Grounds For Optimism

It’s an easy time to feel pessimistic about America. 

Forget the fact that we have the worst president in history (althought that doesn’t help much).  Part of the disaffected right would have you believe that our entire political class, GOP and Democrat, are about the same.  I see your objection – Boehner’s depressing cave on spending – and raise you Ted Cruz and Justin Amash and a few good Tea Party Republicans.

But yet I feel some optimism. 

Part of that is I’ve pretty much internalized Kevin Williamson’s The End Is Near (And It’s Going To Be Awesome), a masterpiece from last year about the inevitability of the eventual collapse of the current political system, and how, if we’re lucky and work hard, it could actually free up some space for the free market to actually solve things.

Along those same lines comes this piece from Victor Davis Hanson.  You need to read the whole thing – but this was buried near the conclusion:

America is not saved by our elected officials, bureaucrats, celebrities, and partisan activists. Instead, just a few million hardworking Americans in key areas — a natural meritocracy of all races, classes, and backgrounds — ignore the daily hype and chaos, remain innovative and productive, and dazzle the world.

The silent few of a forgotten America have given the entire country an astonishing standard of living that is quite inexplicable.

The road to that paragraph is well worth travelling.  Go there.

Mandated Equality

Two truisms at play in this story:

  1. If someone has to mandate your equal outcome [*], then you probably really aren’t equal.
  2. Economics 101:  Forcing people to pay more or less for a good or service than they naturally would will distort the market.  Force the price up, and you’ll get a black market.  Force the price down, and you’ll get less of the good or service.

With that in mind, see if you can see both currents in this piece, about developers in NYC and their reaction to being forced (as a condition of a bailout) to include “Market-Rate rentals” which are, in fact, well below the market rate.

A Queens luxury tower that was bailed out by the city is blocking the large terraces of a few affordable units so tenants above with tiny balconies don’t get jealous, one resident claims.

Erin McFadzen chose her middle-income — and rent-stabilized — corner apartment at Long Island City’s new Q41 building because of its wrap-around terrace.

But when she moved in, half of it was fenced off by what she calls a “Jurassic Park”-style barricade.

The ugly 6-foot-high wire barrier also interferes with views from every window of her sixth-floor, $2,186-a-month pad.

“We’re caged in,” McFadzen told The Post.

“Every time someone comes over, I have to explain why the fence is there . . . and tell them we’re rent stabilized, like it’s a badge I have to wear,” she said.

And the tenants aren’t the only innumerate ones; the developers (read the story, for crying out loud) are just as bad.

The innumeracy washes over us in waves in this piece:

  1. Rent Control/Rent Subsidy (as well as the city’s systematic demonization of landlords, much as Minneapolis and Saint Paul are doing, although not nearly as effectively as NYC does – yet) is exactly why it’s impossible to find an affordable apartment in NYC.  ”If you make a good or service worth less than it would naturally be, there will be less of it”.
  2. The city shouldn’t be bailing out failed developers – so the developers shouldn’t be complaining that the bailout comes with strings attached requiring them to include rentals for much lower rates than the market would ordinarily bear.
  3. Real estate in New York being as much about image as value, the “low-income” tenants shouldn’t be surprised that the developers are doing something to give the residents paying the actual market rates some sense that they’re getting something justifying the premium that they’re paying for the upscale places they’re renting.  And in that case, that means making the the full-rent balconies a better deal than the cut-rate ones.  Even just by the seemingly bitchy means they used.

If governnment has to make you equal, you’re probably not.

[*] Civil rights legislation is, of course, not an example of this; civil rights and liberties are not given to us by a landlord, but by our creator.  Nobody can justly take them away.  Housing is not a right – much less a specific class of housing for a specific price.

It Was Twenty-Five Years Ago…

…that the Berlin Wall fell.

But make no mistake; the Soviets won.

The link is to an article about government’s role in the demise of medicine in America.  The whole piece is a pull quote, and that is not “fair use” by any stretch.  So read it.

And then look at every other area of your life where these same sorts of niggling government interventions happen “for your own good”.

Whose Time Has Come

It was fifty years ago today that Ronald Reagan gave one of the most important speeches in American history, and perhaps the most important speech in the history of American conservatism:  A Time For Choosing.

And it’s more vital now than it was, even then.

You and I are told increasingly we have to choose between a left or right. Well, I’d like to suggest there is no such thing as a left or right. There’s only an up or down: man’s old, old-aged dream, the ultimate in individual freedom consistent with law and order, or down to the ant heap of totalitarianism

Here it is, in its entirety.

It’s impossible to overstate this speech’s importance.  It was the opening salvo in the rebirth of conservatism.  It took a decade for its aftereffects to be  known; George Will wrote in 1984 that it won the Presidency for Goldwater – it just took 16 years to count the votes.

And it’s a hot, blazing rebuke for the mental midgets to claim the GOP has “become more extreme” lately.  Listen to the whole thing.  There is nothing the Tea Party stands behind that wasn’t stated in this speech.

It also destroys the even dimmer claim that “Reagan was too moderate for today’s GOP”.  If only today’s GOP – outside the Tea Party, anyway – had the balls to live up to the standards in this speech.   

In retrospect, Reagan’s presidency – and it may be fairly said that this speech was the beginning of Reagan’s political career – bought this nation a few decades before the extended populist spending orgy that took off in the sixties finally brings this nation to its heels. 

Is there still time to change things?

Perhaps.  But this is the real time for choosing. 

HG

Impure!

One of the more galling facets of the 2012 Presidential campaign was watching Mitt Romney taking flak from the social right, the Rick Santorum crowd, on having been marginally impure on social issues, while at the same time getting beaten up from the fiscal purists (egged on by the left) for Romneycare, and the Libertarians for having been insufficiently pro-Liberty, whatever that meant. 

Of course, the key difference was that Mitt Romney had been in office, governor of not only a large state, but a toxically left-leaning one, in which he had few legislative allies.  To get anything useful done as governor of Massachusetts - and he did – he had to compromise.  “Romneycare”, bad as it may be, was a better compromise than what the Massachusetts Democrats would have spawned. 

The lesson, of course, is that rock-solid principle is easy, when your job never involves having to engage on a daily basis with your opponents to get anything done.  US Congresspeople do that only on the most symbolic and ritual level. 

Governors?  It’s part of their daily job.

And so while the likes of Govenors Romney, Pawlenty, Walker and others may have great black marks against them in the great book of princples in the sky, those marks are given by people who’ve never had to negotiate with a recalcitrant state employee union, or horse-trade with a hostile legislative majority. 

Fact is – as I say all the time – politics is a marathon, not a sprint.  Things get done over time, not overnight.  It’s work for the obsessively patient. 

Society get changed not by the people who have the coolest slogan – “Repeal Now!” or “War on Womyn!” or “TRU LBRT!” or whatever it is that sends a tingle up one’s true believers’ legs – but by the people who not only show up, but keep showing up.

Which is Kevin Williamson’s point in this NRO piece, which you should read in its entirety, and which concludes:

The Democrats did not build the welfare state all at once in 1965, and Republicans didn’t have an honest shot at repealing it all at once in 1995. Everybody has a big plan, and Washington is full of magic bullets: leash the Fed, enact the Fair Tax, seal the borders. But what’s needed — what might actually result in a stronger American order — is a thirty years’ war of attrition against the welfare state and entrenched incompetency. Federal crimes and misdemeanors ranging from the IRS scandal to the fumbling response to Ebola suggest very strongly that we have management and oversight problems as well as ideological ones, but holding oversight hearings long after (one hopes) Ebola is out of domestic headlines provides very little juice for a presidential candidate facing a restive base all hopped up on Hannity. Being the guy who gets up and demands the repeal of Obamacare might get you elected president; being the guy who fixes the damned thing simply makes you a target for talk-radio guys who have never run for nor held an elected office but who will nonetheless micturate upon your efforts from a great height.

Everybody wants to run for president. But somebody has to save the country.

Read the whole thing.

And hold the sloganeering.

It’s A Mad World

Not only some rock stars, but indeed the Communist Peoples’ Republica of Vietnam gets free enteprise in a way that Mark Dayton, scion of a business family, to say nothing of “community organizer” Barack Obama, never can. 

Maybe the parts of the United States that value economic freedom need to launch a torpedo at a US destroyer…

More Jobs!

…Inver Grove Heights-based CHS corporation is building a new fertilizer plant:

CHS, a farmer-owned cooperative based in Inver Grove Heights, Minnesota, said its board of directors gave final approval of the project on Thursday.

“With this decision, CHS is taking an important, strategic step on behalf of its membership owners by ensuring them reliable domestic supply of nitrogen fertilizers essential to help farmers raise healthy, profitable crops,” Casale said in a statement.

Casale said plant construction could begin this fall, and operating in 2018. It would employ between 160 and 180 workers, the company said.

And oh, yeah – it’s going to be in the Berg ancestral home of Jamestown, ND. 

Another Minnesota company, sending jobs to a neighboring state.

The Power Of Suggestion

To:  Progressives (again)
From: Mitch Berg, Uppity Peasant
Re:  Scotland’s Independence Vote

As someone who is of partly-Scottish descent (and it’s the part I have the most fun with), I’m looking at the potential Scottish independence vote (which is, according to some current polls, neck and neck, with the “leave the union” vote nosing ahead according to some polls) with great interest. 

Only partly because of the whole “personal ethnicity” thing. 

No, there are two aspects that are much more important

Dilution:  Scotland is as big a Labour Party stronghold as California and Massachussets are Democrat ones.  Having the Scots out of the Union would have a dramatic effect on English governance (according to John Fund writing in the National Review):

Scottish voters are currently much more hostile than the U.K. electorate overall to free markets — Scots view capitalism as the basis for the Thatcher government’s decision to close unprofitable Scottish industries in the 1980s. Currently, Scotland sends only one Conservative member of parliament to Westminister. The departure of Scottish MPs from Westminster would be dramatic: If 59 Labour-party and Scottish National MPs from Scotland leave Westminster, Tories in the current House of Commons would go from being 21 seats short of a majority to having an outright 20-seat majority. “It is unlikely that without Scotland the rest of the United Kingdom would elect a majority Labour government anytime soon,” says Eamonn Butler of the Adam Smith Institute.

And that could only be a good thing.

Perhaps better? 

No More Government By Unicorn Fart!:  John Fund compares the potential breakup with that of Czechoslovakia – a nation that similarly jammed two ethnicities together in a union that was more a matter of post World War 1 convenience than actual organic need. 

Fund notes that, once the Slovaks gained their independence, and got cut off from all of that Czech free-market money, they got a sudden reality check; the subsidy gravy train was over, and they had to become responsible adults. 

Fund notes that the Scots could have that same sort of ephiphany:

Even with its oil revenue, the same phenomenon could occur in Scotland, where the ruling Scottish National party has often pursued foolish economic policies. With independence, a new government might be more realistic…The stringent policies of the Bank of England and the loss of subsidies could push Scotland to become more fiscally responsible. “Scotland would eventually be forced into a more severe form of fiscal austerity than currently applied, giving the lie to Alex Salmond’s promise of a sort of welfare nirvana for all Scots once free of the Westminster yoke,” ["Salmond" is apparently Scottish for "Krugman"] wrote Jeremy Warner, assistant editor of Britain’s Daily Telegraph. “For the rest of the U.K., losing relatively pro-EU Scotland would further raise the chances of eventually leaving the EU from odds on to that of a virtual certainty,” he added.

Just saying, “Progressives” – you might want to get some ideas, here. 

That is all.

Paul Krugman Hates The Poor

Beating up Paul Krugman – a Nobel Prize-winner who is a poster-child for “narrow expertise” – is a little like fact-checking Heather Martens; it’s easy, and there will never be a shortage of material.

Rich Karlgaard at Forbes spells out yet another reason Krugman is jumping from Princeton in disgrace:

Krugman says the rich sock their money in low-yield bonds. But he fails to consider the obvious. Stocks have almost tripled since March 2009. Urban real estate is in a boom. Art is in a boom. If you believe Krugman, it must be the poor folks who are feeding these asset bubbles. Because the rich, Krugman says, are stuck in low-yield bonds.

This is utter nonsense. The excess liquidity created by U.S. monetary policy does not wind up in the hands of the poor. It winds up in the hands of the rich. The rich then put it into stocks, real estate, hedge funds, and art.

It’s actually the poor and lower middle classes whose wealth — such as it is –lies fallow in no-interest bank accounts (or wealth-eroding cash if they have no bank account at all). It’s not the rich, but middle-class retirees that try to eke out a living on low-yield interest rates.

Krugman has it exactly, 180-degrees wrong. Cheap money is a transfer payment to the rich. It is a tax on the poor. The rich-poor divide grew vast under the cheap money policies of Ben Bernanke. This trend will surely accelerate under Janet Yellen.

Wonder what it’ll be like, someday – maybe decades from now, maybe in the afterlife – when “progressives” realize they’ve been squeeeeeing like a bunch of teenager grrrls at a One Direction concert over the permanent destruction of the middle class.

“The Clinton Years”

To:  The American Electorate
From: Mitch Berg, Guy Who Was Of Cognitive Age In 1992
Re:  The “Clinton Years”

All,

Michael Barone, writing about the putative Hillary Clinton juggernaut:

It seems that Clinton’s standing reflects less on current judgments of Obama and more on rosy retrospective ratings of the presidency of Bill Clinton. Voters may not be eager for a third Obama term, but might like a third Clinton term.

Now, many of you weren’t adults – or at least not paying attention to politics – between 1992 and 2000 (especially in Minnesota, considering who we elected goverrnor in 1998).  You may have been fed a lot of gauzy beatifics about “the Clinton Years”; they were prosperous and peaceful.

Let’s be clear on why that was.

Twang:  Bill Clinton was a Democrat – but he was no Barack Obama.  He was part of the “Democrat Leadership Conference”, a moderate, business-friendly caucus of Democrat pols and advocates.  The DLC has, by the way, been completely extinguished; there’s no  room in the modern Democrat party for such moderation.

Shriek:  But Hillary was not.  Nobody mistook her for a moderate; she was the fire-breathing liberal of the couple.  And for the first two years of Clinton’s first term, many of her pet initiatives – including “Hillarycare”, which in those innocent days before Obamacare seemed like a grotesque power grab, nationalizing 1/7 of the national economy.  The first two years of Clinton’s reign were not much further to the right than Obama’s.

Pow:  The 1994 elections put a stop to that; the GOP took control of Congress for the first time since the ’30s, in a reaction to the Clintons’ “progressive” overreach.  In response, Clinton swung to the right, triangulating to the GOP’s right on issue after issue – essentially neutering all of Hillary’s “progressive” ambitions – to save his presidency in 1996.

During his last six years in office, Clinton was more fiscally conservative than George W Bush.

Poof:  As a result, between the 1994 landslide and his self-inflicted sex scandals, the best thing about the “Clinton Years” was that government was deadlocked between a Congress that was conservative, and a President that was frantically trying to act conservative.

Jing!:  Of course, deadlocked government works best against a background of overwhelming prosperity.  And the US was prosperous during the mid-late nineties – mostly because by 1994, the economy had shifted from Cold War priorities to full-scale civilian production, the so-called “Peace Dividend”.  All those Cold War-period innovations in technology  started filtering into the civilian market, driving frenetic booms in technology, equities, and consumer spending.  We enjoyed the first genuine peacetime boom since the Roaring Twenties – nation’s economic blender switched to “puree”.

The end of the Cold War was, of course, predicated on the end of the USSR – and that was largely the work of Ronald Reagan.

Bill Clinton didn’t govern anything like Ronald Reagan.  Hillary would be much less so.

The Good Old Days Are Gone For Good:  It’s not the nineties.  The GOP doesn’t control Congress – and any circumstances that lead to a Hillary! win would likely also lead to a blunting of any GOP effort to retake the Senate or extend control of the House – as Barone points out in the piece I link above, people are much more likely to vote straight tickets than they were 22 years ago.

So while the Democrats and media (ptr) will flog the idea that Hillary would be a return of Bill which would lead to a return of their gauzy, soft-focus version of “The Nineties” – it’s just not true.  Hillary is not Bill; without a conservative Congress, it’ll be like having Maxine Waters running things.  And Obama has seen to it there will be no surge of productivity when he leaves office.

We will get an expansion of government power; Obamacare will become un-repealable (even as its most onerous provisions finally kick in – and you really ain’t seen nothing yet).  And government debt will zoom under paleo-”progressive” Hillary!, pushing the nation further and faster down the road to the inevitable financial cataclysm.

That is all.

Why Does The DFL Hate Poor Urban Single Mothers?

I saw this idea in “Think” “Progress”…:

Five state lawmakers in Minnesota have decided to take on the “Minimum Wage Challenge” and live off of a typical budget for a worker who makes the federal minimum wage of $7.25.

…and I thought “I loved that skit the first time I saw a bunch of upper-middle-class liberals pretend to be poor to advance their narrative the first time I saw it – when Barbara Ehrenreich did it!”

Back during the high times of the early 2000′s, Democrats assuaged their self-righteousness about poverty by reading Ehrenreich’s Nickeled And Dimed.  Ehrenreich – an upper-middle-class congenital “progressive” who has lived her life by her parents’ dicta “never cross a picket line and never vote Republican” – made a great show of pretending to live as a minimum wage worker in various parts of the country.

It was BS, of course.  Ehrenreich approached minimum wage life the way you might expect someone who’d never had to do it.

And I wouldn’t expect much better from the DFLers that’ll be doing this iteration of the stunt:

Rep. Frank Hornstein (D) told CBS Minnesota that it made him take more notice of his costs. “An orange juice was $1.79. That’s not something that I would normally notice,” he said after getting breakfast from McDonald’s Dollar Menu. “Making the decision to take the bus today versus taking the car will save me a little money for dinner. For food,” he added.

Another lawmaker who lives far from the capitol, Rep. Shannon Savick (D), said, “I can live on what they set for food. I don’t eat a lot,” but she worried about transportation. Where she lives, “if you don’t have a car, you don’t go anywhere, because there is no public transportation. Driving will cost more than what they’re allowing me.” The other three participants are Democratic Reps. Karen Clark, John Lesch, Jason Metsa.

And what exactly will these legislators be trying to do?

The state has one of the lowest minimum wages in the country at $6.15 an hour, which means it gets trumped by the federal wage. A worker who puts in 40 hours a week at that level will earn just $290 before taxes. The challenge limits the lawmakers to $5 a day for food and $9 for transportation.

Meaning $210 a week (before taxes) on…what?

It’s not an idle question.  When you’re poor – and I spent a good chunk of my 20s and early 30s as “low income”, and I’m happy to say I’m forgetting some of the finer points of that lifestyle – you either budget ruthlessly to your circumstances, or you flounder.  Or, often enough, both.

But this stunt seems to assume that the minimum wage earners are heads of households.  Not teenagers living in Eden Prairie and working at Boston Market for pin money.

But minimum wage workers are not, as a rule, adult heads of households – even their own.

This table – from Heritage – shows the demographics of minimum wage workers as of 2012:

Check out the average income line:  most minimum wage earners, even those older than 25, are parts of households with average incomes averaging $26 an hour (including, it must be said, all of the DFLers in the stunt – who, presumably, won’t be eschewing their spouses’ incomes during the stunt).

Upshot?  They are a third as likely to live in poverty as they are to live in a household over 150% of the poverty line.

Most – even the older ones – work part-time, and they are 3-4 times as  likely as the general public not to have finished high school yet.

So the push to hike the minimum wage will  benefit the Dairy Queen worker in Maple Grove – who at best will get a 40% raise, and at worst will spend more time playing “Grand Theft Auto” at home while bitching to their friends about getting laid off.

It’ll directly harm the stereotype they claim they’re trying to help – the urban single parent who never finished high school because they were busy raising kids, and is part of that minority of minimum wage workers who don’t actually have a functional support system, a family to fall back on (like the legislators all do, even during the course of their weaselly little stunt).

 

When Grownups Run Things

On the one hand: Minnesota hikes taxes two billion dollars.  The “surplus” rises about $200 million over what the Republican majority in 2011-2012 left.  The DFL majority is currently arguing not so much over how to spend the “surplus’, but how many times over it shall be spent. 

On the not-stupid hand:  Wisconsin under Scott Walker cut taxes.  Wisconsin’s surplus is pushing a billion dollars.  And the only argument in Wisconsin today is “how are the taxpayers going to get the overbilling back?”

“The additional revenue should be returned to taxpayers because it’s their money, and my administration will work with the Legislature to determine the most prudent course of action,” Walker said in a statement.

Walker has been talking with Republican leaders about tax cut proposals he plans to release in his State of the State speech next Wednesday. Walker’s spokeswoman Jocelyn Webster said the governor wants to adjust income tax withholding tables to put more money in taxpayers’ pockets immediately and is also eyeing income and property tax reductions.

It’d sure be nice to have grownups in charge in Minnesota again.

(VIa regular commenter Chuck)

The Kids Are Kinda Not Alright

“Millennials” are rapidly approaching “Baby Boomers” as the most over-doted generation of all time.  Since the baby boom is slowly ageing out of the demographic hogpile, I figure “millennials” will soon eclipse the Boom as the most hated generation in history around the time the peak of their demographic bell curve hits 45 or so.

Not that its any more the Millennials’ fault than it was the fault of any individual baby boomer.  It’s not that they are individually and severally awful people.  It’s just that they had such awful spokespeople.

In the case of the Millennials, the spokesman I refer to is Jesse Myerson, whose piece “Five Economic Reforms Millennials Should Be Fighting For” (in the ever more vacuous Rolling Stone, natch) delivers eighty distilled years of “progressive” fever dreams in a few pages of Yale-via-video-game argot.

I was going to respond to the whole noxious mess – I spent a week noodling with the idea as I nursed my flu last week – but Walter Hudson has done it, and done it better.

It’s not what Myerson presents so much as what he takes for granted which deserves rebuttal. His proposals proceed from unspoken assumptions which have been promoted in the popular culture by an organized Left, manipulating the nation’s youth into sacrificing their future. Here are 6 lies millennials must reject to live free.

Hudson’s conclusion:

Like each generation before them, millennials will define their own destiny with the ideas they choose to embrace. The whole of human history reads as a tale of tyranny, of political will trumping individual rights. Whether a pharaoh, an emperor, or a democratic majority, the powers that be tend to crush individuals under a banner of grandeur – an appeal to greatness, national pride, or the common good.

 

The American experiment stands out as a remarkable deviation from that dark standard, an attempt to recognize individual lives as ends in and of themselves, rather than a means toward the ends of others. What Myerson advocates is not new when viewed in historical context. He prescribes the old. He rallies for the tried and failed. Following his advice will return us to serfdom.

 

The real revolution, the truly youthful cause, erupts in the pursuit of liberty. A celebration of life and our living of it, liberty unleashes you to be who you are and pursue what you want, demanding only no trespass upon others. That’s the reform millennials–and everyone else–should enthusiastically fight for.

To get the logic that led from the beginning to the conclusion, you need to read the whole thing.

And have it ready, in case any of the “Millennials” in your life try to parrot Myerson.

Start the Revolution Without Me

New York is anything but blasé as de Blasio takes office.

If Supreme Court Justice Louis Brandeis was correct that States are the “laboratories of democracy,” then perhaps America’s cities are the petri dishes – developing political cultures at a micro level.

For 20 years, the Big Apple had largely quarantined the most aggressive tendencies of New York liberalism through a succession of centrist Mayors.  Even for all his nanny-state inclinations, Michael Bloomberg was (as we once noted) all that stood between the average Gothamite and an “army of liberal partisans who saw City Hall as Grand Central Station for a variety of socioeconomic engineering ideas.”

It should be of little surprise then that newly ensconced New York Mayor Bill de Blasio’s campaign certainly looked like something engineered in a political science lab.  De Blasio’s “tale of two cities” rhetoric, his promises to end “income inequity” and repeal “stop and frisk” defined his candidacy as being in stark contrast to Bloombergian Era.  Despite Bloomberg polling at a 51% approval as he left office and his supposedly controversial police chief Ray Kelly at 64%, de Blasio won running directly against the accomplishments (and their architects) of prior two decades.  Voters who cared about crime and candidate experience – once centerpieces to any New York campaign – barely broke for Republican Joe Lhota, and constituted a paltry 15% of the vote.

De Blasio’s supporters haven’t minced words about the expectations his overwhelming election has created in liberal circles, calling his mayoralty a “progressive revolution.”  Such rhetoric, amplified by a litany of speakers at de Blasio’s inauguration that trashed Michael Bloomberg (with apparently with de Blasio’s consent, as he stated he was “very comfortable with all that was done”), glosses over what exactly entails a “progressive revolution”?

From the early previews, de Blasio’s “revolution” may resemble Michael Bloomberg’s in one key, and often criticized, factor – policy tinkering instead of major reforms.  Candidate de Blaiso talked on the campaign trail about affordable-housing projects, stopping hospital closures, and a tax on upper-income earners to fund, in part, universal pre-kindergarten.  The first act of Mayor de Blasio was to end the handsome cab, horse-draw carriages – a move that drew criticism left and right, and even speculation that the position was based on a campaign pay-off.

Even when de Blasio talks about broader political themes, such his obsession with reducing “income inequality,” it’s rarely followed by policy prescriptions that will address the issue.  Some of de Blasio’s proposals will require support from Albany to enact, including aspects of his desired pre-K and after-school programs, while others reek of desperation to find an agenda, regardless of impact or practicality.  De Blasio declared he would expand the Paid Sick Leave law…which was just passed months ago and hasn’t even been enforced yet.  De Blasio campaigned on a goal of “zero deaths” in New York –  a policy that sounds like it was crafted by King Canute the Great.

If de Blasio truly wanted to address “income inequality,” he could look at New York’s punitive tax structure.  A married couple with $60,000 in taxable income pays nearly $2,000 in taxes to the city alone.  That doesn’t include the 25% federal tax rate for a couple in that income bracket, or the State of New York’s $3,200 in taxes as well.  Without including property taxes, school board levies, and a host of other taxes (how about the city’s 8.875% sales tax?), a couple with $60,000 in earned income would be paying out over $20,000 in taxes in one of the most expensive cities in the world.  Is that “equality”?

Keith Ellison And Barack Rex

There are two ways to look at Rep. Keith Ellison’s statement to a group of minimum wage protesters last week; emphasis added by me:

“We in Congress will try to raise the minimum wage. We got opponents on the other side of the aisle who say that there shouldn’t be no minimum wage. So, we are in difficulty fighting these guys.

“But, we know, at the executive level, an executive order can change the situation. We demand it, right now. Mr. President, sign the executive order. We demand this federal worker work reform, federal contractors. Give the pay raise, the livable, fair wage. Let’s do it now. I gave him a letter to this effect, yesterday.”

As Ellison walked off stage, the crowd chanted: “Sign the executive order!”

Either Ellison thinks Obama is a King, with absolute control over this country, or he has very little respect for his audience and thinks he can trick them into believing so. 

I’m going to lean toward “has very little respect, and thinks he can trick them”; that a graduate of a Jesuit high school, Wayne State University and a Tier 1 law school thinks saying things like “shouldn’t be no minimum wage” is authentic reeks of distilled cynicism.

Doomed To Fail

Joe Doakes from Como Park emails:

Bankers were seriously panicked over the last shut-down, fearing government might actually stop paying welfare.  Bankers were willing to fund the welfare system while Democrats kept ratcheting up the hysteria to force the Narrative on the public.  How much of the bankers’ war-gaming was spent lobbying Republicans to turn the spigot back on?

Like the illegal drug business, banking is so immensely profitable that there is nearly no way to take them down from the outside.

And what happens in January, when the short-term-agreement ends?

For Christmas, all my kids are getting bricks.  Of .22’s.

Joe Doakes

This country does need a serious realignment.  Of course, every splinter party and every faction thinks the same thing. The problem is making sure the right splinter or faction drives that realignment.

Also – Joe, you’ve actually found .22LR?

A Little Knowledge

If there’s one thing I’ve learned from my various liberal lawyer friends, it’s this; when I see news of the filing of an absurd lawsuit demanding a bizarre amount of money for an insane claim, take a step back and a deep breath.  A filing does not equal a judgment; while the occasional batspittle-crazy judgment happens, the vast majority of bizarre lawsuits end in a dismissal on summary judgment; a judge determines that no actual matters of law are involved, so there’s no need for a trial. 

And the bizarre cases that appeared in a splash of laughter and anger disappear, unlamented and

Over the weekend, the word got out among the usual circles about a Swiss proposal to give every single citizen a $2,600 monthly government-paid income

There were two reactions from among Americans I’d broadly call “conservative”; mockery, and a little bit of head-scratching.

We’ll look into the head-scratching first. 

The Big Fix: In his classic book Parliament of Whores, P.J. O’Rourke noted that if we just gave the money we currently spend on social welfare to people whose income is below the poverty line, we could bring every person in the United States up to the poverty line, and save money.  We’d do something that eighty years of “progressive” social policy has “tried” and failed to do; eradicate poverty, at least in a literal, personal-financial sense. 

The Swiss “plan” – assuming it also involved eliminating other poverty entitlement programs – might be a huge step toward simplifying poverty entitlements and, perversely, saving money…

The Swiss Reality- …if there were the slightest chance of it becoming law.

The Swiss federal system allows the National Assembly – the Swiss parliament – to refer bills dealing with major government issues – taxes, spending and big policy issues – to a national vote, very, very easily. 

Switzerland, like Minnesota, is starkly divided along what we’d call “red/blue” lines; the big cities, Zürich and Basel and Geneva, are every bit as clogged with socialist bobbleheads as Minneapolis or Duluth.  But the cantons (states) of greater Switzerland tend to be very conservative. The largest party in the National Assembly is the “Swiss People’s Party” (Scheweizerische Volkspartei, or SVP in German), a center-right party that, unlike many European “conservative” parties, could be recognized as “conservative” by an American Tea Partier. The SVP leads a coalition of center and right-leaning parties that don’t quite have a majority of the Parliament – 94 out of 200 seats in the lower house – but would require absolute unity among their opposition to effectively beat. 

But this isn’t even a parliamentary referendum.  Swiss law allows citizen petitions with 100,000 signatures – out of a population of 8 million citizens, or roughly 2% of the voting population - to force a referendum.

Andthatis how this proposal got on the ballot. 

On the one hand, it allows well-organized grass-roots groups to make a big electoral splash by getting the darnedest hare-brained ideas onto the national ballot. 

On the other?  They almost always get beaten.  A “grassroots” group of Swiss got an initiative to abolish the Swiss military onto the ballot in 2011.  It got a slew of headlines.

And it lost by about a 3:1 margin. 

The election of Jesse Ventura shows that if times are good enough, you can get up to 37% of any population to suspend their good judgement on a lark, when they don’t think it matters that much.

But here, we’re talking money.

This initiative is going to generate a lot of headlines, and a fair amount of mockery from American, left and right, who don’t get how Swiss democracy works…

…and, soon, a 2:1 electoral defeat.

With All Respect Due The Esteemed Drs. Banaian And Spry

A line that hovers before me in blog and news-site comment sections like a red cape in front of a bull; “most economists agree”. 

Forbes’ Louis Woodhill has at that oldie-but-goodie:

Let’s be blunt. Whatever economics is, it is not a science. Unlike physicists, who can predict an asteroid’s closest approach to earth within a few miles when it is still 100 million miles out in space, economists can’t accurately predict this quarter’s GDP. Indeed, they are still arguing among themselves about what “really” happened 83 years ago.

In light of the economics profession’s track record, it is hilarious to hear pundits and politicians say things like, “Most economists agree…” as if this mattered…It has been said that generals are always preparing to fight the last war. Similarly, at the time that our current “Pretty Good Depression” started, most of what central bankers knew (or thought that they knew) had to do with “fighting inflation,” which was the last great monetary “war.”

The post itself is entitled “America Doesn’t Need Monetary Policy, And It Doesn’t Need Economists”.  It’s a long read, and worth every bit of it.

Although since some of my best friends are economists, I’ll stick with “America doesn’t need to pay undue attention to them on a policy level”.

What The Hell Do We Do With Our Society? (Part 1: What Can We Learn From New Orleans, The Rockaways And Detroit?)

I grew up in pretty boring times.  If you’re reading this and you’re under the age of 86, so did you, really. 

And let’s be clear; when it comes to the march of human history, boring is good.  “May you live in interesting times” is often attributed as an ancient Chinese curse; it appears to be as “Chinese” as Leann Chin, but the sentiment is dead-on.  For most of human history (and the entire time before it), life was fascinating, brutish and short.

In contrast to most of human history, with its wars and plagues and cataclysms, human history as known to people alive today has been blessedly, wonderfully boring. 

Some react to the boredom by turning the idea of the collapse of civilization into entertainment, from campy “zombie” fiction (The Walking Dead) to breathlessly pompous asteroid fantasies (Armageddon) to moralistic sermons about being our own undoing (The Day After Tomorrow) to conjuring genocidal invaders from the world of fiction (from the sublime Battlestar Galactica  (the 2004 version, not the loathsome seventies one) to the ridiculous Independence Day). I find “end of the world” p0rn unseemly; I didn’t spend this much time and energy raising kids to laugh about the whole world collapsing.  (And may I add “stop being an idiot”).

Others react by hedging their bets against what, throughout human history, seems to be an inevitable. sooner or later; stocking up on food, land, ammo and other supplies to ride out a bad spell the best they can. 

What goes up must come down.  Things tend to move from a state of order to disorder. 

S**t Happens.

And it’s happening all around us. 

And not only is it inevitable – sometimes it can be a very good thing.

———-

A couple of weeks back I had the pleasure of interviewing Kevin Williamson of National Review Online.  We talked in re his new book, The End Is Near (And It’s Going To Be Awesome).   Like all of Williamson’s writing, it’s as breezy and readable as it is intellectually beefy.  He’s like a modern-day Paul Johson – and that’s a huge spiff.

I recommend you read it.  Like, go get a copy.  You’ll thank me later

I’ll oversimplify; the book has a few major premises:

  • Politics is the worst possible way to allocate scarce resources.  Not because people are evil or democracy is wrong – but because while every other aspect of life has evolved, politics remains essentially unchanged over the centuries.  Politics is a perfectly valid way of dealing with many of the human condition’s issues – contracts, justice, dropping bombs on people who try to kill you, issuing restraining orders and the like.  But for purposes of driving the allocation of our society’s resources, it just doesn’t work.
  • No, really.  It’s a disaster.  Our national debt is hanging around a years’ worth of our national GDP.  But the unfunded mandates that nobody wants to talk about currently equal, roughly, the GDP of the entire planet.  As in every single bit of economic output from every man, woman and child on the planet for a full year.  Every Big Mac sold, every Android Phone built, every bag of rice hauled in from a paddy in Bangladesh, every Justin Bieber download sold, everything – just to pay our nation’s mandates.  And most of the world’s other “advanced” economies are the same, and maybe worse – they have no senses of dynamism, little familiarity with the notion of “Creative Destruction”, and even nastier senses of societal entitlement than Americans have developed.  Go ahead – tell a Greek that she can’t have nine weeks’ vacation. 
  • It literally can not go on.  It’s like trying to run a family when your significant other is running off to Ho Chunk with the credit and debit cards six days a week.  It is not sustainable.  No matter how vigorously the world’s political bodies affirm their interest in building roadmaps and finding solutions, bla di blah di blah, it is virtually inevitable that the system is going to misallocate its way straight out of business.   Only instead of a divorce or a painful stretch of credit counseling, it’s going to involve some degree or another of the government running out of money, presuming it stops short of taxing every Big Mac sold, every Android Phone built, every bag of rice hauled in from a paddy in Bangladesh, every Justin Bieber download sold, everything. 

So eventually, and pretty much inevitably, government is going to grind to a halt. 

And to Williamson, that’s the good news.  Again, read the book.  You’ll thank me.   Because once you get government out of the way, things actually look pretty good.  We’ll come back to that later.

And you can thank the good folks in New Orleans, Detroit and – soon, I suspect – Camden New Jersey for giving us a previous of how it’s going to work.  Or not work.

And if you think about it, there is some good news in there. 

More tomorrow.

Rebuilding The State Economy

I met my friend Avery LIBRELLE yesterday out on the bike trail.  Avery, naturally, rides a recumbant bike.  Go figure.

LIBRELLE:  Hah!  Tom Stinson, the state economist, says that Minnesota is doing pretty well!  And that our education system is one of the reasons! 

MITCH:  Well, good!

LIBRELLE: Hah!  Better than good!  It means the DFL plan for leading the state is the right one!

MITCH: What?  Give “eduation” everything it wants?

LIBRELLE: Yes!  Raise your hand for the children!

MITCH:  Oboy.  OK.  For starters, yes – a workforce that can do the job, whatever the job is, is a good thing.  But as we saw last week, to a great extent education – at least, big institutional education – follows prosperity.  Not the other way around. 

And Minnesota prospered, especially during the “Minnesota Miracle”, as much due to its human, social and economic geography as anything else.  It was the economic, social, population and communications center of a large, productive region – especially at a time when the United States as a whole had no competition.  So while it certainly helped that Minnesota had a strong education system, it helped even more that we were in the right place at the right time. 

LIBRELLE: All the more reason to spend more on education!

MITCH: Is it?  Is our education system in Minnesota worth what we spend on it now? 

Especially given the number of black, Latino and Asian Minnesotans who are being served so very very badly by our current system?  Pouring money into a status quo that is decaying fast and is doing little more than resting on the laurels of an earlier era – and let’s not even address whether those laurels were especially deserved – is a huge mistake. 

LIBRELLE: You are clearly a racist. 

MITCH:  For wanting to fix a system that discriminates against minority Minnesotans?

LIBRELLE:  Yep!  Sometimes you have to show them what’s right!

MITCH: Huh.

(And SCENE)

Back On The Shelf

It was the humblest and most obscure among the DFL’s orgy of tax pushes this past session. 

And it may be the one that has the broadest impact fastest

The DFL imposed a tax on warehouse services this past session; basically, if it goes into a warehouse, you pay for it.  And pay.  And pay. 

And Minnesota businesses are not amused:

With a warehousing services tax looming next spring, Rochester businessman Eric Lawrence is rethinking the company’s expansion plans.

That means “not hiring any more people”.  Back to McDonalds, proles – and remember, it’s for A Better Minnesota!

The president and CEO of Red Wing-basedLawrence Transportation Company had been looking to build a new warehouse facility in Winona but tapped the brakes on the plan. While the warehousing tax isn’t the sole reason for delaying construction, he said it is a major factor.

“I want to grow this business. I want to offer the services and have the space to do it, but it’s not worth the risk,” he said.

With Hudson, Prescott and La Crosse just across the river and sharing the same (or better) transportation links that Red Wing has?  

The DFL-led Legislature approved extending Minnesota’s sales tax to commercial warehousing services last month. The proposal is expected to generate nearly $100 million for the state per year once it takes effect April 1, 2014.

It won’t, of course.   Ripping 6.75% plus out of the bottom line of the warehousers – which is not an especially high-margin business to begin with – makes it a no-brainer for any company.  

Senate Majority Leader Tom Bakk, DFL-Cook, said during a recent visit to Rochester that the warehouse tax enabled lawmakers to repeal a requirement cities and counties pay state sales taxes — a cost that got passed on to property taxpayers. It also helped fund an upfront refund for business capital equipment purchases.

“We thought (the warehousing tax) was a business-to-business service that wouldn’t harm economic growth, but we put it in effect in April so we could assess what potential issues that are with it because we’ve never had it before, and if there are some ramifications, there will be time to make some corrections to it,” Bakk said. “But right now, today, I don’t see it having a hindrance on economic output.”

“I don’t see it having an impact”. 

This is from the leader of a party that thinks “supply chain” is something you pay $20 extra for at Deja Vu. 

Critics disagree. They argue the tax will encourage Minnesota companies to warehouse their products in other states…Among the businesses concerned about the tax is Red Wing Shoes. The company declined to provide comment for this article. But in an interview with the Star Tribune’s Neal St. Anthony, Red Wing Shoes President Dave Murphy said the company has decided to delay plans for a new $20 million distribution center in Red Wing as a result of the tax.

I know of one major company in Greater Minnesota with a very large warehouse component that has been quietly renting up all the warehouses it can find in a neighboring lower-tax state (with better transportation connections and easier building permitting to boot); if that company leaves, it will gut the job market in its neighborhood.

It’s not just the warehouse tax that’s got them shopping.  But every little bit hurts, when you’re trying to be competitive with surrounding states thatjust plain get it – they understand competition, having spent the past forty years competing with their fat ‘n happy neighbor at the top of the Mississippi River. 

So when your warehouse gig moves off to Superior or Grand Forks or La Crosse, just remember - it’s For A Better Minnesota!

And They Say DFLers Don’t Get Economics

Let’s say, hypothetically, that you live in a city.

And in that city there are 19 big companies.   They have everything that makes up a big enterprise – a CEO, executives, management, stores, labs, manufacturing plants – in your city.

And then the economy picks up.  And the 19 big companies hire more people, because a good economy means good sales, which means you gotta develop, build and sell all of those 19 sets of products!

So what’s the measure of the good economy?  ”19″?  The number of big companies in your town?

We’ll come back to that.

Then, driven by high wages and the need to be competitive, the 19 companies outsource their manufacturing to the Philippines.  All the people in your town that earned a living from building things for those 19 companies are out of work.

How’s the economy measure?  Still a “19?”

And then the price of R and D rises, and the companies relocated their R&D labs to India and Singapore and Slovenia.  All your researchers are out of work.

Is your city still a “19?”

And then the economy tanks.  Stores scale back and lay people off, managers get RIFFed, the work force plunges.  Your town’s unemployment lines are getting longer and longer…

…but there are still 19 CEOs and corporate boards in town.  They administer companies that do their R&D and manufacturing elsewhere, and sell to whomever can afford the products through stores that are ever dingier and more understaffed.

But those 19 CEOs are still in your town.  So the town’s economy is healthy.  Right?

If you said “what, are you kidding?”, you might be a conservative.

If you didn’t, you probably think this piece by Dave Mindeman at MnpAct makes perfect sense.

North Dakota and Wisconsin taunt our borders with new signs that say – Our State Is OPEN For Business!

Everybody seems to be overlooking the basics here.

Sure taxes have some effect on business decisions….so do a lot of other things. Let’s look how Minnesota compares.

Now, let me make sure I reiterate; Mindeman is one of that tiny minority of Twin Cities leftybloggers that don’t need to be under police surveillance.

But when he says “let’s look how Minnesota compares”, what he really means is “let’s cherry-pick some non-sequiturs as absurd as the fictional list of company CEOs in my example above”.

No, literally:

The Facts: Minnesota has 19 Fortune 500 companies. Five are in the top 100. Fourteen in the top 300. United Health ranks the highest at #22. Minnesota ranks 17th in the nation for total GDP. We rank #14 in GDP per capita. Our current unemployment rate is 5.3%. Our high school graduation rate is 91.6% (National average is 85.4%) Persons with at least a Bachelor’s Degree – 31.8% (National Average – 28.2%) Median Housing Value – $201,400 (National Average – $186,200)

Let’s leave aside for a moment the factors that have nothing to do with measuring economic health (graduation rates are nice, and might – maybe - predict the future, economically.  Or they might not.  But if 100% of your town has masters degrees, but they’re all in Women’s Studies so the unemployment rate is 100%, what’s the real (hypothetical) measurement?);

We’ve got 19 Fortune 500 companies.  Bully.

Now – are those companies creating jobs in Minnesota?   Is 3M building new plants in Minnesota?   In fact, they literally exported one plant, with hundreds of jobs that used to be on the East Side of Saint Paul, to South Carolina.  And do you remember when they used to do R&D in the Twin Cities?  Welcome to Austin!

Medtronic?  Aren’t they contracting?  Well, here they are.  In Tennessee?  Not so much.

Boston Scientific?  Well, they’re not expanding anywhere – but it’s here in MN that they’re contracting fastest.

When was the last time Ecolab built a plant in Minnesota?  (Trick question; it was the seventies).

It’s not just big Fortune 500s, of course; Red Wing Shoes is eyeing a move.  Jostens is shifting jobs from Owatonna to Texas, the first of what will likely be many moves to lower-tax states.  We talked about the iron mill that’ll be built in North Dakota rather than the Range last week.

But we have 19 headquarters here.  Right?

Well, doy.  Of course we do.  If you’re a Fortune 500 CEO, where would you rather live – around Lake Minnetonka, the Guthrie, the Ordway, with Cathedral Hill restaurants and Galleria shoppping, or up in some holler in Mississippi, sweating through your underwear? It’s a no-brainer.  And that creates jobs – for management, for MBAs and upper management, sure – and their administrators and financial planners, and bartenders and caddies and nannies and gardeners, too.

But where are you going to build the plant, and create the jobs, especially for the people who aren’t management?  Who  don’t have the MBA and the BMW and the career spent networking among the corporate elite and the decades of experience in a field?

You did see the paragraph about all the “Minnesota” companies building plants elsewhere, right?

Mindeman:

So, how do we compare with our neighbors?

Vs. North Dakota: Sure North Dakota has a very low unemployment rate. A big surplus. And most of all an oil boom. But North Dakota doesn’t have a single company in the state on the Fortune 500 list.  Not one single business.

Remember that next time you run into an unemployed Ford Plant worker; “hey, you’ve got no job, but at least we’ve got lots of headquarters here!”.

Of course Minnesota has the Fortune 500s.  Minnesota benefitted from what mattered to people, and companies, when population patterns were largely set, back in the 1800s and early 1900s;  proximity to resources, plus water, rail and eventually road communication, which led to an urban center; this center became the center the upper-midwest region, the part of the country west of Chicago and north of Omaha and Saint Louis and east of Denver.   The era when the big Fortune 500s we currently have were largely formed.  An  era that, according to some thinkers on the subject, is on its tail end, and will be over someday soon.

In total GDP, North Dakota ranks 50th out of 51 US economies – and although they do better in per capita rank (20th); of what value is a low GDP with a total population that would fit into Hennepin County?

Leaving aside that Mindeman brushes aside an amazing statistical anomaly – a state that was poor, with a low, agriculture-related GDP fifteen years ago, that is now batting thirty spaces above its weight, in league with the big, inflation-adjusted coastal economies – like it’s no big thing, he gets the real question backwards.

What could Hennepin County – whose unemployment and crime lead the state, whose schools are among the worst in the state, whose achievement gap is a state disgrace, and whose major city is rapidly fulfilling Joel Kotkin’s predictions of the obsolescence of the big central city – do if they used their resources, their inherent dynamism and their talents as wisely as North Dakota has?

North Dakota may be having an economic “boom”, [Why the scare quotes, Dave?  It's a boom.  No bones about it!] but why would any business consider a major move to a state that has a total market of about 800,000 people and a GDP that is about 1/8 of Minnesota’s? Really?

So many problems with that statement.  So many confirmations that DFLers just don’t get economics.  Where to start?

Mindeman is reliably imprecise when has asks “why would any business” move to North Dakota.

Any business?

Best Buy?  3M?  Starkey Hearing?  They’re not going to move to North Dakota.  What’d be the point?

You want to start a trucking company?  You’ll be making money hand over fist.  A machine shop in Minot?  You’ll be working three shifts seven days a week the moment you open your doors.  A house-cleaning service?  Accounting firm?  Security company?  Contract law firm?  Gas station?  Hotel?  You’ll have more business than you can handle.

Mindeman runs through all the neighboring states – focusing especially on the relative dearth of Fortune 500s in Iowa and the Dakotas – and asks:

Again, is that the type of market that can attract major business?

Why the obsession with “major” businesses?

The “Fortune 500″ is an arbitrary set of companies (or was – it hasn’t actually been published in ten years), set by the editorial staff of a magazine.  It focuses, by definition, on the 500 biggest companies, in terms of sales, profits, assets, market value, and employees.

Not growth.  Not innovation.  Just sheer size.

Are these companies the major sources of American economic dynamism?  Of innovation, strength, or even new hiring?  No.  They are not.  Small business is.

Sure there are plenty of people moving out of Minnesota and heading south, but that has been a weather trend that has been going on for decades. Our population is holding better than any of the states that border us.

Another factoid that Mindeman sails past like a mile marker on 94 headed west for good.

Why have people been leaving for decades?  Why is Minnesota on the cusp of losing a Congressional seat?

If you think it’s the weather – the Dakotas are growing.

Let’s put the question this way; if you’re a financial researcher with an MBA, your best shot at a job is in one of the big metro areas, with a big company.  Ditto if you work in political non-profits – you go where the politics are.  Big cities.

But if you’re a person with a high school education, maybe with a child to support and some bills to pay, which state would you rather be in right now – North Dakota or Minnesota?

Republican talking points are only so much hot air.

Minnesota’s quality of life is thriving and we are the Midwest model for business.

That’s what the facts say.

And maybe in a future post Mindeman will explain exactly why, in terms other than “CEOs per acre”.

Maybe.