In the latest Carolina Journalexclusive, Associate Editor Anthony Greco reports on Senate Bill 13, the Balanced Budget Act of 2011 — the first bill passed by the General Assembly. And, perhaps, a bill Gov. Bev Perdue will veto.
Duke economics professor Bruce Caldwell, one of the world's foremost Hayek scholars, offers 10 Hayekian insights into our economic trouble in this Heritage paper.
It isn't short, but is most worthwhile.
Many decades ago, Hayek, Mises, and other economists of the Austrian school demonstrated that the modern "mixed economy" (that is, one with nominal private ownership but widespread government intervention) was unstable due to governmental tampering with the spontaneous order of production and exchange. They foresaw that regulation would lead to all manner of problems, which politicians would try to fix with yet more regulation. Alas, few people listened. Most people liked the notion that government officials could and would make everything better if only we'd give them enough power, so Hayek et al were attacked as being against progress and against "the little guy."
Millions of "little guys" would be much better off today if people had listened to Hayek back in the 30s and 40s.
John Hood has warned us that most states face budget crises. This is despite — or because of? — large-scale growth in federal aid to state governments.
The Cato Institute has a new bulletin on this growth. (There's a PDF link here.)
My name is Matt Norcross; I am a product of the public charter school system in North Carolina, now attending the Academy at High Point Central a Guilford County School and will graduate on the college bound track this year.
My life would have been very different without the charter option. When I was little my parents were told that they should be thankful that I have a little sister to take care of me when they were gone, as my differences were severe. Which as you can see today, is NOT the case.
I simply learn differently than most other kids and am considered “twice exceptional” meaning I am gifted and learning disabled at the same time. If it weren’t for the charter option I would NOT be where I am today, on the college track, graduating and on the A-B honor roll.
When I was little I suffered from epileptic seizures, which contributed to my learning differences. After they were under control and I was in recovery, my parents had no idea what to do with my education, because I did not fit into the mold of a traditional classroom, private or public. They explored every option and nothing fit, so they started Phoenix Academy as a private school and then converted it into a charter school two years later.
The staff consists of highly trained, certified, and caring teachers who understand how to work with all students, the “academically gifted” and “at risk”. You know, there are many children who learn differently than others, and you need schools that can handle these kinds of learning differences. Phoenix Academy did just that.
Thank you for providing this opportunity to speak to you this morning. I encourage you, and everyone in the audience, to talk to kids like me. We know good schools when we see them and are living proof of their success!
Thank you again for your support of Charter Schools – we appreciate it!
The best part, correction the scariest part, of this article by Robert Murphy at the Mises Daily is this:
When Bernanke made his infamous appearance on 60 Minutes, most analysts understandably focused on his absurd claim that he wasn't printing money. But the thing that most alarmed me was this exchange (starting at about 7:20 in this video):
BERNANKE: There really is no problem with raising
rates, tightening monetary policy, slowing the economy, reducing
inflation at the appropriate time. …
Q: You have what degree of confidence in your ability to control this?
BERNANKE: A hundred percent.
Now that should be terrifying. Realistically, Bernanke shouldn't
have 100 percent confidence that he can control his toaster. I mean, he
might turn the dial up too high, or someone might spill water on it. It
could happen.
I appreciate the outreach program that brought Shaw University students to Ligon Middle School in Wake County.
While it appears that both the Shaw mentors and Ligon students are African-American males, mentoring is important regardless of the race or socioeconomic status of the participants. Indeed, this is what community is all about - neighbor helping neighbor.
The clout of tea party advocates and other hard-line conservatives in Congress has caught top Republicans by surprise, raising questions about whether GOP leaders can impose enough discipline in their House majority to pass tough measures, such as raising the debt ceiling.
Within 24 hours this week, House Speaker John Boehner's team had to pull a trade bill from the chamber floor, suffered an embarrassing setback on a USA Patriot Act vote, and failed to recoup money paid to the United Nations.
And in electoral politics, the tea party's threat to Republican incumbents came more into focus. ...
Another Republican leader Wednesday tried to cool the cost-cutting fever of tea partiers. House Appropriations Committee Chairman Hal Rogers, R-Ky., proposed ending more than 60 government programs and cutting $35 billion in spending. ...
There were other signs in Washington this week that Republicans are still grappling with the influence, or threat, wielded by fiscally conservative, libertarian-leaning members.
Interesting word choice, flummox; it means "to bewilder, confound, confuse." The only way GOP leaders could be flummoxed by the strength of the Tea Party in opposition to their half-hearted efforts to cut government spending and power is if they believed the movement was about them, not despite them. But as I wrote just this past December,
If we have to -- and we probably do -- we will spend the next however-many-are-necessary years sounding like Tea Party inspiration Rick Santelli trying to drive the message home:
Why? Because the GOP's strength in this past election wasn't its recent track record on spending, it was foremost its circumstance of being the only way left for citizens to stop the Obama agenda ... [The GOP] promised to stop the spending and reverse the course of Obamacare and out-of-control government, promises that Republicans would be wise to fulfill and Tea Party patriots would be wise to suspect.
Below, Rick Henderson posts about NC Congresswoman Virginia Foxx, who is one of those Republicans wisely trying to fulfill the promise to cut spending.
Gov. Bev Perdue's announcement yesterday that the budget gap is not going to be $3.7 billion was great video, though "over the top happy" might rank with "sheroes" as an example of the need for a thesaurus.
The revenue estimate for FY2012 is $600 million higher thanks to gains on economy-based taxes, not decisions from the governor and the former Democratic majority. The other $100 million may be from extra revenue collections this year, though that hasn't been made clear.
The decisions of the governor and former majority are why the governor and current majority still have to overcome a $2.7 billion budget gap. Instead of using the $1.6 billion in one-time federal money and the $1.3 billion temporary tax hikes in a responsible way to ease the transition to more effective government, they chose to prop up the status quo programs.
Now, the governor wants to veto S13, which would take other funds to further shrink next year's gap, to support Golden LEAF, which has "operated often as a political slush fund."
This does not bode well for fiscal discipline in the budget she will present next week.
WRAL reports that Robert Caldwell of Morganton, who was indicted by a Wake County grand jury Tuesday for what appears to be laundering a campaign contribution to Bev Perdue's 2008 gubernatorial campaign, was expected to resign from the board of Western Piedmont Community College.
Former Gov. Mike Easley appointed Caldwell to the board in 2002, reappointed him in 2006, and Perdue did the same last year. Caldwell served as chairman for two years before leaving that post in September.
Meantime, the Star-News editorial board in Wilmington weighed in on the matter, citing Easley's flight-related woes by saying, in effect, "Oh no. Let's not go there again."
For the Carolina Journal story that laid out this convoluted campaign financing scheme involving the "aircraft provider" program for the Perdue campaign, click here. For all related stories, click here.
Rep. Virginia Foxx, the 5th District Republican from Watauga County, appears in National Review Online's The Corner explaining why she and a group of conservatives have been pushing the House leadership to cut a full $100 billion from the current fiscal year's budget, rather than the $40 billion or $50 billion in the initial House plans.
Last night, the leadership agreed to move forward with $100 billion in cuts.
Foxx said the $100 billion figure was touted in the House Republicans' pre-election Pledge to America, and even though the current fiscal year is nearly half over, the new majority should abide by its promise.
“People want to make it clear that we believe that we heard a message in November that we need to cut spending,” Foxx told NRO. “We wanted to make sure that everybody is on the same page, and as of now, I believe that is becoming the case.”
In his WSJ column today (unfortunately, it's subscriber-only material), Daniel Henninger makes a good case that high public employment is what strangles economic vitality.
Egypt has a moribund economy, but the very comparable nation of Turkey is doing well. Why? Henninger points to this fact: in Egypt, 35 percent of the labor force works for the government, while in Turkey it's only 13 percent. Government employment is almost always low in output (sometimes even negative, as government workers sometimes impede production elsewhere) and high in cost (since there is no competition).
Henninger also makes a good observation about higher education. Referring to the nations of the middle-east and North Africa, he writes "Their universities fed graduates into a nonproductive but high-benefit public economy. Many Tunisian rioters were unemployed college graduates." The same is true in Egypt. The idea that putting young people through college will necessarily provide a country an economic boost (more "human capital" in the labor force, supposedly) is once again refuted by reality. Economic growth comes from the coordination of all resources. For government officials to think that they'll get growth just because they lure lots of people into college and slap credentials on them is every bit as crazy as thinking that, as in the old Soviet Union, economic growth would occur because they produced as much steel as possible.
Henninger concludes, "The first great lesson being learned in the 21st century is that neither the state nor the stork can bring jobs to life in a modern economy. Good luck to Egypt and all other nations on the wrong end of this learning curve."
School choice has been a hot topic on Jones Street in recent weeks, with debates about lifting the public charter school cap and creating tax credits to help parents who seek alternatives to standard-issue public schools.
Now the Alliance for School Choice has unveiled its annual yearbook. (You'll find a PDF link here.)
Terry Stoops discussed school choice issues during a recent interview with Donna Martinez on Carolina Journal Radio.
Representative Ron Paul held a hearing yesterday in the House, seeking expert testimony on the question, "Can monetary policy create jobs?"
One of the economists who testified was Thomas DiLorenzo and you can read his statement here.
In short, discretionary monetary policy interferes with the natural order of the economy. It creates some jobs in the short term, but destroys others and undermines the conditions that give rise to long-run growth.
