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HIGHLIGHTS from the BLOG:
Yesterday, the Missouri House of Representatives passed two key labor reform...
Over the course of the past week, both the Missouri House and Senate have made...
Today, the Missouri Senate Small Business, Insurance, and Industry Committee...
Adam Smith Foundation Blog
House and Senate Pass Labor Reform Bills
March 14, 2013
Yesterday, the Missouri House of Representatives passed two key labor reform bills a "paycheck protection" bill (HB64, sponsored by Rep. Eric Burlison) which would protect workers by requiring an annual authorization for automatic withdrawal of money for union political funds and a prevailing wage reform bill (HB409, sponsored by Rep. Warren Love) which would clarify the types of projects which require payment of the prevailing wage and would change the way wages are calculated to ensure the prevailing wage in rural areas more accurately reflects local pay rates, not urban union wages. Today, the Senate followed suit by passing a paycheck protection bill of their own, SB29, sponsored by Sen. Dan Brown.
All three of these bills are common sense measures.
Paycheck protection will help ensure more transparency for workers; by requiring annual authorization for political contributions, they will regularly see how much they are giving their union for political purposes and will have more control over these contributions.
Prevailing wage reform will help government entities particularly schools and local governments in rural areas save money by ensuring they are not required to use prevailing wage for minor maintenance projects and by restructuring wages in rural areas to ensure they reflect actual local wages. This will have the side effect of allowing more local contractors to compete for these jobs, helping to keep local taxpayers' money in their community.
As expected, unions fought hard against both of these bills. The St. Joseph News-Press has an interesting take on the union fight against paycheck protection, published in an editorial today. As they wrote, "Ensuring workers are informed at some regular interval that they are automatically contributing to a union's treasury hardly is cause for alarm, unless for some reason you would oppose informing these workers of this." Simply put, opposing an annual authorization does not make sense, unless it's more about protecting union power than about protecting union workers.
We hope that you will call your local legislators and tell them that 2013 is the year they need to make sure these labor reforms become law.
Tax Reform Gains Traction in Missouri General Assembly
March 11, 2013
Over the course of the past week, both the Missouri House and Senate have made great strides in making sorely-needed tax reforms a reality for Missouri.
The Senate perfected a package of tax reforms, SBs 26, 11 & 31, on Wednesday of last week. The package included a reduction to the income tax rate that is balanced out by a small increase in sales taxes (a key part of moving from an income tax to a consumption tax), an increased exemption for corporate income taxes, and would enter Missouri into the Streamlined Sales and Use Tax Agreement, helping to make compliance with the sales and use tax easier and more consistent for Missouri businesses.
On Monday of last week, the House Ways and Means Committee heard a number of bills intended to help reform our tax code, including HB536, which would reduce the corporate income tax rate and phase in an income tax deduction for business income; HB607, which would link the income tax rate to inflation in order to modernize the system and reduce the number of people paying the highest rate (which most Missourians are paying right now); and HJR25, which would phase out the income tax and replace it with a sales tax.
Reforms to our tax system need to be made, and the Adam Smith Foundation would like to thank the General Assembly for working to address this issue during 2013.
We hope you will contact your local legislators to tell them to support tax reform.
We also encourage you to watch this very interesting video produced by the Missouri firm Pelopidas which examines the history of the state's income tax and explains why the current system is outdated.
Right to Work Hearings Scheduled in the Missouri Legislature
February 12, 2013
Today, the Missouri Senate Small Business, Insurance, and Industry Committee will be hearing two Right to Work bills SB76, sponsored by Sen. Dan Brown, and SB134, sponsored by Sen. David Sater at 1:00 p.m. in Senate Committee Room 1.
Additionally, HB91, a Right to Work bill sponsored by Rep. Donna Lichtenegger, and HB95, a Right to Work bill sponsored by Rep. Bill White, will both be heard Wednesday, February 13 at 8:00 a.m. in House Hearing Room 5 before the House Workforce Development and Workplace Safety Committee. These are the second and third Right to Work bills to be heard by the Committee this year. The first, HB77, was heard last week.
2013 is the time for Missouri to join the growing ranks of Right to Work states. Just last year, two new states - Indiana and Michigan - became the 23rd and 24th Right to Work states. If a traditionally union-dominated state like Michigan is willing to embrace worker freedom and allow individuals to make their own choices about union membership, Missouri should too.
To ensure we are able to keep up the momentum and encourage Missouri to adopt Right to Work, we need your help to let legislators know that the people of our state support this common sense reform. We hope that you will call your local legislators and voice your support for Right to Work.
Right to Work
February 1, 2013
HB77, a Right to Work bill sponsored by Rep. Eric Burlison, will be heard Wednesday, February 6 at 8:00 a.m. in House Hearing Room 5 before the House Workforce Development and Workplace Safety Committee.
Right to Work is a commonsense measure for Missouri. It will give every Missourian the right to make their own union membership choices, ending the practice of requiring union membership to get a specific job. It will also enable Missouri to compete for new jobs with the six Right to Work states along our borders, encouraging economic growth.
We hope that you will call your local legislators and tell them to support Right to Work.
The Adam Smith Foundation Applauds Michigan for Joining the Ranks of Right to Work States
December 19, 2012
(JEFFERSON CITY, MO) - The Adam Smith Foundation applauds the state of Michigan for making the choice to end forced unionism and become a Right to Work state.
"Michigan, a heavily unionized state, has made the right choice and adopted Right to Work. The Adam Smith Foundation congratulates the state of Michigan for successfully passing Right to Work, and we hope that Missouri will follow the precedent set by both Michigan and Indiana and quickly adopt this common sense policy," said James Harris. "Right to Work would help Missouri compete for jobs that are currently going to the six Right to Work states on our borders, and it would also protect our workers from being forced to join a union and pay dues just to get a job. It is our hope that Right to Work will be a top priority during the 2013 legislative session."
Tell Your Congressional Representatives to Stand Strong in Fiscal Cliff Negotiations
November 26, 2012
At the end of this year, our nation is set to reach what is known as the "fiscal cliff" - the point at which the automatic tax increases and spending cuts that were part of the Budget Control Act of 2011 will automatically go into effect unless the House and Senate pass a bill to avert the problem.
Liberal lawmakers are trying to emphasize tax increases over spending cuts, while conservatives are asking for a solution that will include only spending cuts, not job-killing tax increases. The last thing America needs during these difficult economic times is to burden our citizens with higher taxes.
The Adam Smith Foundation urges you to call your local U.S. Representative and Senator Roy Blunt and tell them to stand strong during negotiations over the fiscal cliff. Tax increases are not the right way to solve our budget problems. We need to get spending under control, not use tax increases to enable government waste to continue.
Miss Your Twinkies? Thank Union Bosses
November 19, 2012
Hostess, a large bakery company, has been forced to shutter its operations because it had been crippled by a strike. The union representing the bakers objected to a plan calling for cuts to pay and benefits in order to save the company, and instead instituted a strike that shut down plants across the nation.
In essence, because union bosses chose to put contract demands ahead of common sense and the welfare of their members, they forced union members to throw away their jobs by striking in such a manner that they completely wrecked a company. Now, Hostess is in the process of winding down operations and laying off 18,500 workers.
Clearly, this strike was not in the workers' best interests. If Right to Work was national policy, these workers could have objected to the union bosses' insistence on using the "nuclear option" of a strike and dropped out of the union to retain their jobs.
This is exactly why Missouri needs Right to Work. Under the current system, union bosses - who do not always have the same goals as their members - can use their power to shut down a business just to make a point, eliminating hundreds or thousands of jobs over a disagreement that could have been solved through negotiation. With Right to Work, both businesses and their employees would be protected from going down the same path as Hostess.
Fearing Public Accountability over TIF Project, Ellisville City Council Considers Changing Recall Process
August 16, 2012
The Post-Dispatch reports that the Ellisville City Council is going to hold a special session tonight where they will attempt to change the recall process outlined in the city charter. The change would require a specified cause for recalls, making it much more difficult to recall elected officials.
Not coincidentally, they are debating this change after members of the public started discussing a recall effort due to a $10.8 million TIF package for a big-box retailer which was recently approved by the Council.
Local taxpayers do not want to pay $10.8 million to set up this store, which would also result in the demolition of 100 apartments, and when they threatened to voice their opinion at the ballot box, the City Council chose to try to make a recall effort more difficult.
This is a shameful act by the City Council of Ellisville. The Adam Smith Foundation hopes that the people of Ellisville will pay close attention to the City Council's actions and oppose any effort to reduce public accountability. Voters need to be able to have their voice heard and hold elected officials accountable for bad decisions.
Judicial Selection Reform Grows During 2012 Session
February 29, 2012
This session, House leadership organized the House Special Standing Committee on Judicial Reform for the express purpose of hearing judicial reform bills. Now, just two months into legislative session, four judicial selection reform bills have been proposed.
Two of them, SJR42 (sponsored by Sen. Jim Lembke) and HJR44 (sponsored by Rep. Stan Cox) would replace the Missouri Plan with a system based on the judicial selection plan in the U.S. Constitution.
Another bill sponsored by Sen. Jim Lembke, SJR41, would implement a hybrid election/gubernatorial appointment system that would allow the governor to appoint one Supreme Court judge, while the people of Missouri would get to elect the rest.
HJR77 (sponsored by Rep. Doug Funderburk) would replace the Missouri Plan with direct, partisan election of judges. Elections are the most common method of selecting local and circuit-level judges in the state of Missouri. Only six of Missouri?s circuits use the Missouri Plan, while the remaining majority of circuits use elections.
Both HJR44 and HJR77 have been heard by the House Special Standing Committee on Judicial Reform and are awaiting executive action. The Adam Smith Foundation urges you to call your local State Representative and State Senator to ask them to support judicial selection reform that will allow the people of Missouri to exercise more influence over the judicial selection process.
House Passes Taxpayer Protection Act
January 20, 2012
Yesterday, the Missouri House of Representatives passed House Joint Resolution 43, also known as the Missouri Taxpayer Protection Act.
The bill, which is sponsored by Rep. Eric Burlison, will prevent spending from the state's General Revenue fund from increasing at a higher rate than inflation and population growth. The limit would not be applied based on this year's budget cycle, which is far below normal due to continued economic difficulties. Rather, the limit would take effect once spending reaches the 2008 level.
If state revenue rises faster than inflation and population growth, the bill will require the excess funding to be put toward paying down state debt, financing two reserve funds that will replace the current "Rainy Day" fund, and reducing income taxes.
Not only will this bill keep government spending in check and ensure small government for Missouri, it will help prevent our budget from going through the boom and bust cycles of the past few years.
We hope that the Missouri Senate will quickly take up this bill and pass it. Missouri's taxpayers need to be protected from out-of-control spending.
House Budget Committee Passes Bill to Limit Spending
January 12, 2012
On January 11, the House Budget Committee approved a bill that will protect taxpayers from out-of-control spending by placing a limit on state appropriations.
Representative Eric Burlison's bill, HJR43, would prevent state spending from growing disproportionately to population growth and inflation. Under the current system, lawmakers often utilize excess taxpayer money collected in prosperous years to create wasteful new programs or initiate expansions of existing programs that simply cannot be funded during economic downturns. Limiting spending growth would prevent future budget shortfalls by keeping spending at a more manageable level, rather than allowing the budget to go through the boom and bust cycles it is currently subjected to.
The bill would allow only 1.5% of general revenue growth to go toward appropriations, with any growth between 1.5% and 2.5% designated to paying off state debt. If general revenue grows over 2.5% but our population and inflation do not keep pace, the funds would be deposited into state emergency funds. If those funds are full, the money would be put toward taxpayers' state income tax refunds.
The Adam Smith Foundation applauds Representative Burlison for sponsoring this bill, and we urge all supporters of responsible spending and limited government to call your legislators and tell them to support HJR43.
Minimum Wage Initiative Threatens State Economy
November 9, 2011
A union-backed group called Missouri Jobs with Justice has sponsored an initiative petition to raise our state?s minimum wage by a dollar to $8.25 per hour, keeping the cost of living escalator provision intact. Given the timing of the initiative, it is obvious this is primarily meant as a political ploy to attract more liberal-minded voters to the polls in 2012. However, the way the initiative is structured makes it more destructive than a cheap trick to attract voters ? if passed, this will do irreparable damage to our economy.
Our state cannot afford to price ourselves out of competition for new jobs. Very few other states require a minimum wage higher than the federal minimum. While our minimum wage is currently equal to the federal minimum, the escalator provision will soon raise it above the federal minimum. That is damage enough. To raise it another dollar on top of that would be simply ludicrous.
The Adam Smith Foundation urges all Missourians to oppose this job-killing ballot measure. We are in the process of recovering from a recession ? we don?t need to enact legislation that will put a damper on our economy and make recovery harder.
U.S. House of Representatives Passes Bill to Outlaw NLRB Interference
September 30, 2011
In response to the National Labor Relations Board's irrational attempt to force Boeing to move production of their 787 jet to Washington from South Carolina, the U.S. House of Representatives passed a bill to outlaw interference in this and other similar business decisions.
The bill, HR 2587, is known as the Protecting Jobs from Government Interference Act and was passed with a vote of 238-186. It will prevent the NLRB from interfering in businesses' decisions by denying the Board the power to order any company to reinstate work on any particular product, require any additional investments in particular facilities, or reverse any relocation decision.
The controversy between the NLRB and Boeing began when union workers at Boeing's Washington facility alleged that production of the new 787 airliner, and the 1000+ jobs that go along with it, was placed in a non-union South Carolina plant as retaliation against the union for a labor dispute. In response, the pro-union cronies of the Obama administration that serve on the NLRB made the unprecedented decision to attempt to force Boeing to make the 787 at their Washington plant.
If the NLRB had been allowed to go through with this, it would have created a precedent that could have essentially nullified the purpose of Right to Work laws by allowing the federal government to force businesses to create jobs in non-Right to Work states if a union complained loudly enough. It would have also put the very nature of our free market in danger by allowing government to step in on a basic business decision like determining the location of a production facility.
The Adam Smith Foundation applauds the House's commitment to protecting free market ideals, and we hope the Senate will soon follow suit and pass this necessary piece of legislation.
Isn't $14.3 Trillion Enough?
July 27, 2011
Our nation has reached a tipping point. We have hit the $14.3 trillion limit on our national debt, and now Congress is being asked to raise the limit by an additional $2.4 trillion (coincidentally, just enough to get them by until after the 2012 election).
Negotiations to raise the debt limit have reached an impasse, as liberals are not willing to give any ground on the issue of substantially reducing the deficit. Essentially, the problem is that the left does not want to make big cuts to spending, especially to the expensive entitlement programs that make up such a large portion of the non-discretionary budget. Instead, they want to raise the national debt and make only a token effort to shrink the deficit by "increasing government revenue" - a euphemism for raising taxes.
Of course, what really needs to be done is to reduce the nonsensical level of spending that our nation's government has been indulging in. Pork projects, bloated entitlement programs, and expensive "stimulus" programs have brought our nation to the brink of bankruptcy, yet so few in Washington want to take a hard look at our budget priorities and cut spending.
If our country is going to continue being the dominant economy in the world, we must get our debt situation - and by extension, our spending situation - under control. Our nation's ability to repay our debt has a profound effect upon the health of our economy. Right now, we are smothering under a debt load of over $46,000 for each individual in the country, but little is being done to bring this ludicrous figure down.
The world's financial institutions recognize we have a problem, and if we continue down this path we are in great danger of having our credit rating reduced, especially if we default on our debts. This is a situation that will increase the amount of interest our nation pays on debt and drive up the interest rate for any loan in the United States, including those that are vital to the growth of businesses and communities.
It is our hope that the politicians in Washington, D.C., put their political posturing aside and get together to work on a true solution to our debt crisis that will reduce spending, cut the size of government, and get our nation back on the path to balance the budget and pay down the national debt. We need to get our federal government's spending back under control, and we must do so quickly to avoid disaster.
The Post-Dispatch Has It Wrong
July 18, 2011
The St. Louis Post-Dispatch has published an editorial blasting a proposal to temporarily suspend prevailing wage requirements during the Joplin cleanup and reconstruction efforts, making the same tired pro-union arguments alleging that suspending the requirement will lead to lower wages and lower quality work. As usual, they got it wrong.
While it is true that the prevailing wage is calculated at a county-by-county level, local wages are very rarely reported to the Department of Labor. Instead, the wages being reported are those from union contractors from our state's metropolitan areas, a situation which gives an incomplete picture of actual wages and increases the prevailing wage calculations for the area. This means that any contractors receiving public works contracts in Joplin will in effect be paid the Kansas City or St. Louis wage, artificially driving up the cost of cleanup.
Enforcing the prevailing wage requirement in Joplin while using inaccurate wage data will prevent local contractors from competing, almost guaranteeing that any jobs generated during the cleanup will go to union contractors from Kansas City or St. Louis instead of local firms that need the business the most.
Around the state, it happens all the time - local public works contracts go to union contractors from Kansas City or St. Louis rather than to local contractors who could do the work cheaper because the prevailing wage requirement means local contractors can no longer quote their usual price, but the "prevailing wage" price that reflects the higher wages paid to big-city contractors. Unfortunately, when they have to charge the same rate as big firms from our state's largest cities, small contractors just cannot compete.
Of course, the lack of true local competition is just one part of the problem with using the prevailing wage for public works contracts. The other is that paying these artificially-inflated wages leads to a higher cost for the projects. There will be a vast amount of public works contracts awarded during the Joplin cleanup operations, and our state cannot afford to pay a premium on the work just to appease union bosses. The money that will fund the projects is taxpayer money, and taxpayers need to know that the work is being done in the most cost-effective way possible.
For evidence of this cost difference, all you need to do is take a look at the prevailing wage rate documentation for Jasper and Newton Counties. In Jasper County, there are three occupations for which wages were set by local non-union contractors - Cement Masons, Group II Operating Engineers, and Iron Workers. The average prevailing wage for these three occupations is $20.20 including fringe benefits. The same three occupations had their wages set by unions in Newton County (just south of Jasper County), and the difference is clear - the average prevailing wage for these three occupations is $37.30, an increase of approximately 85%. This extra cost is forced upon taxpayers any time the prevailing wage requirement is used.
We need to suspend the prevailing wage requirement for cleaning up and rebuilding Joplin. It is the best thing for local contractors and for taxpayers across the state.
U.S Conference of Mayors Estimates St. Louis Recovery to Take Three Years
June 24, 2011
According to an article in the St. Louis Post-Dispatch, the U.S. Conference of Mayors issued a study on metropolitan areas in the U.S. that estimates the St. Louis region's economy will not return to pre-recession levels until late 2014.
During the recession, the study finds that the St. Louis area lost nearly 82,000 jobs. Even during the recovery, unemployment is expected to remain high - it is projected to be at 8.6% in 2013 according to IHS Global Insight, the firm conducting the study. This is a far cry from the 5.3% pre-recession rate and shows just how far our state has fallen during the recession.
To speed up the recovery and get our state's economy back on track, we need to emphasize pro-jobs policies that will enable our state to attract back the 82,000 jobs that have left St. Louis since 2008. The elimination of the franchise tax - one of only a few pro-jobs measures that the legislature passed this year - will help, but we need to encourage the passage of the rest of the pro-jobs plan that legislative leaders outlined at the beginning of the 2011 session. Missouri needs Right to Work, predictable tort laws, consistent employment laws, and strengthened workers' compensation protections if we are going to attract the jobs of the future.
DeMint Report Shows Clear Right to Work Advantage
June 6, 2011
Senator Jim DeMint (R-SC) has released a new report showing that Right to Work states have a clear advantage over forced-unionization states like Missouri.
Right to Work states have consistently attracted more jobs and more businesses, attracting over 1.3 million more jobs and 157,207 more businesses since 1993. This unparalleled job creation has prompted income growth that outpaces that of the rest of the nation 39.5% in Right to Work states compared to 35.7% in forced-unionism states. These statistics are a stark reminder of the disadvantage our state is at without a Right to Work law. By eliminating forced unionization, we could put our state back on the road to economic prosperity.
Of course, not only are Right to Work states attracting jobs, they are attracting residents. Over the past 30 years, non-Right to Work states have lost 25 seats in Congress due to population shifts favoring Right to Work states. This is a particularly salient point in Missouri, where our continued lack of growth caused us to lose a Congressional seat after the 2010 census, reducing our states political influence.
You can read the full report here.
National Right to Work Legal Defense Foundation Sues Secretary of Labor for Easing Union Reporting Requirement
May 24, 2011
The National Right to Work Legal Defense Foundation announced that they have submitted a lawsuit alleging Secretary of Labor Hilda Solis overstepped her authority by unilaterally invalidating a rule that increased reporting requirements for union officials. The Secretary invalidated the rule for being too much of a burden on union officials, but the National Right to Work Legal Defense Foundation believes that this alleged burden is not significant justification for the Secretary to open up a loophole that will allow union bosses to hide how they spend union dues.
Under current law, unions who take in at least $250,000 a year in dues are required by the Labor Management Reporting and Disclosure Act to file financial statements with the Department of Labor. These annual statements, also known as LM-2 forms, are archived by the Department of Labor and made public on the Departments website. These disclosure requirements allow the public to have ready access to important information about how dues are spent.
By creating a loophole that will ease reporting requirements, the Secretary of Labor has done a disservice to the public. I applaud the National Right to Work Legal Defense Foundation for taking on this case. The public deserves to know what unions spend their dues on, said James Harris. Allowing union bosses the opportunity to get out of filing annual reports will allow corruption to continue unabated and will make it harder for union members to see what exactly their dues are paying for.
House Passes Prevailing Wage Law
May 3, 2011
The House has third read and passed HB828, a bill that will update our states prevailing wage law to ensure taxpayer money is saved on future public works projects. The bill is meant to undo damage that had been done by a series of court decisions that broadened the scope of what is defined as construction for public projects. Over the years, the courts have expanded the definition of construction to include such minor projects as painting, decorating, or small improvement projects things that could easily be done by local contractors for substantially less than the prevailing wage. This forced school boards, local governments, and other public entities to spend more money than necessary to get such small projects done. The Adam Smith Foundation applauds the Missouri House for passing this bill, and we urge you to give your local State Senator a call to tell them to support prevailing wage reform.
House Passes Bill to Protect Right to Vote by Secret Ballot
March 21, 2011
The Missouri House of Representatives has passed HJR6, a bill proposing a constitutional amendment that would protect every individuals right to vote by secret ballot. The bill would prevent unions from using card check instead of a secret ballot vote during unionization drives.
The secret ballot ensures that each voter is able to exercise their own free will and express their own opinion without fear of retribution, and as such is a necessary part of a functioning democracy. To vote in a public manner, as in a card check system, opens up the process to external influence and undermines the very notion that any vote taken using such a system constitutes a democratic decision. Guaranteeing the right to vote by secret ballot will protect workers from the intimidation and discrimination that would arise under card check or any other system in which their vote would be made public.
The next step for the bill is to be heard in the Senate. If passed there, it will go to a vote of the people.
The Adam Smith Foundation applauds the House for taking action to protect Missourians right to a secret ballot, and we urge you to call your local Senator to tell them to support HJR6.
The Adam Smith Foundation Thanks Senator Crowell for Supporting Right to Work
January 20, 2011
The Adam Smith Foundation would like to thank Senator Jason Crowell for supporting Right to Work legislation. The Senator has proposed a bill that would allow Missourians to vote on ending forced unionization in 2012.
Under current law, once a majority of voters in a workplace election choose to unionize, unions are allowed to negotiate "union shop" contracts with employers that force any worker to pay "union representation fees" regardless of whether they are a union member or not. They pressure any remaining non-union employees to join the union, using intimidation tactics to get their way. Essentially, current laws allow forced unionization.
Being a non-Right to Work state is a serious hindrance to Missouri's economy. Forced unionization has a high cost, both for workers and employers. Workers are forced to pay dues, while employers are held down by union bargaining tactics and expensive labor contracts. Six neighboring states have Right to Work laws, a fact that leads companies to create jobs in those states rather than in Missouri.
Our state can encourage job creation and economic growth by passing a Right to Work law that would nullify "union shop" contracts and leave the choice of unionization up to individual workers.
Missouri Missing Out on Job Growth
December 27, 2010
Policies like monopoly bargaining, project labor agreements, and prevailing wage laws are holding Missouri back. These laws give unions an unfair advantage, encouraging union abuses and discouraging economic growth.
From 2000 to 2009, our state's manufacturing GDP has decreased by 12.9%, while in Right to Work states it has increased by an average of 14.7%. What does this mean? Missouri has lost family-supporting manufacturing jobs, while states that have laws to make union membership strictly voluntary have gained thousands of jobs.
Manufacturing isn't the only industry hurt by laws that give unions an unfair advantage. Small contracting businesses are hurt by state laws that essentially require all state-funded projects to be awarded to unionized businesses, making it hard for anyone not affiliated with unions to compete for government contracts.
Even workers in union shops are hurt - they are forced to pay money to the union whether they choose to join or not, cutting their take-home pay by a substantial amount. Moreover, they are continually subjected to ridicule and hostility. Often, the choice is either to join the union or be out of a job. This is not a choice that anyone should have to make.
Looking forward to 2011, we have a good chance to get our state back on the right track by pushing for reforms to make sure government is no longer propping up unions by giving them an unfair advantage.
Could Cap and Trade Be on its Last Legs?
October 29, 2010
On Tuesday, November 2, the people of California will vote on a ballot measure that would prevent stricter emissions regulations from being enacted until the state's rampant unemployment is back under control. Early polling shows that the measure has a good chance of passing.
If California - the nation's unquestioned leader in zany environmental laws - has had enough of the liberal environmentalist agenda, can any sane person really think that "cap and trade" is the right idea for our nation as a whole? Of course not.
It is ill-advised to pursue policies like cap and trade, especially in such a weak economy. These ridiculous environmental regulations do nothing but kill jobs and take money out of our economy by forcing businesses to either pay for new environmental technologies or move overseas. Hopefully, lawmakers across the country will hear the call and put an end to liberal laws that threaten to hold our economy back.
What Will California Say About Cap and Trade?
October 21, 2010
Proposition 23, the ballot measure that would put a hold on strict environmental regulations in the state of California until unemployment is under control, will be put to a vote in a matter of weeks. Make no mistake - this ballot measure is the front line of the war against job-killing environmental regulations like cap and trade that threaten to put our nation's businesses at an economic disadvantage.
On October 18, the Wall Street Journal published an editorial (which you can view here if you are a subscriber) that describes exactly what the stakes are if these overly-strict environmental regulations are allowed to become law in such a weak economy. Hundreds of thousands of jobs will be eliminated as manufacturers are forced to either move overseas or eliminate large portions of their workforce to pay for compliance with ever-stricter environmental standards. The average person will pay more for everything from energy to food. The largely imaginary "green jobs" that cap and trade supporters promise will not be able to displace the amount of jobs lost to these new regulations. If these regulations gain a foothold in California, it is only a matter of time before they extend across our nation.
It is clear that stricter regulations aren't going to do anything positive for our nation. We hope that the people of California will help put a stop to job-killing environmentalist measures.
Term Limits - A Good Option for Keeping the Public Involved
September 8, 2010
Paul Jacob responded to critics of term limits with a particularly cogent article arguing that term limits serve a useful function in our democracy. He points out that term limits do not limit choice and turn people away from participation in elections; they create new choices, get rid of incumbent advantage, and encourage more participation in government.
Term limits are a good way to keep our political system from becoming stale. At the national level, incumbents dominate the legislature and very rarely face credible challenges in either the primary or the general election. Because they are over 90% sure they will be reelected, they get out of touch with the people they are supposed to represent and in turn the people get out of touch with them. This is part of the reason behind the anti-incumbent antipathy being expressed during this election cycle - too many Senators and Representatives have been there for too long and the people feel like they can do very little to change things.
Contrast that with Missouri where we have term limits for legislators. Our legislature is a vibrant body with a constant stream of new ideas. We don't allow individual legislators to become entrenched in our capitol. We make sure that at least every eight years the public has a new choice to make rather than a choice between the status quo and the untested. This keeps the public involved and helps reduce the disconnect between legislators and the people they represent.
Term limits are a good thing, and it is important that we work to protect them from those who want to bring back the old system.
California's Proposition 23 - Remove Environmental Regulation Increases until Jobs Return
August 13, 2010
As you know, California's environmental regulations are among the strictest in the nation. Because they are often designed to be more strict than technologically or economically practical, the cost of compliance is often prohibitive and can cause jobs to be eliminated and businesses to go under. Unfortunately for the rest of the nation, these poorly-designed and heavy-handed regulations often work their way east and become the law of the land within a few short years.
This is why the Adam Smith Foundation fully supports Proposition 23, a ballot measure that Californians will vote on later this year. Proposition 23 will suspend stricter environmental regulations that were passed in 2006 until after unemployment has been below 5.5% for at least a year.
Suspending the stricter environmental rules will allow the economy to grow and encourage job creation. Employers who were going to have to buy new equipment to comply with the law can instead use that money to hire new employees or put into research and development. Passage of this proposition will also serve to discourage other states from adopting the stricter standards.
In this weak economy, we cannot afford stricter environmental regulations. The Adam Smith Foundation is proud to stand in support of Proposition 23, and we will continue to support an end to irresponsible environmental regulations.
The Adam Smith Foundation Congratulates Let Voters Decide on Earnings Tax Referendum
August 5, 2010
The Adam Smith Foundation would like to congratulate Let Voters Decide on successfully getting a referendum on the ballot that, if passed, will allow citizens of St. Louis and Kansas City to vote every five years on the earnings tax - essentially an income tax collected by the city.
"I am glad that the earnings tax referendum has made it on the ballot for November. It is time we offer the chance for St. Louis and Kansas City to vote on whether they want to get rid of the job-killing earnings tax that has hamstrung our state's two largest cities for too long," said John Elliott, President of the Adam Smith Foundation. "The burden placed on job creators is too high and has put Missouri at a competitive disadvantage. It is only right that we offer the citizens of St. Louis and Kansas City the opportunity to vote on whether to keep or sunset the earnings tax."
Environmentalist Measures Threaten our Nation's Economy
April 21, 2010
Environmentalists are constantly working to pass liberal measures to interfere with the economy by placing penalties on energy use, putting arbitrary limits on waste production, and blocking our nation from using our own resources. Even when the measures are confined to one state, they can have a lasting impact on our nation because of the interconnectedness of modern markets.
Many of you are probably familiar with the acronym CARB. CARB stands for California Air Resources Board - one of the most powerful environmental regulatory agencies in the nation. CARB standards for air pollution frequently surpass those of the EPA, and several other states have chosen to adopt CARB standards. Though the regulations are meant to apply only to those states that adopt them, the size of the market in California and these other states often means CARB standards become de facto standards for marketing products throughout the nation since it makes little since to produce a California-specific version of each effected product, even though the regulations mean the product will be more expensive to produce. This can be seen widely in the automotive industry - those of you who own newer cars are likely familiar with the acronyms LEV, ULEV, or SULEV: all emissions standards that were originally specified by CARB but have become a part of the national lexicon because of the interaction of government interference and market forces.
Many of you are also probably familiar with the practice of "outsourcing" manufacturing jobs. One of the key reasons companies outsource jobs is to take advantage of environmental laws that do not introduce an artificial cost to production. By moving to nations that do not have the strict standards of the United States, companies have access to cheap energy and save money by avoiding costly equipment like exhaust "scrubbers." Unfortunately, these lost jobs are unlikely to return without significant changes to our nation's environmental regulations.
Voters need to say no to short-sighted environmental legislation. Decisions made in California and other states have a tendency to spread throughout the nation, and that is something we cannot afford. Missouri gets approximately 83% of our electricity from coal, according to the latest figures from the Department of Natural Resources. Coal is the cheapest and most sensible option for Missouri consumers, but it and other fuels that are readily available in the Midwest are the biggest targets of liberal environmental legislation. Unfortunately, laws designed by liberals from outside of our state don't often think about the problems we will encounter if their regulations are forced upon us.
By allowing government to continually interfere with the market by enacting strict environmental laws, we become less competitive on the world market. A returned focus on solid economic principles can help ensure we do not let environmentalists pull our economy down.
Tort Reform Upheld, For Now
April 3, 2010
In what can best be described as a close call, caps on non-economic damages have been upheld by the Missouri Supreme Court in Klotz v. St. Anthony's. In a carefully-crafted per curiam decision designed to allow the justices to avoid taking responsibility, the members of the court avoided addressing the constitutionality of tort reform itself, choosing instead to decide the case by striking down the portion of the law that allowed retroactive application of damage caps. By addressing only the constitutionality of the retroactivity clause, the court has left the caps themselves open for a challenge in the future.
What will happen if the court chooses to address the caps in a future case? A possible result can be seen in the concurring opinion of Justice Wolff. In a short concurrence that reads more like an op-ed than a work of legal reasoning, Justice Wolff argued that caps themselves should be considered unconstitutional because they violate the right to trial by a jury by interfering with the jury's decisions, saying that the only way to make these caps constitutional would be for the people to vote them into the constitution.
If the court does agree to hear a future challenge to our tort reform caps, will it face the same reception as Klotz v. St. Anthony's? Will our court openly acknowledge that caps are constitutional, or will they choose to embrace the view held by Justice Wolff and invalidate the entire law? Only time will tell.
It's about time. Thank you, Representative Schoeller.
February 11, 2010
Representative Shane Schoeller has sponsored the Fair Influence in Government Act, HB 1872, which would prohibit entities who receive taxpayer money from using these funds for lobbying. Many lobbyists have publicly opposed this bill, saying that it will prevent municipalities and government agencies from effectively communicating about bills that are important to them, but make no mistake - the real reason they are protesting this bill is because it threatens to cut into their ability to collect mountains of taxpayer cash every year.
We think it is about time that someone in the capitol stands up to prevent taxpayer money from subsidizing lobbyists who may not always be focusing on our best interests. Lobbying should be funded by people who choose to spend money to express their own viewpoint, not by taxpayers who have no choice in the matter.
Tax Credits and Market Intervention
September 9, 2009
On September 4th, the Wall Street Journal published an editorial about the failure of Michigans tax credits which the Adam Smith Foundation found particularly interesting. Tax credits which are essentially government spending in disguise are often used in Keynesian efforts to try to encourage economic growth in states with stagnant economies.
As pointed out by the WSJ, over $3.3 billion in tax credits were dispensed by the Michigan Economic Development Corporation and $1.6 billion has been spent in other efforts to create or retain jobs. Despite this massive increase in supposedly business friendly tax credits, jobs have left Michigan at a record rate, the state now suffers from the highest unemployment rate in the nation, and it is one of the least hospitable business climates in the U.S.. Why is this? These tax credits cut into the state budget, and the cost must be paid by raising taxes on everyone.
Missouri should take a good hard look at Michigan when it comes time to dole out the next round of tax credits. Missouri gives out millions every year in tax credits for economic development purposes money that comes off of the top of the budget and forces businesses and Missouri families who are not privy to tax credits to pay higher taxes just to keep the budget balanced. If Missouri and other states would focus on responsible market-friendly policies like lower overall tax rates and legal reform rather than outright intervention, the economy would be much stronger and the budget would not suffer.
PRESS RELEASE: The Adam Smith Foundation Protests Ike Skelton's Decision to Not Hold Town Hall Meetings
August 13, 2009
(Jefferson City, MO) - The Adam Smith Foundation, in conjunction with Americans for Prosperity - Missouri, hosted a surrogate town hall outside of Congressman Skelton's Jefferson City office. The organizations decided to host a surrogate town hall as a forum for citizens to share their views on healthcare policy with their elected representative, as Congressman Skelton was either too busy or not interested enough in his constituents' views to host a town hall meeting of his own. Over 100 people turned out to show their concern over controversial legislation that will soon come to the House floor. A video record of their statements was made and will be shared with Congressman Skelton.
"I think it is discouraging to see elected representatives berate the citizens they serve for speaking their mind at public forums," said John Elliott, President of the Adam Smith Foundation, describing the purpose of the planned protest. "Town hall meetings and constituent contact serve as opportunities for our representatives to hear public concerns on legislation - an essential part of a representative democracy. It is irresponsible to steer clear of town hall meetings just to avoid talking about controversial legislation. Our national debt is approaching $12 trillion. Now more than ever, the citizens of this nation need to be informed about legislation that could drive our debt higher. How can our legislators claim to represent us if they won't listen to us?"
The protest took place at 5:30 p.m., August 12th, 2009, at Congressman Ike Skelton's office - 1401 Southwest Boulevard in Jefferson City.
Income Tax: A Costly Endeavor
August 11, 2009
The Show-Me Institute recently published an editorial in the Columbia Daily Tribune advocating the elimination of Missouri's income tax, an idea we support. The Institute found that eliminating the income tax would increase economic growth, saying "real GDP gains would total $438.6 billion" over the course of 25 years. Their research made it clear that staying with the income tax system is costing our state billions of dollars. $438 billion is not some paltry sum that can just be ignored - it is real money that will not make it to Missourians' pockets without major change.
It is clear that the income tax is a heavy weight that keeps our economy from developing as quickly as it should. It penalizes success, hinders economic growth, and is far too complex. As the Show-Me Institute pointed out, states that have no income tax have enjoyed higher rates of economic growth than Missouri, which has been languishing below the national average for years. Our state is in need of a better approach to taxation, and we need it now.
This economic downturn marks the perfect time to wean ourselves from our current tax structure. If we were to eliminate the arcane income tax and switch to a more responsible tax, like the Fair Tax or a flat tax, it would provide a solid base for future prosperity and help us recover from this recession much more quickly. We simply cannot afford to accept the status quo.
Fair Tax - A Better Tax System
June 16, 2009
It is great to see thousands of people gathering and calling for meaningful change in the income tax system as they did in Columbia this weekend. Replacing the outmoded and unfair income tax system will benefit all, as it will do away with a system that has become too cumbersome to be dealt with by anyone but tax professionals, substituting a fair, consumption-based tax system that is consistently and simply applied via a sales tax. Under a Fair Tax, there would be no more loopholes, no more IRS deductions from paychecks, no more audits - just a simple sales tax like that already applied to every purchase by the state and cities.
In addition to the ease of a Fair Tax, there would be economic advantages. The current system taxes success by taking a percentage directly from earnings. A Fair Tax would accomplish the same thing - progressive taxation - but do so by linking taxation to consumption, not outright income. The more people earn, the more they spend, stimulating the economy and filling the state or federal budget at the same time. The current system prevents spending by taking the money up front, slowing the economy.
The Adam Smith Foundation is glad that so many have gathered to voice their support for a better tax system for our state and for the nation. The income tax has outgrown its usefulness - it holds the economy back and is too complicated for anyone but an accountant to understand. A sales tax would work far better, and we are glad to see that the idea is gaining steam.
Initiative for Term Limits on Statewide Offices
April 20, 2009
An organization supporting the implementation of term limits for statewide offices, Term Limits for Missouri, announced on April 13th that they are now gathering signatures for an initiative petition to put a proposal for statewide office term limits on the November 2010 ballot.
Term limits for statewide offices will extend the benefits that term limits in the Missouri legislature have given the state, ensuring that politicians do not become entrenched and encouraging the introduction of new ideas to our government. Limiting the term of statewide officeholders to two four-year terms is a responsible and sensible way to ensure that the politicians in these offices worry less about re-election, fundraising, and political maneuvering and more about serving the people.
When our state's legislative term limit amendment was passed, it was done with a vote of support from Missourians who were tired of the non-responsive ways of pre-term limits government. Unfortunately, not only are some politicians not happy with the new grassroots call for term limits for statewide office, they are now calling for very negative change in the citizen-supported term limits for the legislature. Missour's term limits work, and they should not be changed to benefit career politicians. Missourians deserve Representatives and Senators who are more concerned about what is best for their constituents than what is best for their career.
We believe that the people of this state are best served by a government that is truly "of the people." Term limits help to ensure that representatives do not lose touch with their constituents by discouraging careerism. In a legislature with term limits, Representatives and Senators are generally citizen legislators, rather than career politicians, keeping them in touch with the needs of the hard-working, tax-paying families in their district by virtue of the fact that they, too, have regular jobs and live the life of a working person rather than the life of a career political insider.
The Adam Smith Foundation supports the implementation of term limits at the statewide level, and joins Term Limits for Missouri in calling for the protection of our current legislative term limit laws. We urge you to show your support for term limits by signing the petition to implement term limits for statewide offices, as well as by calling your local legislators and telling them not to support any effort to change or extend legislative term limits. Term limits work in ensuring responsive, effective government, and will continue to benefit Missouri as long as they are enforced in a manner consistent with their original intent as approved by the public.
Merit Pay - A Sensible Solution
April 1, 2009
A new merit pay proposal for St. Louis teachers was discussed in a recent article written by Tony Messenger for the St. Louis Post-Dispatch (which can be found here. Senator Jane Cunningham added an amendment to Senator Shields' SB 291 that would allow teachers in the St. Louis school system to opt out of tenure and potentially earn higher salaries if they meet performance goals, increasing the incentive for educational improvement.
Without a doubt, the youth of this great nation deserve access to the best education available to them, and this means they need an education system that encourages effective teaching and prepares them for a competitive world. In light of our needs, the current tenure system is illogical and irresponsible. Granting tenure to teachers creates a system of job safety and salary uniformity based on years of experience rather than skill level. This system covers bad teachers, sub-par teachers, and great teachers alike, keeping bad teachers from having to worry about improving while keeping excellent teachers from surpassing their lackluster colleagues in salary or benefits.
A system that keeps the bad employed and does not allow for rewarding the good would be unacceptable in any other field. It is unthinkable that this is the standard model for our education system, and it is irresponsible for it to continue. Linking performance to salary and employment is the cornerstone of productivity. Benefits for those who excel and punishments for those who lag behind encourage people to strive to be the best that they can be. Our current system lacks any incentive for improvement, and it keeps failing our children. Merit pay proposals, like the one proposed by Senator Jane Cunningham and backed with a bipartisan vote, are a promising way to make our schools better. The Adam Smith Foundation applauds all those who lent their support to this measure, and encourages the creation of similar programs on a statewide level.
Term Limits: Working for Missourians
March 13, 2009
There has been much discussion around the capitol lately about allowing more "flexibility" in term limits by allowing legislators to spend a maximum of 16 years apportioned between either legislative body, a change from the current system of allowing a maximum of eight in each. This is motivated not by popular demand, but by pure self-interest on the part of legislators who want to be able to spend more time in one house than they are currently allowed.
One thing that these self-serving legislators tend to forget is that there is a reason term limits are structured the way they are: the citizens of this state want new legislators and new ideas to be added to each body from each district every eight years, if not more often. Term limits were meant to encourage good government, fight entrenchment, and increase competition in elections by eliminating incumbents after eight years and shaking up the composition of our government.
Changing term limits would increase the possibility for entrenchment by allowing a legislator to choose either to run for more terms in the House or more terms in the Senate by choosing to run for fewer terms in the other body. It would also reduce the beneficial atmosphere of competition that exists under the current system, as House members would no longer be forced into competitive primaries with other termed-out House members campaigning for Senate seats; instead, they would be able to "wait it out" in the House until the next election cycle, when their chances at winning might be easier, or even choose to stay in the House until the end of their 16 years in the legislature rather than risk their legislative career in a broader, more-competitive election.
The current system creates beneficial competition and ensures the infusion of fresh ideas and new legislators in each district after a period of time no longer than eight years. This is why the citizens of Missouri called for and approved the current structure of the state's term limits. Voters cannot allow the benefits of the current term limit system to be thrown away for flexibility's sake. We urge you to call your legislators and tell them to say "No" to efforts to weaken term limits.
Senator Cunningham Files SJR 15
March 13, 2009
The Adam Smith Foundation praises Senator Jane Cunningham for filing SJR 15, which, if passed, will put a constitutional amendment before the voters to prevent the state from being forced to comply if a court orders the state to raise taxes. The legislature is the only branch of government with the authority to raise taxes, yet courts have shown willingness to attempt to legislate from the bench. We are glad that lawmakers like Senator Cunningham will stand up to keep courts from encroaching on legislative duties, and urge you to contact your local legislator and tell them to support this bill and protect Missourians from abuse of judicial power.
Responsible Tax Policy
March 2, 2009
In an editorial from the January 2-8, 2009, St. Louis Business Journal, Joseph Haslag wrote about the positive impact of revising the state tax structure to encourage budget stability. He suggested ending government reliance on the state income tax, citing the dependence of income tax revenue on economic cycles and the irresponsibility of raising income taxes to compensate for state deficits during hard economic times. As a substitute source of state revenue, he suggests use of the less-volatile sales tax. The Adam Smith Foundation agrees with Mr. Haslag's assessment of the problems with a state income tax.
Taxing income is unfair to Missourians. The income tax penalizes prosperity and takes money away from taxpayers that could otherwise be used for economic growth, whether through increased spending or capital investments. Mr. Haslag explains that the income tax "[acts] as a drag on growth because either businesses must pay higher wages to compensate, or employees will work fewer hours, cutting into productivity," a result with far-reaching consequences for Missourians. Furthermore, Mr. Haslag notes that as the economy slows down, income tax revenue follows and the government is left with a budget shortfall that some want to remedy with higher taxes.
Higher income taxes aren't the answer to economic woes, ending our dependence on the income tax is. Income tax slows growth and takes more money out of Missourians' bank accounts. A sales-tax-only system would not tax economic success, nor would it inhibit economic growth. In addition, as Mr. Haslag asserts, it would provide a steadier stream of revenue, which would remove the incentive for the legislature to raise taxes in times of economic hardship. With an expected budget deficit looming over the Missouri government and a nationwide economic slowdown, Missouri needs responsible tax policy that will not drag down our economy.
Good News for Landowners
January 29, 2009
The Secretary of State announced on January 21, 2009, that three new initiative petitions are being circulated in an effort to reform Missouri's eminent domain laws (the release from the St. Louis Business Journal can be found on our press page). If at least one of these petitions collects enough signatures to be put onto the ballot, it will be good news for landowners in Missouri who are tired of being required to give their land away for low prices to commercial developers for "economic development."
Undoubtedly, economic development is a worthwhile goal, but it should not come at the expense of property rights. The right to own and trade property without government interference is essential to a market economy; to force individuals and small businesses to sell their land to big-box stores and commercial developers in order to spur "economic development" is to ignore capitalism entirely. It is an unfair advantage that is being given to well-connected developers at the expense of families and small businesses, an advantage that does nothing but encourage corruption and unsound business practices.
Individuals occupying a plot of land which a developer wishes to build on should be allowed to negotiate a sale for a fair price or to outright refuse to sell if that is their prerogative. This is how business is done normally, and it has worked for centuries all over the world. Allowing corporations to circumvent the market through political connections is undermining the foundation of free-market America. This must change, and concerned Missourians have a chance to make a change for the better.
To get involved in the effort for eminent domain reform, please contact Ron Calzone at email@example.com.
Relief? From What, Exactly?
January 16, 2009
With the current economic debacle dominating the political landscape, much has been said about the importance of tax relief for working Americans. Undoubtedly, easing the burden of taxation on all Americans would help to create economic security by giving families and businesses more money to invest in their needs. A simple solution would be to cut wasteful government spending and put the money saved back into taxpayers' wallets. Unfortunately for the hard-working people who pay into our tax system every year, the "relief" being proposed by liberals is something entirely different.
The liberal idea of "relief" is not reduced taxes for all who pay in to the system; instead, they propose to increase government spending on welfare and are spinning it as a supposed benefit to the middle class. Yes, many taxpayers will receive a modest tax break. Unfortunately, many other people to which "relief" is being extended do not even pay taxes, yet liberals want to "refund" actual taxpayer money to them. What they have repeatedly refused to acknowledge is that much of their so-called "tax relief" plan is nothing more than redistributive economics in disguise.
Sensible people are asking where this "refunded" money comes from, and we aren't getting a genuine answer. One can only assume this is because the truth would expose a lie being propagated by the left, a lie upon which their economic plan is built. The truth is that the money liberals will use to pay for their plan to "save the economy" is taxpayer money, coming directly from the pockets of those who pay their hard-earned money into the system. This money could be used to truly relieve the burden on many who pay taxes, but liberals have of course chosen to live up to the tax-and-spend stereotype.
In these trying times, hard-working Americans need a government with the economic sense to do what is right: reduce spending and give actual tax relief, not take money out of middle-class America's pocket to support increased welfare spending.
November 4, 2008
On Wednesday, October 29th, the governors of New York and New Jersey came to Congress to plead for federal tax money to help reduce their states' budget deficits, and it is sure that more states are to follow. The question, though, is why should it be the job of all taxpayers in the nation to pay for irresponsible budgeting at the state level? State income taxes are supposed to take care of state expenditures, and state legislatures are supposed to budget accordingly. To have the federal government pay for part of these states' expenses would, in effect, tax non-residents for services provided to residents in financially-strapped states. This would make a mockery of what little of the federalist system is left.
Of course, not all the blame for these actions lies with the states. It is doubtful that these states would be coming to the federal government for help had Congress not shown such willingness to subvert free market principles and bail out badly-managed companies to the tune of $700 billion dollars. Obviously, several states think they can now make the government toss another couple hundred billion their way. Unfortunately, they seem to forget where this money comes from: taxpayers throughout the nation.
It is time for the government to put a stop to these handouts. Not only is it a waste of taxpayer money, it is irresponsible fiscal policy. All that a bailout accomplishes is to encourage a company or a state to continue unsound financial practices. If they are not forced to make hard decisions to rein in their spending, they won't do it. The market, left to its own devices, would force companies and state governments to practice responsible spending or face tough times until they do so. This is the essential corrective power of the market, and our government's handouts are interfering, rewarding the very people who caused our economy's current problems and doing nothing to encourage responsibility. Congress needs to know that taxpayers have had enough already.
Is Capitalism Dead?
October 10, 2008
The recent Congressional bailout of many of our nation's biggest financial companies has many people asking one question: Is capitalism dead in America? There are those who believe that the bailout indicates our nation's willingness to give in to the allures of socialism, choosing to prop up businesses in hard times using public money rather than to let the market correct itself as it naturally will. Others see such regulation of the economy as a necessary evil, having lost faith in the ability of a complex economy to regulate itself. Those who aren't so quick to leave capitalist ideas realize that the bailout is a serious government intrusion into a volatile market in the midst of correcting itself.
The bailout is a sad reminder that Congressional leaders have forgotten how to properly interact with the economy. Yes, the market is in a downturn, but politicians must remember what got our nation to this point: it was not the invisible hand of the market, but a series of ham-fisted attempts by Congress to regulate the economy. For the government to interfere more is irresponsible.
To bail out companies only keeps the market from correcting itself. The market, through mergers, sales, and revisions of strategy, would have turned around without government interference. Unfortunately, the government's decision to throw taxpayer money at failing companies has interfered with the natural survival of the fittest in the economy. In a free market, these companies would have been forced to change management practices and streamline to meet the demands of the present. Instead, the bailout has been marked by golden parachutes, expensive trips, and no change in direction.
Were Congress to have taken a more responsible course, choosing to insure bad bank loans or to make loans to troubled banks, rather than handing out taxpayer money with attached government regulation, the interference with the market would have been minimized and taxpayers would have profited. Instead, taxpayer money has been handed over to failed financial institutions, the stock market is still in a downturn, and regulation of the economy has increased.
Our legislators need to learn how capitalism works. The government should regulate as little as possible and let the market operate in its natural state: efficient, responsive, and prosperous. Trying to artificially change the financial direction of our country is doing nothing more than holding us back.
The Wall Street Journal Sees a Problem, Why Doesn't the Missouri Bar?
August 27, 2008
The Wall Street Journal Sees a Problem, Why Doesn't the Missouri Bar?
On August 23rd, the Wall Street Journal published an editorial (which can be found here) that detailed the problems with "merit selection" plans, specifically mentioning the catastrophic failure of the Missouri Appellate Judicial Commission to act in a manner compatible with the spirit of such a plan. To the astute observer, it cannot be denied that there is a problem with the Missouri Plan. Why, then, can't the Missouri Bar see the problem?
As the article mentions, courts in states with so-called "merit selection" plans have been steadily marching to the left, out of step with the ideals of the voters and the rest of the government. This happens because trial attorneys are allowed to game the system, pushing nominees of their choice into state courts and keeping responsible conservative judges out. Trial attorneys do this only for personal gain, knowing that they can count on liberal judges to treat them kindly in the appellate courts and subscribe to judicial activism.
It is time for a change in Missouri. We need responsible courts that have the best interests of the citizens in mind. This is why we need a reformed Missouri Plan to call our own. Missourians deserve openness and accountability in our judicial nominating system, and it is time for legislators to stand up to the Missouri Bar and stand up for our rights.
The ABA's Proposal for Nationwide Merit Selection: A Bad Idea Made Worse
August 19, 2008
On Thursday, August 14, a Wall Street Journal editorial was written about the American Bar Association's decision to endorse "merit selection" for federal judges. Much like the author of the editorial, we of the Adam Smith Foundation feel that a move to such a system on a national scale would be disastrous and a major Constitutional foul. To make a bad matter worse, the accompanying push to adopt "merit selection" at the state level is a mistake.
As the author of the article points out, state "merit selection" systems don't de-politicize the process, they just move the politics away from the watchful eye of the voters and into back rooms and private offices. In a democracy, the last thing a government should do is allow part of the political apparatus to be put out of reach of voters. A functioning democracy must not allow for the voters to be silenced just because the bar thinks it is a good idea.
Instituting "merit selection" at the federal level would be an even more tremendous mistake. While the Senators involved would still be accountable to the voters (unlike the "merit selection" committees in most states, where the committee members are usually not elected officials), to implement such a system would be to completely disregard the framers' intent when designing the judicial selection process. The system provided for in the constitution works, and there is no reason to change it or to diminish the president's role in selecting judges. The current system allows for the president to check the legislature's power and vice-versa. Tipping the scales in favor of the legislature would accomplish nothing other than to remove one constitutional safeguard from the judicial selection process.
The Wall Street Journal article can be found here.
The Big Top is Going Back Up
August 1, 2008
Once again, it is time for the three-ring circus known as the Appellate Judicial Commission to get back to work and decide the fate of our state's Supreme Court. As you may recall, Justice Stephen Limbaugh, the court's staunchest conservative, was appointed to the federal bench by President Bush. His departure left a gaping hole that trial attorneys want to fill with yet another lawyer-friendly judge. Twenty-three people have applied to take part in the fight to fill the position, and it looks like things are shaping up for this summer's nomination process to be just as controversial as last summer's.
Some say this year's process will be different. Advocates of the Missouri Plan insist that the citizens of Missouri will see a smooth, non-partisan process to select Justice Limbaugh's replacement, giving the Governor a panel of apt potential judges to choose from. After last summer's fiasco, it is fairly obvious that a smooth nominating process is unlikely. It is equally unlikely that the members of the Commission will try to uphold a non-partisan approach to filling this vacancy, despite the lip service they pay to non-partisanship. Special interests have too much control over the Commission and, under current law, there is little that anyone outside the Commission can do about it.
Hopefully, Justice Stith will resist the temptation to (again) misuse our state's nominating process. Maybe the Commission will finally nominate someone based solely on their ability to function as a responsible, apt judge rather than based on their political or personal affiliations. Unfortunately, with a broken Missouri Plan still in use, it is almost assured that this will not be the case.
Supreme Court Strikes Down Millionaire Rule in Big Victory for Free Speech Advocates
July 10, 2008
The recent ruling in Davis v. FEC has scored a victory in the fight against government control of free speech. Under the old rule, should a candidate choose to use $350,000 or more of their own money in financing their campaign, they were actually penalized, forced to use standard contribution limits while their opponent was allowed to bypass standard limits and raise three times more money from each donor until their campaign reached spending parity.
Proponents argue that the Millionaire's Amendment "leveled the playing field," but all it really did was discourage candidates from putting their own money on the line as a way of speaking their mind on the issues for fear that, in doing so, they would allow their opponent access to an unfair advantage. The Supreme Court, in a spot-on decision written by Justice Scalia, acknowledged that the Millionaire's Amendment was more of a burden and punishment than a measure of "equalization" and struck down the law.
In acknowledging this, the Supreme Court has pointed out a glaring fault in campaign finance laws: they limit the ability of every American to speak with their pocketbooks, promoting the political speech they support using their hard-earned money. Unfortunately, they couldn't go so far as to get rid of contribution limits, being that it was not within the scope of the case. Maybe next year...
SLOW DOWN THE SPENDING
May 13, 2008
Earlier this month the AP reported that Missouri's tax revenues dropped sharply, to 1.9%. According to David Lieb's report, alarms were sounding in the Capitol. Whatever alarms sounded were apparently not loud enough. Legislators need to slow down the spending.
When Governor Blunt came to office, Missouri was in terrible fiscal shape. Budget cuts were made, priorities re-adjusted, and the fiscal situation dramatically improved. But all of that hard work, and the criticism that came along with it, are at risk of being squandered. Could anyone blame Missourians for being upset at Republican legislators or the Governor if Missouri's budget situation in 2010 looks substantially like the budget situation in 2004?
The St. Louis Post, with whom we frequently disagree, had some useful cautionary words about this:
Tom Kruckemeyer, chief economist for the nonpartisan Missouri Budget Project, said that the decline in revenue collections - coupled with the national economic slump and tax cuts enacted in 2007 - means that Missouri "almost certainly will face a budget shortfall of nearly $500 million in fiscal 2010." Fiscal 2010 begins July 1, 2009.
In other words, whoever becomes governor of Missouri in January is going to face a major financial crisis in his or her first year in office.
The root of the problem is pork. Legislators are fascinated with their ability to pass special appropriations for this or that. But, just like a family's budget, the state budget must sacrifice special expenditures when times are tight, as they certainly might be very soon.
The first person to stand up and lead the charge to slash the budget, in anticipation of the difficult road ahead, will surely be criticized for cutting whatever it is that gets cut. But that person will also have the luxury of sleeping well at night, knowing that Missourians all across the state will be better for it in the long run.
The Wall Street Journal has printed yet another editorial attacking the Missouri Plan for selecting judges.
May 12, 2008
The Wall Street Journal has printed yet another editorial attacking the Missouri Plan for selecting judges. The latest, from this Saturday, focuses on the Tennessee version of the Plan and the opposition it has received from both Republicans and Democrats in that state, including governor Phil Bredesen. It looks likely that Tennessee will soon be abandoning the Missouri Plan. It is unfortunate Missouri's legislature did not elect to do the same during the last session. From the WSJ article:
Since the 1970s, Tennessee has used a modified Missouri Plan for choosing its judges, known to its proponents as "merit selection." Intended as a way to keep politics out of judicial selection, the method has instead given disproportionate influence to the state trial bar and tilted state courts leftward. The Tennessee plan is set to expire this summer, requiring it to be renewed, reformed, or left to disappear when the legislative session ends this month.
Not if the trial lawyers can help it. Under the current process, nominees to the state appellate court and state supreme court are chosen by a 17-member nominating commission, of which 14 are lawyers and 12 are chosen from among five lawyer groups, including the Tennessee Association for Justice (aka the Tennessee tort lawyer lobby), the Tennessee Bar Association, the District Attorneys General Conference and the Association of Criminal Defense Lawyers.
The American Spectator magazine publishes article concerning the Missouri Plan for selecting judges.
April 23, 2008
The American Spectator magazine has published a pseudonymously written article concerning the Missouri Plan for selecting judges. Be sure to check it out, as it contains some very good facts and arguments. Here is a snippet:
This system for choosing judges, called the Missouri Plan, was adopted by Missouri voters in 1940 (and by more than 30 states since) following a few contentious elections said to have been influenced by the Tom Pendergast machine out of Kansas City. The Missouri Plan was sold as a way to keep politics out of the court system, but as the Wall Street Journal reports, the plan "has instead marched Missouri's courts steadily to the left." This is due largely to the left-leaning judicial commission, which recommends judicial candidates. Last year Missouri Governor Matt Blunt was so dissatisfied with the liberal nominees for the state Supreme Court he considered rejecting all three, which would have allowed the commission to select the most liberal candidate. If you think this is "keeping politics out of the courts," I have a bridge I'd like you to take a look at.
Government Waste: Pig Book
April 8, 2008
Ctizens Against Government Waste has once again done yeoman's work by compiling data and releasing it in the annual "Pig Book." This year's Pig Book details more than 10,000 in pork projects across the country, totaling more than $17.2 billion. According to the organization's guidelines:
A "pork" project is a line-item in an appropriations bill that designates tax dollars for a specific purpose in circumvention of established budgetary procedures. To qualify as pork, a project must meet one of seven criteria that were developed in 1991 by CAGW and the Congressional Porkbusters Coalition.
Unfortunately, Missouri's legislators were cited by the book. As reported by the Sedalia Democrat:
Skelton's earmarks included $10.4 million for a chapel at Fort Leonard Wood, $11.4 million for a consolidated communications center at Whiteman Air Force Base and $341,000 for facilities and equipment at State Fair Community College, according to the watchdog group.
Skelton's total of $45.9 million for 10 projects was only the third highest for the state. U.S. Rep. Jo Ann Emerson of the Missouri 8th District ranked highest, tied for 51st place, with $60.7 million for 50 projects.
Missouri gubernatorial candidate Kenny Hulshof, U.S. representative for Missouri's 9th District, brought home about $19.5 million for 13 projects, placing him in sixth place for the state and tied for 224th overall for the House.
Missouri senators were on the opposite ends of the pork spectrum.
Sen. Christopher "Kit" Bond ranked ninth out of 100 with $309.8 million for 142 projects, while junior Sen. Claire McCaskill came in dead last with no pork spending and no projects.
McCaskill was tied for last place with fellow Sens. Tom Coburn, R-Okla., Jim DeMint, R-S.C., Russ Feingold, D-Wis., and Presidential nominee John McCain, R-Ariz.
They say one man's pork is another man's bacon. But it looks like Missourians may be overdosing on bacon. Call your federal legislator and let them know it's time to stop building bridges to nowhere and to start giving Missourians the chance to spend that money the way they want.
Welcome to Our New Site
February 23, 2008
Welcome to the new and improved Adam Smith Foundation website. We hope the changes we have made will provide you with an easier and more enjoyable experience.
Legislature Attempts to Weaken Initiative Rights
This session, the legislature is considering a variety of bills that will extremely restrict citizens' opportunity to take the lead on legislative issues through the initiative process.
Missourians' initiative rights are extremely important and must be protected. Initiatives are an important tool for citizens to use when the legislature refuses to take action on important issues, and we must ensure this tool remains a viable option for Missourians to use.
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