Columbia, MO –Proposition One Capital Improvement Sales Tax – just vote No

At first glance one might think the proposition should be approved by a hefty majority. Even the most anarchistic of libertarians would concede that it is a primary function of local government to maintain the infrastructure under its responsibility. This proposition dealing with the road system and fire protection would qualify.

But a big-picture investigation leads to many questions and ultimately a vote against the proposition. There are grave questions of truth, manipulation, a cynical us-versus-them mentality, and issues with the wisdom of the proposed expenditures. For example, City Hall is implausibly maintaining that since it merely maintains the existing temporary quarter-percent sales tax which expires December 31^st, Proposition One is not a tax increase. Looked at another way, the city cannot maintain the expiring tax. It is proposoing a new tax carrying the same rate. If City Hall does nothing, there would be a tax decrease – something to be desired, as local taxation is too high. Through its advocacy City Hall has chosen to forego the tax decrease in favor of a falsely labelled new tax. Strike one. 

Political quickie: a question for Barack Obama

Given on the one hand the President’s hand wringing over the deaths of Trayvon Martin, Michael Brown, and Freddie Gray, not to speak of his Justice Department’s ‘civil-rights’ investigations into the deaths, and on the other his silence about the murder of Kate Steinle, we wonder why the press has not asked him this simple question:

Do white lives matter?   

Troglo

CON jobs and collusion

Our human nature leads us to believe that as good people we of course accept that rules are for everyone; it is just that we are special cases. Tax preparers are used to the complaints that this rule is unfair, it should not apply to me; or I am poor, I shouldn’t have to pay that. Economists hear this whine: I believe in competition in general, but my industry is a special case, to wit:

• We need to work together – cooperation – not competition
• My competitor wants to cherry pick the most profitable parts of my business
• I can handle any increase in demand just fine
• Competition will hurt my industry & increase costs
• I bring all kinds of benefits to my community
• Sometimes we hear this argument: My competitor is for profit, whereas I wear the not-for-profit halo

Economists think of another word whenever they hear voices urging cooperation, collaboration, or working together in place of ‘destructive’ competition. That word is collusion.

This blog has written here about the Missouri Certificate of Need (CON) laws and urged their repeal. We write again because all the excuses just listed came up before the Missouri Health Facilities Review Committee which decided the heavyweight contest between the two biggest hospital systems in central Missouri.

Much misinformation centers around the idea that somehow competition or capitalism does not benefit the health care industry. Little justification is ever given besides the brazen contention that the free market is responsible for our healthcare woes. In fact, we haven’t seen anything like a free market in health care for generations; the villain is bad government regulation.

Our favorite excuse is that my competitor is just cherry picking the most profitable parts of my business, as if it were not rational and good business to expand into the most profitable new areas. It strikes us as disingenuous and hypocritical for one to say that state power should be used in the public interest so that I keep my dominant position in the most profitable areas. It is not in the public interest that a hospital’s cash cows should be exempt from competition. Here as elsewhere competition will normally lead to more consumer choice, lower prices, higher quality of service, or all three. Oligopolies, not known for innovation, love sanctioned ‘collaboration’ that keeps potential competitors out of their markets.

Another bogus claim is that productive cooperation is not possible without protection from competition via the CON laws. To the contrary, competition will lead to better cooperation through specialization. One hospital could have a great burn unit, another well known expertise in open-heart surgery. It would normally be foolish for one to compete in the areas of the other’s great strengths; this can lead to sensible competition in the remaining areas, to everyone’s benefit.

Competition will increase costs??? Economists love this excuse because it conceals the true benefits of competition. To compete of course requires some investment or capital costs. But once these are in place the benefits will show themselves in reduced costs, higher quality, & so on. Conversely, keeping competition at bay via state law will enable a hospital to keep chugging along with no incentive to reduce costs.

We have noted earlier that the original motivation for the CON laws was to keep the spigot of Federal money open. That changed three decades ago, but the CON laws have not been repealed in many states. The reason is that CON is very useful in inhibiting competition. Ph.D. economists and attorneys with long experience in the antitrust area at the Federal Trade Commission and the Department of Justice have written about the CON laws. An excellent article from the Goldwater Institute summarizes the consensus and includes many useful references. Below are the highlights:

• Medical costs are 11% higher in CON states
• The Federal Trade Commission found in 1988 that “repeals of CON programs would not lead to increased hospital costs”
• CON states have 99 fewer beds per 100,000 population and lower availability of MRI services, CT scanners, and optical and virtual colonoscopies.
• In 2008 the Federal Trade Commission and the Antitrust Division of the Department of Justice wrote: The Agencies’ experience and expertise has taught us that Certificate-of-Need laws impede the efficient performance of health care markets. By their very nature, CON laws create barriers to entry and expansion to the detriment of health care competition and consumers. They undercut consumer choice, stifle innovation, and weaken markets’ ability to contain health care costs. Together, we support the repeal of such laws, as well as steps that reduce their scope.

For perspective we note that the Federal government is also in the business of restraining competition. Since 2010 the Feds have approved only a single new bank, just one, not the hundreds we would normally expect; (see here) while the Dodd-Frank disaster harms small and midsize banks and secures the dominance of the large ones. The latter, without competitive pressure to strengthen them, will tend to become “too big to survive.”

Our advice is for all committees and commissions responsible for implementing CON laws to ignore anti-competitive opposition. Perhaps one day legislatures will have the public spirit to put together a mammoth bill repealing all anti-competitive laws and regulations, including CON and franchising laws, along with occupational licensing laws, all of which inhibit economic growth and generally harm the public interest.   

Troglo

How is Missouri doing?

We have seven Royals and six Cardinals going to the All-Star game, the most in the majors. The Cardinals have the best record in major-league baseball and the Royals the best record in the American League.

From the baseball point of view, things could hardly be better in Missouri. But in terms of the economic well being of Missourians, things could hardly be worse.

Missouri GDP growth is ranked 46th LOWEST in the country.

OMG, Missouri is ranked lower than Illinois, the paradigm of state basket cases. Americans for Prosperity is right. This dismal showing has much to do with Missouri’s being a Forced-Union state. Our Democrat Governor bears much responsibility for this as well.

Please contact your Senator and Representative and encourage them to vote to override the Governor’s veto of the Right to Work legislation. Look up your Senator here:  and your Representative here.     

Troglo

Keep an eye on Carly Fiorina

Among GOP presidential hopefuls we have long thought that Governor Walker of Wisconsin was worth very close attention. Our thinking has not changed. He offers a proven record of defeating Democrats in a blue state as well as a trustworthily conservative mindset, not neglecting the social side. Carly Fiorina is also in our spotlight. Articulate, bright, truth-speaking and direct, conservative, she pulls no punches when it comes to the abominable Hillary Clinton. All in all she would be a formidable candidate.

What are the most fundamental qualifications we seek in a President? Here’s a possible short list:

• Sound diagnosis of the problems with our government
• A good conservative plan to reform it and the ability to push it through Congress
• Be trustworthy and have enough energy and grit to get the job done
• We could add that a disqualification is a background in politics of going along to get along.

Does Mrs Fiorina have the qualifications to be a successful two-term President?

Donald Trump vulgarian: further thoughts

Our recent post on Mr Trump’s candidacy for the White House was not uniformly well received. We suspect this has less to do with Trump’s positions or qualifications and more with his outspokenness, a refreshing contrast with many Republicans’ mealy-mouthed preemptive and cravenly capitulation to possible attacks from a hostile press and others. We too are very much in favor of plain talk from our candidates, a welcome change from the triangulating tacking of the RINOs and hypocrites. But there are many better ways to do so than Trump’s bluster.

We will concede that his business experience does in fact go beyond the crony-capitalist building of casinos and resorts. But why would this capitalist contribute to Harry Reid, Chuck Schumer, John Kerry, Andrew Cuomo, and Eliot Spitzer, then justify it by exclaiming, “You’re gonna need things from everybody?” Let’s not forget that he contributed to the Clinton Foundation and to Miss Hillary’s Senate campaign. And Monday he proffered this sauce for the goose-sauce for the gander remark after Univision dropped his beauty pageant:

Remember, Univision is the one who began this charade in the first place, and they (sic) are owned by one of Hillary Clinton’s biggest backers.

We doubt the claim that most Democrat politicos would be worse Presidents. His view that illegal immigration from Mexico and Central America is dangerous and must be stopped is correct, albeit very impoliticly expressed. But erecting “an impenetrable border” is not the only immigration issue; there is also the prosecution of employers of illegals. Trump’s position on this is unknown, though we imagine he would not be in favor of it. In fact his position of many issues is unknown.

But we stick to our guns about his mistaken view that China is stealing “our” jobs, by selling American companies goods they can produce less expensively than can U.S. companies. His mercantilist views with high tariff barriers to foreign trade would be very dangerous if implemented, not to mention his tough talk directed at foreign countries. We refer you to an earlier post here.

In short, an impulsive, self-centered man given to bravado and phony claims of accomplishment would not make a good candidate for mayor, much less President of the United States. His vulgarity extends to tasteless name calling: Charles Krauthammer is “totally overrated,” Michelle Malkin is “a dummy.” As Jonah Goldberg wrote here:

He has no chance of becoming president, but he has the huge potential to deny his alleged party a White House victory in 2016. And when that happens, he will of course stay a celebrity, but he will have traded his fame for infamy, even among those now cheering him on.

In other words, Trump is the new Ross Perot, the Texas businessman Presidential wannabe who heard a giant sucking sound coming out of Mexico and splitting the conservative vote then gave the 1992 election to Clinton. Without Clinton, no Obama. Let’s hope Trump exits the Republican primaries very soon.   

Troglo