Inspiring Story From New Hampshire in the Wall Street Journal

Posted on by David Stokes

How angry would you be if the following scenario played out where you lived?

First, you build a successful society based on the ideas of individualism, liberty, and personal responsibility. Nearby, a group of people builds a different society based on high taxes, communal values, general leftism, etc. Your individualistic society succeeds so well that many people from the communitarian society move there to escape the taxes, welfare, groupthink, etc. All of this is fine until the next thing happens, which is that the number of these people who have moved in grows large enough to take over and enact their own laws. And they proceed to make your society much more like the one they moved from. They moved to your society because it worked better than theirs, then reshape your successful society to be more like their failed society, which they left precisely because it was failing.

This, essentially, is what has happened in New Hampshire during the past 20 years — allowing some room for hyperbole in the above scenario. (It is hard to argue that Boston is really “failing.”) The Wall Street Journal has a great article about this today, using the issue of seat belt laws as an entry point to the wider debate of personal freedom in New Hampshire. (Thanks to my brother, Mike, for sending me the link.)

The story inspired me because it is great to see people fighting to preserve their liberties. It is also depressing, because I can only imagine how angry I would be at the people who moved to New Hampshire from Massachusetts, only to make their new home more like Massachusetts.

But I don’t have to totally imagine this, because I am more familiar with New Hampshire than most Missourians are. The girl I dated during much of college was from New Hampshire, and her family members were long time New Hampshirites and rock-ribbed Republicans. I can remember visiting her family on holiday weekends and watching her dad getting mad at whoever was hosting Crossfire, probably Michael Kinsley at that time (early ’90s). So, this post is for him. I can imagine you appearing at one of the hearings mentioned in the WSJ, and being this person:

“Will you require helmets in cars next?” a protester shouted to Rep. Kelly, the bill’s sponsor.

Then again, for all I know, her entire family could be committed leftists by now, given that I haven’t talked to her in at least 10 years. Actually, I just hope her dad is still alive, because I am gonna feel really bad about sending him a shout-out if he isn’t. …

Law of Unintended Consequences

Posted on by Ryan Davisson

Cigarette companies recently began exhibiting a textbook example of the adverse secondary effects of tax hikes. In light of the federal tax increase set to take place in two weeks, tobacco manufacturers Philip Morris and RJ Reynolds quietly raised their prices to just about what price they would be once the federal tax actually takes effect. The article indicates that some unnamed analysts have speculated that “the companies raised prices early to get people used to the new tax and to compensate for an expected drop in sales.”

It is unclear whether this price increase is a temporary measure that the companies intend to drop on April 1, when the government begins its new tax collection and would otherwise drive effective prices still higher — then lament about what it was like, for a short time, to earn like the U.S. government.

Dave Gets His Wish, on a Small Scale

Posted on by Sarah Brodsky

Dave Stokes has blogged recently about the need to cut the size of the public sector workforce. I hope he’ll be happy to see this post by Kavita Kumar at The Grade. The news is that the University of Missouri Press is laying off seven of its 18 employees, with the goal of eventually getting by without the $450,000 that the state bestows on it each year. This is the Press’ official explanation for the decision:

“Out [sic] goal is to be fiscally independent, and we are developing a plan that will reduce our dependence on state funding while at the same time making our operations more efficient to better serve our authors and customers,” said Dwight Browne, interim director of the press, in a statement.

It looks like a smart move to me. I can’t imagine what would justify spending tax dollars on an academic press. The Press’ desire to streamline operations is laudable, a case of a state-funded organization acting like a private-sector company and taking economic realities into account. Little cuts like this one can add up and make a difference in shrinking the public sector.

Of course, this is also a very tough time to be without a job, and I wish the laid-off employees success in their search for work.

Single-Sex Classrooms in the New York Times

Posted on by Sarah Brodsky

More and more schools are separating the sexes in hopes of improving student achievement. This New York Times article reports on the trend and describes the atmosphere in a few all-boys’ and all-girls’ classes. The quotes from parents and teachers are very favorable. I completely disagree with this criticism:

But Kim Gandy, president of the National Organization for Women, said separate classrooms reinforce gender stereotypes. “A boy who has never been beaten by a girl on an algebra test could have some major problems having a female supervisor,” she said.

I always thought tests were about doing your best work, not “beating” other people. Comparing kids’ scores to identify losers and rubbing it in sounds completely inappropriate, no matter what the sex of the students. And when schools are graduating students who lack basic skills and knowledge, I would be more concerned about whether they could get a job in the first place.

Besides, separating boys and girls into different classrooms is just not such a big deal as the critics claim. Kids don’t spend all their time in class. Boys in a boys-only class will still interact with girls in other contexts, after school and on weekends. Some public schools that have optional single-sex classrooms also offer coed extracurricular activities, so that’s another opportunity for boys and girls to learn to get along.

These public schools should be applauded for giving parents a choice about their children’s educations.

Missouri Is on Second Life, But Some State Records Are Stuck in Real Life

Posted on by Sarah Brodsky

I thought of Second Life when I read this article about state records online. A study by Sunshine Week found that Missouri provided online records in 11 of the categories surveyed (e.g., school test scores) but that state sites lacked records in nine other categories (e.g., death certificates). Here’s the first sentence of the story:

Most Americans can easily find videos of water skiing squirrels on the Internet, but they’ll have less luck finding out whether their children’s school buses and classrooms are safe, or if neighborhood gas stations are overcharging.

After I spent a few seconds being offended by the notion that the state should decide whether gas stations are “overcharging” and post that spurious claim online, my attention turned to the water-skiing squirrels. Water-skiing as a squirrel sounds like something you could do on Second Life. Maybe state employees could put a few more records online while they water-ski?

The First Shall Be Last

Posted on by Josh Smith

According to this New York Times article, a number of states were competing for the honor of “first to spend federal stimulus money on infrastructure,” and, by some accounts, Missouri won.

Even die-hard free-marketers will likely agree that once the federal government decides to spend a certain amount on stimulus, the taxes that pay for the program are “gone” in a long-term accounting sense. So, obeying proper economics and ignoring sunk-costs, the question is “why not try to get as much stimulus money as possible?” Someone is going to get it and invest in their infrastructure, why not us?

I am interested in readers’ thoughts on the matter, but I will start with what I think.

Even if we assume that our state government will more efficiently allocate the funds than our neighbors will, it is still dangerous to accept and spend federal funds. Government bureaucracies have a long history of taking every opportunity to ratchet up their budgets, resisting pressure to cut costs. We’ve blogged before about benefits of governments cutting spending in the face of budget pressures. If you already agree that government spends money on things that perhaps it shouldn’t, then take note that stimulus funds will certainly not encourage them to reduce spending. Indeed, before the promise of federal funding, our governor and General Assembly were facing a harrowing budget crisis, and seemed poised to make deep cuts from which Missourians would benefit for years to come. No longer is this the case. The story for the past several weeks has been giddy excitement at new spending opportunities.

Other states will certainly invest in their infrastructures if we don’t. The opportunity we are missing is a chance to discontinue some useless state spending, and trust that the people who will foot the bill for the stimulus package will be wise enough to find their way out of our current economic doldrums without ramped-up state spending.

Only tangentially related, but highly recommended, is this video about the bailout/stimulus from under-appreciated reporter John Stossel. The rest of the program can be found here.

Please weigh in with your thoughts about accepting federal stimulus, tax-funded bailouts, and whether John Stossel is as evil as they say.

The Other Shoe Drops Directly on Commerical Property Owners in St. Louis County

Posted on by David Stokes

The St. Louis Post-Dispatch has done a very good job covering assessment issues through the years. Its coverage of the 2001 drive-by scandal broke that issue wide open, after some great legwork by a few councilmen and others. That coverage continued this weekend, when the Post-Dispatch wrote about how commercial property owners are seeing a substantial increase in assessments while residential owners are seeing a decline.

The obvious question that jumps out is whether the county is intentionally raising commercial assessments to offset the tax revenue declines from residential assessments.

The reassessment left Trampe wondering if the county had manipulated commercial figures to offset a potential drop in revenue from the fall in residential values.

“I guess they have to find money somewhere,” he said.

I have no idea if that is true or not, and the county denies it. However, a little-discussed state law may save the day here and prevent the large tax increases on commercial property. St. Louis County is the only county in the state where local officials are allowed to apply different tax rates for different property classifications. (I have looked for the relevant statute citation, but have not found it yet. I’ll add it when I get it, or correct myself if I am wrong.)

So, there is nothing in the law that guarantees commercial property taxes have to go up. In other counties that set the same rate for everything, this would be a big problem, because the residential averages would dominate the totals. Tax rates would rise in order to offset falling residential assessments, and then the commercial owners would see enormous increases. Here in St. Louis County, various taxing entities can set one rate for residential properties that have experienced an average assessment decline, and a different rate for commercial properties that have had an average assessment increase.

The trick, though, is to make certain that all the school districts, fire districts, cities, etc. within St. Louis County do just that, rather than trying to sneak in commercial property tax increases, along with the legal roll-ups of residential property tax rates that we are seeing. I have no doubt that many taxing entities in the county will try to avoid rolling back the commercial rates — or, at least, keep them level, probably out of a lack of knowledge as much as anything.

The one thing St. Louis County itself should do is roll back the commerical property surcharge by 8.3 percent, in order to offset the tax increase commercial property owners will see from county government. St. Louis County has the highest surcharge in the St. Louis area, and lowering it would be good for business in the county.

Bail Bonds, Repo Men, Process Serving, and Blog Posts

Posted on by David Stokes

Longtime readers might know that I love to write about the bail bonding industry and, starting today, its close cousin: the repossession man. Some of my longer posts (which predated our open-comment policy, so fire away) dealt with this subject. In light of two recent media stories about the subjects (I found the link to one of them — I forget which — from Combest), this is a good time to relink the old stories and share some new thoughts.

If bail bondsmen and repo men are cousins, than another family member is the process server — something I have twice done for a living. In the ’90s, I owned a company that did a lot of this for law firms, and, in 2007, I was a county deputy sheriff serving papers on the dangerous beat of Clayton and Richmond Heights. So, while I have never done any bail or repo work, I think I have a feel for part of what it is like to do them for a living. From my experiences in dealing with the small percentage of people who desperately try to avoid being served, I know exactly what one repo man meant when he said this to the Post-Dispatch:

 “They have to be on their game all the time,” he said of those who try to avoid him. “We only have to be right once.”

From reading the Fox 2 story, I repeat what I previously said: Bail bondsman are one of the occupations that should have some sort of licensing by Missouri government. The article’s subhead about how bondsmen “Can Legally Kick in Your Door” doesn’t bother me, because the act of skipping on bail has long been viewed as the sort of action that results in a forfeit of your rights. However, I understand the problems that can arise from allowing convicted felons to enforce the law.

As for the repossession men (aside: Are there any repo women? Women make great process servers, it’s true), that is a tough line of work. I don’t view them as profiting off of others’ suffering, as some commenters on the Post site have accused them of doing. If they don’t repo the car, or boat, or whatever, then everybody will suffer when the firms for which they repo go out of business.

These two articles taken together, as well a story in the Riverfront Times last year, constitute a very interesting discussion of a very interesting field of work.

Governments Should Make Sense, Not Jobs

Posted on by Josh Smith

There is a lot of talk at present about job creation. During the Great Depression, the federal government engaged in job creation. Currently, our General Assembly is discussing a bill to promote job creation. Some are frustrated that this bill is not being fast-tracked.

There is a mistaken view that governments can solve economic problems such as unemployment. History has shown that government solutions may create short-term fixes, but have long-run unintended consequences often worse than the problem they set out to solve. Our fine editor Eric Dixon recently mentioned to me, “There is a correlation between economic growth and job creation, so government officials tend to think that they can cause economic growth by creating jobs. But it doesn’t work that way.”

Voluntary economic exchange, often coupled with competition, produces wealth and leads to a greater number of people getting what they want, for less — and it brings rising employment. It is true that those who are employed have a lot going for them that the unemployed may lack. For one thing, they have a regular paycheck and are likely self-sufficient. When someone who owns a business decides that hiring a new person will add more value to her business or product than it costs to remunerate the new employee, the business wins, the employee wins, and the customers win.

Tax-incentivized job creation is a cruel parody of this win-win scenario. When the government steps in, there is reason to believe that the legislator who controls the direction of the subsidy knows less about what people need and want than do the people themselves, so incentives are misdirected. Tax dollars go to support things that people may not have wanted, or at least didn’t want at that marginal rate of exchange. When job creation is subsidized, employers and employees win (at least temporarily), and customers may win — but taxpayers lose.

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