The Locker Room

June 7, 2010

Incentives paid and promised

Posted by Joseph Coletti at 4:08 PM

Lee Weisbecker further details the pointless tax credit for small business hiring in the House budget proposal. Almost as bad as the premise of the bill, that a $1,000 tax credit would make a company hire a new worker for at least three years, is John Quinterno's claim in the article that the money would be better spent on government jobs.

That tax credit would cost almost as much as the $38.8 million the state is not paying 12 companies under the Job Development Investment Grant (JDIG) program. The companies were promised cash payments for creating 3,552 jobs that have not materialized. Gov. Perdue and state lawmakers like JDIG so much, last summer they gave the program another six years to work its magic.

Nobody should interpret this saving as a sign that performance-based corporate welfare works. Instead it demonstrates four things and leads to a question

  1. Businesses make location and hiring decisions for business reasons
  2. Grants and tax credits generally do not change those reasons
  3. Governors, bureaucrats, and legislators make bad bets with taxpayers' money

  4. Actual performance does not matter when they make bets

Q: Will anyone at the Commerce Department lose his job because these companies did not meet expectations?

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Re: Cooper OK with suing Fred Phelps; not OK with suing Obama

Posted by Jeff A. Taylor at 3:03 PM

Yay -- another grandstanding pol who does not care about the difference between public and private action.

We have ways of dealing with the Fred Phelps spew without government jumping in. Happened the other week at the Ronnie James Dio memorial in LA -- the Phelps clan saw a good photo op protest chance, a couple thousand metalheads and the private-security of the memorial gardens begged to differ. Guess who won?

Not so with the federal government telling me to buy this policy or pay that fine. All the metalheads in the world won't help, although they might be about the only solace left in this crazy world.

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Restoring the U.S. Constitution to its proper place in American government

Posted by Mitch Kokai at 2:43 PM

Presidents used to veto legislation that exceeded the limits set for the federal government.

But as Michael Sanera explained today to the John Locke Foundation's Shaftesbury Society, no modern-day president would be able to escape political suicide if he rejected targeted aid packages or other legislation that clearly violates constitutional restrictions.

Sanera discussed the reasons for the change in the political climate, and — in the video clip below — discusses methods for reversing the change.

Click play below to watch the full 57:13 presentation.

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

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Is getting a college degree worth the cost?

Posted by George Leef at 1:58 PM

The conventional wisdom that going to college is good for everyone has been under heavy fire for several years. In this Gaston Gazette piece we find that notion criticized by leftist writer Anya Kamanetz. She points out that large numbers of young people who enter college don't graduate and points to lack of academic interest and preparation as a main reason.

The story tries for "balance" by quoting NC State economics professor Mike Walden, who says that college is still "worth it." The trouble is that neither students nor college programs are the same. For some students, the learning that college fosters is very valuable. For many others, however, there is little learning and little lasting benefit aside from the possession of a piece of paper saying that he met the degree requirements. In a market glutted with people having college credentials, that isn't of much value.

The fact that's missing from this article is that large numbers of college graduates are employed (if they're employed at all) in jobs that don't call for any academic preparation -- jobs like airline flight attendant, aerobics instructor, theater usher and so on. They don't get paid a premium just for having a diploma on the wall.

A college degree is rather like investing in a house. For some people it's a good idea, but for others, it's foolish.

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NYT: All the News That Was Fit to Print 10 Months Ago

Posted by Rick Henderson at 11:22 AM

New York Times political reporter Jeff Zeleny discovers that Democrats in Congress, in an attempt to not deal with angry constituents, are avoiding town hall meetings or any unscripted public gatherings that are outside the cozy confines of a union hall.

If this story sounds somewhat familiar, it's because you may have read it last summer. At Carolina Journal Online.

Zeleny's story is worth a read, if for no other reason, to learn that some Democrats who did meet with their bosses last summer are finding better things to do this year.

Still, that story might have been a bit more cutting-edge when we first spotted the trend of widespread avoidance of interaction with the public about 10 months ago.

As a friend once said, there's a difference between a newspaper ... and an oldspaper.

Linkable Entry

Cooper OK with suing Fred Phelps; not OK with suing Obama

Posted by Rick Henderson at 11:08 AM

The News & Observer reports that Attorney General Roy Cooper will join AGs in 47 other states and the District of Columbia in a lawsuit against Westboro Baptist Church and its execrable founder, Fred Phelps.

The lawsuit seeks to prevent Phelps and his church, whose membership the N&O notes largely consists of his family members, from picketing military funerals. The Phelps gang's protests claim that the deaths of U.S. soldiers represent divine punishment for America's "sinful ways." (Presumably, God means to punish us because our laws frown on the stoning to death of homosexuals and adulterers and fornicators and abortion providers.)

Phelps and his ilk are reprehensible and deserve every form of private condemnation imaginable. But they also are protected by the First Amendment.

Cooper has no business getting involved in a lawsuit advocating censorship.

But if the AG has time to join in multistate lawsuits, he would be better served defending individual rights by, say, joining the dozen-plus states challenging the constitutionality of ObamaCare.

Linkable Entry

Latest dispatches from the campaign trail

Posted by David N. Bass at 09:25 AM

  • The N.C. Free Enterprise Foundation analyzes the election hurdles that appointed incumbents face in '10.

  • The Obama administration is gearing up up for the midterm elections in N.C.

  • In a replay of last summer, Chowan residents toast U.S. Rep. G.K. Butterfield, D-1st, about the new health care law.

  • Rasmussen: 58 percent favor repeal of health care law, 48 percent strongly so.

  • After endorsing him in the primary, the Winston-Salem Journal remains firm in its endorsement of Cal Cunningham in the June 22 runoff.

  • Bill Randall, Bernie Reeves are trading barbs in a tough-fought runoff to see who will take on the 13th Congressional District’s Brad Miller this November.

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Re: It's a trap

Posted by Dr. Terry Stoops at 08:32 AM

A bit of Monday merriment:

When the Ole Miss administration voted to chuck Colonel Reb as the school’s official mascot in 2003, chances are they didn’t have Admiral Ackbar in mind as a replacement.

However, it appears that long after concluding his illustrious military career in Star Wars‘ Rebel Alliance, Ackbar is indeed in the running to be the school’s new sporting symbol.


And why shouldn’t he be? From his command deck on Home One, Ackbar deftly orchestrated one of the greatest military upsets in the history of the Far Away Galaxy. (Mind you, people often forget this salient point since it was, you know, a long, long time ago.)
Supporters observe, "Who wants a Colonel when you could have an Admiral?"

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It's a trap

Posted by Joseph Coletti at 07:50 AM

Even if Republicans are successful this fall and win their elections, Art Laffer argues, a la Admiral Ackbar, that the economy is a trap.

Tax rates have been and will be raised on income earned from off-shore investments. Payroll taxes are already scheduled to rise in 2013 and the Alternative Minimum Tax (AMT) will be digging deeper and deeper into middle-income taxpayers. And there's always the celebrated tax increase on Cadillac health care plans. State and local tax rates are also going up in 2011 as they did in 2010. Tax rate increases next year are everywhere.

Now, if people know tax rates will be higher next year than they are this year, what will those people do this year? They will shift production and income out of next year into this year to the extent possible. As a result, income this year has already been inflated above where it otherwise should be and next year, 2011, income will be lower than it otherwise should be.

Also, the prospect of rising prices, higher interest rates and more regulations next year will further entice demand and supply to be shifted from 2011 into 2010. In my view, this shift of income and demand is a major reason that the economy in 2010 has appeared as strong as it has. When we pass the tax boundary of Jan. 1, 2011, my best guess is that the train goes off the tracks and we get our worst nightmare of a severe "double dip" recession.

This might be one reason why the NC House passed a budget with a $488 million hole in it.

Linkable Entry

Halifax schools' results mixed after state intervention

Posted by Dr. Terry Stoops at 07:45 AM

It is too early to tell whether state intervention succeeded or failed to raise student achievement in struggling Halifax County. According to a News & Observer story, "Scores increased at one of the district's high schools, moving from about 28 percent to about 34 percent passing. But at the other high school, Northwest, the numbers barely budged."

A six percent point jump may appear to be good sign, but remember that the cause of the increase is unknown. Perhaps test scores would have increased even more without intervention from the state. It is impossible to know for sure.

Quick Facts:

- At $10,667 per student, Halifax County has the 17th highest per pupil expenditure in North Carolina. Halifax's per pupil expenditure is $2,000 higher than the state average.

- Average class sizes in grades K-8 range from 18 to 21 students. High school math, science, English, and social studies classes have, on average, 13 to 21 students. Most class size averages are two or three students above/below the state average.

- The percentage of elementary, middle, and high school teachers in Halifax County with 10+ years of experience meets or exceeds the state average.

- Elementary, middle, and high school principles in Halifax County have more experience (29 percent have 10+ years of experience) than the average public school principle (16 percent have 10+ years of experience).

Linkable Entry

Protecting employment agencies?

Posted by Mitch Kokai at 06:47 AM

If you’ve followed this year’s state budget debate, you’ve likely heard the Democrats who run the General Assembly talking about protecting teachers’ jobs.

That line of thinking came to mind when I read the following in a TIME article about the challenges in the Kansas City public school system:

[Superintendent John] Covington, a former principal and teacher, hit town a year ago with the task of figuring out how to cut $50 million in spending and avoid bankruptcy. Within days he put teachers, principals and the bloated administration on notice. "We're not an employment agency. We are a school district," he says.

While North Carolina’s public education challenges differ in some respects from those in the shrinking Kansas City system, the idea of avoiding an “employment agency” mentality seems like a good one.

Linkable Entry

A convenient omission

Posted by Mitch Kokai at 06:45 AM

In making their case for new government regulations designed to fight global warming, TIME guest columnists William Antholis and Strobe Talbott tell us:
On May 12, senators John Kerry and Joe Lieberman introduced the American Power Act. The proposed law — crafted with the help of Republican Senator Lindsey Graham — brought together a number of elements proposed by environmental groups and businesses to set the country on a new, clean-energy path.

Conveniently absent from that passage — and the rest of the article, for that matter — is the fact that Graham backed away from the Kerry-Lieberman bill. This fact is no minor point; Graham’s decision removes any hint of Republican support for the measure.

There are, of course, other interesting omissions. Climategate, anyone? Global cooling?

Linkable Entry

Why would Duke Energy's CEO push for carbon caps?

Posted by Mitch Kokai at 06:44 AM

The latest Bloomberg Business Week features a report on Duke CEO Jim Rogers’ advocacy of federal restrictions on carbon dioxide emissions.

Those shocked to learn that a power company executive would take this stand haven’t read Roy Cordato’s analysis of the issue:

According to Steve Milloy's Junk, one of the reasons Duke lists for its revenue decline in the third quarter of '09 is "unfavorable weather," i.e. a cool summer. Oddly enough, Duke's CEO Jim Rogers is himself a cooling denier who has been advocating new energy taxes to combat the non-existent warming. As Milloy points out, "Duke has spent about $10 million since 2008 lobbying for carbon caps. That’s a lot of lost earnings...spent working against the interests of Duke shareholders and customers"-- to say nothing of chasing phantoms.

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Public-sector unions and government growth

Posted by Mitch Kokai at 06:42 AM

Unlike the online version of a new Bloomberg Business Week article on Jerry Brown’s efforts to return to the California governor’s mansion, the print version supplements its headline with the following:
To cut the deficit, Brown may need to stand up to state unions

Why might that be difficult for the man once dubbed “Governor Moonbeam”? Look who’s working hardest to get him elected:

The state's labor unions are worried enough about a potential [Republican Meg] Whitman victory that they're forming independent committees to raise funds and run Whitman attack ads.

One, the California Working Families 2010 committee, is sponsored in part by the Service Employees International Union, the California Professional Firefighters, and Los Angeles investor Ron Burkle. It hopes to spend at least $30 million to portray Whitman as a heartless job slasher with Wall Street ties who'll give tax breaks to rich friends.

Recent California political history leaves little room for optimism that public-sector unions can be thwarted.

Linkable Entry

New Carolina Journal Online features

Posted by Mitch Kokai at 06:27 AM

The latest Carolina Journal Online exclusive features Anthony Greco's report on the $488 million question mark associated with the N.C. House budget plan. 

John Hood's Daily Journal highlights some valuable new information in the quest for better public education.

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