Yesterday Transportation Secretary Ray LaHood came to Ohio to extol the virtues of passenger rail. I hope he offered something in his talk that was more insightful than his comments as reported in the Dispatch: “if you build it, they will come” and “people like to ride trains.”
His platitudes are not only lame but they are also wrong. If you build it, they may come to the train station, but they won’t ride it unless taxpayers pay the majority of their ticket price and fully subsidize the initial start up costs. And, yes, people like to ride trains. They just don’t want to pay the full cost to do so.
I have nothing against train travel. As I explain here, I just don’t want taxpayers to subsidize it.
While I have issues with some of Governor Strickland’s decisions, he hit the nail on the head with his recent comments about tax increases, as quoted by Gongwer News Service($):
Maybe in their ivory towers a tax increase seems like something that would not be painful or harmful. I have said that I think a tax increase could – could – have the effect of deepening the recession and causing it to last longer. And I continue to hold to that belief….I think those who believe that higher taxes are the answer to Ohio’s economic needs and economic recovery are flat out wrong.
He said this in response to Senator Voinovich’s glee over the idea that the slots plan may be killed and thus taxes may have to be raised. As the governor told the Columbus Dispatch:
If I were to have to ask the people of Ohio, as they are struggling to survive in this economic recession, to give even more of their resources to the state, it, in my judgment, would not be the best course of action…. [Senator Voinovich] has a right to his opinion, but he is not the governor. I’m the governor, and I will make the decisions that I consider in the best interest of the state of Ohio.
In this case, the people of Ohio are lucky that Strickland, not Voinovich, is governor. Strickland understands that taxes take the resources of Ohioans and that there are negative economic consequences from raising taxes. Sure, Ohio would be in a better position if Strickland had clamped down on spending more in his first few years in office, but he deserves credits from all fiscal conservatives for holding the line on tax increases.
Did you know today is “World Car Free Day“? I didn’t either until a few hours ago. I learned this after my latest Viewpoint was published on the Buckeye Institute main page. The topic of my Viewpoint? The waste of taxpayer money that is passenger rail. Those who are celebrating World Car Free Day almost certainly love the idea of passenger rail. It’s a beautiful coincidence that couldn’t have been planned better if we tried.
Sen. Max Baucus unveiled his health care plan yesterday and one of its main selling points is that it won’t add to the deficit, according to CBO’s score for the bill. Most of the Baucus bill’s costs would be paid for by reducing spending on Medicare. As Peter Suderman over at Reason magazine’s blog points out, though, the CBO also issued this warning about how unlikely it is that Congress will actually reduce Medicare’s spending:
These projections assume that the proposals are enacted and remain unchanged throughout the next two decades, which is often not the case for major legislation. For example, the sustainable growth rate (SGR) mechanism governing Medicare’s payments to physicians has frequently been modified (either through legislation or administrative action) to avoid reductions in those payments.
Currently, Medicare payments to physicians are supposed to go down automatically if spending in the program accelerates at too rapid a pace. Congress can override these automatic cuts, though. As CBO point out, Congress often does just this. What CBO doesn’t point out is that Congress does this in response to fierce lobbying by physicians and other providers who benefit from Medicare’s payment rates.
I fail to see anything in the Baucus legislation that will either reduce this lobbying or strengthen the spines of members of Congress to resist it. In short, if you think the Baucus bill won’t add to the deficit, you haven’t been observing Congress very closely.
Today, the Ohio Ballot Board certified the language for an initiated statute amendment to eliminate Ohio’s estate tax. The 1851 Center drafted sample language for the amendment that was adopted by Citizens United to End Ohio’s Estate Tax. With the Ballot Board’s approval, signatures can officially be collected to have the state legislature consider the initiative.
The 1851 Center’s sample language for the initiative can be viewed here.
On Monday, the Buckeye Institute released a viewpoint by policy analyst Marc Kilmer explains how the elimination of the estate tax will spur Ohio’s economic growth. That viewpoint can be read here.
Gongwer News Service($) reported on a press conference by passenger rail advocates yesterday that had this astonishing claim:
Creation of a rail line from Boston to Portland, Maine produced a 220% return on the $100 million in public spending, according to real estate developer Robert Martin.
The project has generated more than $7 billion in construction investment, 17,800 new jobs in the region, $76 million in tax revenue, and $2.4 billion in consumer purchases, he said during a news conference.
That seemed quite shocking to me as the evidence I’ve heard about passenger rail indicates that its economic development benefits are pretty paltry (if they exist at all). So I did some searching to see if I need to revise my opinion. A quick Google search shows that I don’t.
The numbers quoted by Gongwer aren’t the economic benefits of the Maine railroad. They are, in fact, merely an estimate from a pro-rail group that are estimated to occur by 2030. Either the Gongwer reporter got it wrong or the pro-rail advocate who said these things was misinformed. Regardless, even this estimate of the thirty-year benefits from the Maine railroad are inflated and unrealistic.
The moral of the story — don’t believe everything you hear about how great passenger rail is.
The Cato Institute has put out a great video on the conflict between campaign finance restrictions and free speech. As it discusses, if the Supreme Court upholds federal law which bans corporations from paying for advertising deemed political, there is nothing to stop the government from banning political books:
In his health care speech last night, President Obama said he would “call out” those who misrepresent his plan. Fair enough, there has been a lot of misrepresentation about health care reform legislation from those who oppose it. However, there has also been a lot of misrepresentation about this plan from the President and his allies. So, in the spirit of Pres. Obama, I’m going to “call him out” on a few of his misrepresentations last night:
“…in 34 states, 75 percent of the insurance market is controlled by five or fewer companies. In Alabama, almost 90 percent is controlled by just one company. And without competition, the price of insurance goes up and quality goes down.” – True enough. However, Pres. Obama goes on to say the remedy for this is to have the government “compete” against private insurance. How about the government allow private insurance companies to compete against each other? The reason insurance companies can dominate markets like Obama says is because the federal government enacted a law in 1945 leading to a situation where state governments impose rules and regulations on insurance companies that stifle competition. If you want more competition, Mr. President, we don’t need more rules and regulations. We don’t need a government insurance plan. We need the federal government to repeal the McCarran-Ferguson Act and allow insurance companies to compete with each other.
In Cincinnati yesterday, President Obama made this astounding claim about those who oppose his health care “reform” plan: “I’ve got a question for all those folks: What are you going to do? What’s your answer? What’s your solution? And you know what? They don’t have one.”
You’d think the President would do a little research before speaking, since what he said was 100% false. There are plenty of ideas out there from those of us who oppose his plan. Peter Suderman over at Reason magazine does the president’s job for him and lists some of the solutions Obama says don’t exist.
To go along with my article this week, here is a much more in-depth look at the damage to workers caused by unions:
Labor unions get more respect than they deserve. They are nothing other than labor cartels. Like all cartels, their success depends on the extent to which they can cut off their trading partners—employers, workers, and the customers of employers—from alternatives. Notwithstanding that the National Labor Relations Act (NLRA) helps private-sector unions capture their victims, over time those unions lose market share because of the process of creative escape….
Exclusive representation precludes employers from dealing directly with employees about wages and other terms of employment. Employers are forbidden to reward individual workers for meritorious performance without union permission. Unions are loath to grant permission because they want workers to think that they, rather than individual productivity, are the source of wage gains. Thus, highly capable workers often want nothing to do with unions. Exclusive representation also prohibits individual workers from speaking directly with employers about any job-related issues without union permission. Individual workers have no voice. Only certified unions may speak.
The full article is well worth the time it takes to read it.
