Economy RSS feed for this section
justin-katz-avatar-smiling

Another Indication of Job Stagnation

As I’ve been noting in my monthly employment posts (most recent here), apart from an uptick in recent months, employment growth has been almost non-existent in Rhode Island for the past year, and jobs based in Rhode Island have been increasing at a glacial pace, if at all.  Ted Nesi points to a related indication of an unhealthy job market in the Ocean State:

The Pew Charitable Trusts said the employment rate for Rhode Islanders ages 25 to 54 has fallen from 83% in 2007 to 78% in 2016, a statistically significant drop of 5 percentage points. While that’s an improvement from the low of 75% reached in mid-2012, the positive trend has reversed this year after a period of rising employment.

The strategy that our governor and legislature are pursuing is one of giving direct incentives to selected companies while spending taxpayer resources to change the character and skills of our people to match what an even narrower group of employers say they want in employees.  That strategy may produce some helpful PR hooks with a nice story in the newspaper from time to time (although it may also produce stories of incompetence and scandal).

It’ll be less likely, though, to move the overall numbers significantly, inasmuch as it simply shuffles Rhode Islanders’ efforts and resources from what we’d do with them on our own to what a domineering government prefers.

justin-katz-avatar-smiling

Markets Judging Central Plan, Not Economy; Fed Stuck

I wonder if analysts of the future will look to our era and find one of the most telling dynamics to be that the investment markets don’t seem to be reacting positively or negatively to good or bad economic news in the way one would expect.  Instead of making decisions based on the likelihood that the economy will expand, investors seem most intent on watching the Federal Reserve and federal government for signs that the forced inflation of their assets will come to an end.

Even those who aren’t directly tapped into the government-corporate money flow take comfort in the idea that smart people with access to data and power can ensure that the economy hums along… sometimes slowing, sometimes bucking, but going forward as smoothly as reality will allow.  As comforting as it may be, that’s a fool’s belief.  Ultimately, the economy depends on your actions and mine and those of your neighbors and those of people around the world whom you will never even know exist.  People who could accurately predict the course of all of those decisions wouldn’t be government functionaries or even central bankers. They’d be quadrillionaires.

Take a moment to ponder this Washington Post article, as it appeared in the Providence Journal:

Two years ago, top officials at the Federal Reserve mapped out a strategy for withdrawing the central bank’s unprecedented support for the American economy.  

The official communiqué was titled “Policy Normalization Principles and Plans,” and it was supposed to serve as a rough outline for the tenure of newly installed Fed Chair Janet L. Yellen. Essentially, it consisted of two basic parts: Raise interest rates and shrink the central bank’s massive balance sheet.  

But now, both of those steps are being called into question as Fed officials grapple with an economy that appears to be stuck in first gear. Instead of executing its exit strategy, the Fed is confronting the possibility that the dramatic measures it took to safeguard the recovery will remain in place indefinitely.

When your plan consists entirely of backstopping and saturating the fortunes of financially powerful interests, you shouldn’t be surprised when those interests use their leverage to make it extremely difficult to turn off the spigot.  Once such a policy has been implemented, in the absence of a courageous will that central planners inevitably lack, it cannot be stopped, and it will not be stopped until the whole scheme collapses.

That collapse will take a huge amount of the wealth from these powerful interests, but it will most hurt everybody else, living much closer to the margin of survival.  Then, those in government and central banks will have another opportunity to decide whether to allow us to work out the economy’s problems through our individual decisions or to protect their wealthy friends again, as after the last crash.

I know which way I’ll continue to bet until America decides to decrease the power of the federal government and cut the strings that are pulling us toward central plans.

justin-katz-avatar-smiling

In Rhode Island, Nothing’s Certain but Death and Taxes

Well, the policies of the State of Rhode Island aren’t getting you to shop, earn, or do business as much as the government expected, but at least you’re dying!

According to an Office of Revenue Analysis report, sales and use taxes came in 0.9% lower than expected, personal income taxes came in 0.6% short, and business corporations taxes missed their estimate by a whopping 12.1%.  That’s $35 million you didn’t produce for your lords in Providence.

The good news is that you’re drinking, dying, and letting the state keep your unclaimed property more than expected, which more than made up the difference ($47 million).  But if that doesn’t sound like a healthy or sustainable way for a government to pay its bills, well, it isn’t.

Comparing the 2016 fiscal year to the year before, of the three sources of tax revenue that would indicate real economic health, only the sales tax went up.  (Patrick Anderson has the income tax wrong in today’s Providence Journal.)  Income taxes were down $10 million (0.8%); business corporation taxes were down $13 million (8.8%); and sales and use taxes were up only $8 million (0.9%).  The net change of all three was a decrease of $15 million.

If it weren’t for dying Rhode Islanders, the state government would have seen its revenue go down from one year to the next, and more than analysts had expected.  That doesn’t bode well for the deficits that the state estimates growing into the future.  The Providence Journal headline, “Rhode Island ends fiscal year with more money than expected,” does us a civic disservice.  We need to acknowledge that the current strategy of our state is not working so that we can change it.

justin-katz-avatar-smiling

“Customers” and the Government Business Model

Somehow, it always seems erroneous for articles discussing government services to use the term “customers” for the recipients.  Granted, the line has blurred, so as a purely semantic matter, it’s probably correct when it comes to HealthSource RI, as in Katherine Gregg’s article in today’s Providence Journal.  Subsidized or not, Rhode Islanders use to Web site to exchange money for a product.  Still, if we’re going to talk about government as if it were a business, we have to be very particular in acknowledging its business model.

That need came to mind the other day, when Mark Reynolds wrote in the same paper about the “success” of the Rhode Island Department of Transportation’s (RIDOT’s) Newport-Providence ferry service.  Consider:

The service’s operating costs were 100-percent federally funded. The service spent $500,000 in transit funds that are earmarked for specific types of projects such as the ferry service.

Thanks to this subsidization, a one-way ticket on the ferry was $10, or $5 for children, seniors, and the disabled.  Contrast that with a $25.50 fee for ferrying from Newport to Block Island, or $13.00 for children.  Granted, the rides are a bit different, but divided up evenly among the 33,221 passenger trips that RIDOT’s ferry made, the federal subsidy of $500,000 counts as $15 per ticket — more than doubling the adult price and quadrupling the lower-priced tickets.

How can we possibly characterize the ferry’s experience as a “success” without noting this fact?  Any given business might have a successful season if it offered every customer a 60-75% discount on every purchase, but it would only be a success to the extent the objective is to give stuff away.  In government’s case, of course, what it’s giving away is other people’s money.

mike-stenhouse-avatar

The 2016 Rhode Island General Assembly Freedom Index

It is a result of the failed status quo of increased government intervention in our personal and business lives that the Ocean State ranks so poorly on so many national indexes. It is not acceptable that we rank 50th with the worst business climate in the nation, 48th on the national Family Prosperity Index, and 47th on the Center’s Jobs & Opportunity Index. It is up to voters to review all the data, and decide whether or not to hold lawmakers accountable for their voting records this November. This trend is exemplified by continued deeply negative overall General Assembly scores on our 2016 Freedom Index.

Loaded with information that will be useful to voters this fall, the Freedom Index is part of our larger transparency initiative. The index examines legislators’ votes in terms of their likely effect on the freedom in the Ocean State.

justin-katz-avatar-smiling

Assessing and Curing Poverty and Housing in Rhode Island

Here’s another article in today’s Providence Journal that proves nothing so convincingly as the reality of profound differences of perspective.  File this one under “advocacy for $50 million in new debt for affordable housing.”

Rhode Island Housing brought down from Boston Harvard sociologist Matthew Desmond, who wants us to know that “America is the richest country with the most poverty in the world.”  That accusation contains a number of grammatical loopholes that would merit a closer look, but suffice for the moment to consider Robert Rector’s “15 Facts About US Poverty the Government Hides,” such as “the average poor American lives in a house or apartment that is in good repair and has more living space than the average nonpoor person in France, Germany, or England” and “eighty-five percent of poor households have air conditioning.”

But let’s accept Desmond’s premise that poverty and housing are a dire problem in the United States.  Stating that as a fact does not mean progressives’ preferred solutions are the obvious answer.  Consider:

Desmond noted that while many discussions of low-income housing center on publicly-assisted housing, only 1 in 4 households eligible for housing assistance actually get it, so most poor families are dealing with the private housing market. In Washington, D.C., for instance, there is a 20-year waiting list for public housing, he said. …

“We have the money,” to help struggling families, Desmond said, adding that the housing crisis is a much worse problem today than it was a decade ago. About 40 people are evicted in Milwaukee every day, he said, and most evicted tenants are mothers with children. Many of these mothers pay so much for rent and utilities that their children often go hungry, he said. One mother Desmond met, after enduring several evictions, “was having a nervous breakdown.”

Frankly, it seems obvious to me that the compassionate advocate would suggest that, if it looks likely that you’ll have to spend two decades waiting for housing you can afford in Washington, D.C., then Washington, D.C., is not a place you should be.  Moreover, as Mike Stenhouse recently had cause to explain related to state purchasing of farmland, government interventions in real estate markets tends to have undesirable consequences.  Decreeing that more people be given money to afford housing will increase demand without increasing supply, driving up prices for everybody.  Partitioning housing such that some segment is “affordable” leaves less housing not in the system, reducing the supply and (again) drive up prices for everybody.

As for the second paragraph quoted above, let’s not fail to make the obvious observation that “mothers with children” implies “fathers of children,” and in and out of government, society should work to ensure that affording housing, utilities, and food is the responsibility of two parents working together.  Unfortunately, such talk makes progressives uncomfortable, because it raises questions about their beliefs on social issues.  And let’s be honest: they kinda want the $50 million in bonded revenue whether or not it makes them feel good about loose sex, divorce, and abortion.

justin-katz-avatar-smiling

Social Services & Negotiating How Much to Take from Others

Sometimes it’s helpful to put stories in chronological order, rather than news-report order, as with this one, from today’s Providence Journal, concerning panhandling and homelessness in Providence:

Complaints about vagrancy, open drug-dealing and drinking exploded after Mayor Jorge O. Elorza decided months ago to stop enforcing ordinances against aggressive panhandling and loitering.

And now the news is that we’ve got Democrat Joseph Paolino getting the heartless 1% treatment because he’s only looking to get $100,000 from the Downtown Improvement District for social workers, along with jobs for two panhandlers, a free apartment for use of a homeless shelter, and up to $5 million in state taxpayer money, in combination with a whole new ordinance that would be even broader than the ones the mayor isn’t enforcing (stopping all transactions through a car window).  The activists protesting Paolino’s PR event have a more comprehensive list:

Less enforcement of minor criminal offenses against people who are poor; more jobs for panhandlers; funding for 150 housing vouchers; drug and alcohol treatment; and amenities such as a day center, public bathrooms and free food distribution. They want the Rhode Island Public Transportation Authority bus terminal to remain.

The core of this proposal is to double down on the policy approach that created the controversy (non-enforcement) and to add into the mix amenities that will draw even more vagrants, dealers, and loiterers to the area.  The protesters chanted, “Whose city? Our city!,” and they sure want it to be evident in the public square each and every day.

In short, the only solutions on the table, apparently, involve a negotiation over how much taxpayers have to pay for how much additional imposition.  Both parts of the plan are sure to exacerbate the underlying problem: namely, a domineering government that strangles the private sector and creates incentives not to work or bring behavior within a tolerable range.

We need another approach that doesn’t treat people as categories or as social-workers’ statistics, but as free individuals (from independent families) who can determine their own destinies in a community of mutual respect and charity.  The longer we deny this necessary change of perspective, the more the government plaque will build up in society’s arteries, making it more and more difficult to clear them.

justin-katz-avatar-smiling

And Now on to the General Election and More Debt

With the general election now the next big event (if the primaries in Rhode Island can even be said to be a big event), I took a look at the bonds that will be on the November ballot.  In total, we’ve got $227.5 million (nearly a quarter-billion dollars) in new debt that Rhode Islanders will likely approve, not including the tens of millions more that municipalities are surely seeking.

That’s crazy.  Government bonds are one area of democratic action that make me mildly sympathetic to progressive inclinations to limit the franchise to those with some basic knowledge.  They’re also a reason I wonder if progressives might be incorrect to assume a more-educated electorate would tend in their direction.  What might voters do differently if they understood that debt isn’t just free money to spend on feel-good projects?

Making matters worse, these bonds aren’t just desperate attempts to gain money to build things for which the state should have budgeted with regular revenue; some of them are clearly policy issues.  How many voters, I wonder, would really want to supply the state government with borrowed money to buy up even more property in the state?

Would voters really fall for these schemes if they took the time to consider just how much of it will (or at least can) become subsidies for private businesses — from the URI “innovation campuses” to help private businesses use public-university research to come up with new products and services for a profit to the government purchase and discounted resale of farmland to improvement of ports that benefit a limited number of businesses at public expense?  All of these things benefit narrow groups at the expense of everybody else.

Even more concerning is that, when you add them all together, the picture becomes one not of a few included groups siphoning off public resources, but a comprehensive system that ultimately excludes those who don’t receive some sort of public aid.  If you’re an ordinary Rhode Islander who wants to know who those excluded parties are, take a look at your latest selfie.

Apparently every hyper-informed person in every ideological group believes that the public would agree with his or her beliefs if only people were better educated, but I can’t help but think that my ideological group is correct in that belief.  As the saying goes, everybody’s conservative when it comes to the things he or she knows best.  I simply don’t believe that people who’d been shown the corrupt, incestuous connections building into a web that ensnares our freedom and opportunity would continue to support such things… or the politicians and organizations who work so hard to make them a reality.

Farmland090716-featured

Testimony: DEM Must Consider Economics Before Buying Farmland

In this video, I speak out against a new scheme by the Rhode Island Dept. of Environmental Management to acquire farmland at a public comment forum held at the URI Graduate School of Oceanography on September 7, 2016.

With government increasingly influencing and controlling the means of production through myriad tax-credit, loan, and direct-subsidy schemes in a multitude of industries, the DEM farmland acquisition scheme, which will actually acquire and resell private property, is not based on any legitimate economic analysis — or any economic consideration at all.

Despite the fact that the state’s own Commerce Corporation demanded a RhodeMap RI–related mandate be inserted into the DEM plan, no economic justification was provided. The Rhode Island Center for Freedom & Prosperity warned you about the dangers of RhodeMap RI; here is one place where the planners’ vision seems to be marching forward.

justin-katz-avatar-smiling

Rhode Island, Making Mediocrity Look Good

Some curious language from a brief Kate Bramson article in today’s Providence Journal.  Bryant’s Center for Global and Regional Economic Studies revised its first-quarter year-over-year economic growth estimate for Rhode Island down to 1.6%, from 3.0% and projects that the second quarter will actually show a drop of 1.2%.  By comparison, New England’s average was 1.5% for the first quarter and 0.4% for the second.  But here’s where the curious phrasing comes in:

Nationally, the economic outlook is brighter, with the U.S. Gross Domestic Product increasing at an annualized rate of 1.2 percent in the second quarter, compared with 0.8 percent in the first quarter.

How strange for 1.2% growth, following 0.8% growth, to be a “brighter outlook.”  Sure, compared with a shrinking economy, even no growth at all would be preferable, but it’s a testament to the “new normal” under Democrat President Barack Obama and the all-too-precedented normal of Rhode Island that 1.2% seems like it ought to put a spring in people’s step.

justin-katz-avatar-smiling

A Note on Growth in RI Farming

Without offering it as rhetorical leverage for my policy preference on the question of the state government’s purchase and resale of farmland (a sort of reverse flipping, because the state enters the deal planning to sell at a loss to taxpayers), the trends of farming in Rhode Island piqued my interest earlier today.  In a Twitter exchange with Matt Tracy, yesterday, he’d noted “unprecedented 10+ yrs of growth in RI’s ag sector,” and this morning somebody else pointed out the following paragraph (emphasis added) in Alex Kuffner’s front page Providence Journal article (which I mentioned here):

Rhode Island farms have cultural value as part of the state’s vibrant food scene, but they also generate a lot of money. In 2015, agriculture accounted for 2,563 jobs in the state and contributed $239 million to the economy, according to the Rhode Island Nursery and Landscape Association. Both figures increased 40 percent from 2012.

The obvious meaning that readers would take from that paragraph and its closing sentence is that farming has grown hugely over just a few recent years, but that’s not what Kuffner’s source says.  The study that he appears to be citing doesn’t present a new round of data; rather, URI Natural Resource Economics Professor Thomas Sproul’s intent is to provide more-accurate data for 2012.  The 40% increase to “2012 Agricultural Census figures” is also for 2012 data, not 2015 or 2016 data, as one would infer from Kuffner’s report.  That is, the statement should be that “both figures are 40% bigger than they were once reported,” which means something different altogether.

Even with a quick glance at the related chart and text highlighted in the document, the Projo reporter should have caught this error, but he’s also wrong that it applies to both jobs and money.  The dollar output was revised to be four times the original amount (and it’s not for “economic impact,” by the way, but straight sales).  If he’d noticed that, he might have questioned whether the data really showed that farming revenue had grown by a factor of four over just a few years.

Even a quick Internet search would have turned up reason to question the finding, anyway.  Writing in ecoRI in 2014, Tim Faulkner reported that the number of farms increased by 24 (2%) from 2007 to 2012, which was more than the national drop of 4%, but less than the New England increase of 5%.  However, RI’s increase was largely in small farms of 9 acres or less, and the state Dept. of Environmental Management’s chief of agriculture wasn’t “certain yet if the shift is due to an economic slowdown or greater food production,” causing a change from “nurseries, turf and flower farming” to “fruit, vegetable, livestock and aquaculture farming.”

A nursery sold as two vegetable farms would double the number counted, so it’s not clear whether the number of farms is a helpful metric. More relevant to the present discussion is this:

Total market value of sales declined 9 percent from 2007. Crop sales declined 12 percent, and livestock sales increased 4 percent.

That doesn’t look like “unprecedented growth” to me.

justin-katz-avatar-smiling

Warwick and RI Can’t Be Generous While Shrinking

The Warwick school department is considering closing up to three schools, and predictably, people aren’t happy about it:

So far, the city has fielded complaints of traffic jams, unfinished construction projects and overcrowding at Warwick’s high schools.

And in an excellent civics lesson, democracy is producing candidates implying they’ll make all the problems go away if elected:

School committee candidate Dean Johnson said he lives nearby and sees the problems every day.

“Nothing but traffic,” he said. “It was 15 minutes from Benny’s to Pilgrim – it was absolutely ridiculous.”

Fellow school committee candidate Nathan Cornell is just 18 years old and said he still has friends in high school.

“At the first day, I called them and say, ‘how was school for you,’” he said. “And they told me it was crowded, especially the lunchrooms.”

Rhode Islanders want to run things as if the state is economically healthy and growing.  It’s not.  When I looked at Warwick’s population in 2012, it had dropped nearly 4% from the 2000 Census to the 2010 Census.  This May, I wondered how the school department could be considering any raises at all (let alone the 10% per year the teachers union reportedly wanted) with a smaller, less-working population with shrunken house values, and what justification there could be when the under-performing district had seen its enrollment drop 34% since the 2000-2001 school year.

Look, if you want neighborhood schools, you need the population and the enrollment to support them.  If you want small class sizes, you need to control the costs of teachers.  Rhode Islanders can’t keep up the economy-strangling approach to government and the union-gorging approach to employees and expect to maintain the quality of life they’ve enjoyed.  It is not paradoxical to observe that when you let government take more money from you and your neighbors and to limit your freedoms, you wind up getting less from government.

What will it take to make Rhode Islanders realize this?  Or more precisely, what will it take to make Rhode Islanders realize this and then change things rather than simply move away?

justin-katz-avatar-smiling

“Affordable” Farmland Means You Pay for Government Grabs

Naturally — no doubt in harmony with the philosophies of its core reader base — a Providence Journal article about the state government’s new program to buy farmland and sell it to beginner farmers at “a steep discount” is celebratory.  What’s not to love about a program that takes money away from people in order to heavily subsidize a space-intensive occupation to support businesses that may simply not make sense in this state while giving the government a new pretense for buying up land and even leasing it out as if to sharecroppers?

As I wrote a couple of weeks ago on this issue, I love the idea of nearby farms and local produce, but subsidizing them benefits the aesthetics and consumer choices of relatively wealthy people.  The way to preserve farmland would be to allow Rhode Islanders to keep more of their money and to lighten regulations so the economy could boom, thus leaving more room in household budgets for the experiential and quality benefits of buying local.

The cost isn’t the only red flag about such programs, though.  Department of Environmental Management Director Janet Coit insists that this program will be voluntary both for the farmer looking to sell his land and the farmer wishing to buy or lease it, but a “for now” is implied.  The 2010 document I cite at the link above, which further research has shown to be a starting point for much of this conversation, includes proposals for making “affordability permanent.”

The document doesn’t explain what that means, although a reader can reasonably infer the drafters were contemplating possibilities should state and federal budgets become too tight for tax-money handouts.  The first suggestion is to put language in “conservation easements” that would “give conservation organizations the right of first refusal to purchase the land at agricultural value.”  An FAQ from the state Agricultural Lands Preservation Commission defines “agricultural value” as the value of land after it has been reduced to account for the restriction that owners can only use it for farming.

As the Providence Journal article points out, that could be an 80% discount off the fair market value.  So, before a farmer could sell his land, a non-profit, a land trust, or even the state government would have to be given the option of buying it for 20% of its value.  As for the ultimate buyers, they’ll surely be restricted in what they can do, probably with requirements to follow government preferences, with allowance for bureaucrats to change the deal with the political winds.

Whether such additions to the program are currently on somebody’s secret to-do list or not, the example should remind us of the danger of taking such steps for feel-good government programs.  Once government is entrenched in the process of buying, selling, and operating farmland, government effectively controls the industry, and once we’ve decided this is a legitimate activity, we can be sure government will look to apply it to other industries, as well.

After all, what’s not to love?

mike-stenhouse-avatar

Inching Progress on JOI (Jobs & Opportunity Index) Is Not Enough

There has only been one way of doing things in Rhode Island for far too long. We have seen the results in our state’s failed rankings. Yet, the insiders and elitists love to point to the rising employment figure to justify their status quo ideas. For this reason the Center has developed the Jobs & Opportunity Index (JOI). If our elected leaders are to craft and advance legislation that removes barriers to the creation of meaningful work and that provides broader economic opportunities for all Rhode Island families, it is important that lawmakers are provided with a deeper measure of economic well-being.

While on the July Jobs & Opportunity Index Rhode Island edged past New York to claim the rank of 47th out of 50 states in the nation, this slow progress is not enough. Rhode Island families deserve more than these bottom results.

justin-katz-avatar-smiling

How Much to Lure High-Tech Company into Low-Tech Building?

When I hear that Internet innovator PayPal is considering a move into the Providence Superman Building — which has been vacant for so long, if I recall correctly, in part because it lacks capacity for the technology of modern companies — I can’t help but wonder what the dollar amounts will be.  Here are Ted Nesi and Dan McGowan:

Matt Sheaff, a spokesman for the R.I. Commerce Corporation, declined Wednesday to comment specifically on whether PayPal is looking at the building but confirmed that state officials remain in active discussions with the company about potentially expanding into Rhode Island. …

One sticking point on a PayPal-Superman deal could be cost. [Owner David] Sweetser has repeatedly argued the building needs significant renovations that cannot be funded without government assistance.

Oh, and don’t forget: “Any transaction would also likely require a break on Providence property taxes, which are among the highest in the country for commercial real estate.”

So Rhode Island’s economic development strategy is to create an environment in which businesses have difficulty operating and “iconic” old buildings can’t find non-government investment to bring them up to date.  Then the governor goes out looking for big companies that would represent, as the article puts it, “a major coup” and promises to give them money taken from the  residents and businesses who are still able to manage to survive in the state, somehow.

This approach may do wonders for political insiders and corporate big-wigs looking for crony relationships.  For the rest of us — particularly those of us struggling to get ahead in the world — not so much.

justin-katz-avatar-smiling

The Obama Glow Is Radiation from News Media Decomposition

Every now and then, you’ll come across a news report mentioning that President Obama has dramatically reduced deficits, as if he’s some sort of fiscal hawk.  The spin of the characterization comes through the fact that such statements start the clock in 2009, Obama’s first year in office, during which the deficit more than tripled, to around $1.4 trillion.  In other words, his deficit reduction only looks like responsible spending in the context of that profligate year — a bit like saying an alcoholic is making strides toward sobriety because he’s now guzzling regular rum, rather than 151.

In a similar vein, an article from the Washington Post in today’s Providence Journal tries to spin the Obama Era as a time of economic satisfaction.  Under the Projo headline, “Poll: Many feel lives have improved under Obama“:

How Americans feel about the state of their lives has improved markedly in the eight years since Barack Obama was elected president, according to Gallup data released Tuesday.

In 2008, fewer than half of Americans said their life was good enough to be considered “thriving,” according to Gallup. But that’s changed: “The 55.4% who are thriving so far in 2016 is on pace to be the highest recorded in the nine years Gallup and Healthways have tracked it,” according to the report.

Not only that, members of each ethnic or racial group in Gallup’s study feel better about their lives.

Ummm… about that.

gallup-satisfactionbyrace-2008-2016

Yes, in the first year of Obama’s presidency, people were feeling better about their lives, especially (not surprisingly) blacks, but 2010 brought a peak.  The percentage of blacks who say they’re thriving has dropped significantly since then, to below the level in 2009.  Asians are down, and Hispanics haven’t budged much.  Whites are up a few percentage points since 2010, but not much above last year.

Reading the rest of Christopher Ingraham’s article, one can only conclude that he’s spinning on purpose.  For instance, he belittles Donald Trump’s recent appeal to black voters, writing that the Gallup numbers “reflect” black “gains in employment, income and education,” which they really don’t.  And then there’s this:

Certainly, economic policies have been central to Obama’s administration, including the 2009 stimulus package and the $80 billion auto-industry bailout. But his supporters and detractors disagree on the extent to which those policies helped pull the country out of the recession.

This is boosterism, pure and simple.  It appears that the only way to make Obama look good is to compare him on his good days to himself on his bad days, so to speak.

justin-katz-avatar-smiling

Don’t Like Tax Competition? Be the Shelter.

This was pretty much my response upon hearing that the European Union wants Ireland to charge Apple more taxes, as Kevin Williamson articulates it:

We could decry overseas tax shelters for the next decade or two, and change absolutely nothing, or we could — here’s a crazy idea — be the tax shelter. You know what Ireland, Norway, and Sweden all have in common? Within living memory, all were desperately poor. That’s why there are more Irish Americans than Irish nationals, more Norwegian Americans than Norwegians, and more Swedish Americans than Swedes. Hunger will make you get on a boat. Sweden grew wealthy under a form of laissez-faire capitalism strikingly different from the EU norm today, with lower taxes and a smaller public sector than its European counterparts. Norway did much the same thing, helped along by a great deal of oil (which can be both a blessing and a curse). Ireland eventually got sick of being poor and followed a similar program.

As Williamson goes on to suggest, our tax system is shot through with deliberate loopholes and special deals; we should just make it low across the board.  If that requires some reduction in government spending, even better.

I’ve written before that the approach government in Rhode Island takes to economic development proves one thing conclusively:  Progressives are interested in economic development only insofar as it does not interfere with government’s heavy hand.  The want the economy to grow as much as it possibly can… with heavy regulations, taxes, and government spending remaining intact.  That is, those other things come first; they’re prior to the wealth and well-being of residents.

(The same goes for education, by the way.  Labor unions and indoctrination take priority over the prospects of actual students.)

justin-katz-avatar-smiling

Reed, Whitehouse Hope Rhode Islanders Don’t Pay Attention

Leave it to our own Democrat Senator Sheldon Whitehouse to weigh in on the recent price increase of the EpiPen in a way that is both blindingly insidious and enlightening:

The sky-rocketing cost increase of the EpiPen is just the latest evidence that our regulation of prescription drug pricing is broken. (The) system is rigged by the pharmaceutical industry to allow this price-gouging, and that is what needs to be corrected.

Drug pricing doesn’t have to be regulated; it’s regulation of drug production that’s the problem.  Everybody from The Guardian to the Wall Street Journal knows that the pricing of the EpiPen is made possible by the government’s enabling of Mylan’s “near monopoly” (as Whitehouse and other senators characterize the company). A Wall Street Journal editorial explains:

… the steady Mylan rise is hard to read as anything other than inevitable when a billion-dollar market is cornered by one supplier. Epinephrine is a basic and super-cheap medicine, and the EpiPen auto-injector device has been around since the 1970s.

Thus EpiPen should be open to generic competition, which cuts prices dramatically for most other old medicines. Competitors have been trying for years to challenge Mylan’s EpiPen franchise with low-cost alternatives—only to become entangled in the Food and Drug Administration’s regulatory afflatus.

Of course, when I write “everybody,” I’m limiting my set to those who are modestly well informed.  A little economic understanding helps, too.  Let me repeat something I write regularly: Prices are measurements of value.  If a price goes up a great deal, especially if it does so quickly, that means people want more of the product than they’re able to get, and it’s a signal to other producers that they should enter the market, even at great expense.

Immediately after a devastating hurricane, it may seem predatory for people with chainsaws and water bottles to charge super-high prices, but their doing so not only forces affected families to weigh the value of the assistance, but also sends a signal far and wide that it’s worth people’s time to invest in tools, supplies, and gasoline and travel to the affected spot.  Of course, as a moral matter, we should all approach such situations in a spirit of charity, but by the same principle, we shouldn’t stroke our own moral vanity by insisting that only those with the right intentions can help.

In the case of pharmaceutical gouging, the focus of Congress should really be on creating laws that require smarter, lighter handed, less capricious regulation and therefore allow more companies to offer comparable products at competitive prices.  Unfortunately, it’s so much more profitable for progressive politicians to empower unaccountable bureaucracies to manipulate the market and create “near monopolies” that make the politicians’ corporate friends and donors rich and allow the politicians to posture in meaningless poses while grabbing more power to repeat the process.

justin-katz-avatar-smiling

The Practical Distance Between America and Venezuela

A post on by Daniel Greenfield got me to thinking why the United States couldn’t suffer a similar fate to Venezuela’s:

After the fun of electronics stores forced to discount televisions at gunpoint, there were no more televisions. And no more cars. Then no more toilet paper, milk and other basic necessities.

The Socialist government tried to solve its money problem by printing more money. But it wasn’t able to pay for the money it wanted to print because of the inflation which officially did not exist.

Greenfield goes on to note that some American politicians propound policies of a similar mindset, making one wonder whether there’s something in the American character that will eventually stop the process or it’s just a matter of luck and the erosion of principle.

The first argument of distinction between our country and the one that Hugo Chavez ruined is that we’re wealthier, and in a broader way. But that just means we have farther to fall, which could mean more time or it could only necessitate a bigger mess up… say a decade of quantitative easing and massive federal debt combined with a regulatory state that makes it more difficult for people to work off the extra burdens and a welfare state that promises to buy them off if dependence on government is an option they’re willing to entertain.

A second argument, related to the fact that we have more wealth and room to fall, is that we have a culture of self-reliance and rebelliousness. Well, we’re arguably engaged in an experiment to discover how few generations it takes to get out of the habit of self-reliance. And as for rebelliousness, that’s well and good to talk about and believe in, but the proof is in the doing.

Ultimately, if it can’t happen here, we better get to proving it soon.