Friday, December 22, 2006

Legislating the Laws of Economics


I noticed on the Roby Brock business talk site that manufacturing jobs in Arkansas took a record month-over-month loss, and that we have lost close to 7,000 manufacturing jobs in the last year. This state is hemorraging manufacturing jobs. But don't worry, our legislature has mandated a non-free market increase in the minimum wage! They are mandating by law that wages have to go up, but they can't seem to mandate by law that the manufacturers have to stay around and pay the new wages. Do you feel better knowing that you WOULD have made more money at that job if your employer hadn't left the state?

Oh, but that is not all our elected leaders have done to "help". They have grown government. So much so that government jobs now outnumber manufacturing jobs in this state by 20,000! And even some people that are obstensibly in "the private sector" like me, are selling products in conjunction with the government (medicare part D prescription drug plans). Statist politicians seem to think we can all make a living delivering government services to one another. They seem more focused on growing government rather than creating a just and friendly general climate for business.

Now some of them are posturing and chest-pounding over their bills to stop "predatory" payday lenders. The bills contain penalties for people who charges more than 17% interest, including fees. But don't worry, it is only "predatory" when check-cashing services do it to poor people. "Financial Institutions" (Bankers) would be exempted from the law! Apparently if you are high-class enough, it is not "predatory" to charge more than 17%!

(continued- click FRIDAY below and scroll down for rest of article)

20 Comments:

Blogger Mark Moore (Moderator) said...

This one is very personal for me. When I was a young man my family was fairly prosperous. My stepfather was a contractor. If he had been able to stay at it, there is no telling how filthy rich I would be today. The last 20 years have been real good for the building industry in NWA to say the least.

But just before the boom in NWA began, there was a state-wide bust. That was because some politicians thought they would be "compassionate" and legislate the laws of economics. They said interest rates above 10% were "usury" and would not be tolerated. No siree. They were going to "protect people" from predatory lending.

When interests rate went up to 20% all the money for home loans left the state overnight. Builders got killed. My stepfather had built a number of spec houses that would have sold if anyone could have gotten any money to buy them, but why should a bank loan money at 10% when they could take it right across the line and charge 20%?

He was stuck with the spec houses. My step-dad's business went under. We went from wealthy to unable to pay our bills in the course of a year. It almost destroyed him. In many ways he never got over it until the day he died. Do I have a strong contempt for legislation that tries to legislate the laws of economics? You bet I do.

As long as both parties know what kind of deal they are making, the government has no business telling them what the minimum wage should be, or what the maximum interest rate should be. When all the poultry workers need their paychecks cashed, are the legislators going to cash it for them? You can't make an artificial rule to help one place without it hurting someone in another.

I think bankers should be allowed to charge more than 17% too, but if you are going to have such a ridiculous law then exempting bankers is a violation of the principles of justice and fairness that the Law is supposed to embody. A just law should be applied equally to all. They shouldn't play favorites. I think that points to the real root of foolish legislation- we have forgotten God. We only give Him lip-service, instead of looking to Him for our standards for civil government.

But since politicians are so determined to pick on "predatory" Payday lenders, I'd like to mention a few facts to put things in perspective about who the "predators" are.

Recently our own government said that our true national debt, counting all of our unfunded future obligations, was 20 trillion dollars. In order to buy themselves votes, politicians have condemned your children to a lifetime of indebtedness and hyper-taxation. They didn't have the guts to raise your taxes to pay for their promises, they just put it on the national credit card. Then they engaged in accounting tricks to hide the true magnitude of the bills they were running up.

Some people have a lot of nerve referring to people running a loan service as "predators".

5:39 PM, December 22, 2006  
Anonymous Anonymous said...

Show me any of the factory jobs that left the state that paid less than the state minimum wage but more than the Federal wage.

The jobs lost left for one or all of three reasons.

1. Improved technology has made production more efficient eliminating workers.

2. Jobs moved to ultra low wage nations to pay wages that wouldn't pay a workers gas to get to work in the US.

3. The location had been fully depreciated and tax benefits exhausted so they moved to another state to do their tax benefit driven dance.

6:48 AM, December 23, 2006  
Blogger Mark Moore (Moderator) said...

I don't have the resources to make a study of it, but growing government drives up the cost of doing business and so does raising the minimum wage. If not the wages of your factory workers then the wages of your janitorial service or your answering service or your lawn service. They all raise the costs of doing business highger. Drip. Drip. Drip.

Finally, there is a breaking point where the business can make more money elsewhere.

Now as to your second point, I agree that the wages being paid in some of these other nations would be too low for a US worker to live on, but we would not have to go that low. We have better industrial infrastructure. We have (so far) a less corrupt government. We have (so far) a better educated workforce. And we have (so far) the big market where they hope to sell their products.

So a manufacturer may be able to pay slave wages in some 3rd world country, but he will have to have his own generator, build his own road, hire a workforce that cannot read and that has a very different idea about the morality of theft, and pay bribes to government officials every step of the way. THen they have to pay to ship their output to the US to sell. Given those conditions it is more profitable for them to pay US workers a higher wage. THE MARKET will do this, not laws saying wages have to be X or Y.

I am in complete agreement with your 3rd point. I am not sure what the answer is, except to tariff the heck out of someone who does that and then tries to sell the products back here.

8:34 AM, December 23, 2006  
Anonymous Anonymous said...

All a minimum wage increase is is a tax on business. It's the government telling someone how to do business and the government has no business in the private sector. I realize that's never stopped them before and will never stop them, but still... If people were mad at how much Huckabee grew government, just wait until Both Ways Beebe takes office. It'll be MUCH worse. Our money won't be our money anymore (was it ever in the first place?). It'll all go to Both Ways and his special interests that he has to protect.

8:50 AM, December 23, 2006  
Anonymous Anonymous said...

Mark you need a lesson in history and economics.

The legislature didn't enact a limit of 10 percent on interest rates in the early 1980s. The amendment in the early 1980s actually raised some legal interest rates,and adjusted others to track the federal discount rate (which no longer exists). The 10% cap was in the state Constitution decades earlier. And the early 1980s amendment wasn't just approved by politicians, but by the people in a general election. So you have to blame a majority of the voters for that one.

The high interest rates of the early 1980s (engineered by Paul Volcker and the Federal Reserve, with the tacit support of the Reagan Administration) were the result of the inflation of the 70s and 80s, which were caused by a number of things: oil prices, lower taxes with increased spending, and especially the hangover of spending on the Vietnam War and the Greaty Society. You can't raise spending without raising taxes, with eventually running up against inflation. (Which is why I predict George Bush's biggest legacy will be inflationary spirals in about 10 years.)

The minimum wage as enacted in Arkansas has little or nothing to do with loss of manufacturing jobs, because manufacturing jobs pay at least 150% of the new minimum wage. The market for manufacturing wages is already far ahead of the state mandates. Workers and businesses most affected will be service- or retail-oriented businesses, populated mostly by female and younger workers. Oppose it philosophically, if you must, but tying the minimum wage to overseas job flight is disingenuous "spin."

Finally, the reason banks are exempt from the recently introduced payday lender bill isn't quite as political as it looks. Federally insured lending institutions are exempt from state usury laws, as the result of federal legislation passed about 5 years ago by a Republican-controlled Congress. (Republicans tend to like local control and states' rights, until really important issues come up, like bank profits and gay marriage.) So, criminalizing FDIC-backed banks for charging more than 17% would violate federal law. That's why the exemption is included in the bill recently introduced by Rep. Johnson and Sen. Womack.

9:10 AM, December 23, 2006  
Blogger Mark Moore (Moderator) said...

I'll take the history lesson, as I was only about 17 when this went down and was not really paying attention until AFTER government intrusion into the free market wrecked my step-father's business.

The economics lesson is another matter, since you simply repeat the assertion that a change in minimum wage does not affect factory jobs which pay 150%+ of those wages. I had already addressed that point in an earlier post- businesses use a lot of services that DO pay minimum wage and as their costs go up they pass it on to the businesses.

But for no extra charge let me add another point: raising wages at the bottom will put upward pressure on wages at higher levels too. The factory worker will say, "Hey, my kid working part time at McDonalds gets two-thirds of what I do now, I need more".

As for the Banker expemption, even if you are right about the real trouble being a federal law, it is still political, the shameless double-standard politics just gets moved up to the federal level. Odd that this was not brought up in the Ark. newspaper account on it though. The article just said "the banking industry had trouble" with a prior bill that did the same thing but did not exempt them!

I do remember paying attention in 82 with the high interest rates and the effect it had on my family. The rates had to go that had to tame inflation. It was harsh medicine, but our economy was sick and needed it. Like you, I fear that the current administration's profligate spending is going to end in destructive inflation that makes that of the 70s look tame by comparison.

9:30 AM, December 23, 2006  
Blogger Mark Moore (Moderator) said...

So what I am getting at here is the pattern. The mandated minimum wages, the bloated overhead of so many government workers, and the tendency of our rulers to reflexively pass laws designed to legislate economics and target a specific business have costs. It all shows a pattern of producing a climate that is hostile to business, including manufacturing.

A business man can't just focus on pleasing his customers and the free market in Arkansas, he has to worry about whether he will get his legs cut out from under him by the legislature artificially changing the rules. With that kind of uncertainty, why not get out while the getting is good?

9:43 AM, December 23, 2006  
Blogger Harvey Edwards said...

Its also as if NWA is the Ritz compared to the Delta. Our Legislators and representatives dont want us to live off of our skills but rather to let the government do it all. This is an oversimplified statement from someone who is going on a year and a half without employment . the following is a statement from my website that gets response from all the State and Federal reps.

Our own US Congressman scoffs at the idea that we will ever attract outside business. He states publicly that we are so uneducated that we will never get the outside help we so badly need. You can see the translation clearly. He means. keep the people undereducated, unemployed and they will work for minimum wages to grow rice. Its been this way since the ground was cleared over a hundred years ago.

I am asking that other small businesses or large for that matter come here for the cheap cost of living and stay for the beauty of our Delta and the friendliness of the real people.

http://home.earthlink.net/~arkansasbiofuels/id34.html

Nothing will change as long as we keep stupidly electing the status quo.

Thats just my two cents.

7:31 PM, December 23, 2006  
Anonymous Anonymous said...

Your argument that Arkansas has a hostile climate to business is, I'm sorry, ridiculous. Arkansas has everything an out-of-state manufacturing employer could want: relatively low wages, low real estate taxes, relatively low utility costs, a legislature historically willing to offer incentives. The big exception is a well-educated workforce, which more employers in even manufacturing are demanding, and which we are still slow to provide. The reasons manufacturing jobs are leaving have nothing to do with the minimum wage -- there are global factors at stake here.

Besides, a race to the bottom as far as wages would produce economic disaster, not success. Why do states like California, Massachusetts, and Connecticut tend to have the most governmental regulation, but also the highest incomes and best economies? Because (1) they have a better-educated workforce that (2) is not tied to the manufacturing industry and (3) is more flexible in terms of job skills. If you want to help Arkansas' economy, figure out a way to force more Arkansas kids to go to college and study science, engineering and technology.

Also, I don't agree that the high interest rates of the early 1980s were necessary to cure a sick economy. Inflation was high, but Volcker was ideological and went over the top. Volcker was beholden to banking interests, who wanted the high rates. He was happy to let farmers, small businessmen, people like your dad, go down the tubes by jacking up interest rates and forcing liquidations of farmers and businesses. And he was always ready to bail out a bad bank. He spent billions of our money bailing out sorry bankers and let your family go belly-up. It's called risk-shifting -- he shifted the risk of bad banking practices to taxpayers and small businesses. George Bush and the financial industry are doing it today, with threats of Social Security privatization and emphasis on 401(k)s rather than traditional pensions. (under both schemes, the risk falls on individuals, not larger institutions like the government or employers)

Here's a little unconventional wisdom -- inflation isn't always such a bad thing for about 75% of Americans. It's bad for creditors -- banks, people who own certificates of deposit (which are really just loans to banks) and owners of bonds. It's not bad for debtors -- people who owe money to banks, people with credit card debt -- and people with fixed assets, like farmers. That's why the value of stuff like gold and real estate shoots up with even mild inflation (see: the last 3 years). That's also why populists in the late 1800s and early 1900s were in favor of a silver standard, rather than a gold standard. The small farmers and rural populists wanted an inflationary economy that silver would bring, to drive up the prices of the farmland and the crops and commodities they sold, while driving down the value of the debt they owed to eastern banking interests.

We've been taught for years that inflation is bad, but it's mostly just bad for the financial industry which we've sold our American soul to. If you owe a lot of debt, or own fixed assets, inflation would help you, because your wages and income and the value of your home or your farmland or your gold would go up, while the amount you owe wouldn't go up as much. People say "inflation is bad because it causes interest rates to rise." No, the fed and bond houses cause interest rates to rise, not inflation. The only truly innocent people harmed by mild inflation are people on fixed incomes who own CDs and Treasury notes. And they can be protected through the relatively new financial product offered by Uncle Sam called I-bonds, or federal bonds that pay interest rates based on inflation.

9:24 PM, December 23, 2006  
Anonymous Anonymous said...

Arkansas has everything an out-of-state manufacturing employer could want: relatively low wages, low real estate taxes, relatively low utility costs, a legislature historically willing to offer incentives. The big exception is a well-educated workforce, which more employers in even manufacturing are demanding, and which we are still slow to provide.

Yeah, Mexico is just teaming with pointy-headed intellectuals who are eager to take manufacturing jobs that Arkansans can't handle.

10:04 PM, December 23, 2006  
Anonymous Anonymous said...

I believe laws against usury are the legitimate domain of state government. The problem, as Mark has pointed out, is that the state's hands are tied with regard to including certain lending institutions, effectively creating privileged loan-sharks (though it should be noted that the banks are far more regulated and monitored than payday lenders).

As with so many of America's problems, we have Washingtonians interfering with, and fouling up the efforts of, state governments. Often, the conflicting dual "solution" is worse than no solution at all.

10:14 PM, December 23, 2006  
Anonymous Anonymous said...

OK the interest rates. Since the current Arkansas constitution was adopted the max interest rate in Arkansas was 10%. Then it was changed to track the fed rate but then that fell and adjustment was made to allow a different rate.

Having significant experience in recruiting... The biggest problem in attracting business to Arkansas has NOTHING to do with government regulation, it is our citizens.

Our kids don't go to college at the national rate and those that do are less likely to graduate than the national rate.

We don't have the workforce required by most businesses that are still willing to be in the US.

One site person said they were looking at Egypt (the nation, not NE Arkansas). One thing he mentioned is that the $2 an hour wage they would pay would fund a week in a hospital there.

10:29 PM, December 23, 2006  
Blogger Mark Moore (Moderator) said...

9:24 Sigh. I am going to take time out of my business Christmas Eve to correct some of the stuff you are putting out here.

First of all, I am not suggesting a "race to the bottom" on wages. I am suggesting that when costs go up, businesses either don't grow or move out, and they don't just take their low wage jobs with them when they go. They take them all. They don't need a janitors anymore, nor do they need a plant director.

You say; Arkansas has everything an out-of-state manufacturing employer could want: relatively low wages, low real estate taxes, relatively low utility costs, a legislature historically willing to offer incentives.

Low wages compared to who? Not the rural states around us! In fact, our minimum wages are now HIGHER by articifial law than those other places. Comparing our wage to seaport states that already have 100 billion dollars in infrastructure built up is not a fair comparison. The reason is that business owners are buying into the total infrastructure situation when they make a decision to start or grow a business, and labor infrastructure is only one component of that. It goes back to what I said in my earlier post about why Americans can compete even while paying a higher wage because we have better infrastructure. The United States has the advantage over Guatemala and Boston has an advantage over Arkansas. In order to avoid wasting our limited public funds we must avoid knee-jerk or superficial comparisons and look deeper to account for all relevant factors.

We do have low real estate taxes, but we are comparable or higher than other states in other taxes. California has an average sales tax of 7.94%, lower than the 9% I pay in Benton county. Income taxes are very comparable, except they have a much higher personal exemption than we do. As far as utility costs go (primarilty electricity), our COST OF PRODUCTION is indeed low, but because our government let the utilites get the better of them the COSTS A BUSINESS MUST PAY for electricity is actually higher. Entergy is using Arkansas to subsidize energy costs in other states and we still tax electricity used for manufacturing while many states around here don't. As for the legislature's "incentives", those go to a handfull of high-profile favorites. The typical business that is not willing to have government lobbying as its major product does not get that.

Why do states like California, Massachusetts, and Connecticut tend to have the most governmental regulation, but also the highest incomes and best economies? Because (1) they have a better-educated workforce that (2) is not tied to the manufacturing industry and (3) is more flexible in terms of job skills. If you want to help Arkansas' economy, figure out a way to force more Arkansas kids to go to college and study science, engineering and technology.

Well, those are all coastal states and just like in China and India and places all around the world that is where the commerce clusters and so people from the rural areas go to those places to get jobs. It is most obvious in China. Are the coastal provinces so much more prosperous than the interior because they have better educated workers than the interior provinces? Of course not, they are the same people! It's the same workers that were in the interior that migrate to the coasts. The coasts are more proseprous because they have easier access to trade markets, and that prompts roads and electricity and industrial infrastructure to be built up, then they start feeding on one another and it builds on itself.

But let's neglect the fact that you are comparing Arkansas with a group of states that differ with us in MANY relavent factors while only recognizing the one (education). I would like to address your misconception that they are more regulated than we are. Or at least that they have a bigger burden of government for their private sector to support. This website http://www.census.gov/govs/www/apesst05view.html is very useful in disabusing people of their misconceptions that Arkansas is a "small government" state while Massachusetts and California et al are "big government" states. The only problem is that is says Arkansas only has 63,000 state employees while the actual figure for 2006 is 73,000. Our state government is big and growing rapidly. Still I will use their numbers and give a little comparison of the number of state employees per 1,000 citizens...

Arkansas= 23.3 California = 13 Massachusetts = 16.9 Conn = 20.7

So we actually have MORE state government employees as a fraction of our population than states that have a "rap" as high-regulation states. Massachusetts actually has about 9% of its GDP from the public sector, which is BELOW the national average of 12%. We are overgoverned here in Arkansas and it is holding us back.

I don't have time to delve into your thesis about how inflation is not such a bad thing, but I disagree to put it mildly. The dollar has lost over 95% of it's purchasing power in my grandmother's lifetime. It has lost about 80% of its purchasing power in my lifetime. Why this is going to destroy our economy will have to wait for another day as I need to get on.

I also need to point out that, depending on what you mean by it, "a better educated workforce" is not the answer. Workforce is the most MOBILE part of business infrastructure. If we educate them before the jobs are their we are just subsidizing the states that have the jobs. It is not the people that are to blame for our plight, except for the fact they are the ones who elected our leaders.

10:04 AM, December 24, 2006  
Anonymous Anonymous said...

Measuring the number of government employees, and equating it to a level of government regulation, is highly deceiving. Here are some examples why:

First, you can't look at simply state employees. You have to look at total government employees at all levels, and who funds them. The departments in which state employees have grown the most, by percentage, in the past 10 years has been the judicial branch, but that's partly because the state of Arkansas took over administration of and payment for the public defender system, in 1997, and the prosecting attorney offices, in 1999. So while you had more state employees, many were simply employees previously employed by counties or other local governments. It's true that we have hired more public defenders and prosecutors and state policemen, as well, but crime has dropped significantly since 1992 (except for a jump this year, which may or may not be a temporary rise).

Second, look at state payrolls, not numbers of employees. That's what actually cost money. Arkansas state employees are notoriously low-paid, compared to both the private sector and other states.

Finally, there are some areas that Arkansas simply has to have more employees -- highways, for example. Arkansas has something like the 12th-largest state highway system, which a much smaller population proportionately and less tax base. With that many highways, you have to hire folks to keep them up, state policemen to patrol them, etc.

On the whole, Arkansas has done pretty well with state employees. What is amazing to me is that from 1997 to 2005, the number of employees employed by the Ark. Dept of Human Services actually DROPPED, while their caseloads ballooned (over half the births in this state are paid for by Medicaid, and 20% of the population regularly receives some sort of service from the DHS division of DHHS).

Look at regulations on employers and taxes on employers, not sheer numbers of employees. Massachusetts and California have much stronger environmental regulations and workplace-safety regulations, stronger workers comp laws. These are the things that bother employers the most, esp. in manufacturing. Arkansas is more employer-friendly in all those areas, and we're still losing ground.

7:04 AM, December 26, 2006  
Anonymous Anonymous said...

Maas. and Cal are losing manufacturing jobs faster than we are.

11:53 AM, December 26, 2006  
Anonymous Anonymous said...

CHINESE COMMUNISTS SET UP SHOP IN WAL-MART
Wal-Mart’s Chinese headquarters now hosts a branch of the Communist Party. The move follows efforts made earlier this year by Chinese labor and state officials to expand the presence of the state-sanctioned Communist Party within the retail giant’s mainland operations. A branch of the All-China Federation of Trade Unions was set up Friday at Wal-Mart headquarters in the southern city of Shenzhen, according to a Chinese newspaper and a Wal-Mart spokesman. Wal-Mart owns 68 stores and has nearly 38,000 employees in China. Neither Wal-Mart nor the union would state how the communist party branch would operate at the Chinese retail headquarters.

5:15 PM, December 26, 2006  
Blogger Mark Moore (Moderator) said...

OK, I admit that growth of government is not the same as regulation per se. My original point is that it is that having high government overhead is "business unfriendly". The next poster thought I was talking about, or somehow slid that into, regulation, and I went with the flow. I should not have. Regulation levels are one way in which government can set up an overall unfriendly geneneral business climate, and high governemnt overhead is another way. There is a correlation between the two, but they are not synonomous.

When you say "we have less regulation" I think you may be right, but it is UNEVEN regulation. That is to say a few favored industries in this state are less regulated than they ought to be while the majority of businesses are just as over-regulated here as in other states. This does little to bring in new business, as the ones that are under-regulated tend to be so because of their political clout, not because they represent a plum industry that we are trying to attract.

Other topics: "but crime has dropped significantly since 1992 " you say as if to justify the state taking over pay of county prosecutors and public defenders. But state-takeover of formerly local functions is not the explanation for the drop. Crime has dropped almost EVERYWHERE in the US except where there are a lot of illegal immigrants. It has to do with the fact that young males are a smaller slice of our aging population, not that the state centralizing control is a good thing.

A small part of the growth might be explained by the 75 county prosecutors and their office staff switching over from local to state employees in the 90's, but there has been a 60% growth in the state government's budget in the last ten years. State employment has grown by another 10,000 since these figures were compiled, and that was after all the consolidating you speak of. The legislature voted last year to give 120 million more dollars to the state department of education to hire more overseers and bump the pay of the current ones. State government is growing faster than incomes, and that is impossible to sustain.

You seem to think that our state employees are paid too little. I am not out to cut their pay but relative to wages in the private sector I would say they are doing pretty good. It is not fair to compare their wages to what a similar government worker would get in California. Costs of living are so much higher there that the same wage here would buy much more. In a comparison of government wages to private sector wages (a more fair way to do it IMHO) my guess is that Arkansas would have higher costs of government than California.

You say, "Finally, there are some areas that Arkansas simply has to have more employees -- highways, for example. Arkansas has something like the 12th-largest state highway system, which a much smaller population proportionately and less tax base. With that many highways, you have to hire folks to keep them up, state policemen to patrol them, etc."

You make an excellent case for changing the way we do highways. Everyone wants to build more, but no one wants to care for the ones we have. You also help make my case that we are over-governed. There is no rational reason for our small state to have the 12th largest highway system in the nation. I don't doubt that many of our highways lack the traffic count that would justify their lane space. Some of them could be demoted to "county roads" and it would be more cost effective to maintain them at that level.

Our medicade system needs to be changed if over half the births are paid for by medicade. That is enough to scare off many an employer looking for responsible people to staff their business.

One thing is that a lot of young people are waiting to get married until AFTER their first child in order to get medicade to pay for it. In that way, the government is actually subsidizing the birth of bastard children. I'd end that loophole immediately. If you can't name the father, it is taken out of your parent's wages or yours- or out of your welfare check. If you can, it is taken out of his.

I agree that our "workmen's comp" in this state is "business friendly", or maybe "worker hostile" is a better way to put it. It cannot make up for a state where as you say 20% of the population is getting services from DHS. Who would want to locate a business in a state where much of your potential workforce is nanny-state dependents?

7:36 PM, December 26, 2006  
Anonymous Anonymous said...

It's not more cost-effective to "demote" public highways to county roads. If you think that's a good idea, go talk to your county judge about it. All that means is that the roads will crumble. Changing the governmental entity responsible for maintaining the road doesn't mean less traffic, usage, etc.

(The state prosecutors were always state employees. It was their staff that became state employees in 1999. And, there are a lot less than 75 elected prosecutors -- it's something like 25. Before you start holding forth on how there are too many state employees, you really need to learn something about what the state employees actually do, and why they are there.)

What concerns me most is that you presume there are easy solutions. Over half the births in the state are on Medicaid? There is no easy solution to that. Your response is to seek reimbursement "out of your parent's wages or yours- or out of your welfare check." My response is this -- to an extent, we're already doing that, or at least forcing the dad to pay child support to the Office of Child Support Enforcement (but it takes a whole division of state employees to collect that money!). The woman probably doesn't have a job, or she wouldn't be on Medicaid. And, you can't hold the parents of an adult child automatically responsible for the adult child's debts. That's silly, and probably unconstitutional.

So, what would you do? Simply end Medicaid, and have children born in back alleys, and die shortly after birth? You care about them in the womb, but not after birth.

7:21 AM, December 27, 2006  
Anonymous Mark Moore said...

State government does so much I doubt even the Governor could even recite it all. And I don't have to know all those details to know that it is a lot bigger than it was even 20 years ago. I don't need to know the details to know that it is a lot bigger proportionally than states which have a reputation as big-government liberal states. That's too big. Somehow the other states make do with less. Somehow WE made do with less 20 years ago. The process of making people into dependents on the largesse of the state is accelerating and is a threat to both our liberty and our economy.

Consider that last bit closely. You accuse me of only caring about children before they are born but not after. But I care about them at both times. I don't want them born into a world where they are government-dependent serfs. I want them to grow up as free men and women. Free of the slavery of government debt and taxation if they do well, and free of the despair of government dependency if they are not.

I don't impugn your motives. You want what you think is best for people and so do I. Somehow though, statists never seem to give libertarians or small-goverment conservatives that grace. The assumption is that if we don't want charity dispensed from the cold arm of the government machine then we are against charity. No. We are against government as the agent of first resort of chairity.

The "progressives" assumption is that if government doesn't do it then it won't get done. We think there is room in life for other institutions besides government.

Now I know that a woman can get child support from a man once a child is born, but that is different from waiting to get married so you can stick the taxpayers with the cost of that first child. I see young couples doing it. I know what is going on. The policies of the state are paying $10,000 worth of medical services if they give birth to an illegitimate child but nothing if they marry first. It is a perverse disincentive.

As for what I would do, I already told you that. The state send them a bill and makes them pay out for the services they consume. This seems like an alien concept to you. Perhaps you think "the rich" should be forced to take responsibility for everyone's medical bills, even for things they have some control over like birthing.

6:36 PM, December 27, 2006  
Blogger Mark Moore (Moderator) said...

A point on the roads. There are nine "state highways" that get more than half of the "state highway" traffic.

When I lived in El Dorado, they all wanted to improve the road between El Dorado and Little Rock. But the Highway commissioner in the area was from Warren. So guess what was built? A shiny new highway from Warren to El Dorado!

If that road "decays" some, hopefully it will just be down to the level that it should have been all along based on its low traffic count. We have people building new "state" highways in their backyards with OPM. No wonder we have more state highways than we can maintain. Make the lowest count "highways" county roads and maintenance dollars will be allocated more rationally. If it is all done at the state level, where OPM pays for new highways and where the exisiting highways are maintained, then resources will be allocated irrationally (compared to the market, but "rationally" compared to the interests of whoever is on the highway commission at the time).

7:13 PM, December 27, 2006  

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