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Confirming a Conservative Response to Poverty

Writing about public policy day in and day out, one can forget that not everybody follows every argument with close attention.  Broad philosophical points of view and underlying intentions can therefore be lost.

Just so, I almost didn’t bother reading a brief essay in which Michael Tanner promotes and summarizes his forthcoming book offering a broad explanation of a conservative policy response to poverty.  It’s worth reading, though, because he summarizes some conservative policies specifically in terms of their human objectives:

  • Keeping people out of jail can promote work and stable families.
  • Breaking up “the government education monopoly and limit[ing] the power of teachers’ unions” is rightly seen as an “anti-poverty program.”
  • Preventing government from driving up the cost of living, especially housing, will give poorer families a chance to get their feet on the ground.
  • Policies that discourage savings also discourage healthy financial habits.
  • A heavy hand in regulating the economy tends to target economic growth toward the rich and powerful.

As he concludes:

An anti-poverty agenda built on empowering poor people and allowing them to take greater control of their own lives offers the chance for a new bipartisan consensus that rejects the current paternalism of both Left and Right. More important, it is an agenda that will do far more than our current failed welfare state to actually lift millions of Americans out of poverty.

My only objection is that I’m not sure that the “paternalism of the Right” is a view that conservatives actually hold rather than a caricature that the Left spreads about us.  Of course, the fault is arguably ours, if we don’t often enough express our real intentions.

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Food Stamp Arrests Before the Holidays

Somehow the weekend of Thanksgiving and Black Friday seems an appropriate time to turn our attention to Jessica Botelho’s Turn to 10 report on arrests for food-stamp fraud:

Twenty-four people have been accused of fraudulently obtaining a combined total of nearly $50,000 in public assistance and food stamps, Rhode Island State Police announced Tuesday.

… anyone convicted of fraudulently obtaining public assistance may be sentenced to up to five years behind bars and/or fined $1,000 if the value of public assistance was more than $500.

Anyone convicted of fraudulent use of food stamps, will be ineligible to participate in the food stamp program for no less than six months and no more than 24 months.

In the scheme of things, this is pretty small-scale stuff, with an average theft of $2,040, and looking at the mug shots doesn’t give the impression of a well-off crime ring.  Probably, these folks saw an opportunity for some extra money and acted on the not-uncommon principle that a little bit of “I got mine” wouldn’t actually harm anybody.

This holiday weekend, we express our gratitude for the good things in our lives and (some of us) take part in ritualistic exercises in excess, whether at the Thanksgiving Day table or in an effort to give our children (or ourselves) a materially exciting Christmas at a discounted price.  These holidays are supposed to direct our attention to those whom we love and those whom we should help, but they often highlight our weaknesses and tendency to measure well-being by things.

These contrasting aspects of the holidays apply to those of us who need help, too.  There is no shame in doing what one can to help one’s family, and food stamp fraud might be easily forgiven for that purpose, but is that really what’s going on?  Stealing in order to fund some habit, like smoking, or to keep up on the season’s materialism carries a bit more culpability, and a drive toward taking control of one’s financial well-being should always be central.

We do our disadvantaged neighbors no favors by instilling an opportunity for fraud or temptation toward dependence, so our welfare programs should be modest and well controlled.  At the same time, we lose perspective if we blow their infractions out of proportion.

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Two Economic Directions for a Generation

We hear a lot of stereotypes about young adults in America today — that they’re soft snowflakes who can’t take criticism and think the world owes them ease and security.  Posts like this one by Helen Smith reinforce that view, noting that there is a 500,000-man gap of 25-to-34-year-olds who should be in the workforce but aren’t:

The colleges are hostile environments and bad fits for many of these men who know that they will not flourish there. Add in the risks of marriage for these men and the fact that many women don’t want them and leisure time playing video games seems like a better alternative, particularly if you can live at home to support a good time. It’s kind of like they are on strike or something.

Instead of punching a clock, they’ve checked out.  They live at home or collect some sort of disability or welfare subsidy.  Maybe they extend their educations (perhaps as a condition of the government’s or mom and dad’s indulgence), following up their useless four-year degrees by spending more of their youth chasing a career-specific education, or maybe they put themselves in a holding pattern, with no degrees or pursuits, just waiting for something to happen.  They’re looking for an easy path and draining their parents’ or taxpayers’ resources.

On the other hand, there’s this encouraging bit of news:

Generation Z—those who were born between the mid-1990s and early 2000s—are more often turning to trade schools to avoid the skyrocketing student debt crisis and hone skills that translate directly into jobs, from electrical engineering to cosmetology. While the power of trade unions has dwindled, and societal value still favors more elite professions, young students are finding themselves drawn to stable paychecks in fields where there’s an obvious need.

The appended podcast has the headline: “The Hot New Gen-Z Trend Is Skipping College.”  Per this narrative, young adults want to work, and their rational assessment of current conditions is finally overcoming a cultural bias for a particular direction.  More kids should go into the trades.  They provide a path with tremendous opportunity, life lessons, and fulfillment.

With a broader perspective, we can see the operation of our economy.  The young adults in the first group are spending down what their parents have earned, and the young adults in the second group are preparing to collect it, thus shifting our society’s wealth toward those who advance our economy.  This will be healthy if the government doesn’t interfere… but it will.

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Increased Wealth and Equality Lead to Gender Differences

So here’s a global research outcome, published in Sciencethat is different from what we’re supposed to believe:

We contrasted and tested two hypotheses that make opposite predictions concerning the cross-country association of gender differences in preferences with economic development and gender equality. On one hand, the attenuation of gender-specific social roles that arises in more developed and gender-egalitarian countries may alleviate differences in preferences between women and men. As a consequence, one would expect gender differences in preferences to be negatively associated with higher levels of economic development and gender equality (social role hypothesis). On the other hand, greater availability of material and social resources removes the gender-neutral goal of subsistence, which creates the scope for gender-specific ambitions and desires. In addition, more gender-equal access to those resources may allow women and men to express preferences independently from each other. …

Gender differences were found to be strongly positively associated with economic development as well as gender equality.

When men and women can afford to choose their occupations, they tend to choose differently.

Of course, this doesn’t tell us whether a particular woman is better for some job than a particular man or how much different jobs are worth in the marketplace.  It should, however, lead us to pause before declaring that any occupation that isn’t distributed 50:50 across the sexes is evidence of sexism. It should also lead us to ponder whether forcing parity would require forcing a reduction in wealth, freedom, and equality.

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When People Become Too Expensive

Blogger The Phantom spots a Reuters article that, in Phantom’s words, shows “what inevitably happens when you raise minimum wage to idiotic heights.”  A grocery company is developing automated stores that are essentially like giant vending machines.  The advantages as the blogger sees them:

Lets list the advantages for the vendors here:
No shoplifting (Which is huge)
No employee stealing (Which is huge)
Much reduced breakage (robots don’t drop stuff as much)
Much reduced spoilage (Just In Time delivery and stock rotation goes a lot faster.)
Tiny square footage compared to regular market
NO EMPLOYEES means the store can be open 24/7/365, including Sundays and holidays. It’s a vending machine.

What’s the downside for the customers or the companies making the decisions?  Well, human interaction is nice and important (at least for most of us) and has some value.  I’ve never seen a statistic, but it has always seemed to me that people will typically go into a store to buy a soda even when there’s a vending machine outside.

The value of human interaction applies to the business owners, too.  Folks start or run businesses in order to earn a living, of course, but they mostly like the idea that they’re helping people support their families and that sort of thing.  Even looking at Phantom’s list of advantages to automation can remind us that a store manager, while annoyed about breakage and such, derives value from interactions — helping an employee to improve, for example, by teaching them life lessons and work strategies.

This is why minimum wages, regulations requiring the provision of certain benefits, and other government interventions are so detrimental.  They increase the direct cost of people to the point that the business begins to not be able to provide the financial benefit to the owners and managers.  That is, they place the ancillary benefits of employing people in opposition to the primary benefit of operating a business in the first place.

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Asking the Wrong Question When the Toy Company Thinks About Leaving

I join others in wondering why it is, exactly, that nobody in Rhode Island government happened to mention that Hasbro was considering a move out of the state until the day after the election.  But the election is over, so we return to our regularly scheduled observations about politicians’ flawed mindset.  Oddly the most telling sentence on this subject has been removed from Tom Mooney’s Providence Journal article since last night:

Grebien said city officials have been talking to Hasbro for several months but that Grebien remains unclear specifically what Hasbro wants in order to stay in the city.

That is simply the wrong question and the wrong attitude, and it shows how politicians’ desire for every decision to run through their hands has put our communities at risk of extortion.  In a healthy political system, Pawtucket Mayor Donald Grebien would be asking what the city and state governments are doing that makes companies want to leave, because we’re doing something wrong if its directors feel as if they can’t remain in the state of their business’s birth.

If the state isn’t doing anything wrong and some factor beyond our control creates the necessity for the move, then we should admit that Rhode Island may no longer be the best fit for the company, or the company for Rhode Island, and society would be better off with more-efficient use of its resources.

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War on Poverty Bolsters… Poverty

Here’s another data point for your “not what I was told to believe” file:

In Thursday’s Wall Street Journal, John Early and Phil Gramm share some depressing numbers about growing dependency in the United States:

During the 20 years before the War on Poverty was funded, the portion of the nation living in poverty had dropped to 14.7% from 32.1%. Since 1966, the first year with a significant increase in antipoverty spending, the poverty rate reported by the Census Bureau has been virtually unchanged…Transfers targeted to low-income families increased in real dollars from an average of $3,070 per person in 1965 to $34,093 in 2016…Transfers now constitute 84.2% of the disposable income of the poorest quintile of American households and 57.8% of the disposable income of lower-middle-income households. These payments also make up 27.5% of America’s total disposable income.

This massive expansion of redistribution has negatively impacted incentives to work.

Incentives aren’t only relevant to welfare recipients, but also to government and the politicians who populate it.  The progressive concept of scientific governance — setting experts to make the “right” decisions for everybody — requires that the people making decisions will make them honestly.  But when government begins giving things out, the incentive is to keep doing so whether it achieves the desired policy outcome or not, because at the end of the day, the desired outcome is votes.

More broadly, the incentive for the bureaucracy is to keep having things to do, like processing benefits, and to sell government as the solution for problems.  For all of these reasons, the incentive is to never honestly assess whether a War on Poverty has actually helped maintain poverty levels while causing a host of unexpected social ills.  Alternately, the incentive is to keep adjusting the definition of “poverty” so that the rate never changes even if the experience of the population does.

By capitulating to progressive-union pressure, and despite disingenuous claims that no broad-based taxes were imposed, Ocean Staters will once again bear increased burdens to pay for new taxes and regulations, more spending, and more union giveaways. Lawmakers chose to appease, rather than resist, the progressives’ job-killing, big-spending agenda.

Lessons and Perspective on Economic Growth

I’ll provide more depth with my usual employment post and Jobs & Opportunity Index (JOI) write-up after all the data becomes available tomorrow, but at first glance, it looks like the national recovery might be stalling out in Rhode Island:

The number of employed RI residents was 539,800, an increase of 200 from the August figure of 539,600. …

The RI labor force totaled 561,900 in September 2018, down 300 from August 2018 but up 6,000 from September 2017 (555,900).

… In September, the number of Rhode Island-based jobs was unchanged from the August revised employment level of 502,100. Overall, Rhode Island’s job count is up 7,000 from September 2017.

Keep in mind that these numbers are all seasonally adjusted, so one can’t cite the end of our summer season as the reason that RI-based jobs have stagnated, employment growth has slowed, and the trend of fewer people looking for work has resumed.  If this is a slowdown, then maybe Rhode Island is a leading indicator for the rest of the country, or maybe our approach to policy has become so different from that of the federal government and other states that the Ocean State is now unable to capitalize on economic growth, period.

Tangential to this topic, I’ve seen murmurs here and there blaming the Republican tax cuts for current deficit problems at the national level.  Yeah, well, I kind of wonder about that:

The Treasury Department reported this week that individual income tax collections for FY 2018 totaled $1.7 trillion. That’s up $14 billion from fiscal 2017, and an all-time high. And that’s despite the fact that individual income tax rates got a significant cut this year as part of President Donald Trump’s tax reform plan. …

Other major sources of revenue climbed as well, as the overall economy revived. FICA tax collections rose by more than 3%. Excise taxes jumped 13%.

The only category that was down? Corporate income taxes, which dropped by 31%.

Overall, federal revenues came in slightly higher in FY 2018 — up 0.5%.

Spending, on the other hand, was $127 billion higher in fiscal 2018. As a result, deficits for 2018 climbed $113 billion.

See also:

The U.S. economy sits atop of the World Economic Forum’s annual global competitiveness survey for the first time since the 2007-2009 financial crisis, benefiting from a new ranking methodology this year, the Swiss body said on Tuesday.

We are the economy — you and me.  Our activity is the economy.  The progressive approach to economic development that Rhode Island pursues is to control what we do in a way that powerful people believe is best, which includes taxing us so the government can redistribute the wealth.  Stop doing that, and our economy will soar; government revenue should be secondary.

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Tempering the Terror of a Climate Doom Report

WPRI reporter Tim White tweeted that this New York Times article about the United Nations’ accelerated doom-saying about climate change is “truly terrifying.”  My response was to ask if this section (emphasis added) doesn’t set off his alarm bells:

Avoiding the most serious damage requires transforming the world economy within just a few years, said the authors, who estimate that the damage would come at a cost of $54 trillion. But while they conclude that it is technically possible to achieve the rapid changes required to avoid 2.7 degrees of warming, they concede that it may be politically unlikely.

Look, one needn’t be a climate change skeptic to acknowledge the layers of assumptions that go into these scary warnings.  First, one must ignore the lack of warming over the last two decades and assume that the models will be more accurate going forward.  Then, one must assume that the change really does derive from human activity and that it’s possible to avert the worst.  Then, another wave assumptions comes with predictions about the effect on weather, creating soaking rains where that will be harmful and droughts where that would be harmful, all coming together in a way that doesn’t equalize the effects (by, for example, simply moving where farming must be done).  Add in the effect of technology and changes in energy production that have made the United States a leader in CO2 reduction.  And don’t forget that one must balance the estimated $54 trillion in costs from warming against whatever the cost would be to rework our economy — including an assessment of the people who bear those costs.

Put that all on a scale that pivots on the promise that giving more power to the people who brought the warning, and a tempered reaction to the terror is justified.

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Who Profits from Deepwater Cronyism

Is a Danish company’s purchase of Rhode Island–based Deepwater Wind relevant to a discussion about corporate cronyism in our government?

Providence-based Deepwater Wind announced Monday that Orsted has entered into an agreement to buy it. Orsted says it’s paying $510 million. …

Deepwater Wind says it’ll expand in the coming years, making Providence and Boston the two major hubs of the company’s U.S. offshore wind activities.

The time line goes like this:  To his shame, Republican Governor Donald Carcieri guaranteed long-term profits for a green energy company run by his former chief of staff.  Earlier this year, Democrat Governor Gina Raimondo surprised Rhode Island by announcing a secret deal to guarantee the company more profits (and then immediately began fundraising off it).

Now the company’s owners have sold it off to ∅rsted, no doubt at tremendous personal profit.  There’s a reason CEO Jeffrey Grybowski hands out about $4,000 per year to key decision-makers in government, with Gina Raimondo taking the lead since 2010, at $6,300 total.  So far this year, Grybowski has given the max to Raimondo, Democrat Aaron Regunberg, Republican Allan Fung, and Republican Patricia Morgan — hedging his bets, it would seem.

Rhode Islanders should push back against these gambles.  If companies from anywhere in the world can make make a profit in Rhode Island while offering its people something for which they are willing to pay, then we should welcome them for that mutually beneficial exchange.  But when our political overlords force us to guarantee profits, the benefits are always imbalanced toward connected insiders.

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The Second Punch of Amazon’s Minimum Wage Boost

The response from various conservatives that I’ve seen to this news from Amazon is the correct first reaction:

Amazon is boosting its minimum wage for all U.S. workers to $15 per hour starting next month.

The company said Tuesday that the wage hike will benefit more than 350,000 workers, which includes full-time, part-time, temporary and seasonal positions. It includes Whole Foods employees. Amazon’s hourly operations and customer service employees, some who already make $15 per hour, will also see a wage increase, the Seattle-based company said.

To this, many conservatives might say, sarcastically:  Wait… what?  Doesn’t this sort of thing require politicians to go out and fight the greedy corporations, forcing them to dig up the money they’ve buried in the corporate courtyard?  No, of course not.  This is how it ought to happen, with companies competing for employees and making such decisions in light of their own, very specific, circumstances.

The second response, though, should be to question whether this is part of a bare-knuckle attempt to knock out competition.  Step 1 is to raise the company’s pay beyond what competitors can afford.  Step 2:

Amazon said its public policy team will start pushing for an increase in the federal minimum wage of $7.25 per hour.

Amazon isn’t just saying that it is willing to do this for employees, but that everybody should have to.  The company may not be content to compete for workers, because after all, there are plenty of people out there willing to work for less if a job otherwise fits their skill sets and particular needs and interests.  Rather, this may be an attempt to put competitors out of business altogether, or at least hinder their ability to sneak up on the retail giant.

While Amazon puts on a pro-worker face, it is working to ensure that workers have fewer employment options.

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Overtime Rules and Progressives’ Vision of a Fallow Field of Money

Here’s a reminder, from the site Uprise RI, that progressives really do think this way.  The topic is the federal rule that allows companies not to pay overtime rates to managers who make over a certain limit.  The Obama Administration wanted to increase the limit from $23,660 to $47,476 annually, but the courts put a hold on the move, so the Department of Labor is spending some time doing research and listening to advocates.  This is from Steve Ahlquist’s coverage of the Rhode Island leg of the tour:

Each month, since the abandonment of the Obama-era threshold, Rhode Islanders have lost about $400,000 in wages, estimated the Center for American Progress and the Economic Policy Institute.

“This is money that could be helping those families,” said [Economic Progress Institute economic and fiscal policy director Douglas] Hall. “They would spend that money locally in our economy, helping the Rhode Island economy to thrive and helping global businesses to prosper.”

Progressives really do imagine that businesses have some field of uncultivated money laying fallow in the economy from which they can pluck more pay.  To the contrary, if this threshold is increased, businesses will have to reduce either productivity or investment.  Fewer new hires will happen and the demands on workers will increase, losing them benefits and flexibility.

Just let the market be.  The government shouldn’t be an uber labor union imposing blanket rules on our economy.  Money always has to come from somewhere, and as a general proposition, the burden will fall most firmly on those who have the least leverage.

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August 2018 Employment: Cooling Already?

The number of Rhode Islanders who say they are employed is still going up, but a one-month job loss and slowing of the rate at which new people enter the job market raise concerns that the boom is already cooling.

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The Cost of Barber Licensing

Apparently, Brown University has at least one student, Austin Rose, who is skeptical of occupational licensing:

As dubious as the costs of freedom are, the costs of licensing are pretty staggering. Licensing of barbers reduces the probability of a black individual working as a barber by 17.3 percent, according to a study published by the Mercatus Center at George Mason University. Every 100 hours of training required adds $2.15 to the price of beauty salon visits. Licensing, by making it more difficult for job-seekers to enter new lines of business and employment, harms social mobility. And, as an Obama White House report notes, low-income entrepreneurship activity takes a hit as well.

Of course, our institutions of higher education layer on much more economic miseducation than one op-ed can correct.

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The Missing Point of Teacher Complaints

Former Republican state representative Bobby Nardolillo promoted on Facebook a hand-made poster that reads as follows:

OK, Fine. You don’t want to pay teachers like a college educated professional? Then give them the glorified babysitter rate.

$10/kid x 8hrs./day = $80

$80 x 25 kids/class = $2k

$2k x 180 school days =

$360,000

Let’s put aside the haggling over the math (actual hours per day, value of benefits, days off, and so on).  What’s striking is the economic illiteracy of this poster, undermines the premises of the people promoting it.  You pay a babysitter a premium because you are seeking a limited, unpredictable engagement during non-business hours watching just a few children (with no economies of scale).  Make the babysitter a full-time nanny or a day-care center, and the price goes down.

Also remarkable is the lack of gratitude.  With reference to the likelihood of our moving into another house, one of my children and I got into a discussion about retirement age.  I said that it’s generally thought to be about 65, although that should probably adjust up as we live longer, and that I don’t expect ever to retire, really, for both economic reasons and my hope to be doing work I don’t feel the need to stop at that point.  I did not mention that it is not uncommon for public-school teachers to retire in their 50s.

Yet, I don’t think I’ve ever picked up a whiff of gratitude to the public for this remarkable career path.  Instead, we hear about how it ought to be even better, how expressing reservations about the cost and the quality of the resulting services is disrespectful.

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No Clear Vision with Government Regulations

Linda Langlois expresses a relatively minor and easily overcome problem that she’s experiencing courtesy of the state’s regulatory regime:

Every few years, I go online to Readers.com to order my reading glasses. For several years now, I have needed the 4.00 strength and have received my eyeglasses within a few days. So imagine my shock when my online order this week elicited this pop-up: We’re sorry, but Rhode Island restricts the sale of the following: Reading glasses with powers over +3.25.I have emailed the governor’s office but have had no reply. I searched online for Rhode Island restrictions, statutes, laws, etc., to find

Wondering what changed, I contacted Reading.com, and the company’s spokesperson directed me to the relevant statute, which forbids the sale of corrective eyeglasses or lenses “unless a licensed optometrist, physician, or optician under the laws of this state is in charge and in personal attendance at the booth, counter, or place where those articles are sold.”  The exception is for “simple reading magnifying glasses,” defined as those with “over plus 3.25 diopters or equivalent magnification.”  However, this statute is not new, so nothing should have changed for Ms. Langlois’s recent order.

I asked Reading.com for further explanation but have received no response.  Perhaps the company only recently discovered the statute.  One might reasonably wonder whether the new requirement to collect sales taxes from Rhode Island residents made the risk of unlawful sales greater than the cost of adding protections against them.

Whatever the case, this is another of the countless ways Rhode Island’s government makes life more difficult and more expensive for residents and those who want to do business with us — reducing the ability for our own businesses to innovate.  It is also a fine example of the frustration that people feel.  Think of the process by which this law might be changed.  Consumers or out-of-state retailers would have to lobby the General Assembly and overcome the entrenched interest of licensed optometrists, physicians, and opticians.  If it became a fight, politicians would have to run on campaigns to change this tiny law and then expend political capital to make it happen.

After a few experiences like this, residents can conclude that the only solution is to leave.  We would all benefit, however, from the election of politicians who operate under the general principle that government oughtn’t meddle so much.

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Gaspee on 10 and Robber Barons in the Government

If you haven’t caught Gaspee Project Clay Johnson’s conversation with Bill Rappleye on 10 News Conference, be sure to check it out (in three parts).

Rappleye seemed baffled by some of Clay’s views, but he articulated them very well — better than is often the case.

One interesting point that I would have taken in a somewhat different direction than Clay was Rappleye’s characterization of “unfettered capitalism” as the playground of robber barons.  Clay’s answer was that a “free market” isn’t only free from excessive government interference, but also from other institutions or forces that seek to restrain competitive activity.  That includes monopolies or cartels that effectively control markets based on their own power, without reference to the tax-and-police powers of the state.

A classic example of this was Cornelius Vanderbilt’s ownership of the Albany Bridge, the only way to get trains from west of the Hudson River to New York City in the mid-1800s, and his closure of that bridge to manipulate the markets and buy off his competitors.  This example is also helpful in that it illustrates why one might reasonably propose that government get involved to regulate use of a private bridge, if not take it over completely, or to create public bridges to compete.

Such questions can become tricky quickly, but the key point in 2018 is that those conditions exist in a much more limited way.  Technology has empowered so much innovation that the problem has flipped.  Metaphorically, thousands of entrepreneurs around the country are deciding that relying on the Albany Bridge makes them vulnerable or is simply irrelevant, and so they’re building new bridges or figuring out how to avoid the use of bridges altogether.  And here comes Mr. Vanderbilt, looking for government to stop that innovation so this antiquated structure remains viable.

As I mentioned back in 2016, the robber barons created a market for progressive politics to use government against the powerful industrialists.  Now we have an even more-powerful monopoly — government — that has much more total authority over us than mere economics, and it has been working to bring other powerful forces, like industrialists, to heel.

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Whom the Wavemakers Wash Out with the Tide

How typical of the Rhode Island Way is Democrat Governor Gina Raimondo’s Wavemaker program?

A total of 240 college graduates working in science, technology, engineering, math and design occupations have been awarded Wavemaker Fellowships to help pay their student loans, the R.I. Commerce Corporation announced Thursday.

The average award in this, the third year of the program, is about $3,600. The tax credits are intended to keep recent college graduates working in Rhode Island, rather than become part of a “brain drain” to other states.

Put aside chuckles at the notion that keeping 240 Rhode Islanders each year does much to help the brain drain problem and the question of whether that $3,600 is actually persuading most of them to stay here despite options elsewhere.  Who pays for this program?

The answer is that we all do.  The money is skimmed from all of the various taxes and fees that we all pay, and as small as the $864,000 price tag may be, it ultimately becomes concentrated on the most active participants in the state’s economy, who must find ways to pass the burden on.  One can’t trace such things, dollar for dollar, but it’s a relatively safe bet that the burden ultimately comes to rest on those with the least economic leverage.

Of course, we know it’s not only $864,000 per year.  For the Wavemaker program to seem so ordinary, there must be many other programs that follow a similar philosophy.  For such a seemingly inconsequential program to be proposed, enacted, and implemented, it must accord with Rhode Island’s political and economic strategy, which we can summarize as getting somebody else to pay for politically convenient favors… preferably somebody whose face we will never have to see.

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