BuckeyeBlog

In a recent Hamilton Journal-News editorial, U.S. House Minority Leader John Boehner cited our study about the dangers of the federal stimulus plan: “The Economic Impact of Federal Spending on State Economic Performance: An Ohio Perspective.” In his editorial, Boehner laments our return to the era of big government and the negative consequences of doing so. Job losses, slower economic growth, higher taxes, and a big burden passed on to our children and our children’s children. When will it end? And when will certain policymakers pick up history books and learn from our past mistakes?

UPDATE OF “WE’RE NOT MAKING THIS UP”:

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Intertwining humor and his opposition to the stimulus bill, Minority leader of the House John Boehner brought out the immense stimulus bill and pointed out that not one member of the House had read it. “I don’t know you could read 1,100 pages between midnight and now.” He then dropped the massive heap of government excess on the floor, creating a thud so loud even the White House could hear it.

I’m sure you’ve noticed, but Obama has been getting some pretty bad press lately. From his bloated stimulus plan to his 60 Minutes appearance to his patently offensive Special Olympics comment on late night television.

But bad news for Barack – the press isn’t going to get any better, especially with his new cap and trade plan now on the table.

The plan entails selling permits to emit carbon, which businesses may pay for at the outset, but the cost of which will quickly be passed on to consumers.  What Ohioans need to take note of is how deeply unequal these costs will be distributed across regions and income groups.

Ohioans receive roughly 86% of their electricity from coal. Our neighbors Indiana (94%), Pennsylvania (56%), and West Virginia (98%) are in similar situations. This means we’ll get hit especially hard, and during a time when we’re already feeling the pain.

To put it in real terms, the Congressional Budget Office estimates that the average household in the bottom income quintile will spend $680 more every year to pay for Obama’s plan.

Our friend Larry Reed, President of the Foundation for Economic Education, delivers in 14 minutes a succinct introduction to the 12 years of disastrous government economic policy-making that gave us the Great Depression.

You can find Larry’s monograph on this topic on FEE’s website:  www.fee.org. 

Talk about being a bad host. Ohio was just ranked 45^th in a national survey that asked CEOs for their opinion of states as it relates to jobs and business growth.

Chief Executive magazine’s 2009 “Best & Worst States” survey polled 543 chief executives on a range of issues, including proximity to resources, regulation, tax policies, education, quality of living and infrastructure.

Perception, as they say, is reality. And if CEOs across the country do not view Ohio as a good place to set up shop, we should only expect our economic woes to worsen in the coming years.

State Rep. Boose

State Rep. Terry Boose, R-Norwalk, recently condemned the raid on Manna Storehouse and insisted that Lorain County General Health District and Ohio Department of Agriculture return the tax records and more than $10,000 in food they took from the Stowers family of LaGrange, Ohio.

The Buckeye Institute’s 1851 Center for Constitutional Law is representing the Stowers in a case against the government agencies for their violent December raid on the family’s food cooperative, and their insistence that operating a private organic food co-op requires a license.

Scott Serazin, the Assistant County Prosecutor who represents the health district, has vowed to continue to illegally detain the Stowers’ family food.  He says they won’t give it back because the Stowers may sell it, even though the food was for the Stowers’ personal consumption.

Boose correctly described the situation as a “case of government gone wild.” We couldn’t agree more. Click here  to learn more about the case.  Click here to read the most recent news.  The Lorain County Prosecutor’s office can be reached at (440) 329-5389. 

It looks like Ohio will, in one form or another, give tax credits to film companies which do business in the state. The general principle is good — lower taxes to spur economic growth — but the method is flawed. Tax breaks for special industries isn’t the best tax policy to help the state’s economy grow. Cutting taxes on businesses and marginal tax rates for individuals is a much idea.

It’s probably true that lower taxes on film companies will draw them to Ohio. Why should they be singled out for this benefit, though? Why not lower taxes on restaurants, factories, car dealerships, book stores, movie theaters, and every other business in the state? Don’t legislators want these businesses to expand in Ohio, too? And what about the state’s citizens? With so many of them losing jobs and struggling under high federal, state, and local taxes, I think it’s a bit strange to be rewarding Hollywood companies without so much as a debate over cutting Ohioans’ income tax rates.

Good tax policy means low rates on taxes that are broad-based. No breaks for favored industries. It’s unfortunate that the General Assembly is debating a special interest tax break instead of considering overall tax reform. If they want to get started, the Buckeye Institute has published a proposal to phase out Ohio’s income tax and has written about the five steps lawmakers should take to institute a pro-growth tax policy.

Congratulations, Ohio! We were just ranked a distressing 38th in a nationwide index of personal and economic freedom.

The study, which was released by the Mercatus Center at George Mason University, includes data on fiscal, regulatory, economic, and personal freedoms.

If coming in 38th out of 50 states is not scary enough, consider that eight of the 12 states behind us are in the admittedly-liberal Northeast (Maine, Vermont, Connecticut, Massachusetts, Rhode Island, Maryland, New Jersey, and New York) and another two are on the Left Coast (Washington and California). Hawaii and Illinois round out the dirty dozen.

My advice to Ohio policymakers is to spend a little quality time with this report in the coming days. Remember that you are partially responsible for Ohio ranking so poorly in this study. But take heart: you are also in a position to change the policies that are limiting our freedoms.

One leading electricity utility executive predicts a 25% increase in Ohio’s electricity rates under the initial $20 ton ”cap and trade” carbon tax proposed by President Obama.  This burden would not be shared evenly across the country as electricity in espcially Ohio and Indiana is generated largely from coal while other states get theirs from nukes, hydro and natural gas not so burdened by this plan.  

Nor is there realistic hope of the benefit of the $645 billion coming out of our pockets and going into the government’s being reasonably redistributed back to what would be a devastated Ohio economy.  As Duke’s Jim Rogers notes:

“My view is they’ll try to use the money from Ohio and Indiana to subsidize the West coast and the Northeast and to use it for purposes that are different from addressing the climate issue,” Mr. Rogers said Friday in an interview with The Wall Street Journal.

“Ya think?”  With anything proposed by Obama going through Rep. Henry Waxman (D – Beverly Hills, Hollywood, Malibu CA), Chair of the House Committee on Energy and Commerce, despite believing in neither?

Let’s hope that Governor Strickland will appeal to the President to forgo this cap-and-trade plan with the same alacrity with which he went after “stimulus” money in recent weeks.