As things currently stand, the American Rescue Plan promises jobless workers $300 per week on top of the usual wage replacement rate of just under 50% all the way into September. For most of the workers who are receiving nearly the same or more to remain jobless, it is understandable that they might be reluctant to accept a pay cut just to go back to work. For small businesses struggling to reopen, these unemployment benefits represent anywhere from a short-term headache to an existential threat. Many of them operate on small profit margins and cannot afford to compete with the artificial compensation offered by a federal government with a nearly endless capacity to borrow. Tacitly acknowledging the role of unemployment benefits in the lackluster jobs numbers, President Biden is now exhorting workers that “if you’re receiving unemployment benefits and you’re offered a suitable job, you can’t refuse that job and just keep getting unemployment benefits.” He has also directed the Department of Labor to work with states to reinstate job search requirements, which in their current form are mostly window dressing that cannot effectively monitor or induce search effort. Instead of trying to fill the leaky bucket caused by bad policy, the federal government ought to plug the hole and stop erecting hurdles to small business hiring and reopening.

In Missouri, the economy sports what sounds like a healthy 4.2% unemployment rate, but here, too, many Missourians have exited the labor force, and there are over 114,000 fewer people working relative to back in February 2020. Missouri’s recently announced termination of enhanced unemployment benefits is one positive step toward addressing this jobs shortfall and returning its economy to pre-pandemic strength.

The post How to Put Missouri on a Faster Path to Recovery appeared first on Show-Me Institute.

With Super Sunday just around corner, we will cite the Apple commercial that introduced the Apple Macintosh personal computer in January 1984. It had the punch line: “You’ll see why 1984 won’t be like Nineteen Eighty-Four.”

That was an allusion to the dystopian future described in George Orwell’s book, 1984. The ad opens with a lone woman on the run. She bursts into an auditorium, where Big Brother—speaking not in person, but from a towering television screen—is haranguing a frightened mass of people. Then, spinning like a top, she hurls a sledgehammer at the figure on the screen. It flies high and right. Big Brother is silenced. The voice-over followed.

In this 60-second spot that aired during Super Bowl XVIII, the first Macintosh ad captured the one thing that an all-powerful or monolithic state cannot easily afford to tolerate. That is, any real expression of individual freedom and initiative.

We believe that is a timely message not just on the eve of another Super Bowl, but still more in the context of the current debate over economic and public policies.

Following a long period of stagnation, the U.S. economy has come roaring back to life. We now have full employment, a booming stock market, and rising wages for most workers, including the lowest paid.

How did that happen? Fast answer: Over the past three years, the free market became a whole lot freer.

In its first year in office, the current administration delivered on its promise of sweeping regulatory relief. Suddenly, the regulatory state, which had expanded by leaps and bounds during the previous administration, began to contract . . . and that has continued, as a result of major changes in policy and direction at the Environmental Protection Agency, the Labor Department, the Department of Health and Human Services, and other arms of government.

Then came the biggest tax cuts and tax reforms since the Reagan era. With the passage of the Tax Cuts and Jobs Act of 2017, the administration lowered income taxes across the board and left more money in the pockets of individuals and business entities alike.

So, we are now living in the best of times economically. How could anyone argue otherwise? But they can—and are. Never mind what the numbers say.

Among leaders on the Left, there is a broad consensus that we are living not in the best of times, but in the most desperate of times—almost as if we were back in the early years of the Great Depression, when industrial production plunged, unemployment soared, and more than a quarter of the population was without any income at all.

In the badly mistaken belief that capitalism and free enterprise have run amok, they are promoting economic policies and ideas that are diametrically opposed to those that got us where we are today.

With little disagreement between them, these same leaders want free college, free health care for all, universal child care, and the banning of fossil fuels as part of a many-splendored Green New Deal—and they don’t appear to care what anything costs or what the adverse impact may be on ordinary people.

Apart from the astronomically high price tags associated with all of these programs—which would quickly bring the economy to a shuddering halt if any serious attempt were made to implement them—it is worth thinking about the underlying message that the leaders who are espousing this great agglomeration of multi-trillion-dollar programs want to send to the American people.

The real take-away message comes down to this:

·         “If you or any of your children want to go to college, don’t worry about being able to afford the college tuition. We’ll take care of the problem for you.”

·         “If you’re worried about health care, don’t think you have to buy health insurance or do anything else. We’ll take care of you.”

·         “Got young children at home and want to go to work? We’ll take care of the kids, too.”

If all that sounds too good to be true, it’s because it is too good to be true. Someone has to pay for college tuition—and all the other freebies—and that can only mean higher taxes on working people at all levels of income.

As George Orwell, the author of 1984, understood very well, a free people who stop taking care of themselves and rely on the state to do everything for them make a very bad bargain. It is one of the insights you find on almost every page of his book.

When people cease to make their own plans—and trust government to make decisions for them in more and more areas of their lives—they commit the error of failing to make full use of their capacities as individual human beings. In failing to make the most of their own gifts and talents, and their own dreams and aspirations, they sell themselves short . . . and lead less-fulfilling lives.

How prophetic was Orwell’s book? Not that this was the author’s intention, but how well did the book foretell the future of socialism in his native country—this being Britain in the first few years after World War II?

The British elections in mid-1945 marked a major turning point—not only sweeping Winston Churchill and a Tory-led government out of office, but also standing as an unquestioned affirmation of the desire of most of the British electorate to bring a new government to power that was fully committed to socialism.

So how did things work out in Britain during the three and a half decades when socialism, as opposed to free-market capitalism, was the prevailing mode of government—a period lasting from 1945 to 1979, when Margaret Thatcher came to power?

Socialist Britain did not become a police state. But it did undergo a metamorphosis. It changed from a powerful and dynamic country into the perennial “sick man of Europe,” reeling from one financial crisis to another in a sustained period of economic stagnation and decline. It became a country obsessed with issues of job security and income redistribution as different groups competed with one another in trying to wring more favors out of an increasingly improvident state. There was little or no new business formation—none of the spark provided by people like Steve Jobs and products like the first Macintosh computer.

Even the Labor Party could see the futility of its centralized, interventionist approach. Jim Callaghan, the last Labor prime minister before Thatcher, admitted in Parliament: “Let me say that of course there has been a fall in peoples’ standard of life. It has fallen this year and will fall again next year.”

Fortunately, Thatcher supplied the leadership that was necessary to pull Britain out of the decades-long decline that began with the wrong turn that it took at the end of World War II.

Is there any possibility that we as a country could make the same mistake that Britain made in 1945?

The danger is there. It is time to throw another hammer—or sledge-hammer—into the works of another historic wrong turn—this time involving the United States.

This does not require heroic action on the part of a solitary individual. But it does require a willingness on the part of many people to play the same kind of role within their own group of friends and relatives that Thatcher played in Britain—in stressing the paramount importance of individual freedom and initiative in securing the future we want for ourselves and future generations.

The post Is There a 1984 in Our Future? A Super Bowl Reflection appeared first on Show-Me Institute.

In the aftermath of the decision, government unions were unable to convince many non-members to become full-fledged members and pay dues. As I discussed in a previous post, union financial reports submitted to the Department of Labor show the National Education Association lost the 88,000 non-member agency fee payers it had in 2017. And the Americans Federation of State, County, and Municipal Employees union lost 110,000 agency fee payers. The financial reporting of another large public-sector union, the American Federation of Teachers, does not reflect the impact of Janus because its reporting period ended in the same month as the decision. However, a new report from the Freedom Foundation states that “union spokespeople indicate the union lost nearly all 85,000 agency fee-payers it had at the time of the decision.”

As Kovacs notes later in the piece, the Janus decision doesn’t only affect non-member fee payers, who in many states were the primary beneficiaries of the case, but also union members themselves. As the ruling notes, “Unless employees clearly and affirmatively consent before any money is taken from them, this standard [for waiving one’s First Amendment rights] cannot be met.”

But are union members aware of these rights? Kovacs persuasively suggest that the answer is no, and that state law can still act as a barrier to securing these rights.

Prior to the Janus decision, workers who wished to opt-out of union membership were restricted by what are known as window periods. For example, in Michigan, many public employees could only leave their union once a year during a short period of time in August. Other window periods only permitted members to leave the union for a brief time period around the anniversary of their hiring.

Despite the text of the decision that allows workers to resign union membership nearly at any time, labor unions are still blocking workers who want to leave by enforcing these invalid window periods. In a recent case, Hendrickson v. AFSCME, New Mexico public employee Brett Hendrickson, represented by the Liberty Justice Center, was prohibited from exercising his Janus rights to resign from union membership. Hendrickson, a quality control specialist for the New Mexico Human Services Department, attempted to leave AFSCME Council 18 and stop dues from being deducted from his paycheck, but was told he could only opt-out during a narrow window period. This is just one of many examples of unions coercing worker to continue paying dues and undermining their First amendment rights.

To what extent Missouri government workers are having their rights curtailed is the subject of rigorous debate. For instance, a court injunction against House Bill (HB) 1413, which reformed much of Missouri’s labor law framework, has created uncertainty as to what the law is on basic issues like union membership and representation. Also, collective bargaining agreements in the state were (to be generous) lightly overseen by the state even before HB 1413 became law, meaning that violations of workers’ rights could be ongoing—and hardly anyone would know about it. Fortunately, Missouri did not technically allow for “fair share fees” of the sort that Janus put an end to nationwide, so many Missouri workers had at least incidental knowledge of their labor rights in the Show-Me State. Unfortunately, that isn’t always the case.

The better educated workers are about their rights, the better off they will be. Especially in this post-Janus legal environment, that educational process is more important than ever.

The post Are Government Unions Adequately Informing Workers of Their Rights? appeared first on Show-Me Institute.

Well, my friend, if you are, I have to admit: You had a couple of modest “wins” in 2018. Here in Missouri, free-market thinking took it on the chin in two ballot initiatives. On Aug. 7, by an overwhelming majority, Missourians voted to kill a right-to-work law passed by the Missouri Legislature in 2017. Then on Nov. 6, Missouri voters passed another ballot initiative boosting the state’s minimum wage from today’s $7.85 to $12 by 2023.

Compared with other news, however, those victories by deep-pocketed trade union groups and their co-dependent, big-government allies were small beer. The year’s big story was the striking success at the national level of free-market policies in driving faster growth and widely shared prosperity for all groups of people. For two years, the federal government has been lifting the burden of regulations and taxes on businesses and consumers alike. The dynamism of American capitalism has done the rest.

Recent GDP growth has been close to 4 percent – or about double the rate sustained over the eight years of the prior administration. Suddenly, there are more job openings than people seeking work. That, in turn, has led to higher pay for people at all income levels.

On Oct 2, Amazon CEO Jeff Bezos announced that he was raising his company’s internal minimum wage for warehouse and other unskilled workers to $15 an hour. This led to mutual back-slapping between Bernie Sanders and Bezos. The self-declared socialist complimented the world’s richest man on “doing the right thing,” and Bezos responded with self-congratulations, saying he hoped that other companies would follow his lead.

But guess what? He wasn’t leading. The U.S. Labor Department recently reported that wages for nonsupervisory warehouse employees had risen 4.6 percent from a year earlier, to $17.87 an hour. That’s almost $3 an hour more than the wage set by Amazon’s act of supposed enlightenment. Faced with the demands of an expanding economy and a tight labor market, companies did what they had to do – they raised wages to poach workers or keep the ones they have. So it wasn’t Mr. Bezos who deserved the compliment, but the unimpeded operation of the free market.

If you look around the country and the world, you see people everywhere who are fed up with the cluelessness of wealthy and long-established political elites who continue to pursue highly questionable policy objectives regardless of the cost in higher taxes, reduced paychecks, and lost economic growth. We are witnessing what the Wall Street Journal calls a “Global Carbon Tax Revolt,” with ordinary people rising up in protest against fuel-tax hikes and costly climate-change initiatives aimed at boosting unreliable renewable power. That has happened with the violent “Yellow Vest” protests in Paris and many rural areas that have rocked the presidency of France’s Emmanuel Macron. Other hot spots in the same revolt by taxpayers opposed to sacrificing growth on the altar of environmental piety include Germany and Canada, along with the states of Arizona, California, and Washington.

In sum, 2018 was a bad year for government-failure deniers. It was a much better year for those who believe in the unrivaled power of free markets to create and spread wealth and to promote greater individual freedom, responsibility, and creativity. But 2018 wasn’t all roses either, with rising fears of a global trade war sparked by retaliatory tariffs.

Tariffs are another tax – a tax on commerce. Of course, the more you tax something, the less you get of it. Missouri is a soybean basket to the world. Our state can ill afford a major disruption in world commerce. Neither can the nation. Looking ahead to 2019, let us hope that the substantial economic gains made in 2018 are not jeopardized or lost through the folly of managed (or mismanaged) trade policy.

The post 2018: A Bad Year for Government-failure Deniers appeared first on Show-Me Institute.

Well, my friend, if you are, I have to admit: You had a couple of modest “wins” in 2018. Here in Missouri, free-market thinking took it on the chin in two ballot initiatives. On Aug. 7, by an overwhelming majority, Missourians voted to kill a right-to-work law passed by the Missouri Legislature in 2017. Then on Nov. 6, Missouri voters passed another ballot initiative boosting the state’s minimum wage from today’s $7.85 to $12 by 2023.

Compared with other news, however, those victories by deep-pocketed trade union groups and their co-dependent, big-government allies were small beer. The year’s big story was the striking success at the national level of free-market policies in driving faster growth and widely shared prosperity for all groups of people. For two years, the federal government has been lifting the burden of regulations and taxes on businesses and consumers alike. The dynamism of American capitalism has done the rest.

Recent GDP growth has been close to 4 percent – or about double the rate sustained over the eight years of the prior administration. Suddenly, there are more job openings than people seeking work. That, in turn, has led to higher pay for people at all income levels.

On Oct 2, Amazon CEO Jeff Bezos announced that he was raising his company’s internal minimum wage for warehouse and other unskilled workers to $15 an hour. This led to mutual back-slapping between Bernie Sanders and Bezos. The self-declared socialist complimented the world’s richest man on “doing the right thing,” and Bezos responded with self-congratulations, saying he hoped that other companies would follow his lead.

But guess what? He wasn’t leading. The U.S. Labor Department recently reported that wages for nonsupervisory warehouse employees had risen 4.6 percent from a year earlier, to $17.87 an hour. That’s almost $3 an hour more than the wage set by Amazon’s act of supposed enlightenment. Faced with the demands of an expanding economy and a tight labor market, companies did what they had to do – they raised wages to poach workers or keep the ones they have. So it wasn’t Mr. Bezos who deserved the compliment, but the unimpeded operation of the free market.

If you look around the country and the world, you see people everywhere who are fed up with the cluelessness of wealthy and long-established political elites who continue to pursue highly questionable policy objectives regardless of the cost in higher taxes, reduced paychecks, and lost economic growth. We are witnessing what the Wall Street Journal calls a “Global Carbon Tax Revolt,” with ordinary people rising up in protest against fuel-tax hikes and costly climate-change initiatives aimed at boosting unreliable renewable power. That has happened with the violent “Yellow Vest” protests in Paris and many rural areas that have rocked the presidency of France’s Emmanuel Macron. Other hot spots in the same revolt by taxpayers opposed to sacrificing growth on the altar of environmental piety include Germany and Canada, along with the states of Arizona, California, and Washington.

In sum, 2018 was a bad year for government-failure deniers. It was a much better year for those who believe in the unrivaled power of free markets to create and spread wealth and to promote greater individual freedom, responsibility, and creativity. But 2018 wasn’t all roses either, with rising fears of a global trade war sparked by retaliatory tariffs.

Tariffs are another tax – a tax on commerce. Of course, the more you tax something, the less you get of it. Missouri is a soybean basket to the world. Our state can ill afford a major disruption in world commerce. Neither can the nation. Looking ahead to 2019, let us hope that the substantial economic gains made in 2018 are not jeopardized or lost through the folly of managed (or mismanaged) trade policy.

The post 2018: A Bad Year for Government-failure Deniers appeared first on Show-Me Institute.

How do STLDI plans save their members money? For starters, short-term plans are not ACA-compliant. They do not offer all ACA required benefits, cover preexisting conditions, prohibit dollar limits on benefits, or insure dependents to the age of 26—some of the very provisions that drive up the cost of insurance. But because coverage is less comprehensive, individual monthly premiums for STLDI plans cost substantially less than unsubsidized ACA plans (see chart below). For many Missourians, these affordable plans are a welcomed option.

The rise of these STLDI plans will likely affect the ACA insurance markets. The departure of low-cost, younger and healthier customers could increase the volatility of ACA risk pools and stoke spiraling premiums further. And for those who choose an STLDI plan? Those customers may have made a bad bet if they get really sick, given STLDI’s comparatively skinnier benefits relative to the more expensive ACA plans. But considering that almost half of Missouri’s population is under the age of 34 and that many are being crushed by exorbitant premiums, a number of Missourians could benefit from an STLDI expansion.

Missouri currently limits its STLDI plans to six months, requires plans to cover some state-mandated benefits, and necessitates that customers have a 63-day gap in coverage before purchasing short-term plans. These regulations impede customers’ access to these plans, creating significant barriers to affordable insurance.

In the 2018 legislative session, Missouri considered House Bill 1685, which would have extended the six-month limit on plans to a full year. Though the measure did not pass before the session ended, it received support in both chambers, and a similar bill could appear in 2019. In light of the change in federal rules, isn’t it time for policymakers to consider expanding short-term plans for the sake of Missourians’ health—both physical and financial?

The post Not Bronze, or Silver, or Gold, or Platinum-Just Affordable appeared first on Show-Me Institute.

The post Holy Smokes! Andy Puzder, a Free-Market Advocate, to Run the Labor Department? appeared first on Show-Me Institute.

The U.S. Labor Department has extended mandatory overtime pay to more than four million white-collar workers, including some 100,000 workers in Missouri. A new ruling from the department more than doubles the weekly threshold for salaried workers exempt from overtime pay to $913 a week (or $47,476 a year), and it requires employers to pay time and a half to employees at or below the threshold for any week in which they work more than 40 hours.

With five hours of overtime pay, a salaried worker at the threshold level will go from making $913 in a week to $1,172.

That may sound good, but it reflects a fundamental lack of understanding of what leads to wage and job growth and upward mobility for workers. It sets a new high-water mark in government meddling in other people’s business—or businesses.

As the CEO of one restaurant chain points out, the new ruling will demote thousands of mid-level managers into “glorified crew members” whose overriding incentive is to log more time rather than get results and be rewarded with bonuses and promotions.

In calling for cumbersome timekeeping systems that will rein in those who see showing initiative and always doing more than the required minimum as a ticket to success, the new ruling restricts the freedom and flexibility of employers and a large portion of their front-line managers to come to mutually beneficial agreements on compensation and working hours.

Other unfortunate side-effects will also follow. According to a National Retail Federation study, the rule will cause employers to move about a third of salaried retail and restaurant workers to hourly status. Further, it will lead to reduced hours for many of those workers and a shift to hiring more temps.

The idea that government can force businesses to take money out of profits in order to pay more to different classes of workers is itself delusional. To force any business to pay more to a worker than his or her value to the enterprise is to ensure that the business will do its best to keep employment of such workers at an absolute minimum. Unlike governments, companies that can’t make money are unable to expand, and are subject to extinction. That is especially true for low-margin, hypercompetitive businesses such as hotels, restaurants, and retailing that have been especially critical of the ruling.

The White House is saying that millions of salaried workers will get a raise under the new overtime rule. However, according to the Federation of Independent Businesses, that is contradicted by the Labor Department’s forecasts of a decline in average pay rates of newly covered salaried workers of about 5.3% in 2017.

To paraphrase Churchill, the Obama administration’s plan to order up a raise for middle-class Americans through an administrative edict is as foolish as the man who stands in a bucket and expects to lift himself up by pulling on the handle.

In fact, the administration’s plan is worse than that. At least the man who pulls on the bucket handle does not descend to a lower level. But that is exactly what will happen through the ministrations of our know-it-all government.

The post Know-it-all Government Undermines Growth and Jobs appeared first on Show-Me Institute.

I didn’t catch why my DJ was upset with the Board of Aldermen, but one reason Saint Louisans are upset with the board right now is their decision to consider a bill that purportedly limits minority businesses from bidding on county government contracts.

The bill mimics regrettable legislation passed by the county in 2012 that requires bidders on construction contracts of $25,000 or more to maintain their own Department of Labor-approved apprentice program. The catch is that union contractors are often the only bidders who can meet this requirement.

When the county council adopted its bill in 2012, my colleague David Stokes wrote,

While some non-union companies do participate in apprentice programs through industry organizations, union-affiliated companies still have a decided advantage in meeting the requirements of this new bill. This is a blatant ploy to guarantee that union companies will win all county bids. . . .

Using the council’s authority to prevent non-union contractors from even attempting to participate in county projects is an egregious misuse of power. It is bad enough that this will increase costs to taxpayers, but the use of government for political favoritism is simply indefensible and immoral.

Just as it was two years ago, this type of legislation still appears to be a naked attempt by elected officials to please a powerful special interest.

Law should facilitate open access, such that access to public institutions is not contingent on personal relationships and political connections. Law should be structured to apply to everyone equally. By favoring unionized contractors over non-unionized contractors, this bill fails in providing a neutral rule. It reeks of cronyism, and it is the sort of thing Saint Louisans are right to be upset about.

The post Union Cronyism and the Board of Aldermen appeared first on Show-Me Institute.

As articulated in the legal treatise Antieau on Local Government:

[L]ocal government officials are not limited to the quality and suitability of the article to be provided but can consider the bidder’s experience, skill, ability, business judgment, financial situation, integrity, honesty, possession of the facilities necessary to perform the contract, previous conduct in similar contracts, reputation and record for reliability, as well as any other factors reasonably relevant to a bidder’s successful performance if awarded the contract.

Antieau notes that at least one court has found that “discretion exercised in choosing the lowest responsible bidder must be based upon substantial difference in quality or adaptability.” Taken altogether, these observations make clear that contractors of similar talent, reliability and quality should be considered on basically even terms in a “responsible bidder” legal construction. If a contractor can do a job reliably and well, the real distinguishing mark should be the price.

But in Saint Louis County, this may no longer be the case. The county’s new ordinance requires that for a construction contractor to qualify as a “responsible bidder,” he or she must “participate in or maintain their own Department of Labor-approved apprentice program for each craft which the firm employs and have active, registered apprentices for each program.” The law further requires that “all on-site employees on the project will be employees and that there will be no use of independent contractors or ‘leased employees’ for on-site work.”

“Apprenticeship programs” are almost always an artifact of union membership. Very few non-union shops “participate in or maintain” such programs, let alone always have “active, registered apprentices for each program.” The latter requirement of “active apprentices” has nothing to do with responsible bids, but it does have everything to do with keeping non-union contractors out. Which, of course, is why it was included. The county’s move will affect all sorts of small businesses, as the St. Louis American‘s Adolphus M. Pruitt noted last month.

The bill restricts non-union contractors from bidding on County projects, thus prohibiting any minority-owned general or prime contractor from County construction work. The bill restricts contractors who don’t have active apprentices. The strange thing about this is that most unions will profess that they are not accepting apprentices. … And the number of minority apprentices active in their programs is dismal.

That is especially bad news in today’s terrible economy. I will explore the “independent contractor” aspect in Part Two tomorrow.

The post Part One: ‘Responsible Bidder’ Does Not Mean ‘Union-Only’ appeared first on Show-Me Institute.

With the state legislature meeting in a special session this
week, lawmakers from both parties are prepared to argue in favoring
of extending $360 million in proposed tax credits to support the
creation of a “Midwest China hub” or “Aerotropolis” at Lambert-St.
Louis International Airport. Based on previous comments, some of
them will admit to a large degree of skepticism about the possibility
that Lambert will evolve into a major cargo hub, but they will go on
to say it is still worth taking a shot at making it happen — given a
huge potential payoff in jobs and increased economic activity.

And on Thursday evening, President Barack Obama will no
doubt echo some of the same sentiments when he addresses a joint
session of Congress on the subject of job creation. We can’t afford to
stand around and “do nothing,” he or his supporters will suggest.
But there is nothing in the history of our state or nation that
suggests government intervention in the marketplace is an effective
tool for job creation. Indeed, when governments use taxpayers’
money in trying to pick economic winners and losers, they almost
invariably pick losers and compound failure.

Milton Friedman, the great economist, observed that people
have every incentive to economize and to get as much value as they
can for each dollar they spend when they are shopping for
themselves, but they are far more likely to be careless or wasteful
when they are spending someone else’s money for the benefit of
others. This is the case when you use an expense account to pay for
someone else’s lunch.

It is also the case when politicians or lawmakers pretend to have the
needed knowledge and expertise to channel a large sum of taxpayers’ money
to selected businesses or industries on the theory that these politically favored
and politically-dependent enterprises will do a bang-up job of
promoting the public good.

Politicians often argue that even one job created through tax credits or
subsidies is better than none. But this ignores the opportunity cost of
expending large amounts of taxpayers’ dollars for little economic benefit. If
the government takes a million dollars to create one job, that’s a million
dollars that could have gone to more efficient and productive ventures in the
private sector — creating stronger and better jobs for more people.

If Missouri lawmakers have some $360 million to spare and want to
put it to good use, they should return the money to all of the citizens of this
state through tax cuts or refunds. As Friedman pointed out, they will know
how to get the most bang for the buck.

The federal government should heed the same advice when it comes
to making a choice between expanded public works or reducing taxation,
leaving people free to choose how to spend a greater share of their own
income.

Andrew B. Wilson is a fellow at the Show-Me Institute, which promotes market
solutions for Missouri Public Policy.

The post The Job-Killing Effect of the ‘Do Something’ Mentality appeared first on Show-Me Institute.

Why is cutting corporate taxes important?

First, everything else being equal, cutting corporate taxes will leave more money available for business owners to reinvest in their companies. A company seeking to expand will have an easier time using its own profits instead of issuing debt or equity to raise capital.

Second, it’s fair.  As we have seen in Missouri, when legislators want to incentivize investment in the state, often they create targeted tax credit programs (like Aerotropolis). This allows the state to place a bet with taxpayers’ money on favored industries. Also, evidence shows that tax credits aren’t very effective. A corporate tax cut applies to every corporation in the state and thus companies can succeed on their own merits and not on how well-connected they happen to be.

Third, corporate tax cuts make a company more competitive. If Company A and B are in two different states and they make the same product at the same cost, but Company A has a higher tax rate than Company B, then Company B will have a competitive advantage. However, Company B would have a competitive advantage not of its own making; instead, the company would have an “artificial” edge due solely to its location. Company B can use that tax advantage to cut its prices and thus gain more customers than Company A.

Having a competitive advantage is important, especially in today’s economy. This applies to individual companies as well as states. If a state wants more job growth, then it needs a competitive tax environment. According to the U.S. Department of Labor (hat tip to Tax Foundation), most mass job relocations occur from one U.S. state to another and not to overseas locations. People in Kirksville, Mo., have more to fear about their jobs moving to Des Moines, Iowa, than to Delhi.

According to data obtained from the Tax Foundation, Missouri has the sixth-highest corporate tax rate compared to its neighbors (the states sharing a border with Missouri). However, if Missouri cut its corporate tax rate to 5.5 percent, it would have THE lowest corporate tax rate compared to its neighbors. In a time when every job is precious, and with the way things are in Washington, D.C., shouldn’t the state do everything it can to make doing business here more attractive?

The post What Will The Neighbors Think? appeared first on Show-Me Institute.

After all, the government is well-equipped to bust some proverbial knee caps of their own, and it looks like the National Labor Relations Board (NLRB) and the Labor Department are taking out the big bats. First, it was Boeing’s decision to move some of its operations from Washington state to South Carolina, which the NLRB is now trying to block. This week, it’s the Labor Department’s turn to do some damage, tightening requirements on employers to report their anti-unionization activities. And today, the National Review editorial board lays out the NLRB’s latest plan to help organized labor and make employer attempts to dissuade employees from unionizing that much more difficult.

It is truly worrisome that the small, ideological leadership of these bureaucracies can so easily, and unilaterally, craft American labor law and interfere with the movement of labor without even a contemporaneous, affirmative act of Congress compelling these fresh rule-making activities. We already know that Obamacare didn’t empower the administration to offer waivers to the law. We know that the Obama administration wants to enact gun control through administrative procedure. Is there anything federal bureaucrats can’t do? If not, isn’t that an enormous problem?

National Review‘s Kevin Williamson puts the problem this way (emphasis added):

If you are an entrepreneur thinking about starting a large industrial enterprise, or an incumbent firm thinking about building a new factory or launching a new line of production, you want to know that your tax and regulatory environment is livable — and that it is not going to change at the whim of one or two or three people in Washington, D.C. The NLRB has five seats (and four members serving; there’s a vacancy at the moment). The fact that such a tiny group of unaccountable political appointees can just wake up one fine morning, have some Pop-Tarts, and then decide to rewrite the nation’s union-election rules is terrifying. Such changes ought to require an act of Congress.

Roll out of bed, toast a pastry, pass a rule. Maybe a bat isn’t necessary after all.

The post Pop-Tartocracy appeared first on Show-Me Institute.

I assume this piece was not original to the Post, but it may have been. I remember about 15 years ago when a state rep from south Saint Louis County wrote a similarly themed article for the Post, and then got in a lot of (political) trouble when it turned out she had just copied it from somewhere else. I remember her name, but don’t feel like printing it. She did lose her next election, if I recall correctly. (All that stuff predated the web by a few years, so no free links are available.)

Not everything he (or she) writes here is crazy or wrong, so feel free to take my lack of comment on certain areas as being along the lines of agreement in those instances:

Dear Tea Party Members:

This morning I was awoken by my alarm clock powered by electricity generated by the public power monopoly, Ameren UE, regulated by the US Department of Energy.

All true, as it goes, but are you really that dependent on the government to get you out of bed in the morning? And didn’t the alarm clock get built in the first place by the mechanics of the free market?

I then took a shower in the clean water provided by the municipal water utility, Missouri American Water.

This is the first flat-out error: Missouri-American is a regulated, private company, not a municipal water utility.

The water was heated by the public natural gas monopoly, Laclede Gas,

Laclede Gas is a private company.

and disposed of by the the municipal sewer utility, Metropolitian Sewer District of St. Louis.

A government entity — ask Tom Sullivan about them.

After that, I turned on the TV to one of the Federal Communication Commission regulated channels to see what the National Weather Service of the National Oceanographic and Atmospheric Administration determined the weather was going to be like using satellites designed, built, and launched by the National Aeronautics and Space Administration.

This totally ignores the role that private companies and people played in all of this, and ignores the fundamental question of whether this regulation is necessary. I can guarantee you the television needs of Americans would be met just fine without government regulation.

I watched this while eating my breakfast of US Department of Agriculture inspected food and taking the drugs which have been determined as safe by the Food and Drug Administration.

This is all true, and a legitimate role for various levels of government, but let’s not pretend that nobody in America was able to feed their families before the government got involved. A nation of farmers fed itself just fine.

At the appropriate time as regulated by the US Congress and kept accurate by the National Institute of Standards and Technology and the US Naval Observatory,

Does the author really think people could not tell time before the government got involved?

I get into my National Highway Traffic Safety Administration approved automobile and set out to work on the roads built by the local, state, and federal departments of transportation,

The private provision of highways is very common in other countries.

possibly stopping to purchase additional fuel of a quality level determined by the Environmental Protection Agency, using legal tender issued by the Federal Reserve Bank. On the way out the door I deposit any mail I have to be sent out via the US Postal Service.

The Post Office versus FedEx and UPS? Enough said.

If I had kids, I would probably drop them off at the nearby public school funded by the state and federal Department of Education.

Many Americans choose private education for their children for a number of reasons, the failure of certain public school systems among them. Clearly, there are many excellent public school systems as well.

At lunch time, I pick up a bite to eat at a nearby restaurant that has been inspected by the local department of health which enforces state and federal guidelines for food safety and workplace safety. I then return to my cubical where I listen to the local FCC regulated radio station

As with television, I will guarantee you that, beyond distributing the channel spectrum as a common good, government involvement is not necessary for radio to operate, at all.

as I work on a computer that has been certified by the Consumer Products Safety Comission to be safe and compliant with FCC Part 15B regulations.

The computer industry has grown as it has during the past 40 years because of private markets, not government involvement.

Sometimes instead of work, I go on a business trip and use an airplane inspected by the Nation Transportation Safety Bureau to travel. But first I have to take off my shoes and anything metal as a walk through the the inspection station set up by the Transportation Safety Adminstration.

Watching grandpa get a body cavity inspection because he shares a nickname with a terrorist is not an argument for government success.

After checking the weather with the National Weather Service, the Federal Aviation Adminstration gives the all clear for the airplane taxi off the tarmac and to take off.

Then, after spending another day not being maimed or killed at work thanks to the workplace regulations imposed by the US Department of Labor and the Occupational Safety and Health Administration, I drive back to my house which has not burned down in my absence because of the state and local building codes

People CAN build things on their own, you know.

and the fire marshall’s inspection, and which has not been plundered of all its valuables thanks to the local police department.

It’s a sad view of society that assumes we would all descend into chaos without government force — perhaps a true view, but still a sad one. I tend to think people cooperate in many more ways without government coercion than the author does.

At home, I can call up my grandparents on a cellular telephone that is FCC Part 15B complaint and designated on a frequency regulated by the National Telecomunication and Information Administration.

As with computers, the telecommunications revolution is attributable far more to private initiative than to government control and regulation.

I then log onto the Internet which was developed by the Defense Advanced Research Projects Administration, an agency of the Department of Defense which is the parent agency of the US Army, Navy, Air Force, and Marine Corps who are defending our country so that I can enjoy my freedom to post on Freerepublic and Fox News forums about how SOCIALISM in medicine is BAD because the government can’t do anything right.

End of letter. Many of the points the writer makes are valid to varying degrees, but he discounts or ignores the role individuals and private actors played in many of the advancements he credits to government. What is also missing is any even remote debate over whether or not these things are the proper role of government as set by our Constitution. As it stands, the letter makes Americans sound like a nation of people who could not blow their nose (the closest to a clean scatological reference I could think of) without government involvement and approval.

Seriously, you thank the government for helping you get out of bed in the morning? That is not the type of life I want to live and not the type of country I want the United States to become.

The post Intriguing, Yet Frightening, Comment Over at Political Fix appeared first on Show-Me Institute.

Without the additional funding, local leaders say, Missouri can’t run with the big dogs — namely other states that offer more incentives to employers. Meanwhile, folks looking to make a decent wage are looking or moving elsewhere. According to the U.S. Department of Labor, of the 77,760 jobs in the Joplin metropolitan area, more than 50,000 of them paid less than $10 an hour in 2005.

The editorial portrays economic growth as an auction in which states bid for a few companies that pay well. The lucky residents of those states then benefit from higher wages.

The real economy doesn’t work that way. Any company can afford to pay its employees well if they’re productive enough. But first, employees need to invest in their own education and skills, and their employers need to train them.

A tax incentive program requiring companies to pay high wages is at best a temporary fix. The jobs will probably go to the most productive Missouri residents, who already earn high wages. And most businesses that come to Missouri for a special tax break will leave as soon as some other state offers a better deal.

A better idea is a tax cut that treats all businesses equally, which would give existing companies the chance to spend more on job training or to hire new employees. It would also make life a little bit easier for imaginative entrepreneurs who are dreaming of creating some well-paying jobs from scratch.

The post Bad Use of Incentives appeared first on Show-Me Institute.