Yes, Voter Fraud Remains a Concern in Missouri

The difference between winning and losing a political race can come down to a handful of votes. Every vote counts, and those votes change the public policies that we spend money on and are subject to. But what happens when votes are counted that shouldn't be? Voter fraud comes in many forms and may not significantly impact every race, but especially in tight races it can be the difference between holding office and setting policy, and not.

And to be clear, we know fraud happens, and that's why vigiliance in protecting the vote is so important. Photo voter ID is one item in that menu of reforms and we've talked about it at length before, but reform can't stop there, as an investigative report last week from the St. Louis Post-Dispatch bears out. An episode cited in the Post-Dispatch's report from a previous year stands out in particular; I've removed the names, but you can read the full article at the link.

The employee, a former supervisor, said that when large numbers of ballots were delivered, she would email other employees and bosses.

“I’d say, ‘Hey, we’ve received numerous ballots from the [ . . . ] campaign and it seems pretty suspicious and they need to be reviewed.’ ” Her emails would go unanswered, she said.

When employees refused to accept hand-delivered ballots, [an individual associated with the campaign] would complain directly to top Election Board officials, Bingham said.

Both former employees said ballots the department initially refused were sometimes slipped through the door, or mysteriously appear elsewhere in the office. Eventually, the employees said, the department would accept them. [Emphasis mine]

The entire article at the Post-Dispatch's website is worth your time. Particularly concerning are the reports about absentee voting irregularities, with absentee ballots dispatched for "incapacitated" voters who were anything but, and absentee ballot requests made by individuals other than the voter. The point is that the suggestion that voter fraud is somehow a fake issue is flatly wrong, and that insistence may have contributed to the wide berth into which this scandal just parked itself. Good government requires public confidence in our elections, and without a concerted effort to protect our ballot boxes against bad actors, our democracy will be at risk.

School Choice: The Personal and the Political

Parents naturally want the best schools for their children. In Saint Louis and Kansas City, this leads many parents to a tough decision. Do they pursue the best school for their child, which may not be the local public school, or do they work to improve their neighborhood school? Many decide to move to a higher-performing county school, to pay for a private school, or to enroll their child in a public charter school. These choices, of course, are not equally available to all parents. As in all areas of life, those with financial means have more options.

A while ago, I decided to explore this issue by conducting focus groups with parents in Missouri’s two largest urban centers. I met with 35 parents in five focus groups. In a forthcoming issue of the Journal of School Choice: International Research and Reform, I discuss the findings from these focus groups.

The crux of what I discovered in my research was a paradox: most parents value choices for themselves, but are skeptical of expanding the choices of others. While they valued the opportunities that would be available to their children, they worried that expanding choices might harm the education system as a whole.

As parents expressed reservations about school choice, one thing that stood out to me:

In many cases, parents seemed to have overstated the comparison. They did not compare school choice to reality; they compared school choice to a preconceived idea of a perfect education system – a high-quality school in every neighborhood. With this comparison, it is easy to see why they politically oppose school choice – it does not lead to their preconceived ideal. Poverty is the problem, not the schools. If we fix poverty, we will fix the schools. That comparison, however, does not describe the current reality in St. Louis or Kansas City. In both cities, the public school district model has failed to create a high-quality school in every neighborhood. It has led to a disparate education system.

We should not fall into this trap. The school systems in St. Louis and Kansas City had problems long before school choice was ever on the scene. Indeed, school choice offers a path out.

You can check out my full working paper here

A New Agenda for Cities Must Come from Cities

Recently, Kansas City, Missouri’s mayor, Sly James, wrote in The Hill that America needed a new agenda for cities. No argument here. But contrary to the Mayor’s suggestion, the new thinking needs to come not from Washington but from the communities with a vested interest in their own success.

One of the biggest problems in Kansas City (as with other metropolitan areas) is that the city’s affairs have been so poorly managed for a very long time through regular rounds of bad “public investments.” It’s not that Kansas City needs more money—it receives plenty through various taxes—but that the city spends and invests that money so poorly, chasing glitz while letting basic services languish. Throwing more federal dollars at failed initiatives won’t retroactively salvage these projects.

Here’s some background. Kansas City is the 29th-largest metropolitan area in the United States. Like many Midwestern cities, our population growth hasn’t kept up with that of cities in other regions.

Unlike many cities (but similar to Washington, DC, where I grew up), our metro region is divided right down the middle by State Line Road. Half our population resides in Kansas, with the entire city proper and the urban core in Missouri.

Also like many urban cities over the past few decades, our city leaders have chosen to bet our future on large development projects. In our downtown we spent—and continue to spend—millions to prop up a large entertainment district whose revenue has yet to meet rosy projections. We have diverted taxpayer dollars to subsidize luxury apartment buildings and world headquarters for wealthy international corporations. We have committed millions more to build a convention hotel downtown despite the unpleasant experiences of our sister cities in Missouri and across the country with similarly ambitious—but ultimately disappointing—investments.

The assessed value of property in Kansas City has been largely flat since 2007, but because of tax diversions to developers, the amount we actually collected in taxes in 2015 was $200 million less than it would have been without those giveaways.

City leaders are eager to spend over a billion dollars to tear down and rebuild our international airport despite its widespread popularity as a convenient and efficient place to travel to and from. And we have the honor of having just finished one of the country’s most expensive streetcar systems for over $46 million per mile, and advocates now want to expand it at an even higher cost.

Kansas City bears the scars of all this misspending. While we suffer through a spike in homicides, our police department has fewer officers than it did in 2011. Embarrassed by a recent documentary on the plight of the urban core, city leaders issued bonds to demolish 800 dangerous buildings—the majority of which were city-owned. City leaders now contemplate a billion-dollar bond to fund badly needed infrastructure repairs due to years of neglect.

Yet Kansas City’s taxes are high. We have a combined sales tax in many neighborhoods of 10% or higher. The Tax Foundation listed Kansas City as having the 15th-highest sales tax in the country. A 2013 Brookings Institution study found that our county and the surrounding counties have well-above-average property taxes paid and taxes paid relative to home value. And of course, Kansas City also charges a 1% earnings tax on those who live or work within city limits.

Mayor James is correct to say that “we clearly cannot afford the status quo.” But his solution is to seek more government funds to bail out decades of bad investments and decision making in Kansas City and elsewhere. If cities like Kansas City, Chicago, Detroit, Newark, and Stockton are allowed to throw good money after bad, none of us will be any better off. America’s new agenda for cities must start with those cities, and it must involve a serious effort to right the wrongs of the past and return to sound management. The solution is not federal bailouts but better management of the money that cities are already collecting.

The Root Cause of Mylan’s “Evil”

In 2015, an average pound of coffee cost about $4.70. Now imagine if, over the next nine years, the price of that same pound of coffee rises to over $26. Our imagined future selves would likely want an explanation for the 500% price increase.

Now just imagine that instead of coffee, the ballooning cost was for a vital medicine hundreds of thousands of people might need in an emergency situation. This is no longer a hypothetical scenario, but the current state of affairs of Mylan, a major pharmaceutical company, and its product, the EpiPen.

The EpiPen is an epinephrine auto-injector (EAI) used to treat severe allergic reactions. In 2007 it cost roughly $100, but today it costs $608. And although Mylan has invested in improvements to their product, critics don’t think the 500% price increase is justified. They think Mylan is just a case study in corporate greed.

But while it’s convenient to blame Mylan for the price surge, that doesn’t go quite deep enough. Mylan is just like any other for-profit business trying to make the highest profit it can. What’s to blame is the near monopoly (98% market share) Mylan has been granted on the EAI market.  

Just this year, a potential competitor to Mylan, Teva, unexpectedly failed to receive approval from the FDA for a generic EAI. And last year, another EAI was removed from the market by the FDA for minor dosage issues. (Note: Mylan just announced it will introduce a generic EAI, although it will cost $300.) Moreover, in 2013, the School Access to Emergency Epinephrine Act, which incentivized schools to stockpile EpiPens, was signed into law.

In short, regulations have made purchasing an EAI besides the EpiPen nearly impossible. Predictably, in the absence of any competition, EpiPen prices rose.

So regardless of whether Mylan’s prices are “unfair,” the real question to ask is this: What is the framework in which private enterprises like Mylan best serve the needs of ordinary people? The answer is a free and competitive market—where barriers to entry are reasonable, regulations make sense, and preferential government treatment is non-existent. Unfortunately, the EAI market is nothing like this.

Perhaps the current EpiPen outrage will make policymakers ask themselves: Is our healthcare market open and competitive? Are our healthcare regulations reasonable and fair? Should we cautiously deregulate the pharmaceutical industry? 

Missouri’s Most Valuable Export Continues to Grow. . . . and That’s Not a Good Thing

If you had to guess what Missouri’s most valuable export was, what do you think it would be? Beer? Cars? Professional football teams? The answer might surprise you—read on while you ponder.

In 2014, Missouri saw record dollars in exports of goods. In addition, the state has enjoyed high levels of exports since 2012. Growth like this shows a strengthening ability of Missouri businesses to provide goods to consumers outside of the state. In return, it brings new money and investment to Missouri that can foster more private sector growth. On the net, Missouri saw a trade deficit of goods to the tune of 4.2 billion dollars. However, this is also a positive, because if Missourians buy more goods and services than they sell, then Missourians are promoting more outside investment in Missouri.

OK, so have you had time to reflect? Missouri’s most valuable export is . . . people. According to the IRS, Missouri is also seeing near-record exports of people. In 2014, nearly 65,000 tax filers left Missouri to live somewhere else. In fact, Missouri has been exporting more than 60,000 persons a year since 2011. Moreover, unlike exporting goods, exporting people could restrict Missouri’s economic performance.

If exports of people were counted and ranked among Missouri’s total exports, it would be the largest-valued loss in the state. This is because when people leave, they take their income with them.

 

Missouri's Export Profile to the World (Annual 2014)
Product Value to Missouri
IRS tax filers leaving Missouri ($3,364,024,000)
Transportation equipment $3,354,290,712
Chemicals $2,422,193,118
Machinery (except electrical) $1,601,938,524
Food manufactures $1,473,625,427
All other merchandise exports $6,806,684,695

(Source: Internal Revenue Service and U.S. Department of Commerce International Trade Administration).

In 2014, exports of people took a potential 3.4 billion dollars out of the economy. That amounts to about 24% of the benefit Missouri gets from exporting goods. In terms of net migration, the number and income of those fleeing residents is strong enough to eclipse what we get from incoming residents by around 4,700 returns, or 309 million dollars of income.

Missouri’s economic environment, whether it’s tied to taxes or regulations, is costing us the very thing that their growing goods exports are supposed to reel in: people and their income. While strong exports of goods is a positive sign, Missouri exporting too many people can become a drag on the economy if not addressed.

Personal Income in Missouri Continues to Lag

Recent economic data reinforces an old story:  Missouri’s economy is not expanding fast enough to substantially raise its citizens’ income. 

The Bureau of Economic Analysis (BEA) data on personal income across states and metropolitan areas (http://www.bea.gov/newsreleases/regional/rpp/2016/_images/rpp0716.png ) shows that real per-capita personal income for the state of Missouri—personal income adjusted for inflation and measured on a per-person basis—increased at a rate of 2.1 percent in 2014.  That puts Missouri squarely in the middle of the pack, with the 26th-fastest growth among states.  Several neighboring states fared worse: Iowa, Illinois, Kansas, and Nebraska all registered slower growth rates. 

Because the state is a mixture of rural and urban areas, it’s worth asking if this middling record is reflective of all areas in the state?  To answer this question, we use BEA data for metropolitan areas in the country to see how real per-capita personal income grew in Missouri’s metropolitan areas.

The table below lists the name of the metropolitan area (metropolitan statistical area, or MSA as defined by the BEA), each MSA’s growth in real per-capita personal income and the MSA’s national ranking based on that growth rate.  For some perspective, the average growth rate in real per-capita personal income across the 381 MSAs nationwide was 2.04 percent in 2014.  The Hanford-Corcoran, California, MSA had the highest growth rate at 7.5 percent; the Danville, Illinois, MSA the lowest growth rate at -3.1 percent.

From the table we see that real per-capita personal income growth in Missouri’s MSAs lags behind most of the nation’s other metro areas.  Only Springfield and St. Louis are at or above the national average, though Cape Girardeau and Kansas City are close to the average.  Columbia basically saw personal income in 2014 remain at its 2013 level. 

The upshot is that the majority of the MSAs in the country had better personal income growth in 2014 than Missouri’s metro areas.  It might not be wise to look to urban growth to raise the state’s average.

 

Growth in Personal Income, 2013-2014
Metropolitan Statistical Area (MSA) Growth Rate (%) Rank
Springfield, MO 2.7 100
Saint Louis, MO-IL 2.0 210
Cape Girardeau, MO-IL 1.9 213
Kansas City, MO-KS 1.8 231
Jefferson City, MO 1.6 261
Saint Joseph, MO 1.4 291
Joplin, MO 1.0 327
Columbia, MO 0.1 365

(Source: Bureau of Economic Analysis)

Think Fewer Insurers is Bad? Wait Until We Have Just One.

One of the biggest problems with American health care has been the fragmentation of our health insurance market. Long before Obamacare, it was already difficult to sell insurance across state lines because of state-based insurance regulations that often had specific coverage requirements. Regulations governing what must be covered can add to the cost of coverage and compliance and thus make it difficult for an insurer to justify entering a state’s health care market.
 
More insurers offering more insurance products would be good for consumers. Unfortunately, we’re getting less and less of that today. And like millions of other Americans across the country, Missourians shopping in Obamacare’s insurance “marketplace” have realized over the last few months that their options in 2017 will once again be more limited than before. In April, we found out that United Healthcare would no longer be offering many of its insurance products to Missourians, including products sold in the government market. In August, we learned that Aetna, by way of subsidiary Coventry, would be exiting as well.
 
It is the largest insurer of individuals in Missouri, holding a 38 percent market share. It’s not clear what part of Aetna’s individual business in the Show-Me state is based on exchange-based individual plans versus plans off the exchange, primarily through brokers. Aetna declined to provide that information.
 
Retreating from that customer base is confusing to some policy experts.
 
“Overall, I think you’re giving up a lot of customers. It doesn’t seem to compute,” Meuse said.
 
Aetna, however, says it needs to reduce its participation on exchanges to stem losses. The insurer earlier this month said it expects to lose $300 million this year from individual coverage it sells on the exchanges, or triple what it lost last year. Earlier this year, Aetna had said it hoped to break even in 2016.
 
Supporters of Obamacare are already trying to use the failure of their own creation as a justification to move to a single-payer, government-centric health care system—to effectively go from not enough insurers to one, with that “one” being the government. In the context of what we already know about insurance market fragmentation and reduced choice, reducing insurance choices to effectively no choice makes, appropriately, zero sense.
 
We need more competition, not less, and that means allowing for more insurance competition across state lines and focusing on bottom-up patient-focused reforms, not top-down government-centric approaches to health care policy. 

Mizzou Researchers Blind and Kill Puppies, University Demands Tens of Thousands for Related Records

And no, the headline isn't an exaggeration.

As reported in the Riverfront Times, four University of Missouri researchers blinded a half dozen beagles, who "were just nine to twelve months at the time they endured the experiment." The researchers then killed the dogs and harvested the eyes after the study (published this past April) proved inconclusive. While it seems like an open question in the media, why the researchers didn't try to adopt out the dogs seems pretty straightforward: that is, they probably couldn't have kept the dogs' eyes if the dogs were alive. Yes, explaining blind dogs to potential adopters isn’t easy, but it’s doable. Explaining dogs whose eyes have been surgically removed? That’s a public relations lift that the University probably wanted to avoid if it could. 

As a dog owner and supporter of a local rescue, I find the entire story gross and grotesque. But the problems don't stop there. A nonprofit that works on behalf of beagles like these wanted to get records related to the University's testing on these dogs and others, but the University wants to make that nearly impossible

Kolde had previously filed a lawsuit against Mizzou on behalf of the Beagle Freedom Project, seeking records relating to the university's care of beagles. The non-profit sought basic records that Mizzou is required by law to maintain. Yet the university sought to charge it $82,222 — as much as $7 a page. [Emphasis mine]

The University of Missouri is a public institution, so it should be easy for taxpayers to access both the details of courses the University teaches and the research its employees conduct. I appreciate the value that can come from research with live animals, and I am not suggesting that it all stop. But if the University is going to conduct this sort of research, it should be done transparently so that taxpayers can judge whether they think that money, spent in their name is being wisely and ethically invested. In this case, taxpayers have ample cause for concern, and Mizzou once again isn't helping its cause.

Heritage Study: $15 Minimum Wage Would Wipe Out Equivalent of 218,000 Missouri Jobs

Show-Me Institute analysts have written for years about the economic research on—and the damaging effects of—mandating a higher minimum wage in Missouri, particularly if the increase is radically above the current floor of $7.65 per hour. That fact hasn't stopped some activist groups from trying to double Missouri's minimum wage to $15 per hour, which we've argued again and again would cost many of our state's workers their jobs.

But exactly how many Missourians would be put at risk if the state actually went through with such a hike? In a recent study, the Heritage Foundation puts a number to the cost of a $15 minimum, suggesting that the full-time equivalent job losses in Missouri could reach a staggering 218,000 if such a wage became law. The problem isn't just that a massive hike would imperil the jobs of the lowest-paid workers; rather, every worker paid a wage between the old wage and the new one would suddenly be put at risk by the government, as well.

Fifteen-dollar-per-hour mandatory starting wages would cover roughly one-third of U.S. wage and salary workers—considerably more than the minimum wage has ever covered.[6] Existing minimum-wage studies shed little light on the number of jobs a $15 mandate would cost, as they examined much smaller minimum-wage increases that affected relatively few workers. In fact, most of the studies look only at sectors significantly impacted by past increases, like teenage employment or the restaurant sector. These studies provide little guidance on the effects of a minimum wage covering one-third of the workforce.

However, economists have extensively studied how businesses respond to higher wages overall, not just minimum-wage increases.[7] On average these studies find a 10 percent increase in labor costs causes firms to reduce employment of less-skilled workers by 6.8 percent in the long run.[8] This is not a precise estimate—some studies find greater job losses, others find lower. This figure does indicate, however, the approximate magnitude of job losses that occur when labor costs rise.

Contrary to what "Fight for $15" supporters might suggest, simply raising the government-imposed minimum wage for the employed isn't an effective way to help our poorest citizens. Rather, such a move could dramatically harm them, thousands of others in Missouri, and millions nationwide. There are many ways to improve the lot of low-wage earners, but government tinkering in the labor market with minimum wage manipulations is neither a serious nor effective means to that end.

Support Us

The work of the Show-Me Institute would not be possible without the generous support of people who are inspired by the vision of liberty and free enterprise. We hope you will join our efforts and become a Show-Me Institute sponsor.

Donate
Man on Horse Charging