Red Clay Citizen

So, what was the reason?

With the decision last night by the Orange County Commissioners that they were not going to put the transfer tax on the ballot this fall, it meant that the big three Triangle counties (Wake, Durham and Orange) have all deferred on putting the tax on the ballot this year.

Funny thing is, it was the representatives of those counties (Orange - Hackney, Durham - Luebke, Wake - Weiss) who were most adamant about giving the counties the option of the transfer tax.  I thought these counties were "so desperate" for new revenue to deal with growth that they had to have the transfer tax?  What happened?

Hmm... Liberal representatives in safe seats, insulated from voter backlash against raising taxes vs. county commissioners who, in many cases, have to run county-wide and face the voters.

I guess we know who won.

Healthcare: Coletti Spells it Out for the Demogogues

This is an excellent piece on some of the issues in healthcare reform. Those who blindly blame greedy corporations for our healthcare woes never look to the actual source of all the pathologies -- the government.

Coletti doesn't go as far as to accuse the left of trying to destroy healthcare markets with regulation. For the record, I do. Lemme borrow from an upcoming piece I wrote:

I believe the majority party actually knows about these pathologies. In fact, I believe they are making concerted efforts at the state and federal levels to exacerbate these problems in the name of consumer protection and insuring children. Whether through expanding children’s Medicaid into the middle class (which drives up premiums), increasing the number of state mandates (which drives up premiums), or limiting competition through keeping the tax code intact (which drives up premiums), the party in power is using regulation to crank down the government vise in anticipation of a final outcry from Americans who are tired of paying these rates and who have no idea why it’s happening. And with that outcry, they will then be able to sell America a single-payer system like Castro’s.

Disaster: Look not to FEMA, Look Locally

North Carolinians, exposed as they are to Atlantic hurricanes, can look to the experience of certain segments of New Orleans for direction. Or at least we can ask the question: why has the Vietnamese community come out so much better than other communities in the Big Easy?  This study by folks at the Mercatus Center (pdf) offers some answers. I gather refusal by that community to depend on government caretakers is one reason for their phenomenal comeback. (Bottom up. Not top down.)

Illegal Immigrants and Identity Theft

It’s often said that most illegal immigrants are decent, hardworking folks who only want to come to America to work. But what happens when they have to break the law in order to obtain employment? During a recent raid at Smithfield Foods in Tar Heel, North Carolina, investigators found that 86 percent of workers arrested for immigration violations had also stolen identities from American citizens. Likewise, during a raid conducted last month at a Fresh Del Monte plant in Portland, Oregon, authorities found that 78 percent of illegal alien workers were using a stolen Social Security number. But don’t expect the federal government to do anything about this problem anytime soon. Money collected from mismatched names and Social Security numbers goes into an Earnings Suspense File (ESF) administered by the Social Security Administration. Currently the fund contains more than $420 billion in uncollected earnings.

Easley: Do One Good Thing Before You Go

After all that Easley has wrought, he might actually do something right.

Climate Change: So Much for Consensus

From DailyTech:

Medical researcher Dr. Klaus-Martin Schulte recently updated this research. ...[H]e examined all papers published from 2004 to February 2007. The results have been submitted to the journal Energy and Environment, of which DailyTech has obtained a pre-publication copy. The figures are surprising.

Of 528 total papers on climate change, only 38 (7%) gave an explicit endorsement of the consensus. If one considers "implicit" endorsement (accepting the consensus without explicit statement), the figure rises to 45%. However, while only 32 papers (6%) reject the consensus outright, the largest category  (48%) are neutral papers, refusing to either accept or reject the hypothesis.  This is no "consensus."

The figures are even more shocking when one remembers the watered-down definition of  consensus here.  Not only does it not require supporting that man is the "primary" cause of warming, but it doesn't require any belief or support for "catastrophic" global warming.  In fact of all papers published in this period (2004 to February 2007), only a single one makes any reference to climate change leading to catastrophic results.

It starting to look like the so-called ACC "consensus" is the creation of an alarmist media and a left wing hungry for a good reason to redistribute wealth. -Max Borders

Turner's Teaser

Steve Turner's teaser follow-up at the Progessive Pulse is worth a read, and the comment section is happening. Check it out. This is a long overdue conversation between market liberals and redistributionist progressives. -Max Borders

Correcting the Myths About Charter Schools

Charter schools rob money from the public schools.  That’s an oft repeated claim from charter school opponents and from many of those who favor retaining the current cap on charter schools in North Carolina. Is the claim true?  A new Issue Brief from the National Alliance of Public Charter Schools and authored by Bryan Hassel and Matthew Arkin of Public Impact Consulting, responds to that question - and five other myths about the financial impact of charter schools - with a resounding “No.” Rather than being a financial drain, Hassel and Arkin argue that charter schools actually spur public investment in education. The authors point out many schools attract planning and development grants specifically designed for charter schools. Moreover, they also demonstrate that charter schools are often quite successful at raising private funds for public education.  Illinois is cited as an example. There, for every $10 in public funding, charter schools bring in an additional $1.78 in private funding. 

Hassel and Arkin succeed in doing what charter school advocates in North Carolina need to do: attack alleged criticisms head-on. And, in so doing, charter school proponents effectively re-frame the debate in terms of the unique advantages and positive benefits charter schools provide. Currently, close to 5,200 students are on charter school waiting lists. Is there a more compelling reason for lifting the ban?

Water: Raleigh's Soviet Rationing is Failing

The politicians are all in a tizzy about Raleigh's water shortages. Maybe they could use, oh, I don't know: PRICES!

Prices allow people to make rational responses to scarcety. Water markets are the best way to conserve water and institute prices (Duh.) Brian Balfour has pointed out on this blog before that if we go to a single payer healthcare system, our country's medical system will mirror Raleigh's water crisis. Markets work folks. Call it "market fundamentalism" if you like, but shortages are rarely, if ever, a problem where there is a market free of price caps, controls, and socialist rationing.

Exposing the "Bipartisan" Energy Takeover

Check out a kind of expose I did here for Capital Research Center and their excellent GreenWatch team. In it I discuss the National Commission on Energy Policy, particularly their mild-mannered approach to pillaging the energy sector and monkeying with the economy -- all for the sake of "bipartisanship". 

You can see how our infinitely wise N.C. General Assembly got the intellectual fodder for a monstrosity like SB 3.

-Max Borders

Will Hypocrisy End the Culture War?

If the death of Jerry Falwell didn't, this surely will. -Max Borders

What is a Vote?

The NC State Board of Elections has set a meeting for Thursday to discuss the "Standards for Determining What Constitutes A Vote And What Will Be Counted As A Vote." (pdf)

Apparently, in an attempt to prevent a scene like Florida 2000, the proposed rules will try to determine "voter intent."

What exactly is a voter's intent?  According to the proposed rules, it can be based on the voter's pattern in voting.  Check out these two sentences on whether a vote is valid:

If the voter has shown consistency in marking choices on the ballot, then those choices of the voter shall be counted so long as it does not result in an overvote for the contest.

And

If a voter uses random markings without a distinctive or consistent voting pattern so that the voter’s choice cannot be determined, the vote will be considered invalid.

Notice the use of the words "consistency" and "pattern."

If a voter cast her ballot for the candidate of the same party for the first five votes, but on the sixth, make a mark that isn't discernible, has she demonstrated a pattern of intent to vote for all candidates of the same party?

Can intent be based on a pattern?  What about in non-partisan races, how is a pattern established then?  Is it a pattern to vote for only female candidates, regardless or party?  Is it a pattern to only vote for "common-sounding" last names?

Call me a cynic, but I'm just a little skeptical of some unknown group of people trying to figure out what a person's thoughts were in casting a ballot.  It should be a fairly clear test, either the voter casts a ballot correctly or they don't.  I don't think "intent" should play any role in voting.

Thoughts?

The Poverty of "Poverty"

Being poor sure ain't what it used to be. Consider this from a report by Heritage:

To understand poverty in America, it is important to look behind these [census] numbers—to look at the actual living conditions of the individuals the government deems to be poor. For most Americans, the word "poverty" suggests destitution: an inability to provide a family with nutritious food, clothing, and reasonable shelter. But only a small number of the 37 million per­sons classified as "poor" by the Census Bureau fit that description. While real material hardship certainly does occur, it is limited in scope and severity. Most of America's "poor" live in material conditions that would be judged as comfortable or well-off just a few generations ago. Today, the expenditures per person of the lowest-income one-fifth (or quintile) of house­holds equal those of the median American household in the early 1970s, after adjusting for inflation.

So much for the class-warfare narrative. This Edwards populism is really about income equality, not poverty. And as I wrote yesterday, egalitarianism a la Edwards is merely the outgrowth of greed and envy.

Here are some interesting bullets to chew on as you consider the next John Edwards diatribe:

>43% of all poor households actually own their own homes. The average home owned by persons classified as poor by the Census Bureau is a three-bedroom house with one-and-a-half baths, a garage, and a porch or patio.

>80% of poor households have air conditioning. By contrast, in 1970, only 36% of the entire U.S. population enjoyed air conditioning.

>Only 6% of poor households are over­crowded. More than two-thirds have more than two rooms per person.

>The average poor American has more living space than the average individual living in Paris, London, Vienna, Athens, and other cities throughout Europe. (These comparisons are to the average citizens in foreign countries, not to those classified as poor.)

>Nearly three-quarters of poor households own a car; 31% own two or more cars.

>97% of poor households have a color television; more than half own two or more color televisions.

>78% have a VCR or DVD player; 62% have cable or satellite TV reception.

>89% own microwave ovens, more than half have a stereo, and more than a third have an automatic dishwasher.

(Update: I hope information like this will serve as an antidote to stuff like this by Rob Christensen, once a solid, less-biased political reporter who as begun engaging in class warfare.) -Max Borders

Climate Change: Inquisition 2

Here's a good piece from my wandering friend Cris Lingle, writing in the Japan Times. Here's a sliver:

Citing computer model forecasts to justify scientific consensus about climate change beggars logic and denies real-world experience. As it is, weather forecasters and economists using similarly elaborate computer models are legendarily inept in making short-term predictions.

Demonizing or ridiculing those that doubt the extent and cause of climate change has a chilling effect on free speech that makes open, rational debate almost impossible.
-Max Borders

Freedom or Equality?

I'm responding to a nice little teaser post from over at NC Policy Watch, in which Steve Turner - prompted by Rob Christensen's N&O piece - wants to know:

1)  Who among you favor freedom over equality?
2)  Who among you favor equality over freedom?

This is a very important question -- one that marks out both the philosophical and emotive differences among factions in NC, the US (and, indeed, everywhere). I want to thank NC Policy Watch for starting this conversation.

Before answering, though, I'd like to point something I take to be fairly uncontroversial: that we (as Christensen did on Cary Parkway) have certain affective responses to inequality in one of the following ways:

a) if I compare my station to yours and your station is apparently higher, I have a propensity to feel envy;
b) if I compare my station to yours and your station is lower, I have a propensity to feel guilt; and
c) if I compare the stations of two relatively unequal people, I may also feel indignation or sanctimony.

The question is: why?  Some would argue that this is a moral response and that our conscience directs us to feel this way because there is something inherently wrong with inequality. I would argue that this emotive response is largely evolutionary -- particularly given that human beings evolved in a situation in which these responses would have conferred a survival advantage to our forebears. The question about the justice of inequality is not really answered by these emotional responses, forged as they were in the paleolithic furnace during an age when we roved in small, familial clans; an age in which sharing arrangements actually worked as well as self-interest. But to extrapolate such  instincts upon the large-scale, contemporary social order is misguided not only from an economic perspective, but within the bounds of justice, as well. Forced redistribution based on guilt and envy, not only takes us from the "I" to the "we" very quickly, but from justice to injustice.

But, more importantly, are envy and guilt virtues to be celebrated? I don't think so. I live less than a half-mile from the very spot Christensen identifies in his piece. I'm not ashamed to admit that I am surrounded by wealth, but am not wealthy. My wife, child and I live a very modest lifestyle nestled among the rich. I am employed, after all, by a non-profit. My wife has chosen to be a stay-at-home mom. One non-profit income will not suffice to allow me to keep up with the Joneses. And yet I will always resist feeling envious of those around me in Cary. Instead, I feel lucky to live in a place marked by such prosperity. While there may be some lucky schmuck in the SUV beside me, I know that wealth as a rule is not created by apathy or luck, but from hard work, specialization, and value-exchanges among people with different conceptions of the good life. My concept of the good life actually keeps me from driving a BMW. Yet I still feel prosperous, and fortunate to live in a place that allows me to work doing what I love -- '96 Mazda Protege notwithstanding.

Thus, in answering Turner's questions above: I, personally, don't believe one should value equality over freedom. But more importantly, I don't believe I am morally justified in making this judgement on behalf of others, and by extention to bend them to my will. Values are inherently personal. When we start to think that there are values (like equality) that ought to extend universally across peoples, we also think that whatever means it takes to implement said values are justified. Thus, egalitarians believe the imposition of their values justifies force and expropriation. I don't. Extreme examples lie with Stalin and Mao. Milder forms lie with elites in Raleigh or Washington who let guilt, envy and indignation drive policy for everyone, instead of allowing people to find their sense of benevolence within, and to keep the spirit of charity within the breast of the individual.

The lover of freedom, in as much as she can, stops with harming others for the sake of her values. That is not to say there are no circumstances under which harm is required, but that non-harm rules work in tandem with the value of freedom. Freedom of exchange and association becomes the default value that underlies justice, because it does not attack the value of equality. The reverse cannot be true, however. This asymmetry is very real. And that is why the lover of freedom is truly tolerant, truly liberal.

In other words, what's so great about justice as freedom is that we can still choose to contribute to the betterment of others around us. And while any real freedom doctrine would proscribe the threat of force to create a utopia in which the "right level" of equality prevails, it still allows us dynamically to interact in ways in which the core values of equality - benevolence, charity, social entrepreneurship, and community involvement - are not crowded out by the coercive apparatus of the state.

And that's why freedom wins in my book.

Supreme Court Orders Redistricting

This just in courtesy WRAL:

"The North Carolina Supreme Court has ruled that the General Assembly must redraw its legislative districts after the 2008 election because the boundaries of some current districts are unconstitutional."

Will the General Assembly ever learn to stop playing politics with redistricting ... ?

Labor and Leviathan: A Socialist Fantasy?

"Fighting the last war" is how Rob Schofield begins his latest attack on us free-marketeers in his latest diatribe on how public service unions will be good for North Carolina.

Funny, that is exactly what the unions are doing by turning their attention to the only captive audience they have left.  With their numbers declining, or in many cases, evaporating in the private sector, big labor unions like the Teamsters and Service Employees International Union (SEIU) are trying to hold the line and "fight their last war" at the only place they can gain membership -- public sector employees.

He talks about repeating the same mistakes over and over, but isn't that exactly what we would be doing by allowing collective bargaining?  Allowing a failed phenomenon to spread?

Unions had a time and place in our history, perhaps--a time when gross negligence by employers was prevalent, when workers' dignity was often not respected, and when workplace conditions were unsafe.  It is very hard to suggest the comparison between the working conditions of the factory worker in the 30s, 40s and 50s with that of the government bureaucrat of today. As a social movement it did its job. As an economic one, it has failed.

Unions were needed when workers had little choice in their jobs and travel and mobility were limited.  Now, if you don't like your job, it is very easy and relatively inexpensive to just get up, leave and go find a new one.

But let me just take a few minutes to rebut a couple of Schofield's assertions:

Schofield claims, "First and foremost, it is simply inaccurate to state that the presence of public employee collective bargaining will automatically drive up the cost of government and/or taxes." However, a document entitled "Report of the SEANC Collective Bargaining Study Committee" found here states that "on the average, collective bargaining boosts state and local-government salaries by approximately five to six per cent and probably increases the dollar value of benefits even more."

So explain to me how a 5-6% increase in salaries will not drive up the cost of government? Especially when according to the NC General Assembly's Fiscal Research division (CAFR p. 318) a 1% across-the-board pay increase for all state employees in 2006-2007 costs $106.89 million dollars. Apparently Schofield believes that the government spending an additional $535 million dollars is not an additional cost or wouldn't have to be paid for with higher taxes.  So exactly where does he envision the money coming from?  Maybe the state can buy some tickets for the $300 million Powerball drawing this weekend.

Next Schofield makes the assertion that, "just because 'the market' has determined that North Carolina workers must, on the whole, make do on lower average wages than other Americans does not mean that this is proper or just."

Hold on.  Go back and read that again.  The labor market is not proper and just?  Is that what you are saying Comrade?  So please Rob, tell me: who then, if not the market, should set wages?  You?  The Central Committee?  And exactly what is a "proper or just" wage?  $10/hr? $20? If Schofield thinks value-for-value exchanges among consenting adults should be determined by an elite, I'd be happy to come and price his Cornflakes for him. (You see, Schofield's likely 'laboring' under the theory of value put forth by Marx, which argues that values are objectively determined by central planners, and that profit is not return on investment, but expropriation. We think values are subjective and are exchanged by free people.)

Finally, Schofield talks about union dues and political contributions.  Funny, he only mentions SEANC when everyone knows that SEANC's political activity is very limited and they let their SEIU brothers do the heavy lifting.  That such is the state of affairs in North Carolina is only because the state doesn't recognize public-sector unions.  Just take a look at any other state, the teachers and state employees unions (if not represented by AFSCME or SEIU) all use forcibly collected union dues for political activities (Maybe a refresher on this recent US Supreme Court case will help).

To allow the government to organize against itself would be the political equivalent of cannibalism. Governments can't go out of business, so there is no reasonable limit to the demands government can make of itself (passing the cost onto taxpayers, of course). Nevermind that there is something really wrong with pitting government against the governed at the negotiating table.

Subprime: Tamny to Schofield?

It was as if John Tamny (here) were speaking directly in response to Rob Schofield here. -Max Borders

Healthcare for All - Except the Poor

It is astonishing that liberals, like Verla Insko and Dan Gerlach, are criticizing the Bush administration for requiring states to extend taxpayer-funded insurance to those children who might actually need it, instead of providing funding to expand such programs to the middle class.

The new rules require that state SCHIP programs, like NC Health Choice, cannot be expanded to cover children from families who currently earn too much to qualify for these programs until 95 percent of children who are actually eligible are covered. Here in North Carolina, for example, legislators appropriated $7.4 million for a new initiative (NC Kids Care) that will extend taxpayer-funded insurance to children from families who earn 300 percent of FPL - $61,950 for a family of four. At the same time, the budget capped NC Health Choice growth at 6 percent annually. In order to be eligible for NC Health Choice a family must earn no more than 200 percent of FPL - $41,300 for a family of four. Thus while thousands of kids who are eligible for NC Health Choice have been placed on a waiting list, the state is extending health coverage to children whose families, in most cases, can afford to buy their own insurance.

All this raises the question of what is really behind the current expansion of taxpayer-funded insurance -- helping the poor? Or simply expanding the size of government?

40 Days for Life

Just an FYI ... on a new nationwide campaign called 40 Days for Life. Slated for September 26 to November 4, the initiative calls for 40 days of constant prayer and fasting in front of abortion clinics across the United States. At the same time, pro-life teams in each community will be conducting outreach and educational efforts. Already, a similar effort in Charlotte brought about 12 saves in one week; in Houston, the campaign helped shut down one abortion provider that had been in business for over 20 years. So far, almost two dozen cities have committed to the campaign. Oh ... and for more information about what the General Assembly did -- and did not do -- this past session to protect the rights of the elderly and the unborn, see this piece. --Jameson Taylor

Light Rail: Subsidized Rich-folk Trolley

I think this Observer piece does a fairly good job of showing how light rail is nothing more than an expensive means for rich people to travel. When the trolley is at least 9 times more expensive than really nice buses, its not worth it to me to use my tax dollars convince "Ruth" to take public transportation. Just check out this rich, white welfare queen:

Ruth Henry, 45, is a white Democrat and a transplant from the Washington area."I am never going to get on a bus in my entire life, but I used trains every day when I lived in Baltimore and Washington," said Henry, who works at an investment firm in University City. "I am totally on board for using tax dollars to build trains."

The DC area is tremendously dense and populous, though, sweetheart. It might be somewhat cost-effective there. But in Charlotte?  If you factored out all the subsidies and charged her full cost, not even Ruth would be able to afford to travel on CLT's light rail. Such a horrible waste of resources in the name of "world-class city" aspirations is shameful. And we shouldn't be subsidizing rich people to travel with rolling baubles just because they're too good to get on a *%#@ bus.  -Max Borders

Budget & Taxes: Fitzsimon believes state government is perfect

In his latest love letter to government largess, Fitzsimon over at Policy Watch sounds awfully defensive trying to justify the explosive growth of North Carolina's state government. Apparently, he believes the General Assembly has done such an outstanding job of governing that they deserve a raise of 20% over the last two years. Of course, this "raise" is actually the GA's way of telling themselves they spend every penny of our tax dollars so wisely they deserve more of it. First, he feels it necessary to justify the GA's spending of the "surplus":

Much of the ($1.4 billion) surplus is considered one-time money that may not be there next year.

Okay, fine. But why not return these self-described "overcollections" to the taxpayers? This marks the fourth straight year of budget surpluses - totaling nearly $3.5 billion. These overcollections amount to roughly $1,600 for a family of four. And let's not forget the thousands of new and better jobs that could have been created with an additional $3.5 billion pumped into NC's economy - jobs that would largely go to those most in need. Instead of economic opportunity and a chance at independence for the poor, "progressives" will choose bigger government and bureaucratic dependency every time.

Fitzsimon goes on to summarize North Carolina's tax burden:

Another important number about the state budget comes from the North Carolina Budget and Tax Center. A July report from the Center using U.S. Census Data found that as a percentage of personal income, North Carolina’s total state and local taxes in the period from 2000-2005 were at the same level as they were in 1990s.

So in his mind, the tax burden is summed as follows: "it hasn't gotten worse, so it can't be that bad."  A closer look at the data contradicts this sentiment, however. According to the Tax Foundation of Washington DC (perhaps the nation's largest clearinghouse of tax data), NC's average state/local tax burden of the 90's was 9.93 percent of income. From 2000-05, it was 10.15 - a mild increase to be sure, but certainly not "the same level." Nevermind the inherent bias of the data by comparing a whole decade comprised largely of economic growth to a five year span dominated by recession.

Furthermore, let's look at some more recent data. Under Gov. Easley's tenure, the state/local tax burden increased from 10% of personal income in 2000 to 11% in 2007; which translates into a 10 percent increase in the share of our income going to taxes.

Furthermore, NC has climbed to the 19th highest state/local tax burden in the nation - and highest in the Southeast. This is up from 36th highest in 2000. In short, NC has passed a whopping 17 states in tax burden under the current governor.  Compare this to our rankings (dating back to 1970) prior to Gov. Easley. The previous high ranking was only 28. According to Fitzsimon:

Hardly sounds like the state’s taxes are out of line.

What "line" might that be?

Thanks Readers

I want to thank everyone who sent such positive feedback about my Observer piece from Wednesday. I'm really excited about the response (even some grudging acknowledge from unusual quarters), which makes me hopefull these ideas could fall into the right hands and inspire change. -Max Borders

SCHIP: September Showdown

Check out this post from Grace-Marie Turner on the September showdown over the expansion of SCHIP.

Science & the Green Inquisition

Here's a damning indictment of the current state of "environmental science" by a UCLA prof.

I suggest also that the fees and taxes we pay for government employed environmental scientists go ultimately to people who sit around and concoct ways to keep their bread buttered (i.e. inventing crises that we must pay them to protect us from). Special interests within government are just as bad as those without. We must be skeptical of the information gatekeepers not just at the international level, but at the local level, as well. As the author writes:

The real danger to the environment, in this context, is not only the estrangement of the thoughtful members of the scientific community, but also the potential estrangement of the general population that eventually must pay for environmental improvement.

-MB

Raleigh Sanitation

Last year, numerous Raleigh sanitation workers stopped working for a couple of days to protest what they considered unfair working conditions and low wages.

Now, one year later, many of those same unfair working condition claims are being made and approximately 70-75% of the workers have joined a union even though by state law, the union has no authority or power to negotiate with the city.  The N&O documents the events here.

(Let me stop here to point out the irony in complaining about low wages, yet voluntarily forking over union dues to a union that has absolutely no power and is not recognized for negotiations.  Why not stop paying union dues and give yourself a de facto pay increase?)

But there is a very quick and simple solution to this problem: 

Get the City of Raleigh out of the sanitation business. 
I'm sure there's a company or two or three who might be willing to bid on the contract.  And who knows, it may just save us citizens of Raleigh some money.

Vouchers: Delhi vs. Raleigh

Delhi achieves what Raleigh cannot.

Education: Emphasize Economics

Good piece in the Charlotte Business Journal on economics education. The upshot: if people knew more about economics, we wouldn't have such bad economic policy coming out of Raleigh and Washington.

(Ironically, the same publication publishes this article. Economics education, indeed.)

Progressives on Progress

The dark ages have returned apparently.

Blue Marionettes Looking for Strings?

I normally wouldn't give any space (much less thought) to the mean-spirited gang of pink-bedizened hatchetmen over at BlueNC. (I'd much rather tangle with a more responsible and reflective group like those at NC Policy Watch. At least with NCPW you're far more likely to get an honest debate instead of ad hominem attacks, venom-spitting and conspiracy theories.)

But BlueNC and the sundry other australopithicines who frequent it all have the poochmouth because JLF didn't invite them to their blogger's party. BlueNC? Upset because the PuppetMaster offered to tie no string to its behind? ... Well they're just going to have to have a party of their own and invite neither the right-wing illuminati with their $100-bill-wrapped cigars, nor traitors to the left like Ed Cone. That'll show 'em (sniffle).

Anyway, I'll be there representing Civitas and RedClayCitizen. I've got rich fat guys lining my pockets, after all.

(Note Ed Cone's and Mike Munger's comments beneath the post. The latter could be our next guvna, ya know. :)) -Max Borders

Climate Change: What is your carbon hoofprint?

Moose burps may be contributing to the latest Carolina heatwave. Check out this from Der Spiegel.

Renewable Energy: Moore Invites Pigs to Trough

Here's one of gubernatorial candidate Richard Moore's "fresh ideas" for North Carolina: Renewable energy as "cash crop". I've explained why this is a bad idea before ...

1. Here
2. Here
3. Here
4. Here
5. Here

Shame a man running the N.C. Treasury needs an economics lesson about the problem of subsidies and environmental costs. This is groupthink at the highest level and conservatives are buying into it, too.

(Update: Easley signed SB3 into law today. Daren Bakst hammers it here. Politicians, left and right, will have hell to pay for this one.)
-Max Borders

Intelligent Design a la NC Policy Watch

Rob Schofield (I actually mention his name out of respect for him and in the spirit of open inquiry) has penned a delightful little piece on the relationship between the sub-prime mortgage fallout and global warming. The connective tissue, by Schofield's lights, is the need for the expansive regulatory state:

In effect, those who would promote and benefit from the continued short-term expansion of a carbon-fueled economy are the equivalent (albeit in many cases unwitting) of the rapacious mortgage brokers who helped propel the home foreclosure crisis. Both groups perceive themselves to be in accord with some set of immutable natural laws in which the pursuit of individual wealth is the highest form of human behavior. Each is oblivious to the broader effects of their own action for the rest of society.

This narrative, of course, is not new. I'm actually surprised that Schofield didn't blame the subprime mortgage issue on global warming itself. Most zealots of the Big Green Church are as eager to blame global warming, as old world zealots blame the Devil. But no, Schofield simply thinks that individual market actors need to be reined in -- kept from their excesses under government jackboots. Or, if you like, government nannies who must keep people from making risky judgements (as if the market hasn't punished the both parties - mortgagers and mortgagees - enough in the case of the sub-prime fiasco). Nevermind that mortgage companies are changing their own rules as they see fit to contain risk.

Schofield's answer is simply to remove risk from life by fiat. He overlooks all the people who are currently benefiting from those subprime loans; people who have been financially responsible and would not have otherwise qualified under his utopian regime. But nevermind them. He and a handful of bureaucrats are prepared to make your household financial decisions for you -- to take away your ability to attempt to live beyond your means and a mortgage company's risky decision to allow you to.  The current market punishment for such excesses is not enough. Excess must be proscribed by law.

But what about Schofield's general celebration of the regulatory state? Does it protect "freedom and prosperity"? Is it possible for an elite to adjust the rheostats of the market to make it work toward some ideal envisioned by Schofield? I'd argue no. Schofield is suffering under the planner's illusion. You might say Schofield believes in Intelligent Design. Allow me to quote myself at length:

Consider quotes like this from the New York Times’ Paul Krugman: “What's interesting about [the Bush Administration] is that there's no sign that anybody's actually thinking about ‘well, how do we run this economy?’”

The very idea of “running” an economy is predicated upon the notion that economies can be run and fine-tuned, much like a machine. But what Krugman and folks like Galbraith fail to understand is that the economy isn’t a machine at all, but an ecosystem. And ecosystems aren’t designed, they evolve.

Recall the last time you were in a room with both liberals and conservatives. If the liberal heard the conservative start to talk about Intelligent Design, you might have seen him shake his head rather smugly. Why? Because he will have read his Kaufmann, his Dawkins, and of course, his Darwin. He’ll let the creationist say his piece, and then he’ll reply along these lines:

As long as the basic regularities of nature are in place, Darwinism and complexity theory predict that the myriad forms of life and details of the world will emerge from the simplest substructures -- i.e. atoms, amino acids, DNA and so on. The world doesn’t need a designer. The complexity of the world is a spontaneously generated order. The laws of nature yield emergent complexity through autocatalytic processes.

But does our smug Darwinist extend this self-same rationale beyond life’s origins?

...

People on the political left, while characterizing conservatives as being flat-earthers, do believe in a form of Intelligent Design. For like their conservative counterparts who believe that nothing as complex as nature could possibly have emerged without being designed, Beltway bureaucrats and DNC Keynesians believe nothing as complex as an economy can exist without being shaped in their image.

What both fail to realize is that neither needs a planner. Markets (individual actors in cooperation) do a better job of self-regulation than any government official can do from on high. Ecosystems (complex flora and fauna interacting in complex ways) regulate themselves better than the most determined ecologist ever could.

In fact, the intersession of bureaucrats in the economy almost always make things worse -- as harmful unintended consequences follow from their actions. Because unlike the Intelligent Designer favored by Creationists, bureaucrats are neither omniscient, nor omnipotent.

The final irony in Schofield's post is that he misses this parallel between the subprime issue and global warming. (Computer models can't map complex systems -- climate or economic.) All of this reflects the conceit of the central planner in thinking he can fully understand and adjust a complex systems to his whim. But he cannot. And that is why people like Schofield, despite all their good intentions, are paving the road to serfdom... And if people are truly being harmed by virtue of some commercial activity, there is a way to adjudicate without central planning. -Max Borders

Awarding Yourself

Under the Dome reports that the NC Center for Public Policy Research (NCCPRR) has recently won two awards from a coalition of like minded (leftist) think tanks called the Governmental Research Association (GRA) for a report it released recently criticizing charter schools.

Well, guess what?  The head of the NCCPRR, Ran Coble, is also the President of the GRA.

So congratulations for giving yourself an award!

And to give yourself an award for a questionable study that ignored many of the unique qualities of charter schools is pretty ballsy as well. (For more on problems with the report, see this op-ed by Lindalyn Kakadelis that ran in the Charlotte Observer. See also this post by Max Borders).

Point of Order

Can a majority party in a state legislature act with impunity, against its own rules? It appears the N.C. General Assembly has done so:

(Listen to the audio.)

Now, here's House MInority Leader Paul Stam on the matter:

The press has reported on the private athletic scholarships that were slipped into the conference report on the budget at the request of Senator Dannelly.  The News and Observer has editorialized against it (August 17, 2007).

Now the News and Observer reports (Under The Dome, August 17, 2007 [Aug 16th?]) that the Speaker believes the scholarship provision should have received a full airing instead of being dropped in the final budget.  “He doesn’t like the process” says his spokesman, Bill Holmes.

But the Speaker was not an observer of the process.  He was in charge.

I advised the Speaker and the House Democratic Leadership that if they tried to slip things into the budget in violation of House Rule 44(b) that I would raise that as a point of order.  Forewarned that I would do that, they slipped in dozens and dozens of items like this, some of much more importance, including an extra $400 million dollars of spending.

The audio of the point of order and the Speaker's ruling is attached and a list of many of the special provisions involved appears beneath my signature below.

Previously under the reign of Speaker Black the rules were generally ignored.  In 2007 the Rules of the House were generally followed, except with respect to the final budget in which the most important rule was obliterated, at great cost to the taxpayers.

Here is a compilation of last-minute items added to the budget without debate, against the rules of the House. Speaker Hackney says he sees nothing wrong with these actions. You be the judge.

(News & Observer update on just the athletic scholarships.)

A sign of things to come?

Virginia Governor Tim Kaine announced today that the state is facing a $641 million budget shortfall next year and is asking state agencies to cut their budgets 5%.

Similarly, Maryland Governor Martin O'Malley says his state is facing a $1.5 billion shortfall.

Both Governors lay blame on the slowing housing market and over-zealous projections of revenue growth and the resulting spending that is now coming back to haunt them.

Obviously there are lessons to be learned for North Carolina, unfortunately those lessons only come after the leadership of the General Assembly increased spending 9.5% and issued over $500 million in non-voter authorized debt.

So, will there be a budget shortfall for North Carolina when the General Assembly returns next May?  Even if our housing market has been somewhat isolated from the national slowdown, you have to figure that the irresponsible budgeting over the past two years will come back to haunt us sometime real soon.

Public Finance of Elections: Fitzsimon Again

Without deigning to mention me by name, Chris Fitzsimon (his own paycheck coming courtesy of "big political dollars") questions my (classical) liberal opposition to public campaign financing:

A recent letter to the editor by a staff member [Max Borders] of a conservative group [Civitas institute] complained that public financing “sacrifices free expression” and “merely trades one evil for another” after admitting that “no one likes the influence of special interest on government.” If no one likes it, then why do we tolerate it?

Here is your answer, Chris: I don't "tolerate" it.  But in the same way I don't believe that the best way to cure a disease is to treat the symptoms, I don't believe that poisoning free expression is the best remedy for the problems of public choice and special interest influence. To blur the analogy: excessive government power in our lives and economic affairs is the disease. Less government power is the cure. Now you know. - Max Borders

Bias Watch

In today's segment of Bias Watch, we draw your attention to an article in today's Charlotte/News & Observer regarding transportation funding.

Reporter David Ingram writes:

The problem is money.

Policymakers in Raleigh can raise the taxes that pay for infrastructure, such as the gas tax, at the risk of alienating many voters. Or they can cut money from other programs, such as health care for the poor.

Wow.  Raise taxes or cut health care for the poor.  Those are our only two choices for how to solve the transportation funding problem?

Why does he not say "spend a portion of the $1.4 billion surplus" or "eliminate corporate incentives" or "not increase spending by 9.5%."  Or better yet, "not fund athletic scholarships."

Why is "health care for the poor" the only item he chooses to highlight?

Transportation: Insiders's False Dichotomy

The N.C. Insider** and government officials alike would like us to believe in this false dichotomy (registration required):

People who want North Carolina to spend more money on its growing transportation needs face daunting challenges in finding sources for that money. Policymakers in Raleigh can raise the taxes that pay for infrastructure, such as the gas tax, at the risk of alienating many voters. Or they can cut money from other programs, such as health care for the poor. In a report last year, transportation officials said the state needs $122 billion over the next 25 years to fix roads and meet the needs of population growth. But they said there would be just $57 billion available, leaving a $65 billion hole.

Programs for the poor or roads?  Well, if that were the choice, roads should prevail. But that's not the choice at all. There are several things N.C. could do without raising transportation taxes:

>Use creative financing measures such as HOT lanes, Toll roads, and other public-private partnerships - that draw and allocate resources closer to the point-of-need.
>Stop building expensive projects in parts of the state that are LOSING population. (That means kill the Equity Distribution Formula that has resulted in the four-laning of everything).
>Break up the Board of Transportation to eliminate old boy projects and take away transportation slush funds.
>Devolve responsibility for roads to counties.
>Introduce more competitive bidding for projects.
>Use the Hartgen Strategy of 1)Projected Vehicle-Miles Traveled (PVMT), and 2) Anything below a certain PVMT should not get built. All such project funds should then be diverted to maintenance.
>Rural N.C. gets well-maintained roads; Urban N.C. gets more new roads which will track both revenues and need very nicely.
>STOP PUTTING RESOURCES INTO WASTEFUL BOONDOGGLES SUCH AS LIGHT RAIL.

Yes, entitlement reform is desperately needed and N.C. will have to find a way to contain costs. But N.C.'s transportation budget and financing mechanisms are adequate without additional taxes. The reform should come in better, more efficient ways of allocating resources, not from throwing more money into an obsolete and wasteful system. -Max Borders

(**NOTE: The Insider apparently republished an editorial in the Charlotte/News & Observer. Chris Hayes blogs about it above (great minds and all...))

Who Owns My Healthcare?

...For most Americans, it's either your employer or the government. N.C.'s resident political polymath John Hood argues that we need to un-skew the tax code and let Americans own their own healthcare.

He's right not only in the personal responsibility, family budget, individual choice kinda sense, but he's right in the good-for-competition, lower-premiums, increased access sense, too. -Max Borders

Pork Spending: Schofield's Screed

Schofield over at Policy Watch can't even let our pork report go without shrieking his objections. In his "reality check," he attempts to compensate for his lack of intellectual firepower by thumbing through his thesaurus and including as many inflammatory adjectives he can find. Here is the final tally:

Schofield describing our ideology: "Far Right," "extreme, market fundamentalist right," "cramped and bizarre worldview" 

Schofield describing the pork report: "half-baked," "misidentify and mischaracterize," "recklessly tarring," "harmful libel," "absurd," "just plain wrong," "attack," "slimed," "flat wrong," "sloppy and inaccurate attacks," "Ill-conceived," "obvious and egregious errors," "slapdash, ideological diatribe"

It seems to me he needs to cloak his "analysis" with such flowery language in order to assure himself he possesses exclusive rights as a moral authority, and anyone he disagrees with should be either silenced or shamed.

Oddly enough, he barely stops short of defending wasteful government spending on the grounds that "waste, fraud and abuse have always been with us." So I guess it should just continue? Not very "progressive" to advocate the status quo.

He continues:

Think that waste is only a phenomenon of government? Then read some of the descriptions of the lavish spending practiced by America’s new “imperial CEO’s” or the vast sums that cycle through our bloated pharmaceutical industry.

What he doesn't understand is the fact that the market punishes excess on the part of private companies. Such CEO's end up in jail, are fired, or punished by fed-up consumers who are free to spend their money elsewhere. What happens when government wastes money? It simply rewards itself with more of our tax dollars.

The main point that needs to be made is this: Collectivists such as Schofield do not hesitate when advocating the use of force by government to take tax dollars and divert them to projects and causes they deem "worthy." He defends items we identified in the report as pork on the basis that he deems them "worthy initiatives." Guess what, there are countless other nonprofits devoted to very worthy causes that don't receive tax dollars. In fact, I can think of several I would prefer to support - and this list likely wouldn't include any of Michaux's pet groups who are happy to engage in political quid pro quo. Even if we were to suppose that government may justifiably support non-profit organizations, wouldn't it be better to have a comprehensive (competitive) grant process rather than allowing certain politicians to divert funds to their favored organizations?

What people like me with "bizarre worldviews" oppose is a government that has such omnipotence to decide for us which causes are worthy, and then take our money by force in order to fund them. Where is the social justice in that?

Schofield exemplifies hypocrisy by claiming our Pork Report should be labeled "things we don't like" and then goes on to defend certain items because they are "things he likes." Some reality check. Our point is not that we "don't like" such causes, it's that we want to be free to choose for ourselves which causes are worthy of support. Never mind that it's dangerous for nonprofits to become dependent on the government for funding - a dependency that will cause them to become complacent, less responsive to those in need and less innovative.

Climate Change: Hysteria over 0.6 degrees?

Devasting: Schwartz on Schwartz.

Fitzsimon on Transportation: Ignorance or Untruth?

Chris Fitzsimon thinks that $170 million in transfers from the HTF to the General Fund are justifiable because that amount was provided for in the original HTF legislation. He argues people like columnist Sharon Valentine and radio personality Ballard Everett are complaining about a whole lot of nothing, because "left out of virtually every rant about the transfer is that it was part of the legislation that created the Highway Trust Fund in 1989." Everyone with hay fever step back--Fitzsimon has created a straw man and he's taking swipes at it:

This year's budget included a provision saying that it is the General Assembly's intent to end the transfer from the Highway Trust Fund. And if lawmakers can find the money without reducing vital investments [like these?], it may be a good idea.//But nobody has been raiding or stealing anything. They are simply following the intent of the law that created the Highway Trust Fund. And if we are going to address the transportation crisis in any meaningful way, lawmakers will need to raise new revenue. Misleading complaints about the Trust Fund aren't enough.

I don't know which hypothesis is more disappointing -- that Fitzsimon knows so little about transportation issues in our state but writes about them anyway, or that he might simply be lying. In either case, I'd like to call Fitzsimon's attention to the 2001-02 transfer of $251.7 million, the 2002-03 transfer of $377.4 million, the 2003-04 transfer of $252.4 million, the 2004-05 transfer of $242.6 million and the 2005-06 transfer of $252.6 million -- all of which are more than the $170 million provided for in the 1989 HTF legislation. Nobody has been raiding or stealing anything?

In defense of Fitzsimon's straw man, however, some people think building infrastructure is the state's first responsibility, not pork projects, state health insurance for the middle class, or Taj Mahal high schools that allow only 18 kids in a classroom. $170 million per year would be a big help in building infrastructure. But what's at issue is the extra the Governor and Democrat-led General Assembly have raided. You do the math. (I'll pass over $700 million in transportation bonds that were sold and used in a weak attempt to pay back what was raided by Easley's N.C. Moving Ahead Project that voters did not approve.)

But what is more disconcerting in all this is that Fitzsimon seems to think there is no other allocation strategy besides the current one (i.e. the Equity Distribution Formula) that might better address the state's infrastructure needs without "new revenue." How about redirecting funds from non-cost-effective projects to the maintenance of existing roads and bridges?  (Professor David Hartgen says we could have saved $2.5 billion if we had eliminated the 50 least-cost-effective projects. This waste would include the elimination of projects like expensive highway exits that get fewer than 50 cars per day, or widening to four lanes rural highways all over rural eastern North Carolina where population is actually decreasing.)

Of course, just like all government spending, all transportation projects are "vital" to Fitzsimon who never saw a new tax he didn't like. And in his heart-of-hearts he knows that he'd rather get everyone in the state on "vital" programs like Medicaid for the middle class before relieving traffic congestion in the fastest growing areas of the state. The next time you're sitting in a traffic jam, fixing a flat caused by a pothole, or worrying about a faulty bridge, you have people like Chris Fitzsimon and Mike Easley to thank. They are running the show.

(FY ending 1990-2006      - millions of dollars)	Original Legislation	Actual Authorization	Difference
General Fund (all years)	$2,946	$3,473	+$527
Match for Federal Funds (04+)*	-	$289	+$289
Road/Bridge projects (02-05)