dana Milbank at the same time.

    Obama really doesn’t get it. In a preview of a 60 Minutes interview to be broadcast on Sunday, CBS News reports: “After a [sic] suffering a ‘shellacking’ in the midterm elections, President Obama acknowledges what many have seen as his chief weakness — failing to sell the importance of several legislative milestones to the American people. … ‘Making an argument that people can understand,’ Mr. Obama continued, ‘I think that we haven’t always been successful at that.’” In other words, it’s a marketing problem for Obama. Others have said the same. Recently Jonathan Alter wrote “It’s a sign of how poorly liberals market themselves and their ideas that the word ‘liberal’ is still in disrepute despite the election of the most genuinely liberal president that the political culture of this country will probably allow.” But I think that people understand perfectly well the liberal or progressive agenda — if not at a deeply intellectual level than by instinct — and I agree with George Will: “Is political power — are government commands and controls — superseding and suffocating the creativity of a market society’s spontaneous order? On Tuesday, a rational and alarmed American majority said ‘yes.’”

    Kansas Republicans a spry bunch. After January, ten of the 12 Kansas statewide or federal offices will be held by people under the age of 55. Exceptions are Insurance Commissioner Sandy Praeger and Senator Pat Roberts. Roberts has indicated he’ll run again in 2014.

    Kansas Senate after the election. The Kansas Senate, unlike the House, was not up for election this year, although there were two special elections. In one, the appointed incumbent was elected, and in another, a replacement for Jim Barnett was selected. While the composition of the Senate remains 31 Republicans and nine Democrats, not all the Republicans are conservatives. Quite a few — including the Senate leadership and two Wichita-area members — have voting records indistinguishable from many Democrats. A good guess at the number of conservative-voting senators is 17, short of a majority. Upcoming: There will be at least three new senators selected. In two cases — to replace Tim Huelskamp and Jeff Colyer — the likely replacements will be conservative, as are the two resigning members. In the third case, to replace majority leader Derek Schmidt, it is likely that the replacement will be more fiscally conservative, although Schmidt did vote against the big-spending budget and sales tax increase this year. With a conservative governor taking office and the House controlled by conservatives, might a few senators decide to adopt a more conservative view? Those left-leaning members who are looking to run for reelection in 2012 have a decision to make.

    Kansas City Star on Parkinson’s pollution. The Kansas City Star laments outgoing Kansas Governor Mark Parkinson‘s decision to fire Kansas Department of Health and Environment chief Rod Bremby. The issue is Parkinson’s desire to get a coal-fired electricity plant in Kansas permitted before new rules come into effect. There are several problems with the Star’s editorial. First, cabinet secretaries like Bremby serve at the pleasure of the executive. If they don’t do what the boss wants, they’re gone. Second, the Star refers to the “tons of new pollution” that will “drift eastward across Kansas.” The editorialist should remember that Bremby denied the permit for the plant based on its carbon dioxide emissions, not for emissions of actual pollutants like sulfur dioxide. To the extent that carbon dioxide is harmful, it is because of its (alleged) impact on global warming, and that impact is disputed. Carbon dioxide is not a pollutant in the sense that it is poisonous or harmful to those who breath it, as it is naturally abundant in the atmosphere. By the way, Bremby’s decision to deny the permit was entirely political, as he was apparently willing to approve a permit for an oil refinery that would emit 17 million tons of carbon a year, when he denied the power plant solely because of its emissions of 11 million tons. See Rod Bremby’s action drove away the refinery.

  • Kansas and Wichita quick takes: Thursday October 28, 2010

    Final fourth district forum. Last night’s debate or forum between all four candidates running for the Kansas fourth Congressional district was the last such event before Election Day. Hosted by KSN Television and moderated by John Snyder, all four candidates appeared: Reform Party candidate Susan Ducey, Democrat Raj Goyle, Republican Mike Pompeo, and Libertarian Shawn Smith. Goyle used almost every question as an opportunity to launch an attack on Pompeo, particularly on the issue of outsourcing of jobs. No dummy — he did go to Harvard law school, after all (so did Pompeo) — Goyle used some clever and creative license to morph nearly every question into these attacks. Pompeo largely ignored Goyle’s attacks but still got in a few digs at him. … Ducey and Smith kept to their principled arguments of limited government and free markets and avoided attacks on each other and the two major party candidates. Ducey, particularly, referred to the constitutionality of programs several times and her belief in states’ rights. Smith’s belief in the superiority of free markets was crystal clear. In his final statement, he referred to the “road to serfdom.” … For those who have been following the campaigns of the two major party candidates, not a lot of new information was presented in the forum. The real news, I think, is the competent and credible performances of the two minor party candidates, Ducey and Smith. They did well in terms of their presentation. Most importantly, if you believe in individual liberty, limited government, and free markets, these two candidates deserve your serious consideration.

    Kansas Republicans in control. KWCH Television and SurveyUSA released new polling showing Republicans firmly in the lead for Governor, Secretary of State, and Treasurer. The only race that is close is for Attorney General, where challenger Derek Schmidt leads incumbent Stephen Six 50 percent to 42 percent. Of this race, the pollster commented: “Incumbent Attorney General Steve Six remains the Kansas Democrat with the best chance of keeping his job, but even he trails his rival Republican Derek Schmidt by 8 points, unchanged from the previous poll. Schmidt led by 20 points when polling began in August, but has led in single-digits since. 20% of Republicans cross-over to vote for Six. Independents in this contest break for the Democrat. There continues to be volatility in this race; among seniors, typically the most stable and reliable voters, the lead has changed 4 times in 4 polls.” Interestingly, all three Democratic incumbents — Six, McKinney, and Biggs — have large advantages in fundraising over their Republican challengers.

    Tweet of the day. @bob_weeks: Government cake was pretty good at Wichita’s National Center for Aviation Training ribbon cutting ceremony.

    Smoking ban now fiscal issue. Today’s Wichita Eagle editorial by Rhonda Holman laments the fact that there’s a possibility the Kansas statewide smoking ban might be overturned. Holman has never respected the property rights-based argument against smoking bans, nor the individual responsibility argument. Now she raises the financial argument for the ban: “Yet in Kansas, the momentum among leaders risks going the wrong way — against public health and the recognition that government has a fiscal responsibility to ban public smoking.” The fiscal responsibility Holman cites comes from the fact that the state pays a lot of the costs of health care, and if fewer people smoke, the state could save money. Perhaps. Next year, I expect Holman to use the same arguments in favor of a ban on alcoholic beverages, salty foods, sugary soda pop, cheeseburgers, and anything else that will increase health care costs. Seriously. By the way, this government regulation of behavior often does not work and produces unintended consequences, as in the recent findings that bans on texting while driving have increased accident rates in some states. Holman supported the Kansas texting ban for safety reasons.

    Many more have voted. As of yesterday in Sedgwick County, 39,000 mail ballots have been returned, and 6,300 people had voted in person. Since there are about 260,000 registered voters in the county, 18 percent of all possible voters have already voted. But looking at likely voters — in the 2006 midterm election 118,258 ballots were cast — perhaps 40 percent of likely voters have already voted. In the 2008 general election — a presidential election year — 194,688 ballots were cast, so using that denominator, 24 percent of likely voters have voted.

    A reason to vote early. Yesterday this column discussed reasons why voters may want to wait until close to Election Day to vote. But there is one reason for voting as early as possible. If you don’t want voter contact — telephone calls, mailings, people knocking on your door — voting early might reduce the number of contact attempts. This is because campaigns, if they want, can receive a list of voters who have returned their ballots each day. Savvy campaigns will then cross these voters off their lists so they don’t waste effort contacting those who have already voted. To make this work well, you’d want to get everyone in your household to vote early.

    Vote machine “malfunctions” reported. There have been several reports that at advance voting locations in Wichita, when the machine flipped to display the page for U.S. Congress, one candidate’s name was already checked, just as if the voter had touched it already. The voters were able to un-check that vote and vote for their intended candidate. I suggested to the tipster that she have people take still photographs, perhaps using a smartphone, of each screen as the voting machine presented it. But an even better solution that would eliminate all source of doubt is this: As you vote, use your smartphone to take video of the entire process. This, I believe, would produce strong evidence of voting machine irregularities, if it is happening.

    Wichita Eagle voter guide. Click here. You can get a list of the candidates, along with their responses to questions, customized for your address.

    Outside spending cuts both ways. Debra J. Saunders of the San Francisco Chronicle: “White House adviser David Axelrod went after the Chamber of Commerce earlier this month, calling its $75 million campaign ‘a threat to our democracy.’ But as the Wall Street Journal reported last week, the public employees union AFSCME is spending $87.5 million on 2010 campaigns.”

    Kansas House could shift. It’s often mentioned that Republicans have large margins in both the Kansas House of Representatives and Senate. In the House, however, there’s a working body of about 55 reliably conservative members. The other Republicans — moderates, they’re called — will vote with Democrats for things like sales tax increases. This could change, however. It’s thought by some that conservatives picked up four seats in the August primary election, getting the House up to 59 reliable conservative votes. 63 votes are needed to have a majority and pass a bill. Can conservatives pick up more seats next Tuesday? Might the prospect of a conservative majority and a conservative governor flip a few moderate Republicans? We may know on Wednesday — or maybe not.

    Ballotpedia to have election night coverage. The website Ballotpedia will have election night coverage focusing on ballot issues, state legislative contests, and state attorney general races. Did you know that voters will be electing 6,125 state legislators next week? See What to expect from Ballotpedia election coverage on November 2 for details on the coverage.

    Report voter fraud, by phone. American Majority Action has developed and released a voter fraud app for smartphones. Describing it, AMA says “This free, cutting edge system will enable voters to take action to help defend their right to vote. Whether you’re a campaign junkie, or just want a better America, Voter Fraud will help you report violations at the election booth and serve to uphold the democratic process.” I downloaded it for my iPhone.

    Waiting for Superman. The Kansas Policy Institute will host a free screening of Waiting for Superman on Thursday November 4th. Of the film, the Wall Street Journal wrote: “The new film ‘Waiting for ‘Superman’” is getting good reviews for its portrayal of children seeking alternatives to dreadful public schools, and to judge by the film’s opponents it is having an impact. Witness the scene on a recent Friday night in front of a Loews multiplex in New York City, where some 50 protestors blasted the film as propaganda for charter schools.” In Kansas, the Wichita Eagle printed an op-ed penned by the education bureaucracy status quo — Sharon Hartin Iorio, dean of the Wichita State University College of Education in this case — to inoculate Wichitans against the effects of what I am told is a powerful film. Let’s hope this film gets Kansans to thinking about public schools in our state, as Kansas is way behind the curve on innovation, compared to other states. The film will be shown at 7:00pm at the Warren Theatre East (11611 E. 13th St.). KPI asks that you RSVP by Tuesday, November 2 to James Franko at james.franko@kansaspolicy.org. Space is limited.

  • Kansas and Wichita quick takes: Friday October 22, 2010

    My best tweet yesterday. I just uninstalled the NPR News app from my iPhone. #NPR #Juan

    Many have already voted. Wednesday Sedgwick County Election Commissioner Bill Gale told commissioners that his office had sent 63,000 mail ballots to voters in the county, and 20,000 had been returned. In the 2006 general election, a midterm election comparable to this year, 118,258 ballots were cast in Sedgwick County. Gale’s numbers tell us that around half of voters will use the advance voting system, and perhaps 17 percent have already voted as far as two weeks in advance of election day.

    Goyle on defense pork barrel spending. Yesterday Kansas fourth Congressional district candidate Democrat Raj Goyle criticized Republican Mike Pompeo for not supporting a second engine for the F-35 fighter jet program. Goyle says we need to protect 800 jobs in Cowley county by approving this project. The problem is this federal spending program is not needed and wasteful. According to Forbes: “The problem General Electric and teammate Rolls Royce face is that both the Bush and the Obama administrations concluded the single-engine F-35 would do just fine with only one engine supplier. … Defense Secretary Robert Gates has decided to make termination of the second engine a test case of whether Congress is committed to eliminating waste.” Spending money on this jet engine that is not needed is the very definition of government waste. A question: If these jobs were not in the Congressional district Goyle is running in, would he support this project? If the answer is yes, he fails the Defense Secretary’s test for whether Congress is really ready to eliminate waste. If the answer is no, he’s already engaging in the type of pork-grabbing — getting anything and everything for the home district, no matter what the cost — that he purportedly disdains.

    They do this too? Here’s another example of left-wing bloggers and writers claiming to have “uncovered” something that sits in plain sight. This time it comes from Think Progress, a project of the hard left — but innocently-named — Center for American Progress Action Fund, which in turn is a project of George Soros. Jonathan Adler explains at National Review Online: “Think Progress has a breathless post up today alleging they have uncovered the Koch brothers sinister plot to coordinate corporate, libertarian, and conservative donors to outside groups and think tanks. What they’ve actually uncovered is (horrors) an invitation-only conference of generally like-minded philanthropic and other organizations that likes to discuss issues and strategies and hear from prominent thinkers and commentators (including, on at least one occasion, NRO’s Ramesh Ponnuru and frequent contributor Veronique de Rugy). Think Progress acts as if this is some sort of revelation, but this sort of thing has been common for some time, particularly on the left. The Environmental Grantmakers Association is one example of an organizational umbrella for like-minded philanthropists that has sponsored closed-door conferences for strategy discussions, but there are others. The Kendall Foundation, Pew Charitable Trusts, and other specific funders have, at times, also taken very aggressive steps to ensure coordination by funders and grant recipients. I wrote about this fifteen years ago in my book on the environmentalist movement. Next thing Think Progress will tell us there’s gambling in Atlantic City.” By the way, the Wichita Eagle will rely on Think Progress as a source.

    Does business favor free markets? Many people naively assume that business automatically supports free markets and less regulation. The Washington Examiner’s Timothy P. Carney tells us that this is not so. Writing about his speaking experiences at an event sponsored by Charles Koch, Carney writes: “I’ve often said — and I said it at the dinner — that privately held businesses tend to favor free markets, even when they get big; while publicly held businesses (like those on the Fortune 500), tend to want bigger government as often or more often than they want free markets, depending on the industry and who’s in power.” Carney lists a number of companies — BP, Conoco, Shell, and Wal-Mart that are in favor of more government regulation. Wal-Mart, for example, favored higher minimum wage legislation because it already paid higher wages than its competitors, and the new minimum wage would hurt them, giving Wal-Mart a competitive advantage obtained through regulation. Carney also makes the case that liberals don’t often realize that they’re being played: “This may be the most important point that folks like [left-wing bloggers] Zernike, Yglesias, and Fang miss: many of these businessmen could profit even more under the policies the Left favors than they do under the free market.” As it applies to Koch Industries specifically, Carney notes that strict regulation of refineries makes entry by competitors difficult to impossible, relying on the Los Angeles Times for evidence: “California refiners are simply cashing in on a system that allows a handful of players to keep prices high by carefully controlling supplies. The result is a kind of miracle market in which profits abound, outsiders can’t compete and a dwindling cadre of gas station operators has little choice but go along. Indeed, the recent history of California’s fuel industry is a textbook case of how a once-competitive business can become skewed to the advantage of a few, all with the federal government’s blessing.” I would add that in competitive markets, business firms must seek to please a diverse array of customers, and that’s harder to do than pleasing politicians and regulators.

    Kansas politics in New York Times. Particularly the governor’s race. The article contains an accurate assessment on how things really work in Kansas, and should be noted by those who blame all of our state’s problems in Republicans: “But while Republicans dominate the State Legislature and the governor was once chairman of the state party, the reality about those who currently control Kansas is far subtler — the effective majority in the Legislature is a coalition of moderate Republicans and Democrats, while the governor defected to the Democratic Party.” See Kansas Governor’s Race Seen Redefining G.O.P.

    Sedgwick County website still dark. Not exactly dark, but the county didn’t renew its domain name registration, and it expired. Usually these things can be cleared up pretty quickly, but for me it’s still out of order after about 24 hours. It works on my iPhone, though, but the county’s website is not friendly to use on mobile devices.

    Energy to be topic at Wichita Pachyderm. Today’s meeting of the Wichita Pachyderm club will feature John A. McKinsey speaking on the topic “Cap and Trade: What is the economic and regulatory impact of Congressional legislation?” The public is welcome at Wichita Pachyderm meetings. For more information click on Wichita Pachyderm Club.

  • Kansas and Wichita quick takes: Thursday October 21, 2010

    Honest journalist too much for NPR. Juan Williams has been fired by National Public Radio. His offense: He spoke in a not-politically-correct way about Muslims. On Monday’s O’Reilly Factor Williams said: “But when I get on a plane — I got to tell you — if I see people who are in Muslim garb, and I think, you know, they are identifying themselves first and foremost as Muslims, I get worried. I get nervous.” According to Williams, NPR said this is a bigoted remark that “crossed the line.” Across all forms of media, this is sure to be a big issue. Williams is an accomplished journalist and reporter who has written many books on civil rights in America. He has been critical of established black leaders like Al Sharpton and Jesse Jackson. Williams will appear on The O’Reilly Factor tonight, with the Fox News promotion teasing “Is he the first victim of George Soros’s new war on Fox News?”

    Star recommends retaining judges. The Kansas City Star recommends retaining all judges on the ballot in Kansas. The newspaper evidently didn’t take into account or give much weight to the admonishment of Kansas Supreme Court Chief Justice Lawton Nuss over an ethics issue. The Star supports the elitest system of judicial selection in Kansas, where lawyers have much more input than do ordinary citizens.

    How the right wing echo chamber works. Here’s another instance of left-wing journalists and bloggers claiming to have discovered something that sits in plain sight. Allegations of existence of an “echo chamber” sound sensational and sinister. The left has these, too, as documented in Politico. If you’ve followed some of the attacks on Koch Industries this year, you’re aware that there is a network of websites and blogs that cut-and-paste the same material for wide distribution. This left-wing echo chamber exists in the mainstream media too, when publications like the Wichita Eagle relies on ThinkProgress and the New York Times editorial page for evidence criticizing Jerry Moran on climate change. Who are these sources the Eagle relies on? ThinkProgress is a project of the hard left — but innocently-named — Center for American Progress Action Fund, which in turn is a project of convicted inside trader George Soros. And the New York Times editorial page is, well the New York Times editorial page — enough said.

    You — not me — should sacrifice. Another global warming alarmist revealed as a hypocrite. “A Youtube film, released by Irish documentary film makers Ann McElhinney and Phelim McAleer, has revealed the shocking hypocrisy of James Cameron, the director of Avatar. The film shows that Cameron, who has publicly stated that ‘we are all going to have to live with less,’ has continued a lifestyle of extravagant consumption. Cameron, yesterday, announced he was donating $1m to oppose California’s Prop 23. Prop 23 will suspend Global Warming legislation and is being bitterly opposed by environmentalists. Supporters of Prop 23 say that if it is defeated California will lose jobs because of an increase in energy prices.” The video is just over two minutes long and may be viewed by clicking on James Cameron — Hypocrite.

    Most expect local tax increases. Rasmussen: “A sizable majority of Americans say their states are now having major budget problems, and they think spending cuts, not higher taxes, are the solution. But most expect their taxes to be raised in the next year anyway.” More at Most Expect State or Local Tax Hikes In the Next Year.

    Texas vs. California. “In Texas, the payroll count is back to prerecession levels. California is nearly 1.5 million jobs in the hole. Why such a difference? Chalk it up to taxes, regulation and attitude, says Investor’s Business Daily (IBD).” Summary at NCPA: A Trenchant Tale of Two States .

    Email spam spreads to Facebook. I’m sure I’m not the first person to receive something like this, but the well-known Nigerian fraudulent schemes that for many years have used regular email have now spread to Facebook messages. Today I was notified by “barrister James Mawulom a solicitor at law” that a man with my same surname had died in Africa, and I am due to receive a lot of money.

  • In Wichita and Kansas, economic development is not working

    The effort of Wichita and Kansas to retain Hawker Beechcraft, one of our leading employers and a Wichita institution, provides a lesson in the futility of corporate welfare as an economic development policy: Someone is usually willing to pay more. We would be much better off if we start transforming Kansas to a state where all companies are nurtured, not by bureaucratic and political oversight and handouts, but by a low taxing and spending environment, and a reasonable regulatory regime.

    Recently I was shown a listing of all the industrial revenue bonds (IRBs) that Hawker Beechcraft and its predecessors have been authorized over the last 20 years. The number is large: $1.2 billion. This is not money that any governmental body has lent to Hawker Beechcraft. The purpose, instead, of the IRB program is to allow companies to escape paying property tax on property purchased with the bond proceeds. In some cases, companies escape paying sales tax as well.

    It would be difficult to calculate how much tax Hawker Beechcraft and its predecessors have not paid due to the abatements, but it is a lot. The company still pays some property tax. Records from the Sedgwick County Treasurer’s system indicate the company paid $971,073 in tax year 2009.

    When asking for tax breaks like this, companies often point out that they hire many people and pay good wages, so the taxing entities make up their money in other ways. That may be true. In fact, the cost-benefit analysis the city and county use make just that reckoning: if we give up collecting some tax from a company, how much additional tax will we collect from everyone else? Perhaps government officials don’t realize that much of this “benefit” is simply taxes shifted to someone else.

    Nonetheless, politicians and bureaucrats call this making an investment in, say, Hawker Beechcraft or whatever company is asking for tax breaks at the moment. The problem is that we don’t know if investing in these companies is the right investment, if government should be making these investments at all.

    Somewhere in Wichita or Kansas there a small unknown company that has half a dozen or so employees — maybe more, maybe less — that is working on some innovation. If we’re lucky, we have many such companies. These companies could be working on a new technology, manufacturing process, computer software, video game, internet site, food processing technology, retail concept, chemical process, restaurant idea, engineering methodology, agricultural process, airplane wing — we just don’t know. Many will fail. But some will succeed, and few will, hopefully, succeed in a big way.

    But these small startup companies may not fit in to the economic development programs the city and state have. Some people may not even think of looking to government for economic development assistance, as when I interviewed a successful Vietnamese grocer in Wichita. He didn’t know “where to dig” for government handouts.

    Any of these now-small companies could become the next Microsoft, Google, Home Depot, or Pizza Hut. We just don’t know which. But these companies, when in small startup stage, struggle to pay the taxes that large companies are able to escape. Being small, they may also be disproportionally impacted by regulation. It’s not necessarily the case that a small startup aviation company is competing directly with Hawker Beechcraft and is handicapped by the larger company’s tax advantages. But these two companies could be competing for the same employees, for example, and that puts the smaller company at a disadvantage.

    How can we identify which companies are deserving of government subsidy? Which companies should have their tax burden softened at the expense of others? Allocating resources — deciding what to do — in the face of uncertainty is the crux of entrepreneurship. It’s something that government is not equipped to do, as its incentives and motivations are all wrong.

    For politicians, the prime motivation is to be reelected. It is rare that the time horizon of a politician extends beyond the next election.

    For bureaucrats, the motivation is to expand their sphere of influence and power.

    Neither of these motivations are compatible with entrepreneurship. Some are not compatible in any way with running a business. For example, a business firm looks at its employees as a cost that must be managed and controlled if a profit is to be made and the firm survive. But to government, spending on employees is a social benefit, and one that is paid for by someone else.

    Another problem is the nature of knowledge. In a recent issue of Cato Policy Report, Arnold King wrote:

    As Hayek pointed out, knowledge that is important in the economy is dispersed. Consumers understand their own wants and business managers understand their technological opportunities and constraints to a greater degree than they can articulate and to a far greater degree than experts can understand and absorb.

    When knowledge is dispersed but power is concentrated, I call this the knowledge-power discrepancy. Such discrepancies can arise in large firms, where CEOs can fail to appreciate the significance of what is known by some of their subordinates. … With government experts, the knowledge-power discrepancy is particularly acute.

    I emphasized the last sentence to highlight the problem of the dispersed nature of knowledge.

    There are other problems with government management of economic development. We need to move away from this and towards a free market approach to economic development. This will take some time, and until then, we’re forced to defend our industry from other states, as we are presently doing with Hawker Beechcraft.

    But if we don’t start transforming Kansas, we’ll be doing this forever. And someone else always seems to have more money to spend.

  • Kansas and Wichita quick takes: Friday October 15, 2010

    Moran at Wichita Pachyderm today. Today’s speaker at the Wichita Pachyderm Club is current United States Representative and Republican Party Senate nominee Jerry Moran. As a large audience is expected, please arrive by 11:45 to get your buffet lunch in time for the noon start (the larger meeting room will be used). Cost is $10, which includes lunch.

    Rasmussen: Voters don’t trust politicians’ promises. “Half (50%) now believe that when politicians break campaign promises, it’s because they deliberately made a false promise to get elected. Thirty-nine percent (39%) disagree and say unforeseen events after they took office forced them to break their promises.” In keeping with my belief in limited government, I might suggest that candidates promise to do less. But then liberal candidates say that conservative candidates don’t have a plan. More at Voters Believe Overwhelmingly That Politicians Don’t Keep Their Promises, and Most Say It’s Deliberate.

    No developer welfare; no apartments. The Wichita Business Journal reports that since developer Jason Van Sickle isn’t able to obtain federal historic preservation tax credits on a property, he’s abandoning plans to develop the project. Tax credits are, in effect, grants of money paid to — in this case — real estate developers through the tax system. But not to worry for the developer: he’s planning to hit up the state of Kansas and its taxpayers for historic preservation tax credits.

    Capitalism saved the miners. Daniel Henninger in the Wall Street Journal: “It needs to be said. The rescue of the Chilean miners is a smashing victory for free-market capitalism. … The president of the U.S. is campaigning across the country making this statement at nearly every stop: ‘The basic idea is that if we put our blind faith in the market and we let corporations do whatever they want and we leave everybody else to fend for themselves, then America somehow automatically is going to grow and prosper.’ Uh, yeah. That’s a caricature of the basic idea, but basically that’s right.” Henninger lists all the innovative technology used in the rescue, that innovation driven by capitalism in the countries where it is not snuffed out. A lesson: “In an open economy, you will never know what is out there on the leading developmental edge of this or that industry.” Innovation is driven by private companies with profit as their motive.

    Holland demands debates, then skips out. According to the Lawrence Journal-World, “[Kansas Democratic Gubernatorial candidate Tom] Holland was invited to the hour-long debate broadcast on WIBW radio and TV, but he declined because he said WIBW had already sponsored an earlier gubernatorial debate at the Kansas State Fair, and because the debate moderators were conservative radio talk show hosts Raubin Pierce and Megan Mosack.” Yes, Pierce and Mosack are conservatives. But Holland, who at one time demanded a series of 10 debates with Brownback, should have appeared. Conservative candidates and officeholders are summoned before liberal newspaper editorial boards all the time. They go and suffer the inevitable criticism. Holland should have done the same — and by all accounts, the questions were fair. And if the questions weren’t fair, Holland could have done what many candidates do in forums: they say whatever they want without regard to answering the question that was asked.

    This Week in Kansas. KAKE’s Chris Frank appears to talk about Hawker Beechcraft and Louisiana. Then Kansas Public Radio Statehouse Bureau Chief Stephen Koranda and myself discuss Kansas politics and poll results. Tim Brown is the host. “This Week in Kansas” airs in Topeka on WIBW TV channel 13 Saturdays at 11:30 am, and in Wichita on KAKE TV channel 10 Sundays at 9:00 am.

    Jim Anderson Program features candidate debate. Kansas fourth Congressional district hopefuls Democrat Raj Goyle and Republican Mike Pompeo will appear on Anderson’s radio show. Evidently, minor party candidates Susan Ducey (Reform Party) and Libertarian Shawn Smith will not appear, despite having made credible appearances on a recent KWCH televised forum. After this, Attorney Genreal candidate Derek Schmidt will appear. The Jim Anderson Program airs from 1:00 pm to 3:00 pm Saturdays on KNSS Radio 1330 on your old-school AM radio, live on the station’s website, or on your iPhone through the station’s free app.

    Kansas statewide races polled. KWCH and SurveyUSA report poll results under the headline GOP poised to win statewide races. The closet contest is for Attorney General, where challenger Derek Schmidt leads incumbent Stephen Six 48 percent to 40 percent. For the race the pollster notes: “Compared to other, stable Kansas statewide contests, there is notable volatility in the Attorney General race, uniquely; any outcome is possible.”

    Stossel on the future, tonight. “This Friday at 10pm [9:00 pm Central time], Fox News will broadcast my heated argument with NYC Transit Worker’s Union President John Samuelsen. It’s part of my special, ‘The Battle for the Future.’ More at Stossel’s blog.

    Tea party rules? The New York Times reports: “Enough Tea Party-supported candidates are running strongly in competitive and Republican-leaning Congressional races that the movement stands a good chance of establishing a sizeable caucus to push its agenda in the House and the Senate, according to a New York Times analysis. … While the numbers are relatively small, they could exert outsize influence, putting pressure on Republican leaders to carry out promises to significantly cut spending and taxes, to repeal health care legislation and financial regulations passed this year, and to phase out Social Security and Medicare in favor of personal savings accounts.” Related: FiveThirtyEight estimates Congressional Tea Party Caucus founder Michele Bachmann has 98.9 percent probability of winning her reelection contest.

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