The Locker Room

February 23, 2010

Pension problems

Posted by Joseph Coletti at 11:22 PM

Our friends at the American Legislative Exchange Council and the Pew Center for the States have each recently released reports on the state of state employee pension funds and retiree health care benefits. Both these reports are extremely valuable with useful information.

Fortunately, North Carolina's pension systems for teachers, state employees, and local government employees are in better shape than those in many other states. There has been and will continue to be pain for employees, governing bodies, and taxpayers as contribution rates increase, but these are potholes compared to the cliff the $30 billion abyss of unfunded future health benefits.

As Sam Hieb pointed out at Piedmont Publius, the Reason Foundation has a number of good ideas to free funds for future liabilities, and we have offered plenty of our own - in budgets, pensions, health care, and total compensation for government employees.

We have seen the future and it is New Jersey. Even New Jersey, though, sees the folly of massive government. If legislators here don't figure that out soon, North Carolina may go from one of the top destinations for interstate moves to a net exporter of people.

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'Nuff said

Posted by Becki Gray at 6:24 PM


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N.C. Democratic Party files formal complaint connected to GOP gubernatorial candidates' air travel

Posted by Mitch Kokai at 3:32 PM

Less than a week after the N.C. Republican Party drew attention to its complaint about Democratic Gov. Beverly Perdue's election campaign, the Democratic Party announced a formal complaint of its own.

State Democratic Party executive director Andrew Whalen announced in a news conference the complaint targeting 2004 and 2008 GOP candidates for governor. As in the case of Perdue, this new complaint focuses on unreported campaign air travel.

Watch the 15:04 news conference by clicking play below.

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Easley, Edwards, and Perdue

Posted by David N. Bass at 2:20 PM

Public Policy Polling's popularity results for the top three current or former political hotshots in North Carolina:

Mike Easley: 16 percent

John Edwards: 15 percent

Bev Perdue: 30 percent

The big difference, of course, is that Easley and Edwards might be on their way to jail. Bev is not.

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There is No Keynesian Miracle

Posted by George Leef at 1:25 PM

So writes historian Paul Johnson in this Forbes column.

Standard Keynesian thinking for nearly 80 years has been that when the country is in recession or depression, the government needs to step in and increase "effective demand" so that unemployed workers can be employed again. That's just the Obama approach -- spend, spend, spend and eventually the unemployment rate will come down.

Johnson cuts through the baloney: "One of the great modern myths taught in some university economics departments is that government treasuries can be run in a fundamentally different way from the finances of private families. This mythology includes the belief that adding to public debt is a form of investment and that spending the taxpayers' money on a colossal scale and in a wanton manner may have positive economic virtues."

Good article. Read the whole thing.

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Cato expert says current federal laws against money laundering cause problems

Posted by Mitch Kokai at 1:12 PM

The latest video from Cato's Dan Mitchell suggests "politicians have created a grossly inefficient system of anti-money laundering laws that impose high costs, trample privacy, and undermine the fight against real crime."


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Bastardi takes "the science guy" to the cleaners

Posted by Dr. Roy Cordato at 12:25 AM

Last night on the Bill Oreilly show AccuWeather meteorologist Joe Bastardi debated Bill Nye on the science of global warming. If you are an alarmists my guess is that you're not posting this on your blogs. 

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Taxpayer-funded abortion could be back on Wake agenda

Posted by David N. Bass at 12:00 AM

Liberals on the Wake County Board of Commissioners could take the first step in putting elective abortion funding back in county employees' health insurance policies at an agenda meeting tomorrow.

For years, the county's policy covered elective abortions, those considered unnecessary for medical reasons (such as to save the mother's life). In mid-February, Wake's county manager and attorney removed the coverage from the plan, citing a State Supreme Court ruling from 1981 that might have declared the funding illegal.

Several commissioners weren't happy with that, and they could take actions to try to re-instate the abortion funding at the commissioners' next meeting March 1.

According to chairman Tony Gurley, County Attorney Scott Warren sent a letter to commissioners explaining the procedures that they would have to take in order to re-incorporate the abortion funding. But Warren is standing by his position that the funding is still illegal, Gurley said.

Reached by telephone, Warren would not comment specifically, but he said there are some "legal nuances" that other county attorneys have missed.

"It would take the heat off staff if [the county commissioners] would either approve or disapprove it up or down," he said.

Commissioners could put the item on the agenda at tomorrow's meeting, or wait until the actual meeting March 1 to bring it up.

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Regulatory Reform Part I

Posted by Daren Bakst at 11:44 AM

Most states and even the federal government are way ahead of North Carolina when it comes to having protections against agencies going overboard with their regulations.

Some of the biggest policy decisions that affect the lives of North Carolinians are made by administrative agencies, commissions, and boards.  For most of these bodies, those making decisions aren't elected or accountable to anyone.

Ideally, the legislature wouldn't delegate so much power to agencies.  However, since there will likely be delegation of some power, the regulatory process has to be created in a way so that agencies don't develop policy out of whole cloth, but instead implement the will of the legislature.  There also should be protections to ensure that regulations are developed with careful thought and consideration.

In my new report, I identify seven simple reforms North Carolina should adopt to reform our regulatory process.  These deficiencies in our regulatory process hurt our economic competitiveness and put too much power in the hands of unelected bureaucrats.

I will highlight some key aspects of regulatory reform over the next couple of weeks (on the Locker Room).

The question is how do we regulate the regulators?

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You might be a progressive if...

Posted by Dr. Roy Cordato at 11:35 AM feel encouraged when faced with a slippery slope argument to one of your policy proposals.

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No (Tenured) Teacher Left Behind

Posted by Dr. Terry Stoops at 11:14 AM

A Wall Street Journal editorial discusses the consequences of putting job protection ahead of learning, with a nod to the Charlotte-Mecklenburg Schools.

School reformers generally agree that the most important education resource is the teacher. But one of the biggest obstacles to putting a good instructor in every classroom is a tenure system that forces principals to hire and retain teachers based on seniority instead of performance.


The good news is that school reformers are making progress in some areas. Charlotte, North Carolina, allows teachers to be fired for poor performance. Chicago limits the amount of time a teacher without a job can continue receiving pay and benefits. Starting next year, teachers in Houston can lose their jobs if students fall short on standardized tests. Florida and Louisiana have moved to strike last-in, first-out provisions from collective-bargaining agreements.

The Obama Administration has made teacher accountability a major theme of its education agenda. Let's hope its Race to the Top selections reward school districts that are actively working to reform the teacher corps and change a tenure system that puts job protection ahead of learning.
Of course, North Carolina does not have the problem of teacher union obstructionism that prevents many school districts from firing bad teachers.

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Less government, not more

Posted by Becki Gray at 10:50 AM

According to a report in Pitt County Daily Reflector, Gov. Purdue  “told reporters in a phone call that community banks in the state tell her they're over-regulated by Washington and hesitant to lend.” 

Yes indeed.  Government needs to get out of the way, let money and credit start to flow in a free market and allow the economy recover.  Daren explains the dangers of regulation in this new report.  Bev Perdue should heed his advice. 

However, instead of making efforts to ease regulation she offers this suggestion. “The governor would like the Obama administration to create a small loan pool.”   We agree on the problem – government regulation.  However, the answer is less government – not more.


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Stupak disses Obama's new health care plan

Posted by David N. Bass at 10:17 AM

Congressman Bart Stupak, a Michigan Democrat, released the following statement in response to Obama's new health care "compromise":

I was pleased to see that President Obama’s health care proposal did not include several of the sweetheart deals provided to select states in the Senate bill. Unfortunately, the President's proposal encompasses the Senate language allowing public funding of abortion. The Senate language is a significant departure from current law and is unacceptable. While the President has laid out a health care proposal that brings us closer to resolving our differences, there is still work to be done before Congress can pass comprehensive health care reform.

HT: Phil Klein at AmSpecBlog.

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Governors want more money

Posted by Joseph Coletti at 09:37 AM

North Carolina's is not the only state government grubbing for money to pay for everything it wants.

Recessions are bad for tax collections, but rainy day funds are supposed to ease the pain.

Why bother with fiscal responsibility when the president offers more funny money to bail out Medicaid?

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The Census and social engineering

Posted by George Leef at 09:31 AM

In this Freeman article Wendy McElroy shows how the Census has evolved from simple head-counting into a tool of social engineering.

Incidentally, one reason why unemployment rates have fallen slightly is the big hiring push for Census workers. Temporary, non-productive jobs with the federal government aren't a sign of economic vitality.

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Re: The promise of not-quite-as-slow rail

Posted by Jenna Ashley Robinson at 09:29 AM

If the trains were actually going to be "high-speed" (which they're not), I could see one major benefit to taking the train instead of a plane--no TSA!

However, given the still-low average speeds and Amtrak's terrible performance record, I doubt even the promise of TSA-free travel will lure people away from the airlines.

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Welcome to Orwell's 1984

Posted by Dr. Michael Sanera at 09:22 AM

Here comes the Census.  Wendy McElroy writing for the Freeman  online here spells out how the Constitutional requirement for a Census every 10 years has turned into a tool for social engerineering. 

Enumeration not only facilitated “a more finely tuned system of taxation and conscription” but allowed the state to intervene effectively throughout society. Although it is often viewed as a benign or annoying process, the census can be used as a powerful tool of social control and social engineering.

The United States government recognizes that power. It is currently engaged in an unprecedented push to count the people, citizen and noncitizen alike, living in the country. In preparation for the  2010 census, state employees even took GPS readings for every front door in America so that individuals can be located with computer accuracy.

It cannot happen here.  Well, it has!!

Starting in the nineteenth century statisticians urged the federal government to expand the type of data collected. Since then the census has been used more and more to facilitate government goals that far exceed apportionment. For example, both sides of the Civil War used the 1860 census to plan military strategy. When Union General William Tecumseh Sherman made his notorious “scorched earth” march through Georgia, he used census data to locate the farms he looted for provisions. During World War I the Justice Department used census data to locate males within a certain age-range who had not registered for the draft; during World War II the data were used to locate Japanese-Americans and target them for internment. More recently, the IRS has compared census data to privately purchased lists to detect tax evaders.

Local governments also scrutinize census data for their own purposes. In a Wall Street Journal column in 1989, “Honesty May Not Be Your Best Census Policy,” James Bovard explained that those responsible for building-code enforcement often used the data “to check compliance with zoning regulations” and to find violations such as “illegal two-family dwellings.

If I urge you to limit your response to the Constitutional requirement (names and ages of people in your household), I will be subject to a fine ranging from $100 to $5,000.  And I believe that would be money well spent.

For my personal story of resistance to the multi-page American Community Survey, see my Locker Room post here. 

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Tar Heel voters to Obamacrats: Take a hike

Posted by Rick Henderson at 09:07 AM

The health care component of the recent Mason-Dixon poll had to be a bowl of sad for the folks at the News & Observer who have so adamantly cheered for ObamaCare. 

Only 38 percent of respondents want Congress to take action on health care reform this year; 51 percent do not. Even worse for the backers of ObamaCare, a mere 27 percent believe "the health care system needs a major overhaul and all Americans should be guaranteed health insurance coverage." One-fifth think the status quo, with a little tweaking, is fine, while 40 percent want to see some changes to expand coverage and control costs.

Think about it: Roughly one-fourth of North Carolinians share the Obamacrats' vision of health care reform. Even so, the president and his allies are determined to cram their disastrous program down Americans' throats.

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What good was "the stimulus"?

Posted by George Leef at 08:44 AM

Harvard economics professor Robert Barro contends that it increased public expenditure by $600 billion while deterring $900 billion in private expenditure.

Read his Wall Street Journal article here.

I applaud Professor Barro for his calculations, but common sense tells you the same thing. Resources are limited. When government spends more, that means using more resources for things that appeal to politicians, leaving less for use by the private sector. Politicians have a well-known proclivity for spending on stuff that merely buys favor with special interest groups and creates short-term political benefits, whereas individuals and private organizations (for-profit and non-profit) stand to lose if they make wasteful, short-sighted decision. That difference in incentives explains why it must be the case that expanding the government means a lower standard of living than otherwise.

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The promise of not-quite-as-slow rail

Posted by John Hood at 08:04 AM

We’ve heaped plenty of scorn on proposals to squander billions of tax dollars setting up new intercity passenger rail trains across North Carolina and beyond. But, you know, you can never heap too much scorn on such an idiotic recommendation, so here’s someone else making the obvious point, in a Christian Science Monitor piece on the Obama administration’s rail fantasies: 

"To believe this makes economic sense, you'd have to be foolish," says James Moore, director of the transportation and engineering program at the University of Southern California in Los Angeles. "In the US, autos cover shorter trips better and airlines capture longer trips. That doesn't leave room for high-speed rail to compete."

Michael Sanera nailed it a while back in a interview:

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Michael Barone asks whether Obama's health plan is serious

Posted by Mitch Kokai at 08:03 AM

His latest analysis for The Washington Examiner suggest that he doesn't buy it.

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Reining in the regulators

Posted by Mitch Kokai at 07:05 AM

Daren Bakst sees the need for North Carolina state government to adopt seven basic reforms of its regulatory process. You'll learn details here.

Click play below for highlights.

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An inhospitable business climate? Da.

Posted by Mitch Kokai at 06:39 AM

You might remember a 2009 Shaftesbury Society presentation from UNC-Chapel Hill historian Peter Coclanis, in which he oulined Russia’s debilitating demographic crisis.

In the Carolina Journal Radio interview associated with that presentation, Coclanis explained a key factor in that demographic decline:

Yeah, Russia’s policies are not conducive, really, to people making informed decisions to bring more children into this world. Some people have claimed that the democracy deficit and the unstable and destabilized political and social environment raises too many opportunity costs, as economists say, to make a decision to “invest” in having a child, or certainly two children. There’s just too much possibility for something going wrong, for the investment not to pay off, for the property rights that you are trying to invest, in a sense, in your child, to really have a chance to recoup that investment over time.

Armed with that knowledge, you won’t be surprised to read a Business Week article headlined “Deadly Business in Moscow”:

Now [Jamison] Firestone, a former board member of the American Chamber of Commerce in Russia, has fled for London, fearing that he, too, could end up in jail. "Police [in Russia] have to stop being the Mafia," he says. "These people are stealing the country."

… In interviews with Bloomberg News, … Firestone for the first time is alleging government-sponsored fraud aimed at him personally. His account underscores the arm-twisting and lawlessness that can afflict outsiders doing business in Russia. As widely reported, oil giants British Petroleum and Royal Dutch Shell have suffered politically backed attempts to wrest control of aspects of their Russian operations. The French carmaker Renault likewise has come under government pressure to assist a Russian manufacturer in which it had invested.

The risk of being targeted for abuse by government officials—sometimes operating in league with Russian businesses—is a central reason the country has attracted less than one-fifth the foreign investment in China and Brazil and half of what's invested in India, according to three years of data compiled by fund tracker EPFR Global.

No wonder few people are clamoring to live, work, or invest in Russia.

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New Carolina Journal Online features

Posted by Mitch Kokai at 06:31 AM

The latest Carolina Journal Online exclusive features Jim Stegall's report about the criticism state education bureaucrats generated when they proposed gutting pre-1877 American history from the public school curriculum. 

John Hood's Daily Journal says North Carolina's prison overcrowding issue provides an opportunity for true bipartisan cooperation.

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