By Isaac Morehouse on 12/29/2007 10:35 PM

Does Government Always Have to Grow? - By Stephen Davies

One of the benefits of historical knowledge is that it brings perspective. Things that seem obvious look quite different when you realize that they are of recent origin. Things that seem inevitable do not appear so when you look at their past. One of the best examples of this is the size of modern government.

Today in the "developed" world, governments spend on average between 40 and 60 percent of the national income. Most people take this for granted. This is where the first element of historical perspective comes in. Government spending on this scale is historically recent. In 1900 the average share of national income taken by government was about 10 percent. Government spending rose as a proportion of national income throughout the twentieth century. The two critical episodes in most countries were the two world wars. Government spending soared during the conflicts. Afterwards, although it declined, it never went back to its pre-war level.

All this is well known. There is an extensive scholarly literature on the reasons for this growth of government since 1900. (1) The common conclusion is that the growth of government was unavoidable and is irreversible. However, taking a longer view than one that stops in 1900 leads to a different conclusion. Government grew, apparently inexorably, before and then was sharply cut back.

Modern public finance was invented in 1696, with the creation of the Bank of England. Before then rulers raised most of their income through direct loans from private bankers. This was a risky business as kings frequently found themselves unable to meet their obligations and resolved their difficulties by defaulting on their debts. The English government solved this problem by inventing the national debt, in which governments raise money by borrowing from the public through the issuing of bonds. The Bank of England had the responsibility of managing the government's borrowing. However, as contem ... Read More »

By Isaac Morehouse on 12/29/2007 6:57 AM

By Isaac Morehouse on 12/27/2007 7:39 PM

It takes at least three public employees to wire a single light.  At least that was the case at Western Michigan University recently.  WMU is putting in some new outdoor lights, and last time I visited I watched as three (and later FOUR) public employees sat around one light post wire for over 20 minutes before they moved on to another (for another 10 minutes or so).  They were chatting and occasionally looking at - sometimes even touching - the wiring.  I will give these guys the benefit of the doubt - it is very possible they were in fact doing or discussing something that required that amount of time and manpower.  Still, it took me back to my days as a student at WMU, when I would watch 4-5 groundskeepers spend a half an hour to rake a 20 foot area.  I snapped a quick photo of the public servants hard at work.

A few years back I recall WMU privatizing just part of their dorm janitorial duties, and saving some $1.2 million over the public union's lowest bid.  To my knowledge however, they stopped there and did not attempt to privatize mush else.  Next time you hear them gripe about not getting a big enough increase in taxpayer funding (even as tuition continues to grow) just remember these men putting your money to work.

By Isaac Morehouse on 12/25/2007 7:52 PM

A great article by John Stossel from Human Events Online: 

The Free Market Does It Better
Another global warming skeptic has dared speak up. Meteorologist John Coleman, founder of the Weather Channel, calls global warming "the greatest scam in history."

"Environmental extremists, notable politicians among them … create this wild 'scientific' scenario of the civilization threatening environmental consequences from Global Warming unless we adhere to their radical agenda. … I have read dozens of scientific papers. I have talked with numerous scientists. …There is no runaway climate change. The impact of humans on climate is not catastrophic. Our planet is not in peril. … In time, a decade or two, the outrageous scam will be obvious."

I suspect he's right.

But what if he's wrong?

I've argued that even if global warming is something to worry about, it's dangerous to look to government to fix the climate. Government is a blunt instrument, riddled with self-serving politics and special-interest pandering. To expect it to do something as complicated as calibrate regulations and taxes to fine-tune the climate -- without making many people poorer and a few cronies richer -- is naive.

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By Isaac Morehouse on 12/23/2007 8:39 PM

I've blogged on this issue before, but this article in the Washington Post got my blood boiling again.  When will the ridiculous practice of forcing taxpayers to pay billions each year to the 1 percent who choose to farm end?   From the article: 

"Nationwide, the federal government has paid at least $1.3 billion in subsidies for rice and other crops since 2000 to individuals who do no farming at all, according to an analysis of government records by The Washington Post.

Some of them collect hundreds of thousands of dollars without planting a seed. Mary Anna Hudson, 87, from the River Oaks neighborhood in Houston, has received $191,000 over the past decade. For Houston surgeon Jimmy Frank Howell, the total was $490,709."

By Isaac Morehouse on 12/22/2007 1:22 PM

A great story from Opinion Journal about how Federally backed and subsidized loans, grants, and other spending on higher education causes tuition to continue its upward spiral.  It's not limited to public universities either, since loan guarantees apply to private schools as well.  Naturally, with the government's hand in the institutions, they start demanding changes in operating procedures too.  So much for academic freedom.

An excerpt from the article:

"..."colleges have little incentive to cut costs," says economist Richard Vedder, the author of "Going Broke by Degree: Why College Costs Too Much." Mr. Vedder explains that there are now twice as many university administrators per student as there were in the 1970s. Faculty members are paid more to teach fewer hours, and colleges have turned their campuses into "country clubs." Princeton's new $136 million dorm, according to BusinessWeek, has "triple-glazed mahogany casement windows made of leaded glass" and "the dining hall boasts a 35-foot ceiling gabled in oak and a 'state of the art servery,' " whatever a servery is."

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By Isaac Morehouse on 12/21/2007 12:06 PM

The State Legislature is at it again - prowling the retail shops of the state on the lookout for those nasty criminals behind the register who just may take advantage of holiday shoppers in a way so cruel, so vile, so underhanded it can hardly be mentioned.  Thankfully, lawmakers in their benevolent wisdom have issued a decree from on high protecting the sheep...ahem...consumers from evil.  No longer can retailers offer us gift cards that expire in five years or fewer.

We've all been subject to such intolerable cruelty for all these years - having gift cards we treasured so much we decided to wait four and a half years to use them, only to find they were no longer valid.  I feel so much better having one less gift card option available to me.  What if I ended up buying a gift card with a four year expiration date?  There's no guarantee that I would've read the fine print, and goodness knows I cannot be held responsible for my own laziness!

Certainly lawmakers cannot count on individual business owners and individual consumers to come up with agreements between them of how to exchange goods and services.  Just remember how terrible the world was last Christmas season, when people were free to place whatever conditions they wanted on gift cards, and freely agreed upon terms of exchange were allowed!

Thanks to the State News for bringing these tidings of great joy to all the people.

By Isaac Morehouse on 12/20/2007 5:33 PM

By Isaac Morehouse on 12/20/2007 12:28 AM

The University of Michigan, after sending students to Lansing earlier this year to demand more taxpayer dollars for their institution, has given faculty and professors pay hikes averaging 4% (more than inflation).

Article here.

In a rare move of fiscal responsibility, Western Michigan University's Board of Trustees voted down a proposal thought would've forced university contractors to pay a "living wage" (a.k.a. union wage) to all employees.

The proposal required all contractors employees, which are primarily for janitorial work at WMU, be paid at least $11.50/hour, or $9.50/hour with health benefits.  Additionally, the proposal required contractors to give their employees 10 paid sick days and 10 paid vacation days.

I had several jobs for contractors while I was in college.  I can tell you, if my emplpyer's had been forced to meet such conditions, I wouldn't have been working.  Living wage proposals are typically pushed by unions as a way to limit competition on public contracts.  Union contractors have a tough time offering services at prices competitive with non-union contractors.  They try to p ... Read More »

By Jason Gillman Jr. on Monday, December 17, 2007 4:12 AM

A fox news story about how congress is fidgeting with a tax bill addressing the AMT really emphasized how the current tax system is, as we like to put it in the military, ate up. Former House Majority Leader Dick Armey, in a USA Today editorial, stated that the tax code is roughly 60,000 pages. From a power point that Deroy Murdoch had during a speech at Central Michigan University, I remember seeing a spike in the number of pages following the enactment of Roosevelt's New Deal policies - no surprise there. It's clear that something needs to be done. But what? Read More »

By Isaac Morehouse on 12/16/2007 12:20 AM

While browsing the comments section for Mackinac Center articles, I came upon a startling comment from a guy who is working on a documentary called "Growth Busters Presents - Hooked on Growth, our misguided quest for prosperity".  The gist of his comment was that Michigan's decline in economic growth and population is a good thing, and should be encouraged by state lawmakers.

His film's website, www.growthbusters.com, is a bizarre place.  As the film's title suggests, the filmmaker believes that human prosperity and growth (whether in population or wealth) are very bad things.  The thinking goes that all this human growth will overload the planet.  I guess I'm not sure what exactly is supposed to happen after we reach that point, or why to an anti-growth advocate the ensuing disaster would be bad.

The site bemoans our lust for growth and the resulting global climate disaster sure to befall us because of it.  But if stopping population growth and prosperity is a good thing, wouldn't "natural" population controls like flood, famine, fire, and disease be welcome?

He's entitled to his opinion that humans attempting to grow and prosper is a bad thing.  My only question is, who does he suggest should be forced to stop having babies?  Who should be forced to stop trying to become wealthier and healthie ... Read More »

By Isaac Morehouse on 12/14/2007 12:01 PM

Indiana is hoping to capitalize on Michigan's misery.  Driving towards Chicago on I-94, this sign can be seen near the border.

I'm not sure how effective such a billboard will actually be at luring commuters to switch states (especially if you've experienced the Gary/Hammond area near the billboard!), and it appears to be an Indiana taxpayer funded gimmick, much like the money-wasting MEDC in our own state.  However, it does serve as a reminder of just how bad our state is doing relative to the rest of the nation - and other states know it.  It's becoming not just data and statistics, but a reputation.

Following the pattern displayed by the city of Detroit, Michigan has been slowly but surely declining economically.  One can surely make the case that our nation's worst unemployment and personal income growth (or shrinkage, in our case), our plummeting property values and out-bound migration are due to declines in the big three automakers.  This may be true, but is that the only thing Michigan Read More »

By Isaac Morehouse on 12/14/2007 12:16 AM

The next time you are frustrated that there are not enough coat hangers in a restaurant bathroom, think twice before begging some bureaucrat to create a new regulation.

Not only would that be a stupid, whiney, and frankly cowardly thing to do (what's more cowardly than asking government, who backs every law with armed enforcers, to make others adapt to your comfort?), but even if it benefited several people in the short-term, it will surely harm freedom for all in the long and short term.  Government "experts" sit around all day long trying to figure out just how, exactly, our lives should be run.  They do this by establishing insanely detailed "norms", and threatening to use force against anyone who does not comply with the norms that these few elites create.  Think I'm exaggerating?  Let's look at a few of the more obscure examples of laws in Michigan:

In Michigan It Is Illegal to:
-Have an emblem or insignia of an organization on your car when you are not a member of that organization
-Have a walkathon
-Play the Star Spangled Banner as a dance tune or exit march, or as a part of a medley
-Use blasphemy, or profane curses
-Use indecent language in the presence of a woman or child
-Have poorly working windshield wipers
-Sell or give cigarettes containing ingredients deleterious to health (wouldn't that be all ingredients?)
-Live with an ex-spouse
-Sell a car on Sunday

Granted, most of these are rarely enforced.  But what does it tell us about the mindset of lawmakers and regulators that ... Read More »

By Isaac Morehouse on 12/13/2007 4:30 AM

If you tax something, you get less of it.  That's the operating concept behind a proposal by an Australian "expert" to tax babies as a way to discourage births, limit population growth, and subsequently lessen the emission of carbon into the atmosphere.

CO2 is that annoying little compound that we emit during highly polluting activities such as talking and breathing.  Oh yeah, animals do it too, and so do trees when they rot and die. (As they all eventually do - unless of course they are harvested first and used for handy things like toilet paper, Kleenex, and books)

This idea makes perfect sense.  That is, if you believe that the earth and every living thing in it are in a constant state of war, and that we need to side with the earth and try to stop human growth and development.  If you believe life is a zero-sum game - if humans succeed earth loses, and for earth to succeed humans must lose - I guess we'll all have to do the right thing for mother earth and stop breathing.  Better yet, work on policies that discourage other humans from breathing, then you don’t even have to change a thing!

Do you see how twisted this line of thinking can become?

By Isaac Morehouse on 12/11/2007 1:15 AM

Ever wonder who would win in a head to head between actress Salma Hayek and economist F.A. Hayek?  I'm sure we all have.  Luckily, someone out there has done the legwork for us.  Check out the Hayek vs. Hayek scorecard!

This could actually be quite educational for some.  I was recently in a conversation with a senior majoring in economics at one of our state's large public universities (I won't say which...just that they have a great basketball program) and I asked if he'd ever heard of Hayek.  He promplty responded, "yeah; Salma Hayek, the actress, right?"  I felt pity for him.  He'd paid thousands in tuition to be taught economics, and was about to escape four years of economic education only having been introduced to one Hayek, and that while watching "Desperado".

You'll have to check the scorecard for yourself - but I will say, the winner may surprise you...

By Jason Gillman Jr. on Sunday, December 09, 2007 9:31 AM

This is the exact letter that I submitted to CM Life. It includes a link to the development plan that was being voted on that CM Life for some reason decided to edit out. Read More »

By Isaac Morehouse on 12/9/2007 12:35 AM

Hill Heavyweights: A Look at Public University Lobbying - By Jonathan Slemrod - The University of Michigan

For politicians, the fact that more 34,000 lobbyists roam Washington [1] is the perfect talking point. They can bash evil oil corporations and greedy financial firms while pledging to defend “the little guy” from robber barons who want to soak them dry. This populist message works; when Presidential hopefully Hillary Clinton said that she wouldn’t stop accepting money from lobbyists at the 2007 YearlyKos convention – a meeting of liberal bloggers – she was booed.

Yet while it is often politically advantageous for politicians to bash private industry for its disproportionate influence on policymaking, such an approach doesn’t begin to describe reality: the marriage of special interests and government is on good terms. Rent-seekers come from all walks of life, but most have one thing in common: the drive for a bigger government that protects them. Public universities are no different.

According to The Center for Responsive Poli ... Read More »

By Isaac Morehouse on 12/7/2007 9:33 PM

By Isaac Morehouse on 12/6/2007 11:18 PM

Apply now for the first annual Students for Liberty Conference in NY, February 22-24, 2008. The conference features an all-star lineup of speakers and workshops aimed at equiping liberty-loving students with ideas and tools to fight for freedom on campus.

Apply here - if you are accepted, email SFE, and we'll take care of your hotel and transportation to NY!

Facebook Event

By Isaac Morehouse on 12/6/2007 9:45 PM

From RealClearPolitics:

What can the government do for you? As politicians, pundits, and voters gear up for January's Iowa caucus, one consistent answer seems to float behind the talking points: pretty much everything. Whether it comes to government-funded preschool, subsidized community college, universal health care, tinkering with free trade, or saving the family farm, Democratic politicians are promising the moon - and, according to polls that could likely make Ron Paul weep, a surprising number of Republicans share similar ideas.

It has, in short, been a rough year for fans of economic liberty, and they're not likely to find consolation in Des Moines, Dubuque, or Davenport. They might, however, try looking 8,300 miles to the east, where a quiet revolution is taking place - a revolution that is shoring up education, providing better health care, thriving through free trade, and, yes, even saving the family farm. It's a revolution spreading through the poorest communities in Africa, fueled by a force often brushed aside by promise-happy candidates: free markets.

"Before the country of Kenya existed, before the government of Kenya existed, and before any of today's charitable organizations existed, there were people buying, selling and trading things," says Greg Starbird, vice president of the HealthStore Foundation, a Minneapolis-based organization working for better, accessible health care for Africa's poor. Founded in 1997, HealthStore bases its operations on a familiar, often vilified, and, for some, surprising model: McDonald's.

"The basic ... Read More »