Red Clay Citizen

NORTH CAROLINA EDUCATION LOTTERY TO HELP FIGHT RECESSION

For Release: IMMEDIATE 

Contact: (877) 9NC-PLAY

         

EDUCATION LOTTERY TO HELP FIGHT RECESSION ANNOUNCES "INSTANT TAX REBATE" SCRATCH-OFF

RALEIGH - The North Carolina Education Lottery (NCEL) is going to help keep the economy from going into a recession. The North Carolina Education Lottery is introducing a new “INSTANT TAX REBATE” scratch-off game in conjunction with the issuing of “Tax Rebate” checks from the federal government.

The federal tax rebates in North Carolina will total billions of dollars and we need to insure that money is not wasted on frivolous spending but goes to supporting education. Since education is the ultimate economic development tool, this will spur the economy in North Carolina and help keep the country out of a recession.

This instant scratch-off ticket will have over $350 million in total cash prizes, which is a spectacular average of over $100 prize payout per household!

If we can convince half of the households in North Carolina to spend half their federal tax rebate on this game we estimate that the NCEL will gross over $1 billion. If the federal government would do the right thing and give a rebate to poor people and lower income families, who don't pay taxes, it would make our job easier as they are our target demographic (we also target mathematical illiterates and people not in full possession of their senses). If this would happen the Sky's the limit for potential sales!

The $300 million “INSTANT TAX REBATE” game is a $10 ticket with top prizes of $10 million. Players who scratch their way to win the $10 million prizes will be paid in installments of $500,000 over 20 years. There are also over 500,000 prizes between $50 and $500 and over 5,000 prizes from $1,000 to $50,000.

These tickets will be available in stores and check cashing centers when government tax rebate checks start arriving in lottery ticket consumers mailboxes!

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                              THIS IS A PARODY!

Same Story, 3 Headlines

Look at the way 3 of the major media outlets covered the Auditor's report of campaign use by the offices of Richard Moore and Bev Perdue:

N&O:  "Perdue, Moore used offices for campaigns"
Charlotte Observer:  "Auditor finds against Perdue, Moore"
WRAL.com: "Moore rips audit critical of computer use"

Interesting that N&O and Charlotte articles are the same text, same byline, except with different headlines.  The N&O gives top billing on its website to the article with pictures of both candidates.  WRAL, conversely,  gives Richard Moore front billing with a picture of just him and the fact that he finds the report flawed.  Favoritism by WRAL editors?  I think so.

Medicaid and Regulated Healthcare: Pure Evil?

From Arnold Kling:

Over the past eight weeks, I have been spending a lot of time with my father, who has developed some acute medical problems. For the most part, my focus is day-to-day (or hour-to-hour) on the issues and stresses that arise.

But I have also come around to some different points of view about our health care system. I no longer think of Medicare and health care regulation as inefficient. I now think of them as pure evil.

Read the whole thing.
-Max Borders

Climate Change: No Comment Necessary

For once, a politician tells the truth.
-Max Borders

More Problems with DOT

The N&O has this article on the newly completed I-795 between Wilson and Goldsboro.

Two thoughts from this:

1. There's an I-795???  Does this just not prove the point that transportation funding is royally screwed up in NC when we've got Interstate roads between two small-medium eastern NC towns, yet I-85, I-40, I-540, I-485 and all the other metropolitan areas suffer in congestion.

The Eastern NC domination of politicians (Hunt, Easley, Basnight, and Rand) have so bastardized the Highway Trust Fund that we're building loops around Wilson, Wilmington and Fayetteville before we finish loops around Greensboro, Charlotte and Raleigh.

2. Another botched paving job?  Really?  You'd think after the I-40 fiasco they'd try to not let that type of thing happen again.

It's time for serious reform of DOT.  Blow it up and start over -- it's just not serving the citizens of NC any longer.  If this was a parliamentary system and we could hold a "no confidence" vote, I don't know that anyone would vote to sustain it.  However, I'm doubtful anything will happen as long as the leadership in the Senate remains and until we get a governor from west of I-95.

Another Sunshine Idea for the Dome

Give state employees a percentage of every dollar they save taxpayers -- relative to a reasonable baseline.

Everyone can agree that state government wastes money. Rewarding government employees to streamline processes and save taxpayer resources (while improving quality, of course) seems like a no-brainer. If businesses do it successfully, why can’t governments? Bureaucrats can be entrepreneurial.

Here's the other thing: if a group of people has a positive incentive to create internal efficiencies and reforms, they're going to look over each other's shoulders. That's built in transparency. That's where we need it. You could have every major N.C. Department adopt such an initiative and not only streamline the orgs, but save taxpayer dollars, and increase accountability. Incentives matter.

-Max Borders

Smithsonian: We're Still in an Ice Age

Jeff Bennett, a Julian Simon fellow at PERC, took two interesting pictures of a display at the Smithsonian Institution. Now, he's taking bets on when those displays will be taken down given the 'climate' of global warming alarmism. Check 'em:

Now, either these old displays are old news and no longer accepted science (the truth is, no one knows the degree to which climate change is due to natural variability), or they're solid as oak. Either way, when the nation's premier nature museum is telling us and our kids that we're in an ice age (and that warming may be due to our coming out of said ice age), we'd better reevaluate something.

My bet? I'm thinking they'll come out by the time we have a new president.
-Max Borders

How Much Do They Make?

To continue on the sunshine in government theme of the week, the Charlotte Observer has a compiled a database to search the pay of NC government employees.

Check it out here.

Stimulus Halfway Home

The $146 billion economic "stimulus" bill passed the US House of Representatives earlier today 385-35.  The only NC Congressman to vote against it was Rep. Howard Coble (R) who had concerns about the impact of the bill on the deficit (and rightly so).

The bill now heads to the Senate where it will be interesting to see if the Senators attempt to change it despite threats of a Presidential veto.

Keep an eye on NC Sens. Dole and Burr on the proposed amendments and see if they hold with the President and House's position.

Also keep an eye on whether the Democratic leadership revises its earlier thwarted attempts to increase taxes on domestic energy production to subsidize renewable energy.  Lots of goodies and favors to be thrown around, it'll be interesting to see just how clean this bill can make it out of the Senate.

N.C. Partisan Index (NCPI) : Pretty Wicked

For political-junkies-cum-number-crunchers: the NCPI. (House, Senate)

As many of North Carolina’s citizens consider whether to run for the state Legislature this year, one of the first questions they ask is whether they have a good possibility of winning. Candidates and political consultants pore over data from past races and voter registration, trying to answer that question. This year, the Civitas Institute is pleased to bring another tool to the table: the North Carolina Partisan Index (NCPI).

Kinda makes me wish I took stats in school. (Nah.)
-Max borders

Wonder Why?

Our friends over at the Locke Foundation released their annual report on the cost of local government to the taxpayers.  To no one's surprise, Charlotte comes out on top -- due in no small part to its obsession with light rail.

But then you see waste like this, "Charlotte city and school board leaders are spending about $45,000 this month traveling out of town for retreats"  and wonder if it is not just something more -- a negligence of their duty to be stewards of the taxpayer dollar.

We already know Mayor McCrory has gone to Paris to study the trains there, but what other far off destinations are the other officials heading to?  Well, how about the Grandover Resort in Greensboro for a 3-day "retreat." 

Apparently, Charlotte is devoid of places for City Council members to gather in one place and talk to themselves.  Maybe they can talk about more ways to spend taxpayer money to lure themselves back to where they live.

What Was That About Sunshine?

Max and Ryan have been talking quite a bit about sunshine in government over the past few days.  Well, that light just got a little dimmer.

State pensions no longer available to the public.

Boudreaux on the Presidential Election

Prof. Boudreaux: "Behind all the soaring (if vacuous) rhetoric, all the Janus-faced and shameless pandering, and all the sleazy campaign tactics lies one truth: each candidate's lust for power, fame, and the tawdry glory that comes with high political office.  Make no mistake: while pretending to tug for my heart, these candidates really are tugging for my freedoms and my wallet."
-Max Borders

NCDOT Corruption: Know Anything?

There is a throw-away line in the Source, the Charlotte Observer's political blog, in which author David says:

[T]hree former DOT employees were sentenced to federal prison just a week ago -- for corruption. Prosecutors say the employees extorted kickbacks from contractors, and that the investigation of DOT corruption is ongoing.

Moreover, a member of the Board of Transportation, Tom Betts, resigned a week ago amid a scandal involving campaign money.

Does anyone know any more details about this corruption, the charges, and the people involved? Inquiring minds want to know (maxb@nccivitas.org).
-Max Borders

Technology, Incentives & Transparency

Ryan Beckwith has been complaining of late - and justifiably so - about the lack of transparency in N.C. government. Much of this murkiness has to do with usability. In this latest post, Beckwith touches on the disparate and disjointed Web sites that allow people to access information on state government:

Consider a newly registered voter. You've misplaced your registration card, but you'd like to check up on your representation in the legislature.

Let's see. You could go to your local Board of Elections and check. Who runs that again? The county? Hopefully you know that, but you could be forgiven for forgetting.

You could go to the State Board of Elections Web site and search its voter database. Another click and you can see your voting districts as well.

Now, then, who represents the 17th House District and the 8th Senate District? It doesn't say.

You have to go to the legislature's Web site for that and search again. Make sure you open a new window in your browser, though, since you may forget the district numberss by the time you click on Representation, click on Representation again, select a House District and hit go, then repeat the process for the Senate.

Civitas, as small as we are, has tried to put this info together, but our Citizen Legislature has limitations -- (limitations that might be overcome with adequate funding from concerned citizens ;). Still it's perhaps more of a clearinghouse than what's available by your government. Which prompts the question: why is it so hard for government to make things easy for users?

The answer is: incentives. Government has no positive incentives to make itself more transparent or to make life simpler for users. Unlike Google - which profits from its usability - the government has only a minimal incentive to comply. If there is no statutory directive to be transparent or user-friendly, then they have even fewer incentives.

There are some ways to bring more sunshine, however:

- Citizen coders could start either a wiki or other technology that allows a distributed community to build a one-stop open source platform for state government information.
- Legislation might allow the government to contract a tech company to come in and do some work to unify the disparate legacy technologies that currently frustrate users.
- Active citizens could form a non-profit devoted to government transparency in North Carolina. The foci of this org could be technology and transparency.
- N.C. Universities could form a coalition/consortium that includes poli sci and computer science students working in collaboration to make government more transparent while giving students real world experience.
- The News & Observer could hold a contest for the best plan to increase transparency. Offer a prize of, say, $2000 and publish the best ideas.
- To repeat: big donors could donate to Civitas to flesh out Citizen Legislature to make it everything we (you) want it to be.

(Update: My 15 mins never felt so good. Plus, Beckwith is right: Gov't has a disincentive to be more transparent. That's why the people have to step in sometime clean house. Power to the people.)
-Max Borders

Gasp! The N&O plugging HSAs?

They're not as gung-ho as I about the cost-saving power of HSAs. But for the media, it's a start. Check it out:

But an emerging alternative to conventional health insurance is the Health Savings Account, or HSA. Touted as a money-saver for consumers and for employers who offer health insurance, an HSA makes you use your own money (or funds set aside by your employer) to pay for medical expenses until a high yearly deductible -- $1,000, $2,000 or more -- is met. Above that, conventional insurance kicks in.

The cost calculator was created for this sort of plan. One criticism of the high-deductible concept is that, while it puts pressure on patients to act as cost-conscious consumers, cost information has been hard to come by. Now "typical" Blue Cross payments will be online. Individual providers' charges will not be, so this is a benchmark, not comparison shopping. Yet it's worthwhile to see how much the costs of certain procedures -- colonoscopies, for example -- vary with the setting in which they're done.

I don't think the N&O understands the impact of, say, a 20 percent penetration rate with HSAs. Once it becomes readily apparent that people are adopting consumer-driven plans, care providers are going to have to start paying attention to cost. Our current third party system means doctors can just slide by only negotiating with insurers. Now they'll have to pay hardball in the market. This will mean tremendous cost savings (though, it's not a silver bullet).
-Max Borders

N.C. Teachers Can Stop Wingeing Now

... even though they won't. Terry Stoops shows teachers in N.C. are overpaid, just like in other parts of the country. Or should I say -- we don't know how much they should be paid, since the public schools are a monopoly? In any case, they get killer benefits, work only half the year in most places, and get paid a solid salary. What more could you ask for?
-Max Borders

More on Raleigh's Train Envy

As Max has pointed out below the problems with the reporting on the trip of the Raleigh officials to worship Charlotte's "Golden God", Raleigh officials can't even get their stories straight on the reason to have transit. (N&O article here.)

Wake County Commissioner Tony Gurley (R) - "A good transit plan will stimulate economic development," Gurley said in an interview. "I don't expect the transit plan to create a significant reduction in traffic on the roads." (Emphasis mine).

Wake County Commissioner Betty Lou Ward (D) - "The bottom line is that as our population increases, the roads don't get much wider, and we get stacked up in traffic."

So which is it, are trains for economic development or for congestion relief?

I'm sure there are better ways to achieve economic development than increasing taxes by $6 billion, and we already know that trains won't do jack for congestion relief due to: 1. the lack of density in the Triangle. 2. The sheer fact that trains carry 20% of the riders of roads at 500% of the cost.

Let's end this fantasy now.

WRAL "Reporting": Staggering Light Rail Bias

WRAL's reporting: Wow, look at Charlotte's new half-billion dollar phallus. That's 21st Century stuff, there. The Raleigh delegation loved it, too, and we want one here, since Charlotte has one. We want to be a world class city!

>>No reporting on how much this cost the citizens of Charlotte, the taxpayers of N.C., or the rest of the country (because, you know, Charlotte got federal funding, which the triangle won't get).
>>No reporting on how much MORE this would cost the Triangle.
>>No reporting on the impracticability of linking separate clusters of activity.
>>No reporting on the difficult issues of Triangle density.
>>No reporting on any skeptics or dissenters to the project in Charlotte.
>>No reporting on any skepticism or dissent in Raleigh.
>>No reporting on the fact that Charlotteans would pay more than $30 per round trip if they had to pay full costs and didn't impose those costs on other non-riders around the state.
>>No reporting on the fact that this will cause more congestion and has no environmental benefit whatsover.
>>No reporting on the fact that this is a subsidy for the wealthy.
>>No reporting on the fact that this carries 5 time fewer people than the average freeway lane, but costs 5 times as much.
>>No reporting on the fact that there are unfinished projects around the state that are unfinished so that Charlotte could get this.
>>No reporting on the fact that this is a fetish and only a fetish.
>>No reporting on the fact that the "bus" that was 20 mins later to their destination would have arrived on time had they not built light rail in the middle of the busway.
>>No reporting on the fact that busways and increased buses are - at least - ten times less expensive, more flexible, and just as comfortable. (They're just not urbane enough for Charlotteans who demand gilded trolleys.)

Now, Triangle denizens have phallus envy. And WRAL is feeding it. Bad journalism.
-Max Borders

Accountability? Think Again...

Last week the Charlotte Observer endorsed the Blue Ribbon Commission on Charter Schools recommendation to expand the number of charters and to take strong action against low performing charter schools.  The editors say tough action is necessary because too many charter schools fail to meet state requirements. What’s strong action? Closing failing schools or not renewing the existing charters of schools that fail to show improvement.

I’m all for accountability and giving “teeth” to existing provisions, but why the double standard?  Aren’t there far more underperforming public schools in North Carolina? According to the NC Department of Education ABCs test results, in 2007 there were 43 low performing schools in the state. What’s more the state is currently under court order to improve or close nearly 20 low performing schools. A cursory review of NAEP, SAT, ABC scores and dropout data is not encouraging reading. Yet, where’s the outcry about low performing public schools? 

If we close charter schools who fail to perform, why don’t we demand the same from low performing public schools  − especially after many of these schools have been the recipients of hundreds of thousands of dollars in so called "turnaround assistance”?  All the talk about accountability rings hollow if we keep open failing public schools. Doing so only underscores the truth that charter schools are held to a different standard −one that seemingly doesn’t apply to the public schools.

So Where'd Your Raise Go? Healthcare

Another favorite narrative of the leftosphere is that there have been no significant wage and salary increases for working Americans in the last few years. Thus, they say, economic booms don't serve the middle class. But we know better. There have been increases - significant increases - and they've all gone to healthcare costs--which have gone up and up due to bad public policy created by, you got it, the Left. Here's Grace-Marie Turner on the matter:

Investor’s Business Daily yesterday published an article I wrote for them about how rising health costs are gobbling up the take-home pay of workers who have job-based health insurance.

This helps explain why people feel they are working harder and harder and just can’t seem to get ahead. A recent ABC News/Washington Post poll found that only one in five Americans feels they are getting ahead financially.

Of the nearly $3,000 in pay increases that workers received between 2000 and 2005, they have taken home less than $900 of the money. The rest went to benefit costs that are subtracted from their paychecks before they ever see the money. More than one-third of the average wage increase went to pay for higher health insurance premiums and a fourth of it went to retirement contributions.

Workers are increasingly benefit-rich but cash-poor. Maybe it’s time for a rebalancing. Visibility of the full costs of these benefits, not just their health insurance copayments and pension contributions, would be a big help.

So you know why premiums are going up? Four basic reasons: 1) government health insurance mandates, 2) overconsumption due to the HMO model, 3) the death spiral driven in part by the first two reasons and Medicaid expansion to children (who're lower risk, so keep premiums down when in the risk pool), and 4) the unfair, unbalanced tax code proping up employer-based healthcare.

The next time you hear someone utter the term "free-market healthcare" with reference to our current system, try to hold your vomit.
-Max Borders

Blogger Running for Office

Dean Stephens who blogs here (and here) is running for public office in Eastern North Carolina.
-Max Borders

Voters Oppose Universal Abortion Coverage

A new poll by the Family Research Council finds that a majority of voters would not vote for a presidential candidate who supports using taxpayer dollars to fund abortion coverage under a single-payer healthcare system. Reports FRC:

56 percent of voters "would be 'less likely' to vote for a presidential hopeful 'if the candidate proposed a national health care plan with universal coverage of abortion at taxpayer expense.'"

45 percent of voters "intensely opposed the idea, indicating that they would be 'much less likely' to vote in favor of a candidate whose plan forced taxpayers to pay for abortion, compared to just 19% who would be 'much more likely' to endorse such a candidate."

The cross tabs show that opposition to "taxpayer-funded abortion coverage crossed nearly every demographic control, including sex, race, region, party, and age."

Keynesian Zombies

Keynes's corpse has awakened. It bit somebody and now throngs of Keynesian zombies are running around Washington croaking "stimulus, STIMULUS." They should be saying "more brains".
-Max Borders

The Relationship Between Trade & Peace

My dear friend Michael Strong has a wonderful paper up detailing the relationship between peace and free trade. (Michael is co-founder along with Whole Foods CEO John Mackey of FLOW -- one of the coolest groups around advocating for conscious capitalism and social entrepreneurship.) Check it out.
-Max Borders

Subsidized Poverty and "the Children"

Progressive Pulse has another "children" post that, I suppose, is designed to divine more crocodile tears for North Carolinia's poor population. Gregg Flynn concludes - based on the recent poverty stats taken by the Census Bureau (see our statewide map here) - that:

Statistics can be obfuscating but what is clear is that in North Carolina at least 287,894 school age children plus 138,820 children under 5  live in poverty and that the distribution of these children and the resources to meet their needs are uneven across the state.

Hmmm. Statistics aren't the only thing that can be obfuscating, apparently.

And how about the fact that poverty statistics don't really determine the "distribution...[of] resources to meet their needs" at all. In other words, you may live below the poverty line - which means your income is low enough to meet the poverty criterion - but that is not indicative of how much you may or may not be receiving in non-monetary government benefits including food stamps, subsidized housing, Medicare, Medicaid, free or reduced lunch, etc. etc. (all that stuff that helps children "meet their needs"). These data do not include localized cost-of-living adjustments, either. For all we know, total benefits per capita could be higher for these counties than in years past.

Indeed, after the Welfare Reform Act of 1996, the poverty rate went down (again, measured mostly by income) -- because more people had incentives to work rather than stay on government benefits. According to the Manhattan Institute:

Child poverty showed a rapid decline in the late 1990s. The decline was especially dramatic for black and Hispanic children, among whom the poverty rate dropped by close to one-third between 1993 and 2002, and did not increase significantly during the recession years of 2001–2002.

The fact that the decline in child poverty overlapped large national economic gains in the mid- to late 1990s has been used by welfare reform critics to bolster the argument that declines in child poverty after 1996 were due to broader economic factors and not welfare reform. However, this criticism does not explain why child poverty declined in such a sustained and dramatic fashion, since it had been impervious to improvements in the economy for more than the two decades prior to the mid-1990s.

What's worse about this latest "children" post is that Flynn doesn't address the very grave possibility that those government benefits that meet the needs of the poor could be the very perverse incentives dragging down the poverty averages. As entitlements creep upward, people have less incentive to earn more -- i.e. to get more income (which is how poverty is measured) -- because they'll lose those overall benefits. This is called a wage trap. And believe me, benefits for the poor have been creeping back up since 1996 -- particularly in N.C. So we should expect the poverty rate also to go up, too, due to the wage trap. It's a vicious circle.

(I don't suppose that Flynn would like to hear that poverty is also calculated not only by income, but by the number of people per family household -- a factor that would change rapidly due to the continued influx of illegal immigrants, who tend to live many to a family and who tend also to be poor.)

I don't expect the people over at the Pulse to burden themselves with tough, counterintuitive economic concepts like wage traps. I expect them to emote, to demand radical redistributions of wealth, and to put up sad, grainy, black-and-white pics of children from the dustbowl era. But I do expect RCC readers to know better when they run across such fallacies ad misericordiam and uncontextualized numbers.

-Max Borders

If Not NoVa, How Triangle?

In a huge blow to the DC area's Metro expansion hopes, the Federal government and the Department of Transportation said today they had serious concerns about the financial viability of the proposal to extend the rail line through Northern Virginia to Dulles Airport.

So, if it isn't financially and technically viable or sound to extend the one of the nation's busiest rail lines through a region that is more densely populated and with worse traffic congestion than the Triangle, how would it be viable here?

Spinning Illegal Immigration: PPP Style

Tom Jensen over at Public Policy Polling says one of our questions was "interesting" and that he would have worded it a "little differently". Our question:

DO YOU AGREE OR DISAGREE WITH THE DECISION BY THE NORTH CAROLINA COMMUNITY COLLEGE SYSTEM TO REQUIRE LOCAL COMMUNITY COLLEGES TO ADMIT 18 YEAR OLD ILLEGAL IMMIGRANTS AND CHARGE THEM OUT-OF-STATE TUITION RATES?

His wording, Jensen says, would have been:

"Do you think the children of illegal immigrants, who have attended North Carolina's public schools, should be able to attend the state's Community Colleges?"

Jensen's wording is a strange - if not seriously misleading - way of putting the question. After all, the policy in North Carolina has nothing whatsoever to do with whether an illegal immigrant has attended the public schools or not. The policy is that they be at least eighteen years of age, which is why we phrased it that way. If Jensen is genuinely interested in some irrelevant counterfactual, then so be it. But I think he's probably admitting that he's interested in spin. After all, most community college students have nothing to do with former public school students, rather are educating illegals -- mostly in their 20s and 30s (average age is 29).

But Jensen's right: He would have worded the question in a way that frames the issue and biases the outcome. But we already knew that's what PPP is up to most of the time. Still, if this is their only objection to the Civitas poll this month, I guess we shouldn't quibble too much.

(Ouch. I'm only just now seeing this PPP skewering from gubernatorial candidate Orr.)
-Max Borders

Housing Foreclosures: Why Think? Just Blame Bush

Rob Schofield over at Policy Watch offers up this painfully shallow piece on the subprime/foreclosure mess. It’s amazing at the incredible lack of depth in Schofield’s “analysis.”  He understands economics about as well as I understand women’s fashion.

"How the heck did we get into this mess? There are a lot of reasons, but it mostly boils down to some toxic byproducts of Bushanomics - namely, a wildly under-regulated market of predatory corporations and a distressed middle class that's having a harder and harder time staying afloat. As Banking Commissioner Joe Smith said, we used to talk about the housing downturn as being only about the "subprime" market. Now we know its reach is much deeper."      

He blames things on a “wildly under-regulated market” while not mentioning a single regulation that has been stripped recently. More telling, there’s no mention of:

1) the HUD rules mandating that Fannie and Freddie finance a certain percentage of loans to “underserved” people

2) the fact that HUD had recently praised the lending industry for its “creativity and innovation” in developing new loan products (i.e. subprime and no doc) to help the underserved communities (mostly minorities) to attain a loan

3) the recently revealed fact that a large share of defaulted loans were taken out by people who lied on their loan application

4) international banking regulation which in the end directs large investor firms to increase their share of (high-risk) mortgage backed securities into their portfolio

5) the government-created oligopoly of credit rating agencies and the resulting perverse incentives for them to give high ratings to these risky securities

Then there is this statement:

"North Carolina

is actually not as bad off as some states. This is mostly attributable to the fact that our state legislators and regulators have done a much better than average job in defying the right wing's deregulatory push in recent years by passing anti-predatory lending and mortgage servicing legislation."

Actually, the states that are worst off are those experiencing the largest decline in housing values. NC is lucky to have experienced (until very recently) solidly growing housing values due to the population influx. As housing values in the state decline, watch the foreclosure rate increase.

Rather than examining some of the real forces at work, Schofield jerks his knee and takes his typical intellectually lazy route of blaming “Bushanomics.”  Why look into the actual incentive structure of the process when you can just blame Bush and call it a day?

Fetal Homicide Bill: Opportunity Foregone

Jameson Taylor's N&O piece is poignant: the N.C. General Assembly has missed a serious opportunity on the question of fetal homicide -- proving just how out of touch the Democrat leadership is with the citizens of North Carolina, not to mention other southeastern states:

If convicted of first-degree murder Laurean will either be sentenced to death or imprisoned for life without parole. Under North Carolina's "injury to a pregnant woman" law, the death of Lauterbach's unborn child is essentially treated as an aggravating factor that would make Laurean guilty of a "felony one class higher than the felony committed."

Because no crime is more serious than the Class A felony of murder, it doesn't seem to matter whether Laurean is charged with a double homicide. At least that's what state Sen. Julia Boseman, D-New Hanover, says. Convicted murderers are "going to go away forever or die, and adding another charge to it is not going to make them die twice or spend two lives in prison."

But by that logic, anyone charged with first-degree murder should not be charged with any other crime. Think of the time and expense to be saved if we dispensed with multiple convictions. Take, for example, Gary Hilton. Hilton is accused of murdering a hiker in the north Georgia mountains. He is also a suspect in the murder of two hikers killed near Asheville. But why bother? Hilton has already been charged with one murder. What good will it do to charge him with two more -- not to mention another murder in Florida?

Perverse logic. Taylor goes on to explain why justice for all victims is the duty of our institutions. No matter where you stand on the question of abortion, ending the life of a fetus is certainly not a choice a murderous non-mother has a right to. This is one failure the G.A. leadership deserves to get bludgeoned with, politically.
-Max Borders

More Calls for Transparency

The NAACP wants more transparency, too. If Louisiana can do it, we can.
-Max Borders

If You Weren't At Lunch Today...

As one of the guest panelists, I went out on a limb and predicted that based on the polling data, Lt. Gov. Bev Perdue would win the Democratic nomination for Governor.

The overall results showed Lt. Gov. Perdue with a 34-24 lead over State Treasurer Richard Moore.

However, if you look at some of the crosstabs, Perdue holds bigger leads on demographics of the core Democratic constituency.
Among self-identified "very liberals" she leads by 15%
Among self-identified "somewhat liberals" she leads by 31%
Among those who say they "always vote Democratic" (aka. the hardcore voters) she leads by 15%
Among African-Americans she leads by 25%
Among women she leads by 17%.

So how exactly does Richard Moore win a Democratic primary without the support of African-Americans, women or liberals?

The only demographic where Moore is competitive is in self-identified "somewhat conservative" or "conservative" Democrats (aka "Jesse"crats) -- those who also say they vote Republican more than Democratic.

The appeal of Moore to conservative Democrats is one that makes him the strongest General Election candidate but that doesn't win you a primary.  My money is on Bev to win the primary even though she'd be a weaker candidate to run against the eventual Republican nominee.

Sunshine on Government

Sunshine on government helps with the various rots and ergots that can form here and there -- and do form with great frequency.

Ryan Beckwith has a great idea: let's make government activities Googlable. This should be a matter of principle, he suggests, because in the Internet Age, sunlight can be filtered by monstrous pdfs and other transparency killers. His principle: "Allow direct linking on complex legislation."

Pretty simple.

Beckwith has asked for more principles to help make government more accountable. The comments are wide open. (I know you conservative-types don't like to comment, but here's your chance to spread a lil sunshine.)

(Update: Bobby Jindal's doing it in Louisiana.)
-Max Borders

The Poll is Up

And the results are truly bizarre on a number of fronts. Check it out: What do you think?
-Max Borders

Unintended Consequences: Do-Gooders Take Note

I've written before on the importance of unintended and hidden consequences. Short-sighted bureaucrats and feel-good pundits still just don't seem to get it. This NYT piece brilliantly lays out some examples of unintended consequences that those who govern by feeling need to pay attention to.

Take the Americans with Disabilities Act (A.D.A.). Who could be against helping the disabled?

"..(an academic study) found that when the A.D.A. was enacted in 1992, it led to a sharp drop in the employment of disabled workers. How could this be? Employers, concerned that they wouldn’t be able to discipline or fire disabled workers who happened to be incompetent, apparently avoided hiring them in the first place."

So, the result of the ADA was fewer disabled people being able to find work because employers feared its repercussions. Still feel the same way about that law?  Of course, nobody is trying to say that the ADA didn't have any positive impact. But such unintended consequences must be considered before enacting new laws and regulations, a consideration that seems to be lacking in the interventionists among us.

Check out the article, and remember what road is paved with good intentions. 

Electing the Superintendent of Public Instruction

With all the discussion on Dome and other political blogs (here) today on Bob Orr's proposal to appoint the Superintendent of Public Instruction, I thought I'd did into the archives of RCC here and point out something I wrote back in June regarding public financing of campaigns.  (Remember, Superintendent is one of the races that the General Assembly approved for a pilot program of public funding of political campaigns.)

First, why are we even electing some of these Council of State positions?  Do we really need to elect the Superintendent of Public Instruction?  As Gov. Easily has proven through his appointment of JB Buxton (who lost to June Atkinson in the 2004 Primary), the position is little more of a figure head and the real power lies in the State Board of Education.

What about Agriculture or Labor Commissioner?  Shouldn't these positions just be appointed by the Governor?   If anything we should be electing the Secretary of Transportation, maybe then we can see some accountability out of that department.

Civitas Poll Luncheon Tomorrow - Come on Out

There are quite a few interesting developments this month in the world of N.C. polling... The biggest one has to be McCain going from zero to hero in this state, followed closely by Clinton's slide. Come check out the results in person; otherwise, find them after 3pm here.
-Max Borders
(PS: Civitas always appreciates the RSVP for luncheon participants.)

Just How "Free" is the "Free Market"?

A recent NYT article posed the question "The Free Market: A False Idol After All?" No doubt, progressives and anti-market types joined in one Pavlovian chorus in response. Folks like Fitzsimon and Schofield over at NC Policy Watch like to delude themselves and their readers into believing that we have been living in some sort of pure laissez-faire-lovers paradise ruled by "market fundamentalism" here in the US. "If only government would interfere just a little bit and correct some of the inherent injustices of the capitalist system, we would all be better off" they often lament.

Jeffrey Tucker has a great response to such nonsense. First, this notion that our economy is largely unhampered, and therefore any "failures" in the economy can be blamed on an unfettered free market is simply fantasy.

"We live in the 100th year of a heavily regulated economy; and even 50 years before that, the government was strongly involved in regulating trade.

The planning apparatus established for World War I set wages and prices, monopolized monetary policy in the Federal Reserve, presumed first ownership over all earnings through the income tax, presumed to know how vertically and horizontally integrated businesses ought to be, and prohibited the creation of intergenerational dynasties through the death tax.

Just how draconian the intervention is ebbs and flows from decade to decade, but the reality of the long-term trend is undeniable: more taxes, more regulation, more bureaucracies, more regimentation, more public ownership, and ever less autonomy for private decision-making."

Tucker then attacks what can be narrowed down to either ignorance or outright deceit on the part of journalists and pundits:

"How is it that journalists can continually get away with asserting that the fantasy is true? How can informed writers continue to fob off on us the idea that we live in a laissez-faire world that can only be improved by just a bit of public tinkering?"

Of course, bureaucrats will always long for more intervention because it provides them with more power, and elites will go along with it because they refuse to acknowledge anything less then their omniscient ability to plan and direct society, nevermind their complete denial of the superiority of spontaneous order and localized knowledge. Naturally, most interventionists think that their recommended dose of meddling is just the right amount to "correct" the perceived negative externalities of the market system. To those folks, I say this: Take one look at the massive tax and regulation codes (both US and NC) and try to convince that we need "just a little more intervention" to make everything perfect.

Revisionist History?

It is often the Clinton's who are accused of using "revisionist history" to look back on past events and portray them different than they actually happened.  But it seems Obama has been stealing a page from their book.

In last night's debate, Obama referred to his praise for Reagan in being that he (Reagan) was "a transformative figure because he was able to get Democrats to vote against their own economic interests to form a majority to push through their agenda."

What?  How was it against the "economic interests" of Democrats to vote against double-digit interest rates and  gas rationing and for tax cuts in 1980?

And it was again against their "economic interests" to vote against Walter Mondale's vow to raise their taxes in 1984?

Wow.  Either that is some revisionist history or a seriously distorted view of what is in the best interest of average citizens.
Who knows, maybe this is what Obama believes -- that the best interest of people is to vote for higher taxes and more government regulations since we all know that government knows better how you should live your life and spend your money.

Wal-Mart. Good or Bad?

Interestingly, the Federal Reserve Bank of Minneapolis takes a look at that question. Is Wal-Mart the evil monster that crushes "Mom & Pop" stores in every small town it enters?

The answer, it seems, is no.

Wal-Mart is widely  believed to destroy local firms and jobs and to have a dampening effect on  wages. But fedgazette findings suggest the opposite: Firm growth, employment and total earnings were somewhat stronger in Wal-Mart counties and, in some cases, even in the retail sector.

The report is an interesting read.  Check it out here.

Rebate Checks: Not Very "Stimulating"

Looks like RCC has commented several times on the proposed "economic stimulus" package coming from DC. The main points describing this as a bad idea seem to focus on the long run, i.e. "the rebate money will just be financed by debt or tax increases, which will place a drag on the economy." This viewpoint, of course, is true.

But what about the short run?

Doesn't it seem like sending a "rebate check" to millions of Americans will prompt them to consume more? Not so. Bruce Bartlett does an excellent job in this WSJ piece describing why using Milton Friedman's permanent income hypothesis:

"(Friedman's) research had led him to conclude that consumer spending was less a function of liquidity than something he called "permanent income." Friedman observed that when workers lost their jobs, they didn't immediately cut back on spending. They borrowed or drew down savings to maintain spending, in the expectation of finding a new job shortly. Conversely, consumers didn't immediately spend windfalls. They kept spending on an even keel until they achieved a promotion at work, or other increase in their long-term income expectations."

In short, upon receiving said rebate checks, people will either save the extra money or use it to pay down debt (two sides of the same coin). Studies following the tax rebates of 1975 and 2001 confirm Friedman's theory. Bartlett proclaims:

"A new rebate probably won't do much harm. But anyone who thinks it will prevent a recession -- if one is actually in the pipeline, which is not at all certain -- is dreaming."

A better fiscal policy response? Treasury Secretary Paul O'Neill provided the best advice:

"If we want to change consumption patterns, we need to make permanent changes in peoples' tax burdens."

Cost-Effective Way to Turn Down the Temp?

Whether climate changes in the Northern Hemisphere are caused by natural climate variability or by anthropogenic greenhouse gases, there may be a low-cost way of turning down the thermostat. David Schnare's Senate testimony linked to geoengineering looks promising on its face. A sliver:

I testified that the oceans will not rise and flood the bay because before that can happen, before the Greenland Ice Sheet can melt, someone is going to employ "geo-engineering" to turn down the global temperature.  They will do that by replicating what volcanos do.  They will put small reflective particles into the troposphere that will create a sunscreen that will stabilize the global temperature at a level that will prevent melting of the glaciers and thus prevent a rise in ocean level.  They will do this because it will be one one-thousandth less expensive than trying to control emission of greenhouse gases.  They will do this because it means they will be able to grow their economies, develop their nations and still not suffer the worst effects of climate change.  They will do it so that they, and the rest of the world, will have a few centuries to find a way to transition to non-carbon energy sources.

-Max Borders

Indoctrinate U at Duke

For those of you concerned about the egregious propagandization of college students should check out the proof in the puddin'. Indoctrinate U - a documentary on the subject of ideological brainwashing in higher education - will be at Duke on January 29th.
Check it out (here's the trailer).
-Max Borders

Ghetto Nihilism: Reflections on MLK Day

Civitas just had NPR's Juan Williams as a guest speaker. In his open forum discussion, he laid out a case against ghetto nihilism similar to this one made by Rod Dreher (whom I usually cannot stomach). Williams' basic point is that the black community must say "enough" to the adoration of no-account rap stars, pull itself up by the bootstraps, and stop buying into the victimology propogated by people like Al Sharpton, (not to mention so-called "scholars" in our institutions of higher education).

When it comes to all the trouble in the inner cities (gang violence, poverty, etc.) the problem many conservatives like to point to is a bankrupt culture - or set of cultural icons, such as hiphop stars and badboy athletes. But we should ask: are these causes or symptoms?

There are two major factors that could lead to all this death and ghetto nihilism in the black community, of which music and culture are probably just symptoms (albeit reinforcing symptoms):

a) the welfare state, which incentivizes people to live at subsistence poverty and abnegate personal responsibility;

b) drug prohibition, which creates high-profit margins on a black market. Gang wars are the result of protecting those markets and associated turf. Simple economics;

c) guilty white folks in academe who perpetuate the notion of institutionalized racism and the contemporary peddlers of race-baiting who feed upon such narratives;

When one considers all of these factors, it's a recipe for total failure in any urban community. But there is no political force in the world that will ever fully deny ghetto kids welfare checks. Nor is there a force strong enough to see decriminalization through. So these problems - particularly those in the urban black communities - are going to be with us for a long time to come. (One could say something similar about rural whites dependent on welfare and meth.) We can talk all day about Snoop Dog or lay blame at the feet of black athletes, but role models will never emerge from a community that the government has set up to fail.
-Max Borders

Where's My NC Stimulus?

With all the talk about the Feds allowing me to have some of my money back so I can stimulate the economy got me thinking.  Why shouldn't the state of NC step up and do its part?

How about letting me have that 1/4 cent "temporary" sales tax increase that was made permanent?  That would inject approximately $250 million into NC's economy.  (Ironically, almost 2x the stimulus package Bush and Congress are talking about).

And don't tell me NC needed the revenue due to a budget shortfall.  All told, the state collected more than $3.1 billion in total surplus revenue from FY2003-04 to FY2007-08. 

I wonder how NC's economy would be faring if that $3.1 billion had been left in the capable hands of the NC citizenry to use as they saw fit.

Malkin on the Stimulus Package

Michelle Malkin hits a home run with her take on the proposed stimulus package.  Tons of great thoughts,  here's one:

I’m all for the government giving me back my money. But why not drop the economic stimulus pretense? Just give me back my money. If the government can spare these “rebates” and send them back now, why did they take the money in the first place? Forget this temporary candy. Why not make this “rebate” permanent?

Preach on, sister!

More Vaporub "Stimulus" for Medicaid and Economy

Grace Marie Turner shoots down another stimulus idea -- the Federal matching system is bad enough as it is:

Among the bad ideas floating around Washington to stimulate the lagging economy is a proposal that would boost the federal government's matching payments to the states for Medicaid

Our colleague Bob Helms of the American Enterprise Institute has done excellent original research on the flaws with "the FMAP" -- Federal Medical Assistance Percentage.
The Federal government provides money to the states to "match" their Medicaid expenditures. But it has become mostly a way for rich states to game the system at the expense of poor states. How this is supposed to help the economy is beyond me.

Richer states, like New York, get a lower federal match -- 50% -- and poorer states, like Mississippi, get a much higher federal matching payment -- 76%. Sounds fair. But when all is said and done, the great majority of federal money actually goes to the richer states.

Nine states, led by New York and California, got half of all federal Medicaid money in 2005, Helms finds. The reason: They can afford to boost their Medicaid spending to "buy" the federal matching dollars. Poorer states can't.

Further, raising the FMAP is just a back-door way of boosting entitlement spending, doing little to contribute to real economic growth or create new private-sector jobs. This is a bad idea that should be scratched off the list of options for the economic stimulus package. lternative minimum tax, and make the Bush tax cuts permanent.

The economy would soar in anticipation of this real economic growth package.
-Max Borders