Category: too much government

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Accountability folly free trade & free markets general freedom initiative, referendum, and recall nannyism national politics & policies property rights responsibility too much government

Minimum Shock

minimum wage, closure, restaurant, business, prohibition, wages, pay, Berkeley, San Francisco

“Three restaurants vacated the Bay this week, with Berkeley’s Bistro Liaison getting the most attention,” the San Francisco edition of Eater informs us. “It’s a bittersweet exit for the owners, who plan to start new careers.”

The week in question was in February. But this was not an isolated event. Sixty-four Bay-area restaurants and fast food joints closed their doors this last winter.

That is a lot of closures.

Why?

Every eatery has a different story, but the entry December 17* provides a big clue: minimum wage hikes.

Citizens should hardly be surprised. They got what they asked for. The minimum wage went up to $13.00 per hour last July, and will go up another two bucks next year. And this was the result of a citizen initiative. “On November 4, 2014, San Francisco voters passed Proposition J, raising the minimum wage to $15.00 by 2018,” the City Office of Labor Standards and Enforcement tells us.

And the thing about minimum wage laws is that they do not — either by magic or by law — directly raise any wages. They, by law and quite directly, prohibit wage contracts below the minimum established.

Businesses then react, struggling to accommodate the newly imposed costs. Sometimes they keep all their employees and economize on other inputs, but often they must re-arrange hours and workers and whole production schemes.

If hemmed in elsewhere, they just go out of business.

Just as one should expect, according to the law of supply and demand.**

Citizens might wish to reconsider. That is, initiate a measure to repeal a previously successful initiative . . . that gave us this unsuccessful policy.

This is Common Sense. I’m Paul Jacob.

 

* The entry reads thusly: “OAKLAND — alaMar Kitchen and Bar as you know it is shuttering on December 17, but will reopen in the new year with a fast casual format. The owner points to minimum wage raises and the cost of doing business in the Bay Area as the reasons cited for the closure/change.”

** It is often said that businesses just “raise prices” and “pass along the costs” to consumers in general, but, for reasons of supply and demand, they cannot do this without decreasing sales and thus revenue.

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Accountability insider corruption moral hazard national politics & policies porkbarrel politics too much government

Cronyism Pays

CATO, FEE, crony, cronyism, Washington, corruption, elites, lobbyist, politicians, privilege, power

Daniel Mitchell, a senior fellow in fiscal policy at the Cato Institute, is a nice guy. But he’s sort of depressing, too.

Weeks ago, writing for the Foundation for Economic Education (FEE), Mitchell offered that “The Washington, DC Gilded Class Is Thriving.” He even provided a “depressing chart” graphing “median inflation-adjusted household income for the entire nation and for the District of Columbia.”

There is a graphic divide: while “the nation’s capital used to be somewhat similar to the rest of the nation . . . over the past 10 years, DC residents have become an economic elite, with a representative household ‘earning’ almost $14,000 more than the national average.”

Dan Mitchell highlights that “the entire region is prospering at the expense of the rest of the nation.” Among the nation’s counties, the top four wealthiest are in suburban Washington, D.C. The nation’s capital region boasts nine of the country’s top 20 richest counties.

Now Mitchell’s back with another FEE column exclaiming more bad news: “The ROI for Cronyism is Huge.” (ROI is “return on investment.”)

Mitchell cites a study entitled, “All the President’s Friends: Political Access and Firm Value,” conducted by University of Illinois professors Jeffrey R. Brown and Jiekun Huang. “Using novel data on White House visitors from 2009 through 2015,” they explain, “we find that corporate executives’ meetings with key policymakers are associated with positive abnormal stock returns. . . .”

The authors find a lot evidence showing that “political access is of significant value to corporations.”

None of this should surprise. Cronyism pays, and it sticks close to power, even geographically.

This is Common Sense. I’m Paul Jacob.

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Accountability free trade & free markets general freedom local leaders media and media people nannyism national politics & policies porkbarrel politics responsibility tax policy too much government

Ballots & Books

New York Times, taxes, tax, libraries, tax cuts, big government, public services, free markets

The people of Roseburg, Oregon, aren’t paying enough in taxes. That’s the upshot of Kirk Johnson’s recent New York Times article, “Where Anti-Tax Fervor Means ‘All Services Will Cease.’”

“For generations in America,” readers are informed, “small cities . . . declared their optimism and civic purpose with grand libraries that rose above the clutter of daily life and commerce.”

And then, the unthinkable: “last fall, Douglas County residents voted down a ballot measure that would have added about $6 a month to the tax bill on a median-priced home and saved the libraries from a funding crisis.”

How dare voters so vote? Didn’t they know the Times wanted those libraries fully funded? Where was the “optimism and civic purpose” of Roseburgians?

“We pay enough taxes,” said auto mechanic Zach Holly.

“The trust is gone from people who are paying the bills,” acknowledged an elected commissioner one county over.

Even Jerry Wyatt, who voted for the library tax, decried that, “There’s no end of waste” in government, adding, “We need less people on the county payroll.”

Meanwhile, the Times reporter explained that “few places” are confronting “the tangled implications . . . more vividly than in southwest Oregon.” It’s not merely “lights out, one by one, for the [library] system’s 11 branches.” There have also been “cuts to the sheriff’s budget . . . [ending] round-the-clock staffing.”

“If a crime is reported after midnight there,” Johnson wrote, “best not hold your breath for a response.”

This is “what happens when citizens push the logic of shrinking government to its extremes.”

To the extreme, eh? Hmmm. Doesn’t seem bad at all.

Douglas County voters made a free choice about libraries and taxes.

Close the book on it.

This is Common Sense. I’m Paul Jacob.

 

* There have also been worthwhile innovations in county government due to the budget cuts. Nearby Curry County combined its juvenile justice department with its parks department to save scarce funds. Then, the parks department began using juvenile offenders to clean up the parks. By engaging teenagers in meaningful work, the policy pushed recidivism rates way down and now Curry County has one of the lowest rates of youths committing a second offense.

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Accountability folly general freedom moral hazard porkbarrel politics property rights responsibility tax policy too much government

No Rich No More

Connecticut, taxes, revenue, budget, tax and spend, wealth, common sense

Connecticut has a budget problem. There’s not enough money to spend.

WTNH-TV in New Haven paraphrased the situation along with the response of Connecticut’s very progressive governor: “Income tax revenue collapses; Malloy says taxing the rich doesn’t work.”

The news story explains, “Connecticut’s state budget woes are compounding with collections from the state income tax collapsing, despite two high-end tax hikes in the past six years.”

Hmmm. Despite the tax increases? Or . . . “because the state of Connecticut depends too much on its wealthy residents,” as the report continued, “and wealthy residents are leaving . . .”

A Yankee Institute report notes that “the exodus of wealth from the state as top earners and businesses relocate to more tax-friendly states” is a major problem. Institute President Carol Platt Liebau calls it a “terrible cycle of tax increases followed by deficits followed by even more tax increases.”

Yet, state legislative Democrats are back pushing more tax hikes on “the rich.” Senate legislation would jack up the tax rate — retroactively — on those with income of $500,000 or more. House legislation would slap a 19 percent surcharge on some hedge fund earnings. In response, the head of the Connecticut Hedge Fund Association testified that his “industry is populated by exactly that type of person that will move based on tax policy.”*

A song by Ten Years After comes to mind:  

Tax the rich, feed the poor
Till there are no rich no more

Doesn’t sound like a good idea even in song.

This is Common Sense. I’m Paul Jacob.

 

* It’s worth noting that Gov. Malloy is now “against raising taxes again to fill the deficits and is instead focusing on spending cuts . . .”

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Accountability folly general freedom ideological culture media and media people moral hazard nannyism political challengers responsibility too much government

French Beacon

France, French, election, Macron, Le Pen, democracy, press, freedom, right, left, centrist

“Since the French Revolution,” the New York Times pontificated online, “the nation has often been viewed as a beacon of democratic ideals.”

Really? Can a nation of constitutional turnovers — kings and republics and revolutions and foreign occupation — be a beacon? Most often we in America compare our Revolution to France’s, focusing on The Terror: mob rule and proto-totalitarianism.

On Friday, “the staff of the centrist candidate Emmanuel Macron said… that the campaign had been targeted by a ‘massive and coordinated’ hacking operation, one with the potential to destabilize the nation’s democracy before voters go to the polls on Sunday.” A few minutes later, the campaigns fell under the country’s election gag rule, unable to debate immediately prior to the voting. The government told the media not to look at what was dug up in the “hack” (which everybody said was by Russians). Though Macron’s putative Islamization plan is worth looking at, surely.

Much talk (at the Times and elsewhere) of how the hack destabilized democracy. No talk, for some reason, about how the election regulation gag rule did.

The idea that information might destabilize democracy? Awkward.

Still, we can see how an info-dump’s timing might destabilize an election.

But since Macron won by a large margin, the Late Exposure Strategy may have backfired, Russians or no.

The most obvious oddity in reportage? The continued reference to former Socialist Party hack Macron as “centrist” while Le Pen is called “far right” ad nauseam. Macron is pro-EU; Le Pen is nationalist. Neither are reliably for freedom. The fact that Macron packaged his En Marche ! Party as centrist doesn’t make it so.

This is Common Sense. I’m Paul Jacob.

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Accountability general freedom insider corruption local leaders moral hazard national politics & policies too much government U.S. Constitution

Separation of Senators

separation of power, conflict of interest, politician, interests, balance of power, civil asset forfeiture, legislative, executive, judicial

The separation of powers doctrine has been a bedrock principle of small-r republican government. Each branch — legislative, executive, judicial — should be independent, and check the power of the other branches.

This requires that no person hold positions simultaneously in more than one branch of government.

Which brings us to Nevada State Senator Heidi Gansert. In addition to being a legislator, she’s currently employed by the University of Nevada-Reno as executive director for external relations . . . an executive branch position.

One can certainly understand why she wants to keep her prestigious legislative perch, while maintaining her annual $203,000 from the university. But those pesky folks at the Nevada Policy Research Institute’s Center for Justice and Constitutional Litigation insist Gansert adhere to the constitution.

They’ve filed a lawsuit.

As if to dramatize why “separation of powers” matters, consider Senate Bill 358, which sought to reform civil asset forfeiture in Nevada. The legislation couldn’t get out of the Senate Judiciary Committee, where State Senator Nicole Cannizzaro is vice-chair. She also holds a $99,000 position as a Clark County deputy district attorney.

“Senator Cannizzaro’s presence on the Senate Judiciary Committee, as it pertains to forfeiture legislation, begs for a lesson on separation of powers,” the Nevada Policy Research Institute’s Daniel Honchariw wrote in the Las Vegas Review-Journal.

“Reform would’ve meant less money for district attorneys,” Honchariw explained, “which, in addition to police departments, directly profit from forfeitures.”

Nevada’s legal precedent on separation of powers is less clear-cut regarding Cannizzaro’s conflicting role in local government, than for Gansert’s state position. But the potential for mischief is the same — and obvious.

This is Common Sense. I’m Paul Jacob.

 

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