The Locker Room

July 30, 2010

Board responsibility

Posted by Joseph Coletti at 3:32 PM

Amid all of the problems that have come to light regarding the Mental Health Association - unpaid taxes, temporarily unpaid wages, questionably high payments to executives and consultants, and now a loss of accreditation, one of the most troubling comments was from John S. McKee III, chairman of MHA's board. McKee told the News and Observer, "I'm on the board because I'm a friend of John [Tote]'s. That's how all of us got on there." John Tote is the former executive director of MHA. Days after Tote was tapped to take over the state's mental health system, news stories revealed that MHA owed the IRS $1.5 million.

An active board would have and should have known. This is actually an argument for more privatization of the mental health system, given the General Assembly's record of oversight is even worse than the MHA board's.

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The importance of economic freedom

Posted by Mitch Kokai at 3:28 PM

The late free-market economist Milton Friedman would have turned 98 Saturday. To mark his birthday, the John Locke Foundation and Foundation for Educational Choice sponsored a Friedman Legacy for Freedom Day presentation on "The Importance of Economic Freedom."

Economist Edward Stringham of Fayetteville State University delivered the featured remarks. He recaps his main points in the video clip below.

Click play below to watch the full 56:01 presentation.

You'll find other John Locke Foundation video presentations here.

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Lawyers practicing extortion

Posted by George Leef at 2:04 PM

Cato's Walter Olson discusses this ugly phenomenon in this Cato@Liberty post. The main case he cites, a Ninth Circuit decision finding a violation of the Americans with Disabilities Act because a wheelchair-bound individual (with, incidentally, a history of serving as a plaintiff in similarly cases) said he was not able to see his burrito being made at a Chipotle restaurant. Flabbergasting.

In any society, there are people who produce value and others who prefer to live by taking away from those who produce. The law is supposed to be against the latter, but sadly American law often helps the takers and hurts the makers.

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Subsidizing college

Posted by Joseph Coletti at 1:49 PM

Katherine Mangu-Ward reminds us that the problem isn't for-profit universities, the problem is government subsidies for higher education everywhere.

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Re: moving goalposts

Posted by Joseph Coletti at 09:40 AM

In an earlier post on health care, I included some words and a graph from Jonathan Chait. It distracted from the rest of the discussion and it lost its impact, too. So here it is on its own with some additional commentary.

Jonathan Chait got in on the act, too, but extended the delusion to include the stimulus

First of all, the stimulus is temporary. And the spending surge is scheduled to largely recede:

I realize that conservatives believe that the stimulus will "really" be a permanent addition to the spending baseline. I have yet to see this explanation account for the mechanics of how Congress will add the stimulus to the regular budget, especially with the constraints of pay-as-you-go financing. It's simply a variant of free-floating quasi-paranoid anti-government animus.

Actually, in North Carolina, it is the big government supporters who act as though they believe the stimulus will be permanent. How else can we explain a budget that spends $1.6 billion in stimulus money on continuing obligations?

The thing to pay attention to in Chait's graph is not the bump in spending, but its after-effects. Through 2008, federal spending was no more than 20% of GDP. In 2000 and 2001, spending was closer to 18% of GDP. We are now in the middle of three years with federal spending taking a quarter of GDP. When this gets back to "normal," federal spending only falls back to about 23% of GDP. The problem with this is that federal tax revenues have never exceeded 20% of GDP. So the new normal at the federal level means annual deficits equal to 15% of federal spending every year.

And Jonathan Chait thinks that's good news.

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A tribute to Theo Albrecht

Posted by Dr. Terry Stoops at 09:26 AM

A sad report from the Associated Press,

Theo Albrecht, the secretive co-founder of Germany's worldwide discount supermarket chain Aldi, a co-owner of Trader Joe's in the United States and one of Europe's richest men, has died at age 88.


Aldi carries a limited selection of fastest-selling, nonperishable consumer items, a strategy that allowed them to increase order volume, cut handling costs and waste, and buy their goods cheap — savings passed on to the consumer.

Aldi now has more than 4,000 outlets in Germany alone, where it is known for its no-frills shopping environment, streamlined processes and a limited range of discount products.
Theo and his brother Karl created stores that allowed low and middle income families to purchase food (or a quantity/variety of food) that they, otherwise, would have been unable to afford. Without a doubt, Theo was a great entrepreneur. But it is just as appropriate to call him a great humanitarian.

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Latest dispatches from the campaign trail

Posted by David N. Bass at 09:16 AM

  • Rasmussen: A plurality of voters say repealing the health care law would be good for the economy.

  • An N.C. Free Enterprise Foundation analysis finds that Democratic candidates running for the state House hold a decisive fundraising lead over Republicans, unlike in the Senate.

  • Jeff Miller, Heath Shuler’s Republican opponent in the 11th Congressional District, disputes poll questions.

  • About 800 Democrats are expected in Fayetteville this Saturday for the party’s state convention.

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Old Hickory didn't like GSEs

Posted by George Leef at 08:57 AM

About a week ago, Alex Pollock of AEI wrote a good piece for the Wall Street Journal on Andrew Jackson's decision to veto the bill to reauthorize the Second Bank of the United States. That piece drew a snippy letter from someone who said that getting rid of the Bank caused the long depression beginning in 1837 and suggesting that getting rid of Fannie Mae and Freddie Mac today would be a similar exercise in free market fundamentalism.

Pollock replies here;

Andrew Jackson and The GSEs: Round Two

When I wrote "Fan and Fred: What Would Andrew Jackson Do?" (op-ed, July 23), I thought somebody would probably bring up the theory that Jackson's famous veto caused the financial and economic bust of the late 1830s to the early 1840s , and Chris Daly did (Letters, July 27). That bust followed a real estate and debt-financed, canal-building boom which came to the inevitable end of all such over-optimistic credit expansions, interestingly including the default on their debt by several U.S. states.

None of this, in my opinion, at all touches Jackson's keen insights into the natural shortcomings of GSEs.

Alex J. Pollock

American Enterprise Institute


Pollock is right. The monetary and credit expansion made possible by the Bank was responsible for the crash in 1837, not the decision to put an end to our first Government Sponsored Enterprise. What people like the letter writer don't understand is that the causes of recessions and depressions are always found in preceding government economic meddling. Just as hangovers don't just happen but are the predictable result of behaviors, so too with recessions.

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York dissects a GOP primary that could have an impact this year

Posted by Mitch Kokai at 08:50 AM

While most upcoming elections are designed to help set government's course in 2011, Washington Examiner chief political correspondent Byron York addresses today a race that could have a more immediate impact: the race to replace Joe Biden in the U.S. Senate.

The winner will take office immediately after the Nov. 2 election to fill the last four years of Biden's unexpired term. Republicans vying for the seat offer very different alternatives:

[Christine] O'Donnell is running for the Republican nomination against GOP moderate Rep. Mike Castle. If Castle wins the Sept. 14 party primary, she argues, he could go on to win the general election and start voting with Democrats right away.

"Republicans have to decide, who do they want serving in that lame duck session?" O'Donnell asks. "Do they want Mike Castle, who voted for cap and trade, voted for TARP, voted for cash for clunkers, or do they want a true constitutionalist?"

There's no doubt Castle is among the most liberal Republicans on Capitol Hill. In 2008, he received a rating of 28 (out of 100) from the American Conservative Union, while receiving a rating of 65 from the liberal Americans for Democratic Action. Most recently, he co-authored the DISCLOSE Act, which nearly all Republicans opposed.

O'Donnell is running on a solidly conservative platform, much like she did in 2008, when she challenged Biden and won just 35 percent of the vote. Now, her biggest job is convincing people that this race -- a primary open only to Republicans -- is one she can win.

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This weekend on Carolina Journal Radio

Posted by Mitch Kokai at 07:05 AM

Does it make sense to devote federal stimulus money to highway signs that promote stimulus spending? Rick Henderson explores that topic in the next edition of Carolina Journal Radio.

Michael Sanera joins us to discuss a constitutional workshop he and Troy Kickler will present Aug. 7 in Raleigh.

Plus we’ll examine the new DNA collection law from several angles. You’ll hear Gov. Beverly Perdue and Attorney General Roy Cooper explain why they supported it. You’ll also hear Daren Bakst and the ACLU’s Sarah Preston point out problems associated with a law requiring law enforcement agencies to collect DNA samples from any person arrested on certain felony charges. Plus we’ll feature highlights from the contentious N.C. House debate on the measure.

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New Carolina Journal Online features

Posted by Mitch Kokai at 07:04 AM

This week's Carolina Journal Online Friday interview features Donna Martinez's conversation with Daren Bakst about the problems associated with taxpayer financing of election campaigns.

Roy Cordato's guest Daily Journal refers to President Obama's anti-recessionary measures as "George Bush on steroids."

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