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RI Senate PawSox Memo Shows the Constitutional Scam

Read this part of Ted Nesi’s summary of a legal opinion from the Rhode Island Senate on the possibility of a public referendum on the PawSox and then let it sit in:

In a memo to Senate President Dominick Ruggerio dated Tuesday and obtained by Eyewitness News, Ruggerio’s chief legal counsel Richard Sahagian cited case law dating back to 1937 that he said reinforces a provision in the state constitution saying only the General Assembly has “the power to make and declare laws.”

“As in Rhode Island, courts across the country have also found that the power to make and declare laws is vested exclusively in the legislative body subject to those powers explicitly reserved to the people in each state’s constitution,” Sahagian wrote.

“The Rhode Island Constitution explicitly enumerates which measures must go on the ballot for voter approval. This is not one of those instances,” he continued. “As a result of the above analysis, the legislature cannot delegate this power by referring the matter to the voters for their approval.”

Since we’re talking about the Rhode Island Constitution, here’s Section 16 of Article VI, which is the article granting the General Assembly any power at all:

The general assembly shall have no powers, without the express consent of the people, to incur state debts to an amount exceeding fifty thousand dollars, except in time of war, or in case of insurrection or invasion; nor shall it in any case, without such consent, pledge the faith of the state for the payment of the obligations of others. This section shall not beconstrued to refer to any money that may be deposited with the state by the government of the United States

The General Assembly gets around this limitation of its power by creating so-called quasi-public agencies that technically are separate legal entities and then promising that they’ll pay the debt of these agencies year to year, which technically doesn’t “pledge the full faith and credit” of the state.  The end result is that investors get a higher rate of return because there’s technically a risk that the state won’t pay, even as the government has every incentive to treat the debt as fully binding because otherwise the scam would fall apart because investors won’t believe the winks and nods that the politicians are giving.

But think about how brazen the Senate’s legal opinion is, here.  The politicians are trying to put together a deal that creates one of these phony “moral obligations” to cover debt for a building project (that helps the Senate President’s labor union), even though the Constitution requires voter approval, and the legislators lawyers (whose salaries the people pay) are claiming that the people can’t have a say because our Constitution gives the legislature power to make law.

How about this:  Give the people a vote to express their opinion, and then lawmakers will follow that vote, even if technically they aren’t bound by it. Better yet, do nothing until Rhode Islanders wise up and vote you all out of office.

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Our Decline Is Now Our Choice

The frustrating thing about assessments like this from Joel Kotkin is that Rhode Island’s decline is entirely its own decision:

Today, the often-disdained red states have the wind at their back, while in blue America, the economy seems to be slowing, as industries and people move to lower-cost, lower-regulation states. Seven of the top 10 states in terms of population growth last year were deep red; overall, the South has become home to the better part of economic dynamism in the country, with Texas and Florida alone accounting for one-third of all U.S. growth since 2010. Some analysts suggest that the new tax law, which works against high-income earners in high-tax states, will accelerate these trends further.

We could easily construct our economic policy — mainly taxes and regulations — in a way that would make Rhode Island the beacon of the North.  Just give people a place in which to conduct their lives and their business, and they’ll come here to do it.

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The IRS Strives to Be Above the Law

A deeper question that arises from John Vecchione and James Valvo’s recent op-ed in the Wall Street Journal is whether the creation of an income tax makes this sort of corruption inevitable:

Congress has passed several laws, including the Regulatory Flexibility Act and the Congressional Review Act, that require agencies to report on their rules’ economic impact to lawmakers and the public. The president also conducts oversight of agency rules through the White House Office of Information and Regulatory Affairs. These good-government measures are meant to ensure unelected bureaucrats can be checked by the public.

Crucially, they are all triggered by an initial determination by the agency of whether its new rule will have a “significant economic impact.” But as our report shows, the IRS has made up a series of exemptions that allow it to avoid basic scrutiny. The agency takes the position that its rules have no economic effect because any impact is attributable to the underlying law that authorized the rule, not the agency’s decision to issue or alter the rule.

A healthy understanding of government process proves this reasoning to be circular:  Agencies aren’t supposed to make rules that aren’t authorized by statute, so every effect of every rule could be said to originate with legislators.  A rule with effects that are not attributable to the enabling legislation is a rule that should not be implemented in the first place.

In authorizing an income tax, however, the government created an agency capable of entering into our lives and manipulating, even dictating, our use of our own resources.  Every rule of such an agency will affect the economy, and therefore every rule ought to trigger a review.

When we’ve discussed tax changes purely from the perspective of revenue and economic effect, I’ve argued that Rhode Island’s circumstances suggest that the state would be better off keeping the income tax and eliminating the sales tax.  From a philosophical point of view, however, it’s hard to argue that a free people can really tolerate an income tax — at least one that isn’t more like a sales tax on labor, meaning simple, flat, and easy to calculate.

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The Hysterics of the Freedom Raters

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How Accountability Works in Government

Former WPRI employee Stephanie Chalfant describes the accountability faced by the Hawaii Emergency Management Agency who inadvertently put an entire city into panic by hitting the “incoming missile” button rather than the “this is a test button”… twice:

The employee who hit the button has since been reassigned, according to state officials.

“I’m sure he feels horrible,” Chalfant added. “I can’t even imagine being in this person’s shoes who had done this. He must feel awful.”

Well, as long as he feels bad, then the public can rest assured that these sorts of mistakes — with the very real potential to put people in harm’s way — will not happen again.  (That’s sarcasm, by the way.)

In the private sector, the consequences to an ordinary employee — somebody who isn’t connected or mission critical — would almost certainly be much more substantial, not the least because the entire company could go out of business.

Once again, the impression is that they (government workers) don’t work for us.  We’re just lucky that they deign to provide us services.

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Can the Right Push Back?

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If the Process Is Open, Why Are They on a Side?

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Real Diversity Needed on Licensing Boards

According to Heidi Hall, of Vanderbilt University, states are facing increased risk of lawsuits following a Supreme Court case, North Carolina State Board of Dental Examiners v. Federal Trade Commission:

Allensworth compiled a list of 1,790 state boards. Eighty-five percent of the boards have rules that result in most of the board members selected to serve being active in the same profession the board regulates.

“The dark side of occupational licensing – its tendency to raise prices to consumers with dubious effects on service quality, its enormous payout to licensees and its ability to shut many willing workers out of the workforce – has begun to receive significant attention,” Allensworth said.

Basically, if licensing boards consist overwhelmingly of members from within the profession, they’ll be subject to lawsuit based on their self-interest in controlling the flow of competition.  In the case of the North Carolina dentists, six of the eight members were required to be dentists, themselves.  Rhode Island’s Board of Barbering and Hairdressing, for another example, requires six of the seven members to be barbers or hairdressers.  That leaves only one vote on the board with no immediate financial interest and, therefore, no incentive to make the rules challenging for potential competition.

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Licensing as Legalized Racketeering

Writing in the American Spectator, Jon Cassidy likens government’s occupational licensing regimes to racketeering:

Racketeering is a multifarious concept, but when the word was coined in 1927 by the Employers Association of Chicago, it referred specifically to tradesmen who had banded together to artificially drive up the cost of their services. The employers group wanted the authorities to crack down on crooked laundry and building trades, among others, but in the long run, the trades won by subverting and perverting the power of the government. It’s easy enough to picture the old noir films with cops on the take, doing the mob’s bidding, but this corruption was of a less glamorous, more insidious sort.

That lead-up reminds me of my response when people attempt to quantify government corruption in order to claim that Rhode Island isn’t that much of an outlier.  The problem is that we’ve essentially made corruption legal, and with deteriorated social norms around inside dealing, the word “corruption” is useless if it must involve something illegal.

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