Monthly Archives: July 2009

Michigan Dems want to hike minimum wage

Posted on by jskorup
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-Jarrett Skorup

As if things in Michigan aren’t bad enough.

According to the Free Press, the Michigan Democratic Party intends to test support for the following issues before possibly putting them on the ballot:

  • Hiking the minimum wage to $10 an hour for all workers.
     
  • Imposing a blanket moratorium on home foreclosures for 12 months.
     
  • Cutting utility rates 20% across the board.
     
  • Requiring all employers to provide health care to their employees.
     
  • Hiking, by $100 a week, and extending, for six months, unemployment benefits.

Undoubtedly, if they get to a ballot before people, these will be passed.  But the reasons are because many of us think with our hearts instead of our heads, and don’t realize the faulty logic that backs these proposals.

Most economists understand that raising the minimum raise does tremendous damage, particularly to lower-end wage earners and small businesses.  A higher minimum wage locks out small-businesses that can’t afford to pay it, forcing them to layoff workers and combat higher labor prices. 

Remember when Philip Morris joined with the Obama Administration to sign the ““Family Smoking Prevention and Tobacco Control Act,” giving the Food and Drug Administration authority to regulate tobacco?  Do you think that was out of the goodness of their heart?

Well that is exactly why Walmart lobbies for a higher minimum wage.  They already pay well above the national minimum wage anyways and this helps keep out competition and increase their market share.

Many times people (particularly conservatives) mistake the terms ”business-friendly” and ”free market.”  Frederic Bastiat said that what separates a bad economist and a good one is that the bad looks at the seen, while the good also takes into account the unseen.  The unseen are the Detroit small-business owners and those low on the economic totem pole; the Democratic platform will crush them.

The Price is Right

Posted on by razma766
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hayekKurt Bouwhuis, Mackinac Center Intern

I was reading through The Road To Serfdom by F.A. Hayek last night, and stumbled across a fantastic passage:  “In a competitive society the prices we have to pay for a thing, the rate at which we can get one thing for another, depend on the quantities of other things of which by taking one, we deprive the other members of society.   This price is not determined by the conscious will of anybody.  And if one way of achieving our ends proves too expensive for us, we are free to try other ways.  The obstacles in our path are not due to someone’s disapproving of our ends but to the fact that the same means are also wanted elsewhere.  In a directed economy, where the authority watches over the ends pursued, it is certain that it would use its power to assist some ends and to prevent the realization of others.”

A Lack of Unity: Lessons from Falkirk

Posted on by ewreynolds
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The Battle of Falkirk (from kikoshouse.blogspot.com)

The Battle of Falkirk (from kikoshouse.blogspot.com)

Per Scriptum,

E. Wesley

We live in a time and place where there’s much excitement and protest about government spending.  But are we being as resourceful as possible?  Are we divided and scattered?  My mind goes back to another July 22nd in 1298 when the sky was less sunny than it is today, being filled with a torrent of arrows.  Freedom was then not being fought on the peaceful grounds of verbal protest and “tea parties,” but rather with swords and spears in marshy swamps.  Heroes walked alongside the peasantry, and the face of friend and foe were never far apart.

During 1298, Edward I of England was continuing his tyrannical invasion of Scotland, and in June he reviewed his army at Roxburgh.  Under his command were 80,000 infantry (English, Irish, and Welsh), 3,000 fully armed heavy cavalry (veterans from the French wars), 4,000 light cavalry, and finally 500 Life Guards from Gascony decked in their finest.  Tyranny looked far more obvious than it does today.  In contrast, liberty was far less comfortable than it is now.  William Wallace and the rest of the Scottish freedom fighters picked the marshes of Falkirk as battleground.  In front of Wallace’s army, a boggy morass would stop a galloping advance of Edward’s cavalry.  To their left and right, the army erected palisade walls.  Due to internal jealousies, only a few Scottish nobles were among Wallace’s peasant army of about 25,000-30,000 strong.  Among the few nobles who served as commanders were Sir John the Grahame of Abercorn and Dundaff; Sir John Stewart of Bonhilll; Duncan MacDuff, 11th Earl of Fife; and John “Red” Comyn, son of the Lord of Badenoch.  On July 22nd, St. Magdalen’s Day, Edward’s army fell into fighting positions and the Battle of Falkirk began.

Edward coordinated the attack in three columns of 30,000 men each.  The first column was to be led by Earl Marshal.  The Bishop of Durham would lead the second column, with Edward himself leading the third.  Earl Marshal rolled his force directly into the morass, and was immediately under fire from the Scottish bowman.  Deciding that going strait through the bog was no good, he swerved to the left to firmer ground and struck Wallace’s right flank.  However Wallace was ready for them.  Wallace had armed his army with 12 ft. long spears, and organized his infantry into tight box or oval shaped unites (the Scottish term for this armed formation is “Schiltron”).  Earl Marshal’s cavalry charged in vain, being simply impaled on the spears.  While Marshal’s force was still fighting hard, The Bishop of Durham’s division wisely decided to ride around the morass, and fall on Wallace’s right.  Wallace may have been able to withstand both attacks had he not been betrayed at that vital moment.  A rival noble to Robert Bruce, “Red” John Comyn and 10,000 followers, simply left the field.  Wallace only had 20,000 to the English force of 90,000.  Wallace, the Hector of the Scots, fought from the front raining blows upon the English with his 6 ft. long two-handed broadsword, but it was too late.  The Welsh longbows (destined to later become famous in the Battle of Agincourt) poured volley after volley of deadly arrows into the Scottish Schiltrons, weakening them for the overwhelming cavalry charges of the English.  Wallace, 7 foot giant though he was, found himself retreating to the Carron ford, as the last rays of the setting sun gleamed on the armor of his pursuers.

Liberty has never been safe with just “a giant.”  Unity is the key to success.  Toward that end, I would encourage my readers to read the Mackinac Center’s Tea Party Activist Toolbox.  What we do during this time is critical, and we certainly can’t just go to our tea parties and return home.  We must stay active.

Teacher unions don’t care about kids

Posted on by jskorup
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-Jarrett Skorup

The National Education Association wrapped up their General Assembly recently and people can learn a lot from the event.  I covered in a recent blog post the idea that the NEA cares about control; not students.  As retiring general counsel Bob Chanin explained, “[The] NEA and its affiliates are effective advocates because we have power.”

So what do they do with this power?

Mackinac Center for Public Policy education policy director Michael Van Beek recently wrote about the NEA assembly.  He explains what went on. 

The NEA covered topics including corporate tax reform, “misinformation” about national health care reform, labor rights in Iran, ethnic study programs, same-sex marriage and adult stem cell research.

The NEA has also outlined their support for abortion in the past.  Now, these issues may be interesting; but what exactly do they have to do with education? 

The problem is not with the teachers; its with the bureaucracy and the system as a whole.  The current educational system has tons of regulations, a tenure system that is out of control, and forced-unionization that cripples the system.  The good teachers are caught up in something beyond their control.  But just as its important for parents to remember that the unions aren’t in it for the kids, neither are they necessarily representing teachers well.  As Van Beek reports,

A study of the LM-2 reports for both the NEA and MEA reveals that only 30 percent of their budgets are spent on representation, while almost 60 percent of their expenses go to “overhead” and “administration.” Union members should be aware that only a segment of their dues are used to represent their best interests.

The NEA (and its MEA affiliate) have become systems looking out for themselves.  They are (in effect) supported by dues teachers have no choice but to give them.  This provides them with less incentive to support their members and even less to work for students.  Let’s not pretend otherwise.

Carry a Big (Pile of) Stick(s)

Posted on by adamrule
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I recently attended an Institute for Humane Studies seminar that delved into how liberty should affect society (oddly similar to our purpose here at Trying Liberty). One of the presenters laid forth an interesting idea that has helped me better understand property and the notion of rights.

The professor argued that rights, and especially property rights are akin to a pile of sticks. When one owns property, it comes with a vast array of rights; the right to farm the land, the right to pasture animals on in, the right to charge admission to it, the right to build a gazebo on its premises. This is the pile of sticks, each one representing an individual right. The owner then has the ability to parcel out individual rights as they see fit, to distribute their sticks. They might see a possibility for profit and sell to another man the right the graze sheep on the land. The buyer though does not obtain all rights to that property. They cannot hunt on it, or mine its earth, they have simply bought one stick: the ability to graze sheep.

Government intervention however gets messy. It would seem o so intrusive to pass legislation saying that only this or that land right may be used. Some of the founding fathers objected to the bill of rights because they could not see how all the rights of man could be listed; it is a rather big pile of sticks.

Consequently, government entities take away from the pile of rights (sticks) slowly and individually. Thus zoning and city ordinances are filled with regulations about how close ones house can be to the curb, how high buildings can be, and how the land can be used for profit among a gross of other stipulations. They are pulling out sticks one by one, hoping citizens will not notice their pile is getting steadily smaller.

This summer Michigan has removed another significant log from the pile. The Michigan Court of appeals ruled on 2000 Baum Family Trust v. Babel that property located on plat-dedicated public roads parallel to Michigan lake shores would not have riparian rights. In laymens’ terms, if you own property on a lake shore and a public road runs between your land and the lake, even if you are the closest property to the water, you no longer have docking rights in the lake. This goes against long held and defended rights of lakefront property owners and could have a significant impact on property values.

The government decreases wealth when it takes individual rights and gives them to the state. Hopefully the Baum case will be significant enough to get taxpayers to look through their city and state code books to see just how much larger their pile could and should be.

Adam Rule – MCPP

Interventions Breed Interventions – Bank On It

Posted on by razma766
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This is a great letter to the editor from Don Boudreaux:

18 July 2009

Editor, The New York Times
620 Eighth Avenue
New York, NY 10018

To the Editor:

Discussing today’s proposed increase in federal financial regulation, Paul Krugman describes “the creation of federal deposit insurance in the 1930s” as marking “the last time there was a comparable expansion of the financial safety net” (“The Joy of Sachs,” July 18).

Mr. Krugman’s history is half-baked.  U.S. bank insolvencies in the 1930s resulted from restrictions on branch banking.  Canada, which had no such restrictions, suffered not a single bank run during the Depression.  And our northern neighbor had no deposit insurance until the 1960s.  So the very safety that Mr. Krugman suggests can be, and was, created only by deposit insurance was itself earlier undermined by misguided government regulations restricting branch banking.

Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
Fairfax, VA 22030

Detroit, and Michigan, must change

Posted on by jskorup
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-Jarrett Skorup

The statistics of Michigan show that the path our state is taking is unsustainable, says Michael LaFaive from the Mackinac Center for Public Policy.

New unemployment statistics are the latest in a seemingly endless series of reminders of Michigan’s economic woes and policy miscalculations. The state’s unemployment rate leapt to 15.2 percent in June, the 40th consecutive month Michigan has had the highest unemployment rate in the nation.

I’ve heard from many people about the unions creating the middle-class in Michigan and how necessary the UAW and DFT are to protecting workers. However, at some point one must confront the figures.

The facts are: School districts are on the edge of bankruptcy. The Big Three are collapsing. Dealerships are closing in record numbers.

Our state is doing something wrong. And blame who you will, but it is a fact that the areas of our country doing well (comparatively at least) are the ones with the least taxes and less regulation (Wyoming, North Dakota, Nebraska, etc.).

Not only does Michigan have the highest unemployment rate in the nation, but, according to the Mackinac report:

To put things in even greater perspective, consider that Puerto Rico’s unemployment rate — 14.5 percent — is lower than Michigan’s, the first time it has been lower than any state in the union since 1976, save for one month after Louisiana was blasted by hurricane Katrina.

Also, United Van Lines indicates that 70% of its Michigan-related moves are people leaving the state. Census figures will soon show our population to be shrinking.

People vote with their feet, and their voting against Michigan. When will our policies reflect these realities?

GM to create jobs?

Posted on by jskorup
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-Jarrett Skorup

According to AP sources, GM is planning to build an assembling plant for batteries somewhere south of Detroit.  The plant will be for battery packs for the upcoming Chevy Volt.  According to the story:

The new factory off Interstate 75 in Brownstown Township, about 15 miles south of Detroit, will take batteries made by LG Chem in South Korea and assemble them into packs that will power the new Chevrolet Volt, said one of the [sources].

The Volt will be due in showrooms sometime next year and be able to travel 40 miles after being fully charged.  There is a small engine to supply gasoline anytime after that.  And how much does this new car cost?  An alarming “$35,000-$40,000″.  Not a good sign with oil prices apparently stabilized. 

Maybe that’s why, “GM doesn’t expect to make much money on the Volt initially…”

Though 100 jobs is better than nothing, it seems clear to me that GM is merely doing this for a public relations boost and not necessarily because this will become profitable for the company.  I am predicting that our string of bailouts for General Motors is far from over.

At least South Korea will see some job growth.

Bankruptcy for Detroit schools?

Posted on by jskorup
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-Jarrett Skorup

“Bankruptcy may be next for Detroit schools” screams the Detroit Free Press headline.

Robert Bobb (how’s that for a name?), the state-appointed emergency financial manager called the Detroit Public Schools budget “ground zero” and the worst he’s ever seen, saying that bankruptcy for the district is an option.  DPS has a deficit of over $250 million and will have to jump its job cuts from 1,766 to 2,451.  Also, teachers have to agree to a bunch of cost-saving practices; like unpaid furloughs, health benefit cuts and larger class sizes.  Things are so grim that even The Detroit News has editorialized in favor of bankruptcy.

The tragedy here is that the sad state the district was run means a lot of teachers will lose their jobs.  Not the tenured teachers of course, just the new ones.  It’s extremely difficult here in Michigan to fire a tenured teacher, as West Ottawa found out when they attempted to fire a tenured teacher for the first time in the district’s 50-year history.  How many tenured teachers has DPS fired?  No on seems to know, but most districts agree to buyouts with the teacher in order to avoid the court costs.  Because of how hard unions have made it to fire teachers in New York City, over 700 sit in “rubber rooms” in order to keep them away from children.  A lot of non-tenured teachers have been fired in the last few months in Detroit and things are only going to get worse.

In response to these problems, Bobb said, “We need revenues.”  No Mr. Bobb, like Washington, you need to cut spending.   

This leads us to the good that may come from these problems. 

Other than bankruptcy, DPS may also have to expand its number of charter schools, liquidate assets and privatize major departments such as transportation, technology, maintenance, custodial and security services.

These are all good things that save money and increase service.  If DPS had done a better job with its enormous budget, this would not have happened.  After all, you shouldn’t have to be a ghost to have a job in Detroit.

Taxpayer Dollars Advocating For More Taxpayer Dollars

Posted on by jskorup
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-Jarrett Skorup

As I’ve gone through the school districts here in Michigan, I’ve noticed a very disturbing trend:  School districts advocating on their websites for more money.  Some examples:

Saulte Area Public School Districts has a link on their website that reads, “Contact Your Legislators“.  It takes you to a page that gives you some “key points” about what to say.  The points are as follows:

  • The State of Michigan’s investment in our children is critical
  • You value your local public schools
  • You know that strong public schools are a key to economic development
  • Funding our public schools should be their top priority
  • You want the state to provide adequate and equitable funding for all public school students
  • You want to retain the high quality educational programs provided for your children

Another district, White Cloud Public Schools, asks people to “Share your views on school funding with your elected legislators in Lansing.”  It then lists the contact information.  Do you think White Cloud is suggesting people call legislators to voice their opinion that schools are overfunded?

The last example is probably the worst.  Mesick Consolidated Schools has a “Message from the Superintendent“.  This links to a letter that outlines the following positions:

They are against cutting state aid/funding and amend the act “such that reductions cannot occur midyear.”  They support stimulus funds being used “equitably” for schools.  It calls for a reduction in the number of Charter Schools by “reviewing their performance and revoking charters for those that are failing our students.”  (What about the public schools that are failing our students?).  It also calls for rolling back term limits to twelve years, which would seem to have little to do with schools. 

This letter is signed by:

Scott Crosby, Superintendent, Wexford-Missaukee ISD

Paul Liabenow, Superintendent, Cadillac Area Public Schools

Bud Ashton, Superintendent, Lake City Area Schools

J. Mark Parsons, Superintendent, Manton Consolidated Schools

Charles Chase, Superintendent, Marion Public Schools

Michael Harris, Superintendent, McBain Rural Agricultural Schools

Dennis Stratton, Superintendent, Mesick Consolidated Schools

Jim Ganger, Superintendent, Pine Rive Area Schools

Dr. Robert VanDellen, President, Baker College of Cadillac

 Why do we find this acceptable?  I remember being told in Junior High that my favorite teachers would be fired if a tax hike didn’t pass (even though my father was president of the Board of Education).

The funding of schools is a controversial political issue, so why are schools allowed to advocate for one position or the other?  We don’t allow public institutions to rally on behalf of candidates with tax dollars and we shouldn’t allow them to advocate for more of their own funding.

Obama Urges You to Read This Post

Posted on by nkhunt
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obama adI just recently picked up on the new trend in internet marketting. Apparently nothing catches people’s eye more than the will of their dear leader “urging you” to refinance your mortgage, go back to school or grab some other goodies he’s giving us all for free.

This is one of the more disturbing trends I’ve seen on the internet – which is saying a lot – since the advertisers wouldn’t be using this technique if people didn’t find Obama’s wishes compelling. It’s the sort of thing I would expect in North Korea, or an African Country where the dictator renames the days of the week after himself. And seeing the will of your leader – the person that can coerce you to no end without it even making the news – as a better reason to do something than what you yourself desire, is a bad idea no matter what country you’re in.

State of Emergency

Posted on by adamrule
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There is always hope.  The following is from a Detroit News article put out today:

Declaring an “academic emergency,” Detroit Public Schools Emergency Financial Manager Robert Bobb today announced the hiring of four private education firms that will immediately help overhaul 17 failing high schools.

The out-state firms have a proven track record of raising student achievement, Bobb said, and they will be held accountable if they don’t improve the test scores and academic culture at the schools. District officials touted the overhaul as the largest of its kind in the nation.

It is amazing how accountability is stressed for private enterprises, but when it comes to state dollars, the voices dull. When dollars can be seen going out-of-house, then the fact of necessary economy in spending becomes a reality.

This is not going to be the end of Detroit Public Schools problems, and the fact that the money to be paid to these private firms is from Federal stimulus funds does not help the chances of the program’s success.  Nonetheless, let us hope that Detroit will see that what it turned to in an emergency, it should have been looking toward all along.

Adam Rule – MCPP Intern

Rubber Rooms

Posted on by adamrule
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Jarrett Skorup mentioned in a recent post that it was difficult to fire tenured teachers.  Some paces are having trouble getting rid of any teachers.

About 700 New York City educators are currently sitting in designated “rubber rooms” doing yoga, painting, and playing Scrabble all day.  And, they are getting paid to do so.

These teachers have all been accused of some type of misconduct ranging from insubordination to sexual misconduct. Currently, they are sitting in off-campus sites waiting for their disciplinary hearings.  It is not unusual for these teachers to spend 2-3 years waiting, and some have been  there for 6 years.

All the while they are collecting full salaries of $70,000 and up.  An estimated $65 million is being lost to by the city school district to pay these patient teachers.

Why the wait? There are only 23 arbitrators to hear the cases.  They work a mere 5 days a month. Union contracts are involved in making it extremely difficult to fire teachers.

The rooms’ name is a reference to the padded walls of insane asylums, and many of the teachers are said to be depressed, just sitting with little productive to do.  Other make use of the time to pursue graduate degrees, read, or even plan summer vacations.

Thanks to Marginal Revolution for the tip.

Adam Rule – MCPP Intern

You Can’t Have It Both Ways

Posted on by jskorup
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-Jarrett Skorup

From the Free Press:

The Detroit Federation of Teachers today called 394 layoff notices the Detroit Public Schools sent to teachers in June a contract violation and demanded the district rescind them or face a lawsuit.

On the one hand, as pointed out in an excellent recent article from the Mackinac Center, the DFT fights for constant higher wages, more benefits, better health care, longer lunch breaks, less classroom time, and more members; on the other, they want to ignore that these things lead to unemployment.  To believe otherwise disregards economic reality.

To be fair, the DFT was arguing against the firings based on a technicality (allegedly the paperwork wasn’t done on time).  However, the union has opposed nearly every teacher firing at any time.  Millions around Michigan are tightening their belts and a stagnant bureaucracy doesn’t have to? 

The tragedy here is that some very good teachers are undoubtedly being fired (or will eventually, something has to happen to close that deficit).  Are all of them really worse than every single tenured teacher in the district?  As a result of the near-impossibility of firing tenured teachers (even bad ones) the district may save money, but also make itself worse in the process.