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Well done, Minnesota Department of Health (seriously!)

July 31st, 2008 by Craig Westover

This commentary originally appeared in the St. Paul Pioneer Press Thursday, July 31, 2008. Comments welcome there

Regular readers know I expend a lot of column inches railing against big government and unnecessary taxation. I don’t see a virtue in being ranked in the top 10 highest-tax states, and I don’t believe increasing taxes is going to get us a ‘better Minnesota.’ So when I say ‘well done’ to the Minnesota Department of Health, I probably have some explaining to do.

The media have been reporting about and praising the Minnesota Department of Health for its key role in unraveling the mystery cause of the salmonella outbreak that had baffled federal investigators for months. In less than two weeks after the first case in Minnesota, MDH investigators traced the source of the outbreak that sickened more than 1,200 people in 43 states and Canada to jalapeno peppers grown in Mexico, shipped through wholesalers in California and Texas.

A contributing reason for Minnesota’s quick and accurate investigation is centralization of responsibility and authority to investigate epidemic outbreaks. In many states, county health departments take the lead and only report up to the state; here, the MDH is in charge of investigations from the first recognition of an outbreak.

Predictably, some progressives are latching onto the “Case of the Tainted Jalapenos” to justify high taxes and expanded government. If you’re of the progressive ilk and hoping that my praise for the MDH signals I am about to recant my contrarian ways and “admit” the benefits of big government, you will be sorely disappointed.

What we have here is a teachable moment, a moment that supports the idea that government governs best when it does just what it SHOULD DO and not all that it CAN DO.

The problem with progressive analysis that deems “Tainted Jalapenos” a case for big government is the progressive inability to make distinctions between legitimate functions of government and expansion of government into areas where it doesn’t belong. Tracking down the source of a salmonella outbreak is a legitimate public health concern and a legitimate function of government — not just because I say so or some progressive think tank says so, but based on consistent and predictable criteria. A public health issue that necessitates government intervention must meet three issue-neutral criteria:

  • A person is exposed to a risk to which he did not consent. People do not consent to being exposed to tainted food.
  • The risk can affect everyone or anyone. A salmonella outbreak of unknown origin poses such a widespread risk.
  • A reasonable person cannot avoid the risk on his own in a reasonable manner. Avoiding all possible contaminants might be a short-term precaution, but it is not a reasonable long-term solution. A reasonable person cannot tell by looking at food whether or not it is tainted.

Thus, government has a legitimate role in assuring a safe food supply; one can debate how this is done most effectively, but it is beyond debate that the government has the obligation to protect people from risks to which they do not consent and cannot reasonably avoid on their own. In fact, that is the primary “should do” of government. If fraud or criminal negligence is involved, punishing the perpetrator and/or administering civil suits that might arise are also obligations of government.

However, contrary to the progressive argument, the praiseworthy effort of the MDH does not justify an expansion of “public health” beyond its legitimate responsibilities. It does not justify doing away with private property rights to prevent bar and restaurant owners from allowing smoking for patrons who choose to do so. It does not justify “sin taxes” on fatty foods or making our children’s body-mass-indexes a matter of government concern. It does not justify “transforming” the Minnesota health care system at the expense of freedom to contract among patients, doctors and insurance companies.

Not every health issue is a public health issue.

What people should be thankful for is not that Minnesota hasn’t cut its Department of Health, but that despite the best efforts of the Legislature, the Minnesota Department of Health has not yet expanded its purview too far beyond its proper function. So it can still do, and do well, that which it is supposed to do.

Well done, MDH. Well done.

Craig Westover is a contributing columnist to the Pioneer Press Opinion page and a senior policy fellow at the Minnesota Free Market Institute (www.mnfmi.org). His e-mail address is westover4@yahoo.com This e-mail address is being protected from spambots. You need JavaScript enabled to view it . This commentary originally appeared in the St. Paul Pioneer Press Thursday, July 31, 2008.

Revealed: Conservatives Have Escape Plan for When They Destroy the Earth

July 30th, 2008 by David Strom

This Column was originally published at Townhall.com Comments welcome there.

 

Well, the secret is out. Conservatives’ willingness to destroy Mother Earth in pursuit of financial gain now makes sense.

The missing fact that helps explain the seemingly inexplicable willingness of Conservatives to destroy the planet was revealed last week by former astronaut Dr. Edgar Mitchell. You may or may not remember Mitchell as the astronaut who holds the record for the longest moonwalk.

Dr. Mitchell has broken a long-standing wall of silence and revealed that our government-and governments around the world-have been in secret contact with alien beings from another planet. Mitchell revealed the aliens to be “little people who look strange to us.”

Mitchell still refuses to put a name to cigarette-smoking man and other top government officials in on the conspiracy, but details are sure to follow. We can surely know that they are a cabal of neoconservatives.

The details don’t matter as much as this one fact: we now know why conservatives have felt free to destroy the Earth. They have negotiated passage to a new, better, and cleaner world elsewhere in the Universe!

Those little grey men with the big eyes and short, lithe bodies probably drove a hard bargain for passage to a new world. Who knows how many DVD players and Plasma TVs it took to entice them to open up their world to human settlement? It may even be that conservatives’ insistence on opening up ANWR and the continental shelf to oil drilling is part of their plan to pay off the aliens

How else to explain conservatives” propensity to doubt the wild claims of environmentalists about the imminent destruction of the planet? Conservatives first ignored Rachel Carson and her warnings about the coming “Silent Spring” that would follow from capitalism’s raping of Mother Earth. Now conservatives are casting doubt on the claims that the Earth’s climate is ultimately driven by mankind’s reckless burning of fossil fuels.

So-called “progressives” tell us that there is, and can be, no doubt about mankind’s destructive impact on global climate. And they warn us incessantly about the flooding, hurricanes, desertification, and even earthquakes (yes earthquakes!) that will be caused by global warming. “The Earth has a fever,” we are told, and anybody who questions that fact is a “denier” in the mold of holocaust deniers.

House Speaker Nancy Pelosi herself declared she was on a crusade to “save the planet”-presumably from we conservatives who want to destroy it.

The question many people had on their mind as they gave conservatives the benefit of the doubt was: how can conservatives actually be willing to abide the destruction of the planet, given that it and its climate will be the primary inheritance we leave our children and grandchildren?

Now the answer is out: Conservatives’ children will NOT be inheritors of planet Earth. As Dr. Edgar Mitchell’s revelations suggest, conservatives will have a whole new planet to escape to once they finish destroying our home planet.

See, once all the facts are out, the seemingly feverish conspiracy theories of the left suddenly make sense. Once you understand that conservatives intend to leave poor Planet Earth behind (along with its billions of residents who cannot escape) the picture suddenly comes into focus.

My only question is: why haven’t I been invited to join the conservative exodus once it gets under way?

McCain’s education reform: ‘Bold but practical’ ultimately means ‘not bold’

July 24th, 2008 by Craig Westover

As a perceived ‘friendly’ and someone who strongly supports parental school choice, I got a call from Sen. John McCain’s presidential campaign and an advance copy of his speech to the NAACP last week. McCain would be proposing some ‘bold but practical’ educational reforms, I was told. I cringed.

In the early 1990s, Harvard Business School professor Chris Argyris coined the phrase “skilled incompetence” to describe the mixed messages that waft through large organizations. A common example is a directive from management to employees to “be innovative and take risks, but be careful.”

Management thinks it is telling employees to “break from conventional thinking;” the employee hears only “don’t mess up.” The result is tweaking at the margins of a problem, which is ultimately destructive to an organization.

“Bold but practical” sends the same signal.

On the rhetorical level, McCain’s education proposals are indeed bold. His support for school choice differentiates him in the presidential campaign. He challenges Americans to “shake off old ways and to demand new (education) reforms,” but as a practical matter, McCain also sends the innovation-crippling “be careful” message — the feds are still going to set the standards, provide the incentives and bestow the rewards.

“If I am elected president, school choice for all who want it, an expansion of Opportunity Scholarships (an existing Washington, D.C., voucher program) and alternative certification for teachers will all be part of a serious education reform,” McCain told the NAACP. Bonuses for teacher performance as measured by student achievement, more local control of federal education dollars and support for “virtual schools” are also part of his serious education reform.

Parental school choice focused on the educational needs of individual students is a bold theme and a sharp contrast with presidential rival Sen. Barak Obama’s focus on “fixing and improving public schools.” In a speech to the American Federation of Teachers, Obama dismissed parental choice and private school vouchers for low-income families as “tired rhetoric.”

What is “tired rhetoric,” McCain counters, are the endless excuses of people more concerned about their own positions than about our children. “No entrenched bureaucracy or union should deny parents choice and children opportunity,” he told the NAACP.

Bold stuff, but then McCain gets “practical.”

Despite his school choice rhetoric, McCain’s proposals clear no new ground for meaningful school choice. Demonstrating some skillful mixed messaging, McCain praises parental school choice while providing little of it.

The essence of school choice is parents choosing the best schools for their children from among a variety of educational alternatives developed by many sources. McCain’s actual proposals tweak at the margins of the status quo system — a single approach to education from a single educational source. McCain’s reforms come with the unspoken but clear message that the federal government runs the show. Under a McCain presidency, John McCain will call the shots.

“Under my reforms, we will entrust both the funds and the responsibilities where they belong, in the office of the school principal,” McCain told the NAACP. Charter schools are successful because principals have spending discretion, he noted. “And I intend to give that same discretion to public school principals,” he said (my emphasis added).

Don’t waste time looking in the Constitution for the clause that gives the president of the United States authority to write job descriptions for elementary-school principals in Woodbury. It isn’t there. But the “minor” issue of constitutional authority aside, consider this display of skilled incompetence:

While proposing that bonus money for teachers should not be controlled by “faraway officials in Washington,” McCain told the NAACP that, as president in faraway Washington, he would expand support for virtual schools, redirecting some $750 million to create new online schools.

Now how from faraway Washington McCain arrived at a $750 million need for virtual schools, I haven’t a clue, but the mixed message to school districts ought to be obvious — “You have authority, but here’s what I think is a good idea.” That message sets up conflicts that channel energy away from locally inspired innovation into chase-the-carrot, avoid-the-stick policymaking, irrespective of the needs of individual students.

Kudos to McCain for boldly putting the school choice question before the public, but he has a ways to go to get to “a serious agenda of education reform.”

If McCain is sincere about supporting school choice, he must do so unambiguously and unequivocally. He must be willing to eviscerate the faraway (and extra-constitutional) federal role in education and trust local schools to provide quality education. Bold rhetoric is meaningless without bold action.

Craig Westover is a contributing columnist to the Pioneer Press Opinion page and a senior policy fellow at the Minnesota Free Market Institute (mnfmi.org). His e-mail address is westover4@yahoo.com This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

This commentary originally appeared in the St. Paul Pioneer Press Wednesday, July 23, 2008.

Do Conservatives Hate their Children?

July 23rd, 2008 by David Strom

This column was originally published at Townhall.com. Comments welcome there.

 

If you listen to the Man-Made-Global-Warming proponents, conservatives must be a pretty callous lot.

In fact, they must hate their own children. After all, according to these advocates we “deniers” are selling out the future of the planet just to get a few bucks.

That’s funny, because according to the research available conservatives are much more fertile than liberals – in fact, almost 50% more likely to have children.

Yet we know that it is conservatives and not liberals who are most likely to doubt the arguments for man made global warming. And by far they are less likely to call for massive intervention in the economy to prevent the “inevitable” destruction of the biosphere by mankind’s profligate use of fossil fuels.

What’s going on here? Are conservatives really so callous as to be willing to sacrifice their children’s future, or even their lives, just to drive a bigger car and use incandescent light bulbs instead of compact fluorescents? Are conservatives willing to sell their children’s future for a few bucks from big oil, big coal, or big auto manufacturers? Or to save a buck or two on the price of gas?

Of course not. What’s really going on here is that the debate over global warming is not an argument about the future of the environment, but about the future of the economy. It is about who controls the means of production – people or the government (or “government sponsored entities”).

The fight over climate change is primarily a fight about whether big government should control everything from the largest to the most minute aspects of economic activity, or whether our economy should remain at least relatively free. After all, control of energy production and use is tantamount to control of the entire economy.

This is the same battle we have been fighting since before Karl Marx declared that ownership of the means of production should be socialized and incorporated into the State. The Left says yes to socialism in some form or another, the right says no: freedom and free markets are inseparable.

In this context consider Al Gore’s proposal to completely eliminate fossil energy from the American economy in ten years-ten years!-at the cost of trillions of dollars and just about all our freedom. Imagine what it would take to replace about 80% of our electricity generation with zero carbon sources-and more importantly, how much government interference in our economy it would justify.

No serious person who understands our energy production believes that Gore’s goal is achievable or even desirable. But that’s not the point.

The point is that setting this goal and committing all the resources of the government to achieving it would require a massive restructuring of the U.S. economy, massive government subsidies and penalties, and the picking of winners and losers in the marketplace (and just who do you think would be raking in those trillions of dollars?).

All in all pursuing such a goal would be the greatest leap forward for socialism in the United States since the New Deal. Following Gore’s prescription would make the government interference in the economy during the New Deal look miniscule by comparison.

So why have conservatives been-to a great extent-on the losing side of this argument in the political realm? After all, the political (if not scientific) “consensus” behind Man Made Global Warming is strong enough that both major party candidates for President support making massive changes to the American economy to address it.

Conservatives have been, I believe, too afraid as a group to fire back when the so-called “Progressives” accuse them of selling out the environment and our children’s future for a few bucks in their pocket today.

Yet how hard would it be? Conservatives have more children and grandchildren than liberals. They in fact have a much greater stake in the future of the planet than a dual-income-no-kids liberal couple. And in reality the average conservative has little or no real financial interest in the fossil fuel industry beyond the need to put fuel in our cars and turn on the lights in our homes.

Can the same be said of the leading liberal proponents of the idea behind man-made global warming? How often do we hear from the proponents of the global warming hypothesis about how there is money to be made in moving to a carbon-neutral economy? Who do you think is investing heavily in biofuels, solar and wind power, and all the other Rube Goldberg schemes being pushed to “solve” the current “crisis?” Who is making money off all those carbon-offset credits and the like?

So tell me: who, really, is willing to sell our future down the river for a few bucks? Or at least sell out our freedoms for a chance to grab control over the energy backbone of the entire economy?

The bottom line is pretty easy to understand: if the proponents of radically changing our economy get their way they achieve two of their most cherished goals: moving our economy dramatically toward socialism, and getting rich off of the inevitable government mandates and subsidies required at the same time.

So getting back to the original question: do conservatives hate their children? Of course not. But do liberals hate Conservatives’ children? You be the judge.

A dialogue on government restraint

July 18th, 2008 by Craig Westover

The following commentaries on the restraint of government originally appeared in the St. Paul Pioneer Press. Craig Westover is a Senior Policy Fellow with the Minnesota Free Market Institute; Dane Smith is President of the think tank Growth & Justice.

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The problem with progressives

Craig Westover – Pioneer Press 6/19/2008

Credit where credit is due: The symposium on ‘Minnesota’s Progressive Republican Tradition’ that progressive think tank Growth & Justice has scheduled during the Republican National Convention is pretty good PR. Pushing progressivism is what Growth & Justice is all about, and what better stage to co-opt than the GOP national convention.

However, I must drop the other shoe: Praise for Growth & Justice ends with acknowledging its pragmatism. The notion that we are all progressives now — or, if not, we should be — is a dangerous challenge to constitutionally limited government.

Progressives, it seems, don’t want to be called “liberals” anymore. I don’t blame them. Big-government liberalism has degenerated into a politics of arrogance and willful ignorance of economic realities.

Speaking in Minneapolis earlier this year, liberal DFL Senate Majority Leader Larry Pogemiller asserted: “I think it’s simplistic and naive to say people can spend their money better than the government. … The notion that everybody can individually spend their money better than government I just think is trite, wrongheaded and antidemocratic.”

A “progressive,” by contrast, shuns such arrogance. Instead, he advocates for higher marginal tax rates with the humble totality of religious conviction; a “progressive” tax system based on “ability to pay” is the moral thing to do (hence, growth and justice). That is not willfully ignorant economic argument; it is not economic argument at all. It is moral argument, dividing the world into the self-sacrificing good and the selfishly individual.

Progressivism is politics as religion. Left-leaning progressivism strives to impose values on society every bit as aggressively as the Christian right pushing a moral agenda of “family values.” Whether the supreme authority over individual liberty is a secular state or a religious one, the operative word is “supreme.” Progressivism is ultimately about total control.

Progressivism is immune to restraint; it respects no constitutional limits on government. The progressive may prefer the near-sacramental word “holistic” to describe the effort to create a better world, but, as National Review’s Jonah Goldberg reminds us, Mussolini coined the word “totalitarian” for the progressive vision — a society where everyone belongs, where everyone is taken care of, where everything is inside the state and nothing is outside the state, where there are no hard trade-offs.

“Growth” and “justice” are both desirable, and the progressive believes this makes them compatible irrespective of the laws of economics. Equality and freedom are both good things; therefore the progressive justifies state intervention to eliminate conflict among the vicissitudes of fate and the variability of personal ambition, so that all might be free to achieve their potentials.

Consensus among “experts,” the high priests of progressivism, determines how much growth is just (what level of private profit becomes “unreasonable”) and the appropriate ratio of equality to freedom (everyone “chooses” among state-run health plans).

Everyone, says the progressive, has the “right” to a useful job at a fair wage, a decent home, medical care, a good education and adequate protection from economic fears of old age, sickness, accident and unemployment. Concern that such “rights” necessarily impose obligations on others is negated by the righteous beliefs that we all have moral obligations to our fellow citizens, and moral obligation to the “common good” can be coerced by the police power of the state.

That brings us back to the Growth & Justice concept of a “progressive Republican” — which is analogous to “agnostic Lutheran.”

The operative word is “agnostic.” “Lutheran” is the set of beliefs the “agnostic Lutheran” no longer holds. His beliefs are agnostic, not Lutheran.

Likewise, the operative word in “progressive Republican” is “progressive.” “Republican” is the set of principles the “progressive Republican” no longer holds. He is in essence a “progressive” shunning Republican principles to use the police power of the state for the collective good of the people at the expense of the inalienable rights of the person.

The Growth & Justice symposium not withstanding, “progressive Republican” is a chimerical fiction. So is “progressive Democrat.” One believes in constitutionally limited government — in individual economic liberty and personal liberty protected by the rule of law — or one does not. good PR does not equate with good public policy.

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In the mainstream – legitimately
Dane Smith – Pioneer Press6/25/2008
Thanks to conservative columnist Craig Westover for recognizing the ‘pretty good PR” in the event that Growth & Justice is sponsoring on Sept. 3, during the Republican National Convention, and our salute to ‘Minnesota’s Progressive Republican Tradition.”

But he went way out in the weeds with his assertions (”The problem with progressives,” June 20) about what progressives — certainly the pragmatic variety here at Growth & Justice — actually think and stand for.

It is just preposterous to assert that progressives as represented by Growth & Justice are mounting a “dangerous challenge to constitutionally limited government,” or that progressivism is ultimately about “total control” or totalitarianism. We also strenuously object to his claim that we are “immune to restraint” or that we represent a “politics of arrogance and willful ignorance of economic realities.”

No matter how widely he wanders to gather his libertarian proof points, Westover always gets around to the same dark world view: Our state and national governments essentially are illegitimate and are using the “police power of the state” to transfer money from one set of people to another set of people.

He manages to link Growth & Justice with a nefarious cabal of statist confiscators including Italian dictator Benito Mussolini, agnostic Lutherans, DFL Senate Majority Leader Larry Pogemiller and stalwart Republican Minnesota governors such as Harold Stassen, Al Quie and Arne Carlson — some of the leaders being honored by the event that sparked his latest broadside.

Here’s a fundamental point Westover keeps missing: There’s all the difference in the world between undemocratic governments under brutal dictators and democratic governments, like our own, that are responsive to the will of the people and largely a force for good. We’ve fought wars over this difference in legitimacy. And our governments, “of the people, by the people and for the people,” should be a point of pride for Americans and Minnesotans.

Contrary to Westover’s hyperbole, here’s a little more information about what Growth & Justice actually believes: We cut taxes too much in the last decade. Because of a wrongheaded no-new-taxes orthodoxy, we invested too little in public education, transportation (and bridges), health care and environmental protections. We think the overall size of our state and local public sector during Republican Gov. Arne Carlson’s administrations in the 1990s was about right, and typical of a Minnesota formula for success for more than 30 years, when our economic growth was more robust than it is now.

In today’s dollars, a 1990s-sized public sector for Minnesota would be a couple billion dollars more now than then, on a base of about $35 billion. But that’s a mere 1 or 2 percentage points more in the Price of Government, which is the official Minnesota Finance Department measure of total revenue as a percentage of total income. The difference between a 16 percent Price of Government in fiscal year 2008 and 17.5 percent in 1998 probably does not strike most reasonable people as the difference between “constitutionally limited government” and jack-booted, Mussolini-style totalitarianism.

Westover selectively quotes Pogemiller to wrongly suggest that progressives think the government can spend all your money better than you can, but leaves out Pogemiller’s larger point at a community meeting in March that “no matter how rich you are, you can’t build a freeway system by yourself … (or) a public educational system by yourself.”

He also misses the main point of our event at the GOP convention. A progressive orientation toward governing, which invests in human capital so more people have an opportunity to prosper, has been an admirable and distinctively Minnesota trait exemplified in all major parties.

Examples abound throughout our history of Republicans’ embrace of both progressive reform and good-government accountability: Gov. Harold Stassen’s early backing of civil rights in the 1930s and civil service reform that cleaned up serious corruption in state employment; Gov. Al Quie’s practical and humane compromise in raising income taxes to address a budget crisis, and his lifetime of service on behalf of prison inmates and judicial quality; Gov. Arne Carlson’s fiscal discipline coupled with visionary planning and wise investment in the MinnesotaCare program, providing health care for working families.

Private enterprise and governments both have great capacity to improve life. There are ideologues at the extremes who think one or the other ought to reign supreme, but that does not represent the Growth & Justice position. Nor does it accurately reflect the mainstream Minnesota view that our good life results from a balance between good government and a vigorous free market.

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Government’s legitimacy is grounded in restraint
Craig Westover – Pioneer Press6/30/2008
I am quite pleased to see how quickly Growth & Justice President Dane Smith responded (”In the mainstream – legitimately,” June 25) to my June 20 column (”The problem with progressives”) in which I asserted my mistrust of progressive politics. Like my dental hygienist, I get a little pleasure out of hitting a nerve.

Smith “strenuously” objects to my contention that progressives are immune to restraint, and he finds the notion “preposterous” that progressivism is a dangerous challenge to constitutionally limited government. Yet nowhere in his piece does he say what it is that restrains progressives from expanding government beyond legitimacy. And that is really what the debate is all about.

Let’s put to rest the notion Smith attributes to me that our government is “illegitimate” – government is legitimate. What I question as illegitimate is the scope of activities Smith would endow with government authority.

The Declaration of Independence establishes that governments are instituted among men to secure the unalienable rights of life, liberty and the pursuit of happiness. Smith’s view not withstanding, government is not instituted to create a better world through the “visionary planning and wise investment” of an elected few.

The declaration goes on to state that government derives its just powers from the consent of the governed. Smith misses the word “just” when he chides me for failure to recognize the difference between “undemocratic governments under brutal dictators” and “democratic governments that are responsive to the will of the people and largely a force for good.” The legitimacy of a government is not determined by whether that government is a democracy, a republic or even a dictatorship, or whether it is “largely a force for good” or “in the mainstream.” Every form of government can exercise tyranny. Each has.

Just authority legitimizes government. Just authority is the inherent right an individual has to secure his own unalienable rights, which he can, therefore, justly consent to government. I have a right to recovery if someone steals from me; I can consent that power to government through police and courts. I have no right to band together with my friends to rob our rich neighbor to help our poor neighbor. I cannot consent that power, which I do not have, to government.

Just authority is not any old power that at one time or another 51 percent of the people think is a good idea or a legislature or executive can usurp based on an election mandate.

That brings us to the crux of the question.

I argue that the declaration’s principles and the language of the Constitution both legitimize and constrain government power. Smith believes that the will of the people endows government with both legitimacy and authority. The question he ignores is, “What restrains the will of the people to expand government authority beyond legitimacy?”

The best answer I can infer from Smith’s piece is I ought to trust the “pragmatic” progressivism of Growth & Justice and Smith’s personal sense of “balance between good government and a vigorous free market.”

Here’s why I am leery of betting my freedom on such trust:

Growth & Justice, according to Smith, believes we have invested too little in public education, transportation, health care and environmental protections. OK, let’s assume Smith is correct. At the same time we were saying “no” to more investment, we were also saying “yes” to a plethora of wealth-transferring, behavior-modifying, regulation-imposing programs of dubious merit and less constitutional authority. We created monopoly education and government-regulated health care systems that limit individual choice. We made transportation policy intent on engineering behavior and guiding development rather than increasing mobility. We expanded the scope of government “service” well beyond what is authorized by either the state or federal constitution, or by a decent respect for individual independence.

Yet, Smith argues that government in the last decade was “restrained” because the “price of government” was a constant. The “price of government” is a formula that determines the “proper” size of government based on the total income of the state.

In other words, government is restrained not by rule of law or enumerated powers, but by how diligently you and I produce wealth. The more wealth we create, according to Smith, the more government is entitled to, the more government we can afford and, therefore, the more government we should have – of course while maintaining a “balance between good government and a vigorous free market.”

Dane Smith is no “jack-booted, Mussolini-style totalitarian.” But his belief that life can be improved through a government restrained solely by some Hobbit-like virtue that vows to use the Tolkienesque ring of government power “largely as a force for good” is naïve and dangerous. And the longer Smith wears the ring, the more he might come to realize that good intentions are not an adequate check on unrestrained government power. Ultimately, however, it is your individual liberty that hangs in Smith’s progressive balance between good government and a vigorous free market.

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Government as an agent of progress
Dane Smith – Pioneer Press7/1/2008
It’s a good thing around Independence Day to be having an old-fashioned American argument over the proper role of our governments. And thanks again to the Pioneer Press for letting us make the progressive case in response to libertarian columnist Craig Westover’s latest counter-counter point on the subject.
We’re finally getting somewhere when Westover says ‘government is legitimate” (and I’m assuming he’s talking about all of them: federal, Minnesota, city and county, and the Metropolitan Mosquito Control District). Government as an agent of progress
7/1/2008 11:14 AM

It’s a good thing around Independence Day to be having an old-fashioned American argument over the proper role of our governments. And thanks again to the Pioneer Press for letting us make the progressive case in response to libertarian columnist Craig Westover’s latest counter-counter point on the subject.

We’re finally getting somewhere when Westover says ‘government is legitimate” (and I’m assuming he’s talking about all of them: federal, Minnesota, city and county, and the Metropolitan Mosquito Control District).

And let’s give libertarians their due on a fundamental point: Restraint is necessary. The power of government, even our own largely good and effective ones, is coercive. If you break laws or fail to pay your taxes, you go to jail, so we need just laws and fair taxes. Governments need to be restrained, checked and balanced, open to challenge and inspection, kept within bounds, always respectful of individual rights and liberty.

The erosion of civil liberties brought on by an over-reaction to fear of terrorists is a clear example of what can happen when the collective impulse overrides individual rights. Economic liberties are important too, and the enduring and somewhat distinctive American resistance to taxes serves as a check on that front.

But Westover veers off to suggest that in the realm of public investment, taxes and spending, there’s a certain “scope of activities” favored by myself and other progressives that is illegitimate or in violation of the Declaration of Independence or the U.S. Constitution.

Then he completely reverts to the dark side a few paragraphs later by declaring that we have “no right to band together … to rob our rich neighbor to help our poor neighbor” — implying any effort by democratic government to equalize opportunity and prosperity is downright criminal.

Practical progressives like those of us at Growth & Justice revere the founding documents as much as conservatives and libertarians do.

In response to Westover’s challenge to say “what it is that restrains progressives from expanding government beyond legitimacy,” we would come back to the Declaration’s assertion that “governments are instituted among Men, deriving their just power from the consent of the governed” and that “it is the right of the People to alter or abolish” their governments when they fail or exceed their limits.

So there it is. Rather than picking an arbitrary tax rate or percentage of income for public investment, or specific lists of things governments can or can not do, the Founders wanted to let “the governed” decide for themselves. And our courts, even those packed with conservatives in recent years, have upheld the constitutionality of the basic structure of our federal, state and local governments’ scope of activities.

In all the inveighing by anti-government libertarians I’ve seen over many decades, I’ve seldom seen them assign a specific limit to government’s portion of income or a comprehensive list of illegitimate activities such as, say, mosquito control.

One does see frequent complaints that road-building is OK but mass transit is not, that public schools make sense but that far too much is spent, that armies and police are legitimate but that endowments for the arts and humanities are not.

In the spirit of ‘76, let’s consult a Founding Father on this parsimonious view of government. The following are the words of John Adams, our second president and a frugal, no-nonsense New Englander, from David McCullough’s recent Pulitzer Prize-winning biography.

“Laws for the liberal education of youth, especially for the lower classes of people, are so extremely wise and useful that to a humane and generous mind, no expense for this purpose would be thought extravagant (italics added).”

Today’s low-tax, small-government conservatives might be further surprised to hear Adams wax eloquent on the truly expansive role he set out for his own state government (liberal Massachusetts, wouldn’t you know) and a responsibility for “engineering behavior,” as Westover puts it.

A section of the Massachusetts constitution, written by Adams, calls for “spreading the opportunities and advantages of education in various parts of the country, and among the different orders of people … It shall be the duty of legislators and magistrates in all future periods of this commonwealth to cherish the interests of literature and the sciences … public schools and grammar schools in the towns, to encourage private societies and public institutions, rewards and immunities, for the promotion of agriculture, arts, sciences, commerce, trades, manufactures, and a natural history of the country, to countenance and inculcate the principles of humanity and general benevolence, public and private charity, industry and frugality, honesty and punctuality in their dealings, sincerity, good humor, and all social affections, and generous sentiments among the people.”

Today’s progressives believe, as Adams did, that enlightened investments in human capital and physical infrastructure build a foundation for wider and greater prosperity. And we’re not even talking about a government-run program to encourage virtues like “sincerity” and “good humor.”

An Unpopular Truth

July 15th, 2008 by David Strom

This column was originally published at Townhall.com. Comments Welcome there.

It’s been a while since I really angered a good chunk of my readers, so I guess it’s time.

In this spirit today I am rising up in defense of commodities speculators; more specifically, speculators in the price of oil and agricultural products.

There is no group more vilified today than the speculators, and few who are as unjustly attacked. Speculators have been taking a lot of heat from politicians and various other demagogues as the cause of the rapid rise in food and energy prices.

The latest group to get into the act of blaming speculators for rising prices is a coalition of a few big businesses (mainly airlines) that use a lot of fuel. They have banded together to create “Stop Oil Speculation Now,” a group dedicated to getting the government to seize more control over the futures trading market. One thing these businesses fail to tell you is that they were doing badly long before oil prices went up, mainly due to poor management.

If the idea of big businesses calling for more big government doesn’t frighten you, you must be a socialist already. These companies aren’t pushing this agenda for the common good of all of us—they want the government to bail them out by imposing price controls on oil through the back door of impeding the trading of futures in oil.

It’s hard to find an idea as dumb as this getting such serious attention.

Attacking speculators is akin to shooting fish in a barrel. Price speculation is as naked a profit-seeking activity as can be found in a free-market economy, and when consumers get angry about price increases or shortages there is not easier target than the “blood sucking” and “profit before people” speculators.

Of course, nobody mentions that without a futures exchange the modern market in commodities would come to a screeching halt. In fact, the history of futures exchanges—where so-called “speculators” do all their trading—goes as far back as 1710 in Japan and 1800 in America, and some argue that even the ancient Greeks had futures markets.

What good is a futures market in commodities such as oil and food (and gold and silver and…)? Why do we need speculators to make a modern economy work?

Growing food and mining gold and pumping oil are risky businesses. Prices fluctuate a lot, and the supply of those goods varies quite a bit over months and years. A particularly good or bad harvest, the discovery of new oil fields or the flare up of a war in the Middle East, and even the decision to print fewer or more dollars by the Treasury or Federal Reserve can all have tremendous impact on the value of commodities. Supply and demand constantly fluctuate in these markets, and prices along with them.

That makes it difficult for producers of commodities to make long-term investments. They have no idea how an investment today might pay off tomorrow. Will large investments today yield significant profits tomorrow? In just a few hours of one day—July 15th, 2008—the price of a barrel of crude dropped $10. From the point of view of somebody deciding whether to invest billions of dollars in a new oil drilling venture, the prospect of significant declines in the price of oil looks both real and frightening. Same goes for farmers buying new farm equipment, or mining companies investing in a new mining venture.

Of course if they can lock in a price for the delivery of their goods at some time in the future producers will be more willing to make investments in future production, because they have a pretty good idea of what the return will likely be. And that is what happens in futures markets. Producers sell the rights to take delivery of their product at some specified time in the future in exchange for a certain price today.

And who buys those rights? Speculators. They are making a bet that the product they are buying at a certain price today will be worth more tomorrow. Sometimes they win, and sometimes they lose. Often they sell off their rights to another speculator who has a different bet on what the price in the future will be of the product they are buying. (For a great short lesson on who speculators are visit the blog Market Power written by economist Phil Miller).

That’s what futures markets do, and that’s why they—and the speculators who make them work—are so important. Farmers will farm less if they are less sure of their profits. Oil companies will seek less oil if they worry that oil to have another price collapse—as happened in the 90s after the peak prices of the 1970s and 80’s. (No, high prices as far as the eye can see are NOT inevitable, history tells us).

It’s the futures markets that make being in the commodities business stable enough to function relatively efficiently. Without futures markets, fewer commodities would be produced and prices would be, on average, even higher than without futures markets. It is the futures markets that provide the necessary stability (most of the time) to the commodities markets to keep producers in the business of selling risky goods.

The government taking more control over futures markets would do nothing to hold down the price of oil or food—in fact, such a move would almost certainly make things worse in the long run. And I am willing to bet that the folks behind Stop Oil Speculation Now KNOW that it would make things worse for consumers.

But they aren’t worried about that. I think they are hoping that getting the government into the oil pricing business will lead to more explicit price controls and supply management, putting their “vital” businesses at the head of the line for cheaper fuel and avoiding the inevitable fuel shortages that price controls would bring.

We’ve been down this road before: in the 1970s the government got into the business of price and distribution controls for fuel, and it was not a pretty sight. For those of you who don’t remember, government interference in market in the 1970s brought us gas lines, fuel shortages, and eventually stagflation.

Markets always work better than government, so let me hear from you all: three cheers for speculators!

Matt Kane, Growth & Justice, conversation with the Civic Caucus

July 8th, 2008 by Craig Westover

If you are not familiar with the Civic Caucus, “a Minnesota e-group of senior policy wonks,” I highly recommend checking out their web site (http://www.civiccaucus.org/). The group holds weekly interviews with area policy makers and influencers. What is unique about these interviews is the interviewees tend to be more candid than they are in press interviews or public statements.

Thus you get Peter McLaughlin admitting that a chief objective of the rail system is to guide development and congestion relief is a lesser goal – a position contrary to what many supporters of light rail claim when trying to rally public support of projects like the Central Corridor. You get state Rep. Bernie Lieder warning that counties should look to property taxes to make up any transit operating shortfalls and not looking to the state for aid as a result of the transit sales tax that was part of the $6.6 billion transportation tax increase package – which came during a legislative session ostensibly focused on property tax relief.

Summaries of Civic Caucus interviews (approved by the interviewee), posted here, are emailed to over 800 Minnesota movers and shakers for comment and response, which is linked to each interview. (Full disclosure — I have been interviewed twice by the Civic Caucus: One on the future of newspapers and once on transportation policy. Minnesota Free Market Institute President David Strom has spoken to the Civic Caucus on government in Minnesota.)

On June 20 the Civic Caucus interviewed Matt Kane of Growth and Justice on major transportation issues in Minnesota. It is an excellent interview, which I recommend as a thoughtful progressive approach to transportation. I found it interesting that Kane and I are not far apart on the reasons for congestion, the deficiencies in the structure of transportation funding and a dislike of the transit sales tax – although often for different philosophical reasons. Following are my specific responses to Kane’s comments submitted to the Civic Caucus:

In discussing the Central Corridor, Kane noted that it is not intended to ease congestion but to accommodate anticipated demand, which buses can’t accommodate, and thus provide access to destinations for people. Regarding the relationship between buses and LRT he says, “We need to keep in mind both costs and who is served when exploring transit modes.”

I think Kane’s analysis is of the Venus De Milo kind — what there is of it is magnificent, but missing are important elements. The first is, transportation is about more than getting from point A to point B. All trips are taken with a purpose. Mobility is getting people from where they are to where they want to go, to do what they want to do when they want to do it. While transit can enhance the ability to get from where you are to where you want to go, ii doesn’t necessarily enhance your ability to do what you want to do (grocery shop for a family) or when your want to do it (grocery shop on a Viking’s Sunday). To the extent that transit costs detract from other transportation options, it is a limiting factor on mobility.

Second, demand is never independent of price. The demand for transit is based on the assumption that non-transit riders will subsidize not only transit construction but also ongoing transit operations. This greatly distorts the market. On the one hand, there are lamentations that the wealthy don’t pay their fair share of taxes; on the other the state subsidizes suburbanites who work downtown and people who can afford to drop a couple hundred dollars at a Viking’s game. For transit “demand” to have a viable economic meaning (let own a multiple-line viability), we need to move away from subsidizing the system to a model where most people pay a full fare market rate and the state, as necessary, subsidizes low-income riders allowing them to make independent transportation decisions.

Third, Kane’s statement vis-à-vis keeping costs and who is served in mind is what in the business world we referred to as “skilled incompetence.” It is circularly true, but ignores that hard reality that there is a trade-off involved and that someone is going to come out holding the smelly end of the stick. It avoids conflict during decision-making, but never removes it because it is never brought up. The Central Corridor project was premised on LRT from the get go. Just look at all the route controversies and manipulation of the bus routes taking place to make the project viable – all taking place well after the fact that LRT was decided on as the way to go. And why did the U finally compromise? Because it didn’t want to be the one that kept LRT , the agreed upon good, from becoming a reality.

Regarding suburban transit systems, Kane noted that that it is difficult to design a system to well serve potential transit users in locations with low densities for housing and low concentrations of jobs, but innovative approaches would be welcome.

The lack of innovative approaches is an opportunity cost of heavily subsidized transit systems. Because public models are so large in scale, they set pricing parameters – think Medicare setting the bar for medical prices in private practice. Segmenting the transit system into a public sector that picks the low hanging fruit and a private sector that must compete with subsidized pricing in suboptimal sectors does not encourage risky innovation.

Kane said that the metro area needs a wider range of options for getting to where they need to go and that land use matters, too, in terms of where people live vis-à-vis where they work.  He said that the use of pricing mechanisms to encourage drivers to seek lower cost alternatives has appeal. One approach he noted would be to charge motorists based on vehicles miles traveled, perhaps varying the rate based on when, where, and how far a trip occurs. Kane also said he is not opposed to considering a parking tax, too.

Treating roads as a commodity, it is reasonable that during high demand times, individuals should pay more for the limited supply of road than during times when the supply of road is greater than the demand. In the interview Kane noted that reducing congestion shouldn’t discourage economic activity, yet he seems divorced from that concept with these recommendations. New pricing mechanisms should NOT be implemented to ENCOURAGE alternatives; they should be implemented to provide additional value (generally time-saving) for additional cost. Thus, charging congestion pricing is not a good policy (and a parking tax is an absolute disaster) – building an alternative route or designating high speed lanes at a cost is better policy. LRT like the Central Corridor, subsidized transit that only replaces existing capability, is not cost effective; a high-speed light rail charging what the market will bear might be. Higher cost should be based on increased value.

Kane also said that the metro area needs a wider range of options for getting to where they need to go and that land use matters, too, in terms of where people live vis-à-vis where they work. This is the dangerous notion of new urbanists – the idea that we must accept decreased mobility as if that had no consequences. The Department of Labor tells us that the average person will change jobs four to seven times in a career. If a person is limited to making career choices based on proximity to his or her home, that severely limits opportunity. The slippery slope is new urbanist transportation can’t work without land use policy; land use policy can’t work without reengineering individual behavior.

Kane said Growth & Justice favors tapping into income tax revenues. The Minnesota Free Market Institute doesn’t favor an increase in income taxes, but we do believe that state resources are state resources and roads, bridges, and transit should be paid for out of general fund dollars and compete with hockey arenas, zoo exhibits and sheet music museums for bonding authority. The bucket approach of category-designated funding for to transportation projects and the process that places a priority on geographic equity over statewide necessity ought to be done away with.

To support transportation funding, Kane says Growth & Justice believes Minnesota should look to income tax increases targeted toward higher income earners. A discussion of this notion can be summed up in two words: “Carlos Delgado.”

Delgado is a professional baseball player traded from the Florida Marlins to the New York Mets. His contract contains a clause that if he moves from a low income tax state (or no income tax like Florida) to a high tax state, his new team must increase his salary so he nets the same dollar amount. The Mets had to pay Delgado an estimated $350 to $400K a year more than the Marlins because of the New York tax system.

The point is, in the modern world a single state cannot control the flow of capital. If Minnesota has a higher marginal tax rate at upper incomes, it will have to pay higher salaries to lure people to come to or stay in Minnesota. Higher salaries, in turn, create a higher cost of doing business, which creates higher prices for products and services. Higher marginal rates also create a larger pre-tax gap in wages between wealthy and non-wealthy (between mobile and non-mobile professions and individuals).

A progressive tax system is a more effective tax system when low income people pay a very low tax rate, but the marginal rate jumps quickly between low and average earners and then increases in very small increments at the margins. Economic activity is determined at the margins, and the greater the tax percentage of the last dollar earned, the less motivation to earn that dollar and the less value of that dollar’s worth of productivity to society. Top-loading the system decreases productivity and, contrary to the objective of Growth & Justice, creates a greater (and more visible) income gap between wealthy and non-wealthy. It creates a society where benefits for the majority are based on the productivity of a small minority, which hurts low and middle income families dependent on government services during times of recession when upper incomes tend to fall more rapidly as then do government revenues.

A final note on the Growth & Justice model: While G&I is going through the multiple steps of their process of collecting and analyzing data to come up with economic policies, millions of individuals are making billions of decisions, each in its small way contributing to a changing economic environment. It is a “fatal conceit” to think that any group of experts can shape the market more effectively than individuals pursuing their own interests – that a better society is produced by experts integrating transportation, land use and behavioral engineering using a multistep planning model than is the society created in response to millions of individuals making billions of transactions.

What Liberals Dream Of

July 7th, 2008 by David Strom

This article was originallly published on Townhall.com. Comments welcome there.

Conservatives are in a funk—one that threatens to turn into a full-blown retreat from the battlefield of ideas.

Everywhere I turn I encounter conservatives ready to give up for the next few years. After all, many of us rightly feel a bit betrayed by our elected officials given how badly they performed over the past few years. And many conservatives are hoping that two or four years of liberals actually running things will wake America to the dangers they face.

It’s hard to blame people who feel that way, but they couldn’t be more wrong.

Even a mere two or four years of liberal ascendency in Washington policymaking could do immeasurable damage to our economy and our freedoms—damage that could take years or decades to repair, if ever. Once a liberal policy is in place it is almost impossible to reverse it.

Don’t think that a few years of liberals in charge is that dangerous? Just take a moment to consider what liberals dream of doing once they gain absolute power.

There is no aspect of our lives—none—that today’s liberals concede is off limits to the meddling use of government power. In their vision there is no dividing line between the public sphere and the private sphere. Limited government is a concept that makes no sense to them.

A great example of this phenomenon is Time magazine’s columnist Joe Klein’s recent proposal. Klein just recently called for—get this—a reduction or elimination of the use of air conditioning in America. (This is a measure that would be wildly popular in Arizona, Texas, and Florida I’m sure).

Air conditioning, you see, consumes 4% of the energy used in this country, and thus by his lights has become a serious threat to national security. Wars may soon be fought over air conditioning—or at least the energy we use to power it—so we must reduce or eliminate its use.

Air conditioning also adds to global warming, makes us more dependent upon foreign oil, and not coincidentally annoys the heck out of Joe Klein, who happens to like it warm or even hot and muggy.

Klein’s proposal is a perfect example of how liberals think: turn a personal goal or pet peeve into a matter of public concern, and then advocate the use of government power to achieve the desired result.

Klein’s vision is no mere pipe dream. You may recall that California’s Energy Commission recently sought control over every thermostat in the State as a means to save energy. And both the national and many state governments are mandating “renewable” energy and “renewable” fuels as part of the energy mix for the future.

Energy policies are just the tip of the iceberg—although control over energy gives government control over pretty much the entire economy already.

In a world run by liberals literally no aspect of our lives will be outside the legitimate regulation of government. That is because anything—even what temperature you like to keep your house—can be turned into a matter of legitimate public concern.

Everything we do, including breathing, eating and of course procreating, can be argued to have an impact on those around us or the great mother earth. And if it affects others, it can and should be regulated by those who know best, at least according to the liberals.

Liberals want to regulate just about everything: where we live, what fuels we use, what car we drive, whether we can drive or be forced to use government mass transit, where we send our kids to school, what doctor we see, and even to what extent we express our approval or disapproval of others’ lifestyles. It’s hard to find something liberals don’t want to regulate.

Is that a world you want to live in? A world where all our liberties are subject to the slightest whims of lawmakers and regulators?

Whatever our personal feelings, conservatives simply can’t afford to indulge in the funk many of us have fallen into. The price we pay for handing absolute power over to liberals is just too high.

What’s at stake are the very concepts of personal liberty and limits to government power.

We can’t afford to just walk away from this fight.

Transit Sales Tax: A bite here, a bite there, pretty soon we’re limping

July 2nd, 2008 by Craig Westover

A visitor to a Minnesota farm noticed a hog limping around on a makeshift leg fashioned from a broken broomstick. When he asked the farmer about it, the farmer replied:

‘Let me tell you about that hog.

“I was out plowing the field one day when the tractor tipped over and pinned me under the wheel. Well, when I didn’t show up for feeding time, that hog searched me out and brought help. But that’s not all. One day, my little son Sven fell in the well. That hog pushed the bucket into the well with his snout, grabbed the rope in his teeth and pulled Sven to safety. But that’s not all. One night, my whole family was sound asleep when the house caught fire. That hog rushed into the burning house, woke up my wife and me and helped us carry the kids outside.”

“That’s amazing,” said the visitor. “But why does the hog have a broomstick for a leg?”

“Why,” said the farmer, “when you have a hog that has done so much for you, you don’t want to eat him all at once.”

So it is with Minnesota tax policy: When legislators have productive Minnesotans creating wealth and willing to work for a better Minnesota, it’s not smart to gobble them up all at once to pay for a better Minnesota.

Having taken a nibble out of taxpayers with a 2-cent-a-gallon gas tax increase in April, the state took another bite Tuesday when five of the seven metro-area counties — Anoka, Washington, Ramsey, Dakota, and Hennepin — imposed an additional one-quarter of 1 percent sales tax to pay for transit improvements. Come October, the state digests another 3 1/2-cent gas tax increase while sampling wheelage taxes and increased vehicle license fees a la taxpayer. For dessert, there’s an additional 3 cents in gas tax increases on the table, all part of the $6.6 billion transportation tax increase passed over Gov. Tim Pawlenty’s veto.

Let’s not forget that the Legislature got a taste of taxpayer during the 2007 session when it allowed Hennepin County to skip a public referendum and impose an appetizing 0.15 percent sales tax for the Twins stadium. And this fall, taxpayers could be looking at an additional 3/8ths of 1 percent sales tax increase to support outdoor recreation and the arts.

If you’re keeping score, that’s a total gas tax increase of 8 1/2 cents a gallon, and, if voters approve the outdoors and arts sales tax, five metro counties will each have sales taxes greater than 7 percent. All that stands between St. Paul and Minneapolis and an 8 percent sales tax is some wild hair like a Vikings stadium tax, the Legislature returning for the one-quarter-cent of proposed transit tax that got compromised away or some suddenly “necessary” mitigation on the increasingly controversial route of the Central Corridor through downtown St. Paul.

And let’s remember that in the just-completed legislative session, the proposal was floated to expand the sales tax to clothing and selected services. While that proposal included reducing the sales tax percentage, it also significantly increased the number of items taxed. The impact would be that in the future, small tax increases, like one-quarter of 1 percent, would amount to significantly more out-of-pocket expense over which we would have less control if the state were taxing necessities.

No wonder our family budgets are a little limp.

For a state with an awful lot of people advocating for a more progressive tax structure, that’s an awful lot of regressive taxation to put on the tax menu. Of course, there is a solution to that problem — raise income taxes so the evil wealthy are paying their “fair share.” Raising taxes on the wealthy provides more state revenue, but it doesn’t alleviate the tax burden on the rest of us. We’ll still be paying the regressive 8 1/2-cent gas tax increase and sales taxes over 7 percent, in some cases close to 8 percent, but “fair share” makes a good sound bite and is in keeping with a progressive nibble, nibble, nibble approach to tax policy.

As an aside, gas and sales taxes are paid with after-income tax dollars; to pay an 8 1/2-cent gas tax (after you make over $31,860), you must earn over 9 cents in real income.

I finally understand what is meant by a “progressive” tax policy — you just keep progressively paying a greater share of your income for a progressively lower standard of living. As valuable as we taxpayers are, progressive-minded legislators don’t want to eat us all at once.

Craig Westover is a contributing columnist to the Pioneer Press Opinion page and a senior policy fellow at the Minnesota Free Market Institute (mnfmi.org). His e-mail address is westover4@yahoo.com This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

This commentary orgininally appeared in the St. Paul Pioneer Press Wednesday July 2, 2008.

July 3rd, 2009 Weekly Update

July 1st, 2008 by Adam Axvig

Minnesota Free Market Institute
The Minnesota Free Market Institute Weekly Update
Friday, July 3, 2009


An “Exit Strategy” for Big Government?
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If you believe in freedom and free markets like I do, you
will no doubt be appalled, on this 4th of July holiday, to reflect
on how much of our economy is now owned or partially owned and directly
controlled by the Federal government as a result of the Obama administrations’  policies to combat the financial crisis and
the recession.  The government has a
direct ownership stake in failing auto companies, GM, Chrysler, Insurer AIG and
nearly 500 other companies. Two different presidential administrations have
told us that all of the dramatic measures that have been taken are “temporary”
and that they will be reversed as soon as the economic storm is over.  When asked to define what “temporary” means,
there has been an unwillingness on the part of officials and the President
himself to set a deadline or an expiration date for when failing private
companies might return to private ownership.

A new effort by Sen. John Thune, (R-South Dakota) fixes a
end point for government ownership–July, 1, 2010. The bill, recently introduced
in the Senate, mandates that the Federal government must divest itself of private
company ownership.  It also must not
acquire any new private assets. To those concerned that the government may then
be forced to dump assets in a fire sale potentially costing taxpayers millions,
Thune has a out. If Treasury Secretary Geithner can show that the assets are
undervalued and likely to regain their value,
a yearlong extension may be granted.
While it is true that congress could modify the deadline prior to its
expiration, this new initiative by Thune at least sets a clock ticking and puts
the end of federal government ownership on the table, not as some vaguely held
goal in the far off and indistinct future but as a reality at some relatively
near point in time.

Thune’s bill also covers the present “conservatorship” of
Mortgage guarantors, Fannie Mae and Freddie Mac  and demands that Treasury find a way to end
that temporary status to return the entities to a stable and sustainable
course.

Although support for the bill is slow in coming from
Congress, public opinion on it is fairly clear: Rasmussen polling shows 80% of Americans want the Federal Government to divest itself of GM and Chrysler ownership right now.

It would be great to think of celebrating next Independence
day with an end to government ownership in our economy and a return its
rightful role, enforcing laws and contracts.

Pat Anderson is President of the Minnesota Free Market Institute

America’s Shredded Wheat Future
Craig Westover
One of the first things one learns about the art of
salesmanship is conditioning the customer to say “yes.” Small talk isn’t small
talk. That offhand comment about the weather, “Sure is a nice day, isn’t it?”
has a purpose as surely as the less subtle, “So, would you like to save some
money today?”
Given that putting a potential customer in a buying frame of
mind is sound sales technique, one must wonder what a new advertising
campaign for Post Shredded Wheat says about the times in which we live. The
campaign, created by Ogilvy and Mather, promotes the product proposition
that for over 100 years shredded wheat has been made with “one simple, honest
ingredient” – natural whole grain wheat.

“There’s been a marked change in American values,” Kelly
Peters, director of integrated insights and strategy for Post Foods told the
industry publication Marketing Daily,
“with a greater desire for honesty, trustworthiness and security during a time
of economic and social uncertainty.”

It’s that context for the ad that is especially
interesting.

In one
spot, pitchman Frank Druffle plays (tongue in cheek) the fictitious company
CEO. Sitting in warehouse loft-like retro office, Druffle asks, “Has progress
taken us to a better place?”

“I’d say it’s taken us for a ride,” he answers his own
question. “Honestly, what thanks do we owe progress? We’re up to our necks in
landfills, down to the wire in resources, and climate change … (here he goes to
the window; outside the trees are banging against the building, and the wind is
howling) … it’s out to get us (he closes the blinds).”

“That’s why progress plays no role inside Post Shredded
Wheat,” Druffle adds. “Here, we put the ‘no’ in ‘innovation.’” He then goes on
to make a virtue out of shredded wheat’s unchanging nature.

To the degree the lead-in satire of the piece works — the
reason any good satire works — is that it contains an element of truth. The
Post campaign counts on the fact that the audience shares at least some empathy
with the idea that progress isn’t all it’s cracked up to be. The commercial’s
humor requires that people look askew at progress and innovation as worthy
goals. The pitch depends on peoples’ willingness to trade off the potentially
uncertain future for the stability of a perpetual present.

Is it any wonder then that we have a Congress and
administration selling a plethora of policies that put the ‘no’ in ‘innovation’
and promise us the bland security of a shredded wheat future? Is it a surprise
that we so easily accept a Cap & Trade program that effectively caps
innovation and trades away progress? That we accept with nary a nod that
reducing the nation’s wealth and productive capacity can be called ‘progress’?
That it is somehow ‘progressive’ to preserve the status quo?

It is ironic that progressive policy produces the opposite of
its root. Instead of ‘progress’ we are sold the equality of progressive health
care that curtails cost by saying ‘no’ to  unproven innovation. We are pushed to
progressive public education that eschews the innovation spurred by private
competition. And most ironic of all, we are pitched progressive taxation that
reverts to the age-old barbarism of the politically powerful looting the
nation’s wealth, shredding the rule of law in the process.

Have we become a country where GM stands for ‘Government
Motors,’ and the new moniker of our modern economy is ‘What’s good for Post
Shredded Wheat is good for the USA’?

That question is not just small talk.

Craig Westover is a Senior Policy Fellow at the Minnesota Free Market Institute

Culture and the Rise–and Decline–of Free Markets
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Many years ago, Daniel
Bell wrote “The cultural contradictions of capitalism.” It’s been  a long time
since I’ve read anything from it, but ever since the start of the financial
meltdown last year, it’s popped into my head from time to time.

If I
correctly the recall the comic-book version of Bell’s work–and face it, isn’t
that the form that most of our memories of great books take?–Bell argued that
economic prosperity leads to changes in habits and expectations that lead to
economic stagnation. Well, if Bell didn’t say that, I’m going to.

As
Americans, we are filthy rich when compared with the history of human population
and people living across the world today. By some measures, we live much better
than people in western Europe, the people whose political and economic systems
resemble ours the most. Our greatest nutritional problem is not starvation but
obesity. And homeless people have more access to information, thanks to wi-fi
hot spots and public libraries, than the great scholars of centuries
past.

And yet too many citizens are willing to throw this wealth away by
choosing order, predictability, and certainty over chaos, unpredictability, and
the possibility of failure. They don’t do this directly, of course, but that’s
what we all get when government protects us from the unpredictable misfortunes
of life, whether it’s an illness, a down economy, poor personal planning. and
just plain bad luck. So we have product-safety regulations, financial services
regulations, regulations on health insurance, government welfare and health care
programs, and laws and programs meant to eliminate or at least mitigate every
miscalculation, every wrongdoing, every bad bet. The bailout culture is simply
the latest manifestation of this trend.

Increasingly, we are giving up
the risk-acceptance that is necessary for a dynamic, growing economy, preferring
the certainty of laws and programs. But that certainty has costs. Sometimes the
costs are obvious (as on April 15). Other times they are not so obvious, as
when, say, new banking regulations shut down alternatives to the 30-year
mortgage. And sometimes we push the cost far off into the future, as is the case
with the $75 trillion worth of unfunded liabilities that we have shifted onto
our grandchildren through the Medicare program.


More laws won’t guarantee us that certainty. People will continue to break laws, sometimes to an outrageous extent before they are caught and punished, as we have seen with Bernie Madoff’s ponzi scheme.  Madoff broke existing laws but somehow evaded scrutiny due to a combination of lax enforcement and the same skills that every confidence trickster has used from time immemorial.


We’ve become, as a
nation, so wealthy that we’re unaware that prosperity (and its companion,
opportunity) is fragile. Government regulations and taxes take away money that
would be used to invent new goods and services, make it more difficult for new
businesses to start, and squelch the opportunity to fail–or succeed.

In
short, the success of free people and free markets have led to undermining
both.


John LaPlante is a Policy Fellow at the Minnesota Free Market Institute

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The Minnesota Free Market Institute Weekly Update is edited by Margaret Martin

The Minnesota Free Market Institute conducts research and advocates for
policy that limits government involvement in individual affairs and
promotes competition and consumer choice. By analyzing the actions of
the past and applying the enduring lessons of the free market, the
Minnesota Free Market Institute creates policy options for the future.
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In This Issue
An “Exit Strategy” for Big Government?
America’s Shredded Wheat Future
Culture and the Rise–and Decline–of Free Markets
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