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America’s Job Creator in Chief

It just keeps getting better and better in Texas, thanks to governor and potential 2012 Republican presidential candidate Rick Perry, who signed pro-business tort reform legislation last week—forcing loser-pays rules for groundless lawsuits. The state is already a leader in tort reform and job creation, making Rick Perry “America’s Job Creator in Chief.”

For the 12 months through April, Texas has added 250,000 private-sector jobs. Over the last 10 years, it has added 733,000. New England, in contrast, lost 244,000 over the last 10 years. That’s a 977,000-job spread between Texas and New England.

Here’s why: Texas has implemented tort reform; has essentially no business, income, or estate tax; is a right-to-work state; and doesn’t allow collective bargaining agreements by public-sector employees.

New Hampshire on the Verge of Right-to-Work

States compete with each other, pure and simple, and because of the close geographical proximity of the New England states, competition is especially fierce. New Hampshire House Speaker Bill O’Brien gets it … and is doing what he can to override Governor Lynch’s veto. “Passing right-to-work on top of not having an income tax could make us the Hong Kong of the region,” says O’Brien. New Hampshire’s unemployment rate of only 4.9% is the lowest in New England. Even if Rhode Island’s unemployment were cut in half, it would still be higher than that of the “Granite State.”

Public-Sector Unions Control the Purse

The year 2009 marked the first time in history that the number of unionized public employees outnumbered those in the private sector—51% of all union members are dues-paying public employees. Of the government workforce, 37% are members of a union, and in Rhode Island that figure is 70%. The reason for the decline in union membership in the private sector is simple—when there’s no more money, there are no more jobs, whereas in the public sector, union membership grows as long as there are taxes. It’s the taxpayers who make good on the promises made to union leaders by unaccountable CEO governors and a general assembly they help to elect.

Rhode Island and the 25 other states that have collective bargaining for all state and local employees need to give control of the state purse back to the taxpayers. Remove collective bargaining powers, and the incentives are put back into alignment with the interest of taxpayers. But in Rhode Island, there’s no political will to make the obvious and necessary changes.

A States’ Rights Template: Ohio’s Senate Bill 5 Paves the Way

Ohio governor John Kasich’s signing of SB 5 was the first major reform of Ohio’s 27-year-old collective bargaining law for government employees. Over the weekend, unions set up drive-through stations in grocery store parking lots, gathering signatures to overturn the law by putting it on the November ballot. Here’s a breakdown of the items in SB 5 that unions find most contentious:

1. Public employees can continue to collectively bargain on issues related to their wages, hours, and terms and conditions of employment. However, they will not be permitted to negotiate on issues considered to be management decisions. 

2. Public employees will be asked to pay a modest share of their benefits costs (at least 15% of their health insurance plan, when private-sector workers pay an average of 31%).

3. Government employees who are not union members cannot be required to pay a portion of their salaries to a union, and government contracts cannot require a public employer to collect payroll funds for political use without employee authorization.

4. In terms of pension reform, taxpayers will no longer pay the 10% employee portion of the pension contribution; employees will have to pay it themselves (taxpayers already pay a 14% contribution).

5. If employees are not happy with their union representation, 30% of a bargaining unit will be able to petition for a decertification vote. The vote to decertify would require a majority. Also, non-union members will not have to pay a fee for the union’s effort to negotiate and enforce a contract on their behalf. 

Unions claim SB 5 is an attack on the middle class. Yet the law applies to only 6.5% of Ohio’s 5.5-million-person workforce. If Rhode Island had its version of an SB 5, unions would take the same approach. Like Ohio, only around 6.0% of Rhode Island’s 571,000 workers would be affected. It would not be an attack on the middle class; it would be a support of the taxpayer.

Wisconsin Supreme Court and Governor Walker’s Right-to-Work Legislation

On Monday, the Wisconsin Supreme Court began hearing arguments in the legal challenge against Governor Scott Walker’s law that eliminates collective bargaining rights for public workers. The law was voided by a circuit judge. The opponents argued the law was invalid because Republican lawmakers had violated Wisconsin’s strict open meetings law when they passed the measure using a legislative maneuver. It is now before the Supreme Court, where one of the seven justices is recently reelected judge David Prosser. A union-led assault forced a recount of his reelection results. He won the recount by 0.5% of 1.5 million votes. If unions don’t get what they demand, they go for a recount and take it to court.

California: The Biggest Loser

Click here to enlarge the chart

Over the last 10 years, California has been the biggest loser of jobs, shedding a total of 624,000 private-sector workers. A political contingent travelled to Texas to learn how to save or create jobs. Unions pressured the Democratic wing of the contingent not to go to Texas. While the group visited Texas, business leaders were testifying about how the state’s tort reforms had improved the job market in Texas. On the day this was going on, what was California doing? As John Fund of The Wall Street Journal writes in his article “California Dreamin’—of Jobs in Texas”:

On April 14, the state senate passed a bill mandating that all public school children learn the history of disabled and gay Americans.

One speaker from California shook his head in wonder: “You can have the most liberated lifestyle on the planet, but if you can’t afford to put gas in your car or a roof over your head it’s somewhat limited.”

It’s this lack of political will on the part of politicians in states like California and Rhode Island, among others, that lose their states jobs to the reformers—like Texas’s Rick Perry, Ohio’s John Kasich, Wisconsin’s Scott Walker, and maybe New Hampshire’s House Speaker Bill O’Brien—who are just as happy to take them.

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Anyone who believes that a perfect democracy will be constituted in Egypt within the year is naïve. You can’t go overnight from living under a modern-day pharaoh to the direct democracy of Switzerland. But when I hear of read Americans discounting a transition to democracy, it comes as a great surprise because America’s own democracy was not a day in the making. July 4, 1776, did not herald a perfect democracy. Can anyone argue that America is even a perfect democracy today?

America is the first or second most advanced democracy in the world (running in a close heat with Switzerland, which has a direct democracy bordering on the extreme), but the road has been neither straight nor smooth. It took until May 29, 1790, for the last state to ratify the Constitution, after a terrible national experience under the failed Articles of Confederation. America has had its share of violent insurrection. Anyone remember the Civil War, The Shays’ Rebellion, or The Whiskey Rebellion? United States history even includes its own quasi-war of religion, the Utah War, in which minor skirmishes nearly led to a full-fledged battle between Mormon militiamen and the U.S. Army.

These are only the most violent expressions of trouble in American democracy. U.S. history is no stranger to persecution based on ethnicity and race. The horror of black and Indian slavery, forced migration on the terrible “Trail of Tears,” and the internment of Japanese, Germans, and others during World War II aren’t part of what most Americans would define today as a free and fair democracy. It took 144 years from the signing of the Declaration of Independence for women to be given the right to vote.

Americans need to think about where we are today and how far we have come. It should be remembered that America didn’t cut a straight path to the freedoms held dear today. Neither will Egypt, Libya, Tunisia, or any other country still oppressed under the rule of a dictatorial government.

Many Americans thought the prudent action would have been to allow Hosni Mubarak to stay in power in Egypt. Mubarak had been an ally, and why take a risk for freedom? Thomas Jefferson laid out a response to that question in the Declaration of Independence when he wrote:

Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn that mankind are more disposed to suffer, while evils are sufferable than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security.

So, yes, there are many Arabs who hate America for allying with their despotic rulers. And, yes, it may have been prudent to assist these rulers in an attempt to extend America’s will throughout the Middle East and to protect ourselves from the inevitable retribution of those Arabs who do hate us. Egypt has started down the path toward democracy, and, though that path may be twisted, it will lead to a better life for the Egyptian people.

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America is facing a fiscal deficit of $1.48 trillion in 2011, according to the CBO. That’s nearly 10% of projected GDP. So 10% of what America “produces” next year will be money the government borrowed from the Fed, China, Russia, Japan, and the oil states. That’s not a sustainable way to run an economy.

A quick economic review: Economies are based on only a few inputs, consumer spending, investment, government spending, and the net of exports and imports. Add those together and you get GDP. This week Chairman of the Federal Reserve Board of Governor, Ben Bernanke, lamented before Congress that China will not allow its economy’s investment portion to decrease by spurring greater consumption at home. In the same testimony he argued that his strategies would ultimately spur consumer spending to increase America’s GDP. China’s GDP is very out of balance, but America’s is too. The U.S.A. has been reliant on consumer and government spending for far too long and needs a sustained increase in investment.

Congress can help those investment dollars flow by lowering or eliminating the corporate income tax. As an ever-decreasing portion of overall revenues, the corporate tax does more to discourage foreign investment in the United States than it does to fund government. The corporate tax portion of revenues has been steadily declining and was on 12% of government receipts in 2008. Besides, when corporate income is finally distributed to shareholders, it’s taxed then at the shareholders’ marginal tax rates.

At the conservative gathering happening in Washington right now, called CPAC, Senator Rand Paul told fellow conservatives how it is. He said, referring to the proposed budget cuts, “It’s too timid.…We must be more bold.” Boldness seems to be in short supply in Washington. I see today a lot of supposed presidential candidates working at building their base, not at laying out ideas for the future. I see Former Speaker Newt Gingrich singing the praises of ethanol subsidies. Ethanol subsidies? Where is the constitutional validation for that? I e-mailed House Committee on Agriculture chairman, Congressman Frank Lucas (R-OK) to ask him where the constitution justified such subsidies. I’ll be sure to let you know if he gets back to me with an answer, but don’t hold your breath. When Congresswoman Nancy Pelosi was asked where the constitution justified Obamacare, her answer was “Are you serious? Are you serious?” Let’s hope Congressman Lucas and Former Speaker Gingrich come up with a better defense for ethanol before 2012.

Without sustained, bold leadership from conservatives in the House and Senate, the budget deficit appears here to stay. As long as Republicans are bashing Senator Rand Paul for proposing cutting foreign aid (an absolutely fabulous idea when Americans are going hungry and borrowing from foreign countries) and singing the praises of ethanol subsidies, the country has major problems that a switch in partisan power is not going to fix.

Nancy Pelosi’s Answer to a Question about Obamacare’s Constitutionality:

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The likely reason you’ll see no help from America is that the nations yearning to be free are Arab. And these  nations have dictators who have, over the years,  been very cooperative with the United States. Many of the leaders have been “duly elected” (I would say dubiously elected) for decades. For instance, in Tunisia, Zine al-Abidine Ben Ali held power for 23 years before his recent ouster. Egypt’s Muhammad Hosni Sayyid Mubarak has been in office for 30 years, Yemen’s Ali Abdullah Saleh for 21 years (Yemen’s first and only president so far), and Algeria’s Abdelaziz Bouteflika for 12 years. Jordan and Morocco make no pretension that political change is even a possibility. The two countries are ruled by kings, Abdullah II and Mohammed VI, respectively. At the top of the list is Saudi Arabia,where there have been no reports of protests, not surprising given that protesters are probably too afraid for their lives to demonstrate. Remember, this is the same country where most of of the 9/11 hijackers originated.

The power-hungry leaders of these countries have been some of America’s closest allies in the Middle East. Placated by hefty deals for weapons and an American blind eye to human rights violations, these countries have muted their public disdain for Israel and allied themselves with the U.S. against Iran (these are mostly Sunni-dominated countries while Iran is Shiite-dominated, which  helped them pick sides with the U.S.). The price for allegiance has been the freedom of their people.

When CNN plays images of Arabs dancing in the streets when terror strikes the United States, it shouldn’t surprise anyone. Arabs view the United States as the mercenary state that is propping up their despotic leaders. In American history classes, young children are often told of the brutal Hessian mercenary soldiers hired by King George to help the English fight against the Continental Army during the Revolutionary War. To many Arabs, America fulfills the same role as the Hessians – a hired gun protecting the interests of autocratic rulers.

The most common argument for all this hypocritical U.S. action in the Middle East, is that if America allows the people of Muslim-Arab countries to be fully free, these countries will become Islamic nations ruled by Sharia law, spawning terrorists with a mission to destroy the United States. Think about that logic, it doesn’t make sense. Who do you think is more likely to become a radical terrorist, someone with no freedom living under a despot, or someone who has a voice in his own government and an outlet for peaceful change? With the 9/11 hijackers  mostly coming from Saudi Arabia – an oppressive monarchy – I think the answer is obvious. Also, the current protests seem to be broad-based, and not led by radical Muslim groups.

Arab people don’t hate the United States because of America’s freedoms (as many conservative American leaders have unfortunately repeated). Many Arabs hate America because of a freedom stifling U.S. foreign policy. Congressman Ron Paul alluded to just as much in the now-famous exchange between Paul and former New York mayor Rudy Giuliani in the 2008 GOP presidential primary debates. Giuliani unfortunately shouted down the congressman before Dr. Paul was allowed to fully explain his point.

With protests today gripping many countries in the Middle East, the U.S. should support freedom in the region. That’s what America stands for. America’s solidarity with those yearning to be free should not extend solely to those countries where regime change is a business opportunity.

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The bill targets the pay of federal employees, which has outrun that of private employees for years now. The President offered a modest two year freeze on federal employee pay. The RSC has proposed freezing their pay for five years, allowing their numbers to dwindle by 15% through attrition, and not allowing federal employees to work as union bosses on the taxpayer dime (that this last one isn’t already the case shows you just how bad things are in Washington).

The bill could save Americans $2.5 trillion through 2021. That’s a great start, but it won’t make a dent in the projected deficits over that time period. Anyone screaming about how wrong these cuts are is in for a rude-awakening if a balanced budget ever emerges.

The bill’s focus is bringing spending levels first to the 2008 baseline during fiscal 2011, and then to the 2006 baseline starting in fiscal 2012. The GOP is making good on its campaign promises by introducing bill after bill that would cut federal spending. I’m afraid though that the scope of their cuts isn’t deep or wide enough. Military spending cuts and entitlement reform are going to have to be a factor in balancing the budget. I’d like to see troop numbers and weapons systems protected by removing troops from foreign soil. Entitlement programs must be matched with reality. People are living longer, therefore ages of enrollment must increase. Imagine someone living until age 85, not uncommon in today’s society. They can live on Social Security for 20 years! The system was never meant to do that, and it simply can’t do that.

Promises have been made to older generations, those promises should be kept. But younger age groups should enter the system later, and the youngest should have Social Security phased out for them altogether. As part of the generation many are calling the “millennials” I highly doubt I’ll see a Social Security check anyway. The government should make it official.

Medicare and Medicaid are the largest burden on the federal government. The system was never meant to handle full-blown health care welfare payments. Medicaid is obviously unconstitutional and should be punted to the state level altogether, rather than engaging in the tax money shuffle that goes on today. Imagine running your business in such a way! Here’s the analogy: Your business (a state) has customers (citizens). Those customers send their money to a bank (the federal government). The bank takes a percentage and then gives the money to your business. Your business then takes a percentage and hands the money back to a fraction of your customers. That fraction then gets to use the leftover money to buy health care. That’s an efficient system, huh?

Let’s not delude ourselves any longer. The federal government is in line for major cuts. We can start by sending some of the obvious local systems like Medicaid, the Department of Education and the Department of Transportation back to the state level. Then, take the knife to the remaining federal budget.

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Here’s a chart I made using FBI National Instant Criminal Background Check System (NICS) statistics and FBI violent crime statistics. The blue bars represent the growth in background checks for gun sales, and the red bars are the change in the violent crime rate. As you can see, gun sales are soaring, and crime is down.

Click to Enlarge Image

The traditional logic says that during times of economic downturn like today, crime goes up. Add to that the Brady Campaign’s false logic that “guns = crime,” and the U.S. ought to look like a Mexican border town filled with al Qaeda on one side and the Israeli Defense Forces on the other.

But that simply hasn’t happened. On Monday (December 20, 2010) the FBI announced that violent crime rates are still declining. As more Americans exercise their Second Amendment rights, criminals must think twice about pursuing their trade.

Two initiatives that need conservative support are the extension of Castle Doctrine law to Wisconsin and Iowa. The NRA has announced its plans to use new conservative majorities in the states to lobby for recognition by states of citizens’ rights to defend themselves. I say “recognition” because citizens already have those rights; it’s just that states don’t recognize them, making self-defense a crime. (For a full acounting of states’ Castle Doctrine laws see Dick Young’s Liberty & Freedom Map)

The FBI has announced that crime is down again in 2010. For its part, the Brady Campaign has announced its call to disarm Americans during times of emergency or national crisis. What are these people thinking? On top of that, the Bureau of Alcohol, Tobacco, Firearms and Explosives (BATFE) has come out with a call to start tracking sales of firearms.

Buried in the Federal Register on Friday (December 17, 2010), the BATFE asked the Office of Management and Budget, “to require Federal Firearms Licensees to report multiple sales or other dispositions whenever the licensee sells or otherwise disposes of two or more rifles within any five consecutive business days with the following characteristics: (a) Semi automatic; (b) a caliber greater than .22; and (c) the ability to accept a detachable magazine.” If granted, the request will give BATFE the right to infringe upon Fourth Amendment search and seizure rights for 180 days, without congressional approval. That’s something you don’t see often—the government using one abridgment of your constitutional rights to perpetrate another (using a perversion of the Fourth Amendment to infringe on your Second Amendment rights).

If you’d like to register your outrage, please contact the Office of Information and Regulation Affairs, Attention: Department of Justice Desk Officer, (202) 395-6466. Alternatively, during the first 60 days of this same review period, e-mail Barbara A. Terrell, Barbara.Terrell@atf.gov, at the Firearms Industry Programs Branch of the Bureau of Alcohol, Tobacco, Firearms and Explosives, or fax Barbara at (202) 648-9640, or send her a letter at 99 New York Avenue, NE, Washington DC 20226. (Be nice. There is nothing worse for Second Amendment rights than angry, frothing activists with no manners, and Barbara is just a contact person, not the stooge who runs the show; if you want to call him, dial (202) 456-1111.)

Americans’ Second Amendment rights are under assault. It is obvious that liberals in the country feel you shouldn’t have the right to own a firearm; for instance, watch Justice Stephen Breyer explain that the Second Amendment doesn’t mean what it says:

The Supreme Court is one liberal vote away from having a majority that thinks as Justice Breyer does. Every conservative American must work to remove that threat at the ballot box in 2012.

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America today reminds me of a working couple where the husband has just lost his job, they have two kids in junior high school, a mortgage and they’re maxed out on their credit cards. On top of it all, they recently agreed to take in their troubled cousin, Kabul, who just can’t get his act together and keeps bouncing from relative to relative. Meanwhile, their Indian nanny, who traded room and board for baby-sitting, just got accepted to M.I.T. on a full scholarship and will be leaving them in a few months. What to do?

Only, I don’t think in America’s case the father has lost his job. Most Americans are still working and paying taxes. It’s not a revenue problem that is driving U.S. debt worries. Over the past 12 months Uncle Sam has been given $2.3 trillion of Americans’ money. That would equal the world’s sixth-largest country by GDP if the government were a sovereign nation! That’s larger than the entire GDP of Russia ($2.2 trillion). What exactly is the government doing with all that money? And how can a country like Russia be considered a threat to the U.S. when our government outspends its entire GDP?

The solution Friedman is looking for presents itself to America every day: cut spending, cut spending, cut spending. We simply cannot afford the programs we are attempting to pay for. Our competitiveness in the world is being eroded by our focus on propping up inefficient government programs that sap the economic will and resources of the nation for projects with Keynesian multipliers that are less than one. For those non-economists out there, less than one is bad. In other words, for every dollar the government spends, it generates less than a dollar’s worth of GDP.

Friedman goes on to cite poor education in America as one reason we’re falling behind:

We’re in a hole and still digging. Our educational attainment levels are stagnating; our infrastructure is fraying. We don’t have enough smart incentives to foster both innovation and manufacturing; we’re not importing enough talent in an age when we have to compete for jobs with low-wage but high-skilled Indians and Chinese—and we’re still piling up debt.

He’s absolutely right, and he calls for a solution to America’s scoring “14th in reading skills, 17th in science and 25th in math” in the PISA rankings of the world’s industrialized nations’ educational attainment.

I am 27 years old, and thus have only recently left the bowels of the public education system to enter the working world. I am keenly aware of my peers and the trouble many of them seem to have in grasping any benefit from their education. I believe the problem stems from a lack of focus in the classroom. Here is my solution.

Allow only these materials into the classroom: textbooks, blackboard, chalk, pencils, erasers, notebooks, and materials for scientific experiment. As Dick Young would say, practice the KISS method: Keep It Simple, Stupid. The Clinton-era “computer in every classroom” schtick is ridiculous. Math has not changed very much in the past 50 years, nor has the English language, history (other than the newly generated), or basic grade school science. What has changed is the number of distractions in classrooms—overhead projectors, computers, distance learning, televisions, movies, and enough social workers to sink a battleship.

In 2000 I travelled to China as part of an exchange program. During my stay I visited Nanjing Middle School #29, the school of my Chinese counterpart, Wang Peng. During lectures, his class was seated, still, and paying attention to the teacher in the front of the room, who taught with a board and a book, nothing else. Peng was expected to know his materials, and if he didn’t, that was his loss. Without a proper education, the Chinese are simply left to pick up a job that is unskilled, not moved along the ranks through school because they are “entitled” to a good education. (Remind me again: Which is the capitalist country and which is the communist?)

One other thing I noted on my trip to China was the vigorous, militaristic physical education classes that the students attended on a daily basis. Exercise was done at every grade level, and these were not “sports” like baseball where you sit or stand in one position for 65% of the time. These were aerobic exercises. (As a somewhat disturbing side note, high schoolers were wearing military fatigues, and I saw elementary students practicing what could only be described as throwing hand grenades. Though that’s all the topic of another post.)

I keep hearing that American students outperform their international peers in measures of creativity. They are somehow better at looking at odd circumstances and “thinking outside the box.” But the problem is that American students don’t even know how to build the box in the first place. Rote memorization is boring, but it is one of the essential components of learning. The absolutely horrific spelling ability of most Americans is exhibit number one of the dismal educational system we are stuck with today.

The reason college graduate unemployment rates haven’t skyrocketed like those of high-school graduates, is that for many, college is the first place in which basic education is applied. Many students show up to college without even the remedial skills needed to complete freshman-level coursework. I witnessed droves of my peers attend courses in college that taught junior-high-level mathematics and reading skills. These kids didn’t belong in college, much the same way many of their parents didn’t earn enough money to really qualify for a mortgage. The same “American Dream” principle that was applied to home ownership has been applied to receiving a college education. Americans wouldn’t depend so highly on a college education if their high-school education was worth a damn.

Here are some additional education solutions we should try. I am no “education professional,” but I think in this case that might give me more credibility, rather than less.

Solution 1) Implement year-round schooling. Kids forget a lot during summer break, so every year many weeks are wasted on reviewing concepts from the previous year. If kids need lots of time off in a year, spread it out.

Solution 2) Do more with less—as I wrote above, KISS. This might help end the practice of having parents send in school materials to be shared among the students. If schools weren’t buying computers for every classroom, they may be able to afford tissues for runny noses and toilet paper for the bathrooms.

Solution 3) Memorize. It’s essential, even if it is boring.

Solution 4) Do real exercise in PE class. Study after study shows that fit (not fat) kids learn better. That’s good for the nation’s health-care costs, competitiveness in the world, and military readiness.

There are a lot more solutions out there; send me some good ones at feedback@richardcyoung.com, and I’ll post them on the site.

Also, check out Michelle Rhee’s StudentsFirst.org. Rhee has been a serious advocate for students and seems bent on trying anything to get American kids learning more.

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On deck for control of the Bureau of Alcohol Tobacco Firearms and Explosives (BATFE) is Andrew Traver, an anti-gun BATFE agent from Chicago’s field office.

Here’s a video of Traver, that is misleading viewers by showing them an automatic AK-47, but saying that assault weapons ought to be banned. The AK-47 that’s in the video is already illegal in the United States for those without a special permit. This type of confusion of the facts is the bread and butter of the anti-gun lobby.

America surely doesn’t need another bureaucrat to confuse the issues for them. The Obama administration is already full of people who are doing that.

Any senator that votes to confirm Traver as head of BATFE will certainly face the wrath of voters come their next election. The NRA has already come out strongly against Traver. Below is an interview with Chris Cox from the NRA that outlines why Traver shouldn’t be allowed anywhere near Washington D.C.

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