Kim Crockett, President

Kim contributed this piece to a Center of the American Experiment Symposium entitled “How Can We Better Encourage and Reinforce the Most Entrepreneurial and Talented Among Us?” To put it succintly, Kim thinks we should just get out of the way.

“In 1942, Joseph Schumpeter agreed with Karl Marx that capitalism would collapse from within and be replaced by socialism, but not in the revolutionary way old Karl predicted (and not quite the way Schumpeter predicted either, but his insight is still compelling). Schumpeter described a great irony that is playing out now: Capitalism contains the seeds of its own destruction.

The great, private wealth generated by a free marketplace is now used by the state to support a progressive, socialist vision. Simply put, capitalism is funding socialism and it is capitalism—not the state—that is withering on the vine. The power of the state to tax and regulate, combined with its insatiable appetite for cash and authority, is discouraging our entrepreneurial spirit and creating great uncertainty. The intellectual elite, so hostile to democratic capitalism yet dependent on its wealth and liberal spirit, campaign relentlessly against business through their domination of the media, academia, and the arts. Our dear fellow citizens, with a growing, sometimes militant, sense of entitlement, vote for candidates who promise to take the risk out of life at someone else’s expense.

Private enterprise and taxpayers (a much smaller group than citizens, many of whom do not pay federal taxes) are laboring to support a massive, corrupt bureaucracy, which directly or indirectly employs a significant percentage of the population and thus grows unchecked by the democratic process. Public employees now enjoy greater salaries and benefits than their counterparts in the private sector. Government, currently our leading growth industry, has run up deficits both annual and structural that stagger the imagination. The modern corporation, though nimble and innovative, often joins the government and its political enemies at the table in order to avoid being on the menu.

We are talking about encouraging entrepreneurs in this symposium because most everyone is looking to them and economic growth to get us out of this mess, which, while daunting, would be no match for American private enterprise, if the state would just get out of the way and stay there. Right now, the entrepreneur is like Gulliver on the beach, trying to get up but unable to do so because he is tied down by the Lilliputians.

The financial crisis and ensuing recession were caused largely by government-created obscenities like Fannie Mae and Freddie Mac. Yet President Obama and Congress pile on bailouts and stimulus spending, new regulatory schemes, and massive legislation based on faulty premises and bad science (e.g., ObamaCare, Cap and Trade). All of this only further distorts markets and adds to the cost of business. An arrogant and guilty Congress dragoons executives with its subpoena power to deflect attention from its central role in our economy’s collapse. Senators Barney Frank and Chris Dodd should be tarred, feathered, and run out of town on a rail. Instead, they are still calling the shots, though Dodd’s impending retirement (and other political shake-ups) may be a sign that all is not lost.

Will we prove Schumpeter wrong and at least extend the greatest experiment in freedom and prosperity for the next generation? This Congress is hostile to free markets, and the courts abandoned economic rights long ago. President Obama would like the economy to recover, but only so he can fund an enlarged welfare state.

Therefore, to whom can we turn to defend American enterprise and free the entrepreneur? The people, We the People.

Liberals and conservatives alike must familiarize themselves with the concept of a limited federal government of enumerated powers. We must elect representatives who understand that means rolling back the state. We must reinvent core services, including K-12 education, while shifting social services back to an already vibrant charitable sector. Public pensions, the big daddy of icebergs for the ship of state, must be reformed. We the People must get our hands out of each other’s pockets so our children do not have to work like mules for the state while dwelling in the mediocrity of socialism. We have tipped, but we have not yet fallen.”

The spectacle of a trust fund baby beating Kelliher was just too much. It was quite interesting to watch two guys out-spend the endorsed (woman) DFL candidate. Entenza was spending his wife’s money to get elected, so he could spend your money once elected. (Advice to Lois: put your husband on a tight budget.)

Dayton, using his inheritance, ran on the message of taxing the rich–though in reality his regressive policies will tax all Minnesotans (more on that later). He is the classic guilty trust fund baby. He has never created wealth or jobs and fails to grasp the moral superiority of the free enterprise system that created his wealth. We suggest he revisit how his predecessors built the company that has employed so many and the company that has given so much to Minnesota. (We note here that Dayton’s ex-wife, Alida Rockefeller Messinger, contributed to his campaign.)

Enough sermonizing, here is the commentary by Matt Peiken: http://www.startribune.com/opinion/commentary/100806309.html?elr=KArksLckD8EQDUoaEyqyP4O:DW3ckUiD3aPc:_Yyc:aUUsZ

Mr. Peiken has a website called “3 minute egg” featuring videos of the Fringe festival and other Twin Cities attractions. While we do not share his progressive views, we share his irritation and appreciate his sharp writing and entrepreneurial spirit. We wish him great success. Here is his website.  http://3minuteegg.org/

We the People

Everyone knows that the founders gave us three “co-equal branches” of government and carefully crafted ”checks and balances.”  It has not worked perfectly but the founders anticipated that problem.  Article V of the U.S. Constitution permits Congress to amend the Constitution–this is widely known. What is not widely known is that state legislatures can also petition Congress for a convention; two thirds (34) of the states are required. Any amendment passed at the convention has to be ratified by three fourths (38) of the states. An Article V convention has never been called. Is it time?

The Constitution has been amended 27 times. The first 10 amendments are the Bill of Rights; they were ratified in 1791 a few years after the Constitution was ratified. Interestingly, the twenty-seventh amendment was part of the proposed Bill of Rights in 1789 but it was not ratified until 1992 by the vote of Michigan. It contains a common concept of “good government” today; that pay raises for Congress cannot take effect until after an intervening election.

There is a growing movement to call an Article V Convention. There is always fear of a “run away” convention, though the requirements of Article V to both call a convention (two thirds rule) and to ratify an amendment (three quarters rule) would seem to make that unlikely.

Clearly, we have a “run away” federal  government. The founders gave the states a tool to address weaknesses in the Constitution and abuses by the federal government. We will be exploring this option from time to time here at the Minnesota Free Market Institute.

Former Senator Norm Coleman has decided that it is time for an Article V convention. Here are his most recent remarks on the subject.  http://americanactionnetwork.org/news/aans-ceo-norm-colemans-remarks-alec-conference

ObamaCare!

The state of Virginia’s challenge to ObamaCare is now in federal court. A federal judge has denied the Administration’s request to throw out the suit, finding enough merit in the case to proceed to trial.  Here is an article from the Christian Science Monitor (and see links to a discussion under “Related Stories” on the 14 state lawsuits challenging the constitutionality of the sweeping legislation):  http://www.csmonitor.com/USA/Justice/2010/0802/Judge-refuses-to-block-Virginia-challenge-to-health-care-reform

On Tuesday, 71% of voters in Missouri rejected the idea that the state can force citizens to pay a fine if they do not carry health insurance. This undercuts the law’s enforceability. Missouri  joined five other states that passed similar measures via legislation (Idaho, Utah, Virginia, Georgia and Louisiana). Here is the Wall Street Journal’s Editorial  on Missouri’s vote: http://online.wsj.com/article/SB10001424052748704026204575266472609370944.html?mod=WSJ_hp_mostpop_read

Various legal challenges (legislation, referenda, and law suits) to ObamaCare are active in at least 26 states–not including Minnesota. So far, all Minnesota has is a task force appointed by the governor to study it with a report due in December–we are double checking on this with Twila Brase and other experts, but it appears that Minnesota will not join the fight in 2010.

If the federal legislation is found to be constitutional, state law will be pre-empted by federal law. We think the legal case against ObamaCare is clear but given the history of the federal courts acquiescence to other unconstitutional grabs by Congress, we do not want to count on it.

We did not make this stuff up: Monkeys given cocaine are being studied for their reaction. And (different) monkeys are being studied for their reaction to “inequity.” (Maybe next they’ll study the monkeys that did not get cocaine to see if they felt an “inequity.”) People who are trying to quit smoking are given Blackberries and students who might not graduate are given Ipods. (Maybe the monkeys who did not get the cocaine should be given a Blackberry or an Ipod to make up for the inequity.) Oh, and the National Science Foundation is studying our reaction to the stimulus program. These are not bad TV sit-com ideas; these are your tax dollars at work.

$554,763 for the Forest Service to replace windows in a closed visitor center at Mount St. Helens

$762,372 to create “Dance Draw” interactive dance software

$62 million for a tunnel to nowhere in Pittsburgh, PA that even Governor, Ed Rendell called “a tragic mistake”

$1.9 million for international ant research

$1.8 million for a road project that is threatening a pastor’s home

$308 million for a joint clean energy venture with…BP

$89,298 to replace a new sidewalk that leads to a ditch in Boynton, OK

$3.8 million for a “streetscaping” project that has reduced traffic and caused a business to fire two employees

$16 million to help Boeing to clean up an environmental mess it created in 2007

$200,000 to help Siberian communities lobby Russian policy makers

$39.7 million to upgrade the statehouse and political offices in Topeka, KS 

$760,000 to Georgia Tech to study improvised music

$700,000 to study why monkeys respond negatively to inequity

$193,956 to study voter perceptions of the economic stimulus

$363,760 to help NIH promote the positive impacts of stimulus projects

$456,663 to study the circulation of Neptune’s atmosphere

$529,648 to study the effects of local populations on the environment…in the Himalayas

The full report can be found at: http://mccain.senate.gov/public/index.cfm?FuseAction=Files.View&FileStore_id=07809d54-2616-4867-b6a0-e8ac3ceeded7

The development was covered on Mine Web:http://www.mineweb.com/mineweb/view/mineweb/en/page66?oid=109166&sn=Detail   And here is the Neal St.Anthony’s article in the Strib :http://www.startribune.com/business/99903829.html

Update as of July 28:The Democratic leadership wanted this passed before fall elections but fell short with just 57 of the 60 votes needed to move forward with a vote. The usual Republican suspects Democrats turn to for votes (Senators Collins, Snowe and Graham) opposed the Act. Senator Scott Brown of Massachusettes, who recently provided the 60th vote for so-called financial reform, also opposed the Act. This time, he stuck with Republicans. There is a good article in the Washington Post by Dan Eggen if you want to read more about it:  http://www.washingtonpost.com/wp-dyn/content/article/2010/07/27/AR2010072704656.html?nav=emailpage

Background from early July: As we approach the 4th of July, Democratic leaders in Congress, in response to the Supreme Court’s decision in Citizens United v. Federal Election Commission, lead the charge to pass the “Disclose” Act on June 24, 2010. The Act, introduced by Senator Chuck Schumer (D-NY) and Representative Chris Van Hollen (D-Md), is designed to blunt the First Amendment ruling in favor of speech rights for corporations and other groups, including labor unions. The Citizens United decision, relying on the First Amendment, ruled that corporate funding of independent political broadcasts in candidate elections cannot be limited. The court reasoned that political speech is indispensable to a democracy, though it upheld the ban on direct contributions to candidates from corporations and unions. We note here that political speech is also fundamental to free enterprise and individual liberty.

Our friends at CATO are on top of this: http://www.cato-at-liberty.org/2010/02/12/congress-goes-after-citizens-united/

Background: Citizens United made a movie about Hillary Clinton (Hillary: The Movie). They were prevented from showing the movie under the “Bipartisan Campaign Reform Act” that regulates political speech. They fought for an injunction against the law, took their case to the Supreme Court and won. Let’s see if Congress succeeds in once again tinkering with the First Amendment.

If passed by the Senate, the Act will require the disclosure of the names of major donors for political ads, require corporate and union executives to appear in political ads that their entities pay for and like a candidate, state that he or she “approves this message.” All of these are designed to discourage political speech. It also bans government contractors from contributing to campaigns, and regulates the recipients of TARP money as well as contributions from foreign nationals and countries. Senate Majority Leader, Harry Reid (D-Nev) wants it passed before the fall elections.

Aside from the obvious constitutional issues, which have been raised by (mostly Republican) critics, liberal Democrats have also criticized the bill because the Act contains  hard to defend “carve outs” that, when applied, exempt certain powerful special interest groups such as the Humane Society, AARP and the Sierra Club–but also the NRA. The exemptions were negotiated by Democrats so they could get the Act passed and on the president’s desk. This is sausage making to be sure. Sadly, it will add to the already absurd quilt-work of bad election/campaign finance laws that thwart the First Amendment right to political speech.

Climategate has now been “reviewed” several times by organizations we should be able to trust; a special committee of the British Parliament, Penn State, an environmental agency of the Netherlands and most recently the University of East Anglia itself.

The Minnesot Free Market Institute (and other members of the No Cap and Trade coalition) approach these “reviews” with great skepticism. The reviews seem less than indepedent in their methodology and conclusions; the self-dealing is just compounded . Moreover, we are impressed with the speed with which they were all done. It seems that the institutions who are committed to the UN’s view of  global warming (which relies on CRU data) were in quite a hurry to do damage control following Climategate.

The Wall Street Journal, which shares our skepticism, covered the latest review here: http://online.wsj.com/article/SB10001424052748703394204575367483847033948.html

You can read more at the Volokh Conspiracy (by Jonathan Adler), including international commentary about the quality of these reviews here:  http://volokh.com/2010/07/11/climategate-revisited/  .

We think there is a better way to insure a clean environment and recommend to you the “free market environmentalism” approach taken by the Property and Environmental Research Center (PERC) in Bozeman, Montana. Please visit them at http://www.perc.org/  .