BuckeyeBlog

A solid piece from Julie Carr Smyth on the bumble-squared fiasco that erupted at the top levels of Ohio government earlier this year, when Attorney General Marc Dann bumbled his office administration and Ohio officials at all levels bumbled their response to it.

The problem, as Smyth’s piece develops, is that now the standard of government is “we’ll run around in a panic of self-interest whenever the press or anything else drives us to it.”

Seasoned observers may say it has always been so, but nonetheless, a government that is not based on law is beyond troublesome. It’s dangerous. Split, 5-4 and 4-3 decisions of high courts are a tremendous part of the problem, and so are incidents like the Dann scenario, where everyone concluded he should be hanged, they just were not quite sure for what, or when or, as far as the law goes, why. (more…)

Ohio state representative Chris Widener was featured on CBS’s “Eye to Eye” segment discussing Ohio’s ban on payday lending. As we saw during the debate on this issue, state legislators like Widener just don’t understand the economics behind payday lending. For instance, he repeatedly refers to some sort of “cycle of debt” seemingy caused by payday lending. I have no doubt that Rep. Widener believes that payday lending causes such a cycle of debt. However, outside of the flawed research by the advocacy group the Center for Responsible Lending, you’ll have a hard time finding any academic who studies this issue agree that payday lending causes this.

As testimony from Dr. Tom Lehman pointed out, those “studies” which show that payday lending causes a debt trap are so full of methodological errors that they are worthless. Unbiased research clearly shows that payday loans do not cause economic problems; instead, people who are already having economic problems turn to them. Eliminating these loans will do nothing to stop the “cycle of debt” that Rep. Widener discusses. In fact, as Dr. Lehman’s testimony illustrates, it is likely to cause even more problem for these folks as they turn to even less attractive alternatives.

Unfortunately, Ohio legislators like Rep. Widener ignored the hard data and instead relied on anecdotes and ideologically-driven “research” upon which to base their votes. And it really seems they believe these falsehoods about payday lending and payday borrowers. The banning of payday lending was a shameful expample of legislators failing to do their job. It’s sad that Rep. Widener feels so proud of this abdication of duty that he goes on TV to brag about it.

The Dayton Daily News reports that there are some folks in Ohio who are eligible for Medicaid but are waiting to get on the rolls:

A backlog has placed 16,000 Ohio residents in an administrative limbo while they fight to receive Medicaid benefits from the state.

Services for Ohio’s poor, disabled and blind are in short supply and the lines are long. Administrative processes take months — sometimes years — to navigate, leaving in-need residents frustrated or suffering.

Quite a few states have waiting lists for people with disabilities. I think a lot of us would probably agree that providing care for people with disabilities who live in poverty is a legitimate function of the Medicaid program. The fact that these folks can’t receive service in Ohio and other states indicates (to me, at least) that Medicaid should stop trying to provide care for the middle class and instead focus on the truly needy.

Of course, in Ohio the Democratic governor and the Republican General Assembly approved a plan to expand the program to middle class kids. Perhaps they should take care of the folks on the waiting list before they try and dilute the program’s resources any further.

Crossposted at State House Call.

Columbus native and Northwestern University economic prof Lynne Keisling in her excellent Knowledge Problem blog dishes up the meow mix to WSJ’s Rebecca Smith for a badly misinformed analysis of the impact freer electric energy markets are having in Texas.

Perhaps Ohio’s recent decision to extend government regulation of electric utility energy will protect corporation bottom lines and manufacturing jobs in the short run. Eventually, however, the distorted or completely missing signals of true prices for consumption and true returns for production investments will cause Ohioans to lose out on jobs and prosperity to places with freer markets such as Texas.

BTW, Texas added 139,000 jobs so far in 2008. Ohio has added a paltry 6,000 jobs.

Twenty years ago there was controversy over burning the American flag. People found it wildly offensive, but it’s hard to imagine a better example of political speech than that, and of course there can be no doubt that political speech is protected by the First Amendment.

Now several legislators are upset about a stupid law that bans the use of fireworks.

Ohio’s fireworks law is “utterly ridiculous” and “makes liars out of all of us,” said state Rep. Robert F. Hagan of Youngstown, D-60th.

In fact, “Hagan and other local legislators, who are all Democrats, say they expect to move on this if their party takes control of the Ohio House after the November election. . . . “Let’s not have a law that’s a farce,” said [Rep. Ronald Gerberry]. “They’re not being taken out of state.”

If only they applied the repeal-stupid-laws-test across the board, that’d be reason enough to vote for them right there. Problem is, there wouldn’t be many laws left. Maybe the slogan they need is, “Vote for me. I won’t go to Columbus.”

(Meanwhile, the repeal effort was dealt a setback in Toledo, where nine interconnecting buildings burned down because of errant incendiaries: “If legislators were serious about eliminating injuries and fires caused each year by fireworks, they would begin by passing a law that bans the sale.”)

Thomas Suddes wrote this op-ed in Sunday’s Columbus Dispatch regarding the Ohio Supreme Court’s recent decision to compel Ohio Secretary of State Jennifer Brunner to appoint Brian K. Daley to the Summit County Board of Elections. The Summit County Republican Party Executive Committee recommended Daley after Brunner refused to appoint the committee’s first choice, Alex Arshinkoff.

Despite Suddes’ claim that the court deployed “activism” in reaching its decision, the reality is that the court was presented with a statute that is ambiguous as it relates to the relative roles of the county political parties and the secretary of state in appointing members of the county boards of elections. The justices used their interpretive skills to effectuate an outcome that is consistent with the text and intent of the statute.

This is nothing compared the court’s past activism. During the 1990s up until 2002, the Ohio Supreme Court regularly found itself in protracted battles with the General Assembly by striking down laws related to school funding, tort reform, workers’ compensation reform and other public policy matters. Today, following a series of retirements and subsequent elections, a majority of the court has emerged that respects the doctrine of separation of powers and recognizes the authority the Ohio Constitution gives the General Assembly to enact public policy. Two justices – Maureen O’Connor and Evelyn Lundberg Stratton – who are part of that current majority – are up for re-election this year. Accordingly, the November election will help determine the future direction of the Ohio Supreme Court, including whether it will maintain its current path of acting with restraint from the bench or return to its activism of the past by regularly second-guessing the policy decisions of the General Assembly.

Chances are fair that I agree with what’s written below the fold, but how would I know?

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In an editorial today, the Cleveland Plain Dealer once again decided that getting its facts straight is optional when it comes to smearing payday lenders. It makes the completely unsupported claim that these lenders make “grotesque profits … leeched from consumers.” As was the case with the legislators who supported the payday lending ban, it is clear that the Plain Dealer editors have never actually looked at the scholarly evidence on payday lending. Instead, they rely on the false impressions levied by self-appointed “consumer” advocates.

To pick one study from many, this article published in the Fordham Journal of Corporate and Financial Law states:

this study finds that payday lender profit margins are less than half that of their mainstream lending counterparts…. For pure payday lenders, the average profit margin was 3.57%. When including pawn operators, this figure more than doubles to 7.63%.

These figures indicate that payday lenders are not overly profitable organizations. Contrary to conventional wisdom, these firms fall far short of profits for mainstream commercial lenders. In addition, profit margins of payday lenders are far below those of Starbucks. The profit margins of Starbucks for the measured time period were just over 9%. This is almost 2% more than all payday lenders, and more than double the pure-payday lenders. These figures indicate that arguments against payday lending, couched in terms of preventing excessive profits, are unfounded. If companies should be limited to a certain profitability measure, citizens would be better off fighting Starbucks than their local payday lender.

Anyone who looks at the scholarly data on payday lending can easily see that the common attacks on this industry bear no relation to reality. Unfortunately, the General Assembly and Governor Strickland (as well as the editorial boards that were prominent in pushing for a payday lending ban) decided that anecdotes, name-calling, and agenda-driven “studies” would carry the day.

One of the trendy ideas in health care reform is a “slacker mandate” — requiring insurance companies to cover “children” on their parents insurance up to the age of 25 or 30. The idea is meant to address the fact that young adults make up a large portion of the uninsured. This idea has hit Ohio in the form of SB 115, which is ostensibly aimed at covering “dependent children” up to the age of 30.

One, there is no requirement in the bill that those covered be dependent. It merely states that they can’t be working at a job that offers health care benefits.

Two, since when are adults up to the age of 30 still considered “children”?

New Jersey was the first state to adopt such a mandate. It didn’t really go too well.

Currently the state Senate is debating the Governor’s “economic stimulus” package. In reality, this bipartisan spend and borrow mess will do nothing to help the state’s economy, as discussed in Sam Staley’s Viewpoint. Unfortunately, some cities in Ohio are passing resolutions urging the General Assembly to engage in pork barrel spending, reward politically-connected industries, and burden future Ohio taxpayers with debt (of course, they put it somewhat differently). The Gahanna city council, however, is bucking the trend. They voted down a resolution that was promoting the stimulus package and are now considering the resolution below, which advocates steps that would do much more for the state’s economy than anything being discussed in the General Assembly today:

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