How much will it cost? (Part four of a multi-part series)

Since I was talking about the minimum wage in part three and the focus on the Ben Jealous “Make It In Maryland” plan was getting long in the tooth, I decided to split the piece in two and focus on the remaining items as a series of bullet points in this portion. While I wasn’t truly intending to space it that far, it does make for a good Labor Day post.

So these are the remaining topics in his MIIM plan, listed as a series of points I’ll respond to one at a time.

  • Creating a Governor’s Office of Tech Transfer
  • Better Retaining and Supporting Maryland’s Entrepreneurs
  • Reclaiming Maryland’s Position in Biotech and Life Sciences
  • Ensuring Prosperity Reaches Everyone By Tackling Chronic Unemployment
  • A Job Boosting Program For Every Marylander Who Wants To Work
  • Ending Youth Unemployment And Underemployment
  • Boosting Employment For The Formerly Incarcerated
  • Reviving Maryland’s Rural Communities
  • Making Maryland A Center Of Global Commerce
  • Connecting Workers To Jobs With A 21st Century Transportation Plan

Office of Tech Transfer: Jealous begins this section by citing a number of vague, subjective statistics, including this howler straight from the Joe Biden School of Spelling:

The top five states for cybersecurity deals in quarter 1 of 2018 were California, Massachusetts, New York, and Texas.

These states are also bigger than Maryland, and have various industries and factors which may give them a natural advantage. Regardless, while it’s unknown just how large this OTT will be or where it’s placed on the pecking order, the biggest cost might be the freedom to elude red tape, to wit:

Help to coordinate infrastructure and development policy, including multimodal and active transportation infrastructure, smart growth land use planning, mixed-use development, and gigabit internet to create the urban fabric and connections that give rise to an innovation ecosystem.

I truly have issues with that sort of mission creep and interference with both local government and the private sector. As envisioned it seems to be more than just a clearinghouse that could be useful in coordinating a limited area of policy.

Maryland’s entrepreneurs:

While Jealous paints a picture of a state that’s not inclusive enough…

Ben Jealous will create the innovation environment that will enable more locally grown companies to grow and stay in Maryland. Ben Jealous will also consider whether rules related to bonding for contractors can be eased to enable more entrepreneurs to access contract work and remove  unnecessary barriers. He will also work to make entrepreneurship more inclusive in Maryland. For example, black women are the most likely of any population group to become entrepreneurs, but they are the least likely to receive funding.

Ben Jealous will create a more level playing field to ensure this changes. As governor, Ben Jealous has also committed to raising women and minority business targets in the state to levels that better reflect equal representation. 29% is just far too low when 50% of our population are women and nearly 50% identify as minority. In order to support creation of these businesses, Ben Jealous has pledged to work with lenders who have a history of inclusive lending to support their models, identify additional strategies to capitalize businesses, and review bonding requirements for contractors that may pose unnecessary barriers.

…if you ask actual entrepreneurs they may say the problem is a little different.

For several years I was the recipient of a steady diet of updates from a company called Thumbtack.com – it’s actually a listing of entrepreneurs who provide various services. Over that period they have done a survey of business friendliness, which – even though I haven’t noticed the updates – has continued to this day and shows Maryland has been on an upward trajectory. But while Maryland has rebounded from failing grades to a B+ in Thumbtack’s 2018 survey, the one category they still receive a big fat F in is the tax code. That’s not on the Jealous agenda.

I don’t look at who owns a business, I look at the job they do – and so do most others. All affirmative action does is plant a seed in the mind of people who ask: did they get the job on their merits or because they checked a box of government approval someplace?

Oh, and one more thing:

Another critical part of changing our business culture in Maryland also is support new and emerging types of business ownership, including employee-owned businesses, worker co-ops, and other democratically-owned and operated businesses. These organization types are critical for challenging the notion that ownership of a business must concentrate profits in the hands of a few, and these organization types can open up the benefits of business ownership to many more individuals.

Whether a business is employee-owned or not – one good reasonably local example of employee ownership is the Redner’s grocery chain, which has very nice stores based on my experiences working in them a few years back in a previous career – doesn’t matter to me. But the fact Jealous opposes the “notion that ownership of a business must concentrate profits in the hands of a few” when it’s truly none of the state’s damn business is troubling.

Biotech and Life Sciences: This is mostly a series of platitudes whining about how Maryland has fallen from the top position, particularly behind Massachusetts which “made large investments in biotechnology through tax breaks, grants, and funding infrastructure.” That’s their taxpayers on the hook, so whatever.

If I were to make a suggestion for state encouragement, why not promote the area of biotech that deals with the agriculture industry? People tend to think of this as an urban phenomenon, including those at the state Department of Commerce as agribusiness is last among its “key industries.”

But maybe Jealous should read the state’s website because there’s already a program in place.

Chronic Unemployment: Aside from a vague pledge to “engage stakeholders” and conduct yet another useless study, Ben wants to throw more money at EARN Maryland (reversed as “Maryland EARN” in the Jealous plan), Operation HIRE (aimed at veterans), and the Maryland Apprenticeship and Training Program. While none would be large expenses, one has to wonder if having these disparate programs is very efficient and effective.

Job Boosting Program: To make a long story short, it’s a hiring program to create more state and state-dependent workers. Jealous cites a study done by the Department of Legislative Services that cites a chronic shortage of workers necessitated by budgetary reality. But the source material for the study makes me question its sincerity:

Research for the study consisted of data gathered from various documents; workload trend data; agency site visits; and meetings with the representatives of the American Federation of State, County, and Municipal Employees (AFSCME) and AFSCME employees. (My emphasis.)

It’s also worth noting that the number of employees the executive branch has been “shorted” is nearly matched by the number of additional positions at higher education, where staffing has increased 23% from 2002-18 (Executive Branch staffing is down 9.6% in that period.) Honestly, I don’t think we have a neutral referee doing this study. Needless to say, many of these new workers will be quickly absorbed into the public-sector union, which is, I’m sure, their quid pro quo for AFSCME support.

Youth Unemployment: Jealous would expand the YouthWorks program in Baltimore City to a statewide program and make internships or part-time jobs part of the public school curriculum. It seems to me the YouthWorks would be better tailored to a county or city level (one reason being: the city of Salisbury has a similar program in conjunction with the local Junior Achievement branch.) So the opportunities are already there.

As for the school curriculum, this is a matter where public schools could compete when it comes to school choice.

Formerly incarcerated: I believe Jealous is going to work along these lines by “banning the box” in private-sector employment (meaning applications cannot inquire about criminal record) and adding incentives to hire formerly incarcerated – however, there are private-sector employers already doing so. I believe this should be on a case-by-case basis and not a mandate.

Rural communities: The message from Ben Jealous: you can grow, but only a little bit and only on our terms. Developed areas can retain their advantage because we won’t let you compete.

Smart growth and conservation policies that Ben Jealous will promote will help Maryland to restore its reputation as a one that protects its most valuable natural resources, from farmland, to the Chesapeake Bay, to mountains, forests, and beaches. When our natural resources in land, water, and air are cared for, rural places are able to thrive as producers of agricultural products, thriving tourism centers, and choice places to live. In a 21st century economy, rural economies are also transitioning into being producers of clean energy, like solar and wind farms. Land in rural areas near existing development and infrastructure can be repurposed or ethically developed to host clean tech manufacturing, data centers, and other 21st century economic engines. Finally, rural economies are powered by small businesses, and, with proper support for early stage businesses throughout rural Maryland, these small businesses will continue to multiply and grow.

Basically, this is an extension of the MOM era where most agricultural land would be placed off-limits to development (except for solar panels and wind turbines, which are neither reliable nor desirable sources of energy). And say what you will about “low-impact tourism” – I will show you the difference between the economic base that is Ocean City in the summer season against whatever is drawn by Blackwater being a wildlife refuge. That’s not to say that I’m not glad we have the industry we do here, but we shouldn’t say no to more traditional development even if it’s placed in a more rural area.

This also ignores the transportation needs of this region, such as a second (southern) Chesapeake Bay crossing and, in cooperation with Delaware, an interstate-grade highway connection north to I-95.

As governor, Ben Jealous would provide additional funding to the state’s cooperative extension programs to develop technical assistance programs providing support to farmers transitioning into the 21st century marketplace. This would include linking urban agriculture and food production businesses with rural agricultural businesses, so Maryland families, restaurants, and commercial producers can conveniently access an abundance fresh agricultural products grown right here in Maryland.

If you were a savvy farmer, wouldn’t you already be doing this? Why is it a state concern?

We also have the talk of expanding broadband, the means of which is already in place here in Maryland as a non-profit cooperative. It will be interesting to compare their process and progress with Delaware, which is using more of a PPP approach for rural portions of Kent and Sussex counties.

Global commerce: Mainly deals with expanding Foreign Trade Zones around the Port of Baltimore. As the center of the local poultry industry that sends chicken products around the globe, I wonder why Salisbury couldn’t have one? Perhaps because it’s a federal designation. Jealous exhibits his Baltimore-centric view (and a little bit of ignorance) with this one.

A 21st Century transportation plan: The first page of this is devoted to Jealous whining about the cancellation of Baltimore’s Red Line boondoggle and Larry Hogan’s changes to Baltimore’s bus service. I think it’s hilarious how a 21st century transport plan uses the strategy and limitations of 19th century technology by advocating for more usage of the light rail service money pit.

And then we get to this:

Complete streets policies build thriving and prosperous communities by ensuring that the design of roads and other facilities is safe and convenient for pedestrians, business patrons, cyclists, and all other road users. As governor, Ben Jealous will make Maryland a complete streets leader by ensuring that ample funding is directed to local communities through the complete streets and other programs like Maryland Bikeways, and by ensuring that the Maryland adopts the most progressive complete streets policy possible.

So we cater to the 2% of travelers who use alternate means of transportation – ones that aren’t nearly as convenient and useful at a time such as this moment with a thunderstorm overhead – at the expense of the 98% who would like to get where they wish to go as quickly and conveniently as possible. This also works hand-in-hand with the effort to pack people into the urban areas, leaving vast wildlife corridors for critters to traverse.

Aside from a means of taxation in some states, those who crave control hate cars because they equate to freedom of movement and less restriction on behavior. If it’s 6:30 and I want to be at a 7:05 ballgame, I’m not going to ride my bike or walk – and sure as heck ain’t going to consult the Shore Transit routes to see if any run and stop close by. I have a car and I’m going to drive it.

Most of us do not want to be at the mercy of someone else’s schedule, which is why driving is the predominant means of personal transport in the nation. People like Jealous don’t like that, so rather than make driving easier they would rather discourage it.

If you really want a 21st century transportation plan, make it easier to use that freedom of movement by improving the roads. Promote entrepreneurship by giving less of a hassle to services like Lyft, Uber, or whatever competes with them rather than try and regulate them like taxicabs, making an artificial market the locality can use to create revenue. And rather than create the incentives for employers to encourage their employees to commute, perhaps they should instead encourage the use of remote work where possible. Given the proper broadband connection to my work server and to my boss, I could reasonably do much of my job at home.

So for this segment I can’t tell you just what the Jealous agenda will cost in monetary terms, but it’s going to cost the taxpayer a lot to wander down some pathways better trod by private initiative.

I think I’m going to put this series on hiatus for a little while, since I have a couple other projects I’d like to concentrate on. Thus, I may not get to everything on the Jealous agenda but I think you probably get the picture anyway. So I’ll see if I’m ready to resume by month’s end or not.

How much will it cost? (Part three of a multi-part series)

Despite the fact he’s trailing by sixteen points in the latest poll, I still think it’s worth the time to dissect the policy proposals of Democrat gubernatorial hopeful Ben Jealous. In recent days, he’s reshuffled his priority list, displacing his previous #1 priority of education and replacing it with a jobs agenda he calls “Make It In Maryland.” As always, though, the devil is in the details.

Jealous begins by complaining that we have fallen behind Virginia in something called the New Economy Index. It turns out, interestingly enough, that Maryland is the bottom of the three states comprising the Delmarva region – although being on the bottom is still sixth-ranked in the nation. Here’s what the Information Technology and Innovation Foundation said about our three states:

Virginia comes in fourth with some of the fastest-growing companies in the country, and its proximity to the nation’s capital attracts high-skilled workers for the numerous R&D-focused firms in the region. Fifth-place Delaware is perhaps the most globalized of states, with business-friendly corporate law that attracts both domestic and foreign companies and supports a high-wage traded service sector…Sixth-ranked Maryland holds its place among the leaders primarily because it has a high concentration of knowledge workers, many employed with the federal government or with federal contractors in the suburbs of Washington, D.C.

In theory, then, a downturn in federal government employment would hit both Maryland and Virginia hard, displacing them from the top tier of the rankings. But the bulk of his “Make It In Maryland” outline speaks to something federal workers seldom have to endure: working for minimum wage. Over the next five years, Jealous would increase the minimum wage in Maryland to $15 an hour for regular workers, with tipped employees reaching the plateau three years afterward.

While Jealous claims that a $15 per hour minimum wage would increase the pay for 573,000 Maryland workers, such a raise would place those just over that threshold at risk for a significant decrease in their standard of living. After all, the extra expense businesses would have to shoulder would have to come from someplace, and that someplace generally lies in two regions: increasing prices or decreasing labor costs by lopping off the least productive or lowest-skilled employees. As I often say, the true minimum wage is zero, from being jobless.

In a properly functioning marketplace, the wage one makes is just a shade less than the amount of value that employee creates – the small difference keeps the business profitable and viable. Obviously this is a relatively subjective category, best expressed by those who work on a straight commission and/or own their own business. And it doesn’t always take a lot of skill: for example, not to pick on landscapers but doing yard work isn’t the most highly skilled job – however, it is time-consuming so there’s a market of people who don’t want to take the time and effort to maintain their lawns that’s being met by entrepreneurs of all sizes who make it their job to take care of yards.

In fact, my first job was helping my brother take care of an older lady’s lawn – for 2 to 3 hours of work after school once a week I was paid the princely sum of $5. Luckily we could ride our bikes there – about 2 miles – and we used her lawnmowers and gas can filled with $1 a gallon gas. So it was not a high-skill job but it was one she was too old and frail to do, so she found two teenage boys willing to do it. That was the value to her, since she wasn’t able to perform it herself. And as it turned out, if we were efficient I would come close to making the minimum wage, which at the time hovered around $3 an hour. (Since my brother got $10 for riding the tractor to do a maybe 3/4 acre yard while I did the trimming with the push mower, he was already making minimum and then some.)

My second job was somewhat similar, but there was a catch. For most of three academic years I made minimum wage working in the dining halls at college. If we were busy, I was creating value by ensuring the cafeteria maintained a stock of clean dishes. On the other hand, if it was early in the shift all of us standing around were a money pit. The same was true at my first job out of college, working in a department store – again, for minimum wage. If there was a customer I could assist in some way and that customer made a purchase, well, I was creating value for Hudson’s. If not, I was a money pit. Luckily, I had acquired a good education so my time there was short – just weeks later I had my first architectural job, one that I spent four years at college learning the ropes to secure. In turn, I got quite the education learning in the workplace. In the next half-decade through on-the-job training I went from being a ink-on-mylar draftsman to a CAD operator (way back with AutoCAD version 11) which made me more valuable to them. Increasing skills and knowledge to maximize production: that’s the way it’s supposed to work.

Conversely, if you artificially raise the wage without getting a corresponding increase in value, do you know what you get? Kiosks at McDonalds or self-service checkouts at Walmart. Unfortunately, those were among the jobs that people in my generation got to grasp as the first rung on the ladder, but increasing the minimum wage is going to leave those people behind – particularly in areas where the wage support isn’t already present. (There are places in the state where $15 an hour is pretty much a de facto minimum, particularly in the DC area.) In any case, increasing the minimum wage isn’t going to help very much in areas with persistent unemployment because there’s little there with which to create value.

But one place increasing the minimum wage will help? State coffers. While some will lose their jobs, I’m sure the Jealous campaign is banking on enough income being created out of whole cloth to help grease the wheels on some of their other pipe dreams. So I honestly don’t know what it will cost, but I’m sure we will all pay the price nonetheless.

Now, there’s actually more to this section than just the minimum wage. But I liked this here piece so much that I decided to split “Make It In Maryland” in two and cover the rest next time.

Thoughts on 3rd Friday – April 2018 edition

The beauty of having a blog is that I don’t have to be in any hurry to post what, to others, may be old news by now.

Yes, this month’s Third Friday is a hazy weekend past and normally about this time I would be starting my wrapup of the monthly Republican Club meeting. But since I don’t play as much in the political game (and I had a previous commitment anyway) I was someplace else tonight. (Apparently I missed the annual legislative wrapup this evening, but it doesn’t matter because I’m working on the real legislative wrapup called the monoblogue Accountability Project. What do you think I spent a good part of my weekend doing?)

Digression aside, on Friday evening the family and I went downtown for a little while to see what we could see.

Looking west down Main Street as the sun starts to sink on downtown Salisbury.

The parking lots were about full, but it didn’t seem like that translated into a lot of people on Main Street. It was a nice gathering, but I’ve seen wall-to-wall people down there, too.

The wares of Zockoll Pottery.

One business that has seemed to be down there month after month is Zockoll Pottery. Now I’m a little biased because I know Brent through church, but he’s quite the artisan and even tossed a little bit of clay while he was down there. His business is slowly recovering from a fire that damaged his studio around the holidays.

At the top of the Plaza hill looking east down Main Street.

As I strolled up Main Street to the top of the hill, it seemed to me the crowd was a little thinner. Granted, we arrived about 6:30 or so, thus the sun was going down and it was cooling off rapidly. Also, there’s been a bit of a change in the setup where the area that’s being closed off has increased to the first block of Market Street so the focus of Third Friday is geographically shifting a bit to the west.

This is the forgotten corner of Third Friday, down St. Peter Street.

The photo probably doesn’t do this justice, but this is where the bubbles were coming from. Sometimes there’s been a food truck down there but this is also where the Jaycees sell the beer. It’s an unusual setup to have such a large open container section since there are two blocks of space where people may imbibe.

The band of the month was a staple local cover band called Tranzfusion.

The musical choice was one of the more unusual ones – normally they don’t do a straight-ahead classic pop cover band. Normally they choose something in a more alternative or acoustic vein, but these guys kept a decent crowd nearby. Wasn’t completely my thing but that’s quite all right.

Back in the day Third Friday used to be more ambitious with multiple music groups on two or three stages, but in recent years they’ve settled on the single stage of the Plaza for music and maybe some other act (like a youth dance group) on the courthouse steps. One thing that I’m going to be curious about regarding downtown development is whether Third Friday will eventually be relocated to focus the music on the amphitheater that’s under construction – alas, that location doesn’t leave a lot of space for artisans unless they are placed across the river.

Not much was up on North Division Street this particular Third Friday.

The event that would make good sense based around the amphitheater is the “Fridays at Five” event (like the last one from 2017 that I attended in this North Division Street location.) That is a gathering where such a focal point would enhance the event. (The same goes for First Saturday, which I’ve always managed to miss. Half the time it’s held inside anyway.) I think there will be some events held in and around the amphitheater this summer as a dry run for the National Folk Festival.

Suzanah Cain, running for District 4 County Council, was one of several candidates at Third Friday. By the way, she’s not in the photo because she was circulating as a good politician would.

While Third Friday’s physical location lies just outside the district, both County Council District 4 hopefuls were pressing the flesh. I saw Josh Hastings out walking around, while I got to at least introduce myself to Suzanah Cain before I left. At the time she was standing with the guy in the ultimate catbird seat, Delegate Carl Anderton. (The third in the confab was one of my favorite Democrats, Sarah Meyers – so it was a reach across the aisle.) Also making his rounds was Clerk of Courts candidate Bo McAllster, who I saw for the second time in less than a week. He had his wife and two kids in tow.

One place I didn’t stop by and say hello was the Republican Women’s booth. (Honestly, I’m not sure which of the two local groups was there. I’m sure someone reading this would tell me and break my you-know-whats for not dropping in.) But this was while I was still walking with Kim – shortly after she stopped and I kept going until I got to the band – only to turn around and see she was talking to Carl Anderton, who I had seen a couple minutes earlier and said hello to walking by. (Turnabout is fair play, I suppose.)

Anyway, we checked out the scene and departed as things were already breaking down about a half-hour before the scheduled (but informal) 8:00 close of festivities. Seeing them bail early was the second part of the foundation of my theory that the crowd was less.

A final thought: in years past this particular Third Friday date would have been a lead in for Pork in the Park. But for just the second time in over a dozen years, there was no Pork in the Park in April. (In 2014 it was held in May because it would have fallen on Easter weekend.) A few months back Wicomico County finally decided to pull the plug on that event to concentrate on the WIcomico County Fair, which is held in the same location.

You could couple that somewhat official excuse with the cyclical nature of food-related events. Even the venerable old Delmarva Chicken Festival that had dated from the 1940s ran out of time a few years ago and was – ironically – folded into the former Wicomico Farm and Home Show and rebranded as our county fair in 2015. It’s sad because Pork in the Park was one of my favorite weekends of the year until they ruined it by being greedy. That began in 2012, which was the year they alienated half their food vendors, and then a couple years later Pork in the Park doubled down by charging a hefty admission fee. Anyway, to get a “do you remember when” back when Pork in the Park was a premier event, here is a nice walk around video from 2012 (with a cameo from Jonathan Taylor of Lower Eastern Shore News – watch from the beginning and you’ll see him.) After those spectacular failures and the loss of the KCBS competition, it was never the same. Even worse, the event that succeeded it with KCBS (Pig and a Jig, down in Snow Hill) also seems to be no more.

But the demise of Pork in the Park and the former Salisbury Festival a few years apart means that two staple events of the so-called spring shoulder season are no more. The Wicomico County Fair is held in the traditional late-summer slot one would associate with a county fair, while the Salisbury Festival is being rebranded as the Downtown Salisbury Festival and they will try it in early June, when the june bugs are in OC.

With those cautionary tales in mind, we will see how Third Friday fares as the years go on. Has it reached its peak like all these other events did?

One place gets it right

If you’ve been keeping up with my infrequent musings of late (admittedly, it’s not hard to do) you’ll probably know that I’ve been keeping an eye on the struggle to bring common-sense, job-creating right-to-work legislation to Delaware – as has the national internet site The Daily Signal.

On that front I bring you some good news and some bad news: first, the bad news.

As a prospective resident of Sussex County, I was dismayed to find out that the County Council there is four shades of gutless. That represents the four County Council members who let the vague threat of lawfare scare them into rejecting a bid to make the county the first in the state and region to become a right-to-work county. Only Rob Arlett, who represents District 5 – a district that takes in much of the southern third of the county, including Delmar, Millsboro, and Fenwick, but not Laurel – voted for the measure he sponsored.

Granted, the ink wouldn’t have been dry on the ordinance before Big Labor found a friendly judge to slap a TRO on it (and that would have been done out of Wilmington or Philadelphia, since there’s not a ton of union presence in Sussex County) but it also would have allowed a second circuit to rule on the law, just as the Sixth Circuit Court of Appeals that covers Kentucky ruled favorably on a county-level law there. (Later, the entire state adopted right-to-work legislation.) Since Delaware is in the Third Circuit and it’s fairly dominated by Democrat appointees, it’s likely they would have ignored the Tenth Amendment and found some excuse to thwart the county’s will. (Bear in mind that the County Council didn’t seem to object on the aims of the law but only the fact it would create a legal hassle.) Yet once two circuits come to a split decision, the next step is the SCOTUS and maybe this is a good time for them to decide on it.

So it was left to the town of Seaford to accomplish what their larger governmental unit could not, approving a right-to-work ordinance in December that was announced today. Good for them, and that was definitely good news.

And it may well be good for them. The timing was probably coincidental, but it was also announced today that a former industrial plant in the city would be getting new life as an intermodal rail and truck facility. So if you figure there’s going to be needed renovations that create construction jobs as well as a handful of jobs for distributing the freight from railcar to tractor-trailer and vice versa, that could be the difference between sitting at home making a wage of zero and working for someone making a reasonably decent wage. It could even be a union shop, with the key difference being that not everyone would be forced to join or pay dues.

Here’s the thing. What unions seem to be most afraid of isn’t the fact that they would have to compete and sell new workers on the benefits of joining, but the prospective loss of political power they would suffer if the number of dues-paying members drops off. Wisconsin is a good example of this: the unions’ dues-paying rolls are off 40 percent since right-to-work legislation passed in 2011.

(As an aside, isn’t it interesting that union members have time to go picket and speak at public meetings? So who is doing their jobs?)

Assuming the Seaford measure isn’t taken to court, which it probably will be for the reasons stated above, perhaps more businesses can help boost Seaford’s bottom line. Unlike a lot of other similar-sized towns, they have the slight advantage of having infrastructure for growth already in place thanks to a number of shuttered or underutilized industrial sites left over from the days it was the “nylon capital of the world.” I’m sure they don’t care if they get back to making nylon, or even if they’re the capital of anything – they just want to thrive.

While Big Labor may beg to differ, even the average union guy on the street knows the true minimum wage is zero. And in an area that cries out for good-paying jobs, why not make yourself as attractive as possible to secure them?

Making Maryland’s employers sick

As would be expected from a body that’s never passed up on a chance to saddle Maryland’s business community with more dictation and regulation, the Maryland General Assembly overrode Governor Hogan’s proper veto of last year’s hilariously misnamed Maryland Healthy Working Families Act. All Republicans voted to uphold the veto, along with the top five early contenders for the monoblogue Accountability Project’s final Top (Blue) Dog Award, given to the Democrat who most crosses the aisle in the right direction. But those five Democrats could be spared because the majority party had more than enough to pass the override – a situation that must be addressed in November.

Rather than write a summary of all 22 pages of the bill, which among other things requires the state to “develop a model sick and safe leave policy that an employer may use as a sick and safe leave policy in an employee handbook or other written guidance to employees concerning employee benefits or leave provided by the employer,” the chief takeaway is that an employer has to provide approximately 9 days of sick leave a year to full-time employees. Yes, it’s one hour for every 30 hours of time worked, with employers that have 15 or more employees also required to pay for the privilege. (Those with 14 or fewer still have to provide the time; it just need not be paid time.) In short, once again the state butts its head into something that should be between employee and employer, doing so based on their vast amount of time running businesses. (I would be curious how many in the majority have actually signed the front of paychecks for their employees.)

I’m not going to say that every business is like my employer, but I think most are understanding of various situations. Mine is a good example: seeing that it’s our daughter’s senior year and last basketball season, he and I have worked out a way for me to get to all of her games, home and away. I just shift my schedule accordingly and do the work needed beforehand. Luckily I have a job that allows this, and I know not everyone is that fortunate. But there are ways to work these situations without the state’s heavy hand and threat of liability from employees who may have an axe to grind months after their dismissal. (Three years of record keeping on this is even more paperwork for employers.)

In keeping with this I see employers doing something I’m familiar with as a policy: simply roll vacation and sick days into an overall category of “paid time off.” Those who use more sick days than the three previously allowed are fine, but they have fewer vacation days as a result. Next year we will see a law that prohibits employers from rolling the two together: that’s my guarantee. They can’t leave well enough alone.

It seems to me that General Assembly Democrats, not content with the plethora of people who are already drawing some sort of welfare from the state and cognizant of Margaret Thatcher’s asserting that socialism works until you run out of other people’s money, are trying to make employers into the new providers of welfare in the state. How else would it be that employers are forced by the state to pay people who aren’t being productive rather than work it out in-house? Shouldn’t there be an incentive for employees to develop their skills to make themselves more attractive to employers with better benefits rather than those employees running to the state? The market will eventually favor the employer who is most fair because they’ll get the best employees; that is, if the state doesn’t figure out a way to screw that balance up.

To use a similar example, Obamacare tried to supplant a system that almost everyone was either happy with or at least grudgingly accepted as a benefit that maybe wasn’t perfect but was better than nothing. It turned out to be a solution that didn’t perform as intended in whittling the number of uninsured down to near zero yet made the previous beneficiaries suffer with higher premiums and co-pays. Having seem this example first-hand, I can tell you this paid sick leave bill won’t work as intended either.

But Democrats win (and working Marylanders lose) in several ways: now they have created yet another entitlement that those unmotivated to work will bitterly cling onto with Democrats having the expectation of gaining their votes for another couple hundred years. Plus, as a special added bonus, they can either bludgeon Hogan with the resulting hiring slowdown or point to employment gains as evidence that this is no big deal – in fact, they would probably use it as evidence it should be expanded, never mind unrealized potential left on the table thanks to their meddling. Remember, being a Democrat in government is never taking responsibility for adverse real-world actions.

So I suppose those on the “progressive” (read: regressive) side will be cheering the override of this bill, a measure that’s wrong for the Eastern Shore and wrong for Maryland. They may like Jim Mathias’s support of it, but when he comes around later this year trying to convince us that he’s “fighting for us” just remember how he sold out the job creators for something that didn’t need to be a state concern. If I, with my public-school education, can wade my way through the bull to find the common sense, so can the average voter.

Sorry, liberals, sick leave is not a right and a sane General Assembly would rescind this in the future. In November we can work on restoring that sanity.

Tax cuts and jobs?

Since I said this yesterday:

I guess I better use the space for something besides music reviews, analysis of baseball trades, and other non-political items.

As many of you who know my site probably also know, the House put forth its initial proposal for what is being called the Tax Cuts and Jobs Act. (President Trump would have preferred the Cuts Cuts Cuts Act himself, though.) So most of the argument and commentary seems to be on whether this does enough for individual taxpayers – naturally, Democrats revert to their age-old “tax cuts for the rich” saw while some Republicans fret about losing particular deductions.

But I want to address two things in this post. First, I want to try and step into the shoes of a small business owner because part of the bill title is “that three-letter word, J-O-B-S” (with apologies to Joe Biden) and they are the ones who create most of them – including the ones I have now.

I’m not going to get into actual dollars and cents here because this is more of a philosophical argument. Each year business owners hand a share of their revenues off to various branches of government for a host of reasons, but the one item that perhaps draws the most blood, sweat, and tears is that federal tax return they (or, more likely, their accountants) fill out each year. Thus, the idea of both lowering rates and making things simpler works positively in two ways: a little more money to invest in the business for new hires, capital improvements, or expansion (people in my line of work perk up their ears at the latter) and a little more time to enjoy life or improve the business plan. They may not need to give that accountant quite so much, but, alas, there are winners and losers in life. (However, the day we find out H&R Block is lobbying against a tax reform proposal is the day we’ll know we have the right formula.)

The common perception from the Left is that every business owner is a fat cat member of the 1% who pays his employees less than minimum wage, skimps on benefits, and hoards his profits to spend on his fancy car and yacht – Ebenezer Scrooge personified. I don’t know about you but I haven’t met one like that yet, although I will note my previous employer went out and got a BMW i8 complete with vanity plate (and installed the charger in our parking lot) thanks to a series of very successful businesses. But that came after years of long days and lots of hard work, so I wasn’t going to complain because he had aptitude, drive, and a range of talents I didn’t.

By the same token, it’s not unknown for my current employer to be at the office or meeting clients late into the evenings or on the weekends – I know because I used to work in there at those times myself (on top of my full-time job) in order to seize the opportunity I was presented to get back into his firm. Ambitious people laugh at a 40-hour work week, and the overriding question that is being answered to an extent by the Tax Cuts and Jobs Act is whether they should be rewarded for those efforts or forced to hand over the excess to government to redistribute to the less ambitious.

After all, hopefully there comes a point in the life of a business where the boss can’t do it all himself (or herself.) Adding people, though, brings a whole new world of complexity to the tasks so the rewards should be maximized and risks minimized in order to encourage even more hiring when business dictates. If the government takes a pinch less maybe the additional economic activity will make up for it in time.

This brings me to my second point: whose money is it anyway?

Consider the average dollar, which is representative of an intrinsic value. There’s an old joke where someone leaves a $100 bill on a hotel counter while he inspects a room and it quickly makes the rounds paying off various debts up and down the street before the customer decides the room isn’t satisfactory and takes back the Benjamin, which seconds before had paid off the last debt owed to the hotel clerk. Everyone had a value assigned to the cash although the overall transaction was a wash.

When a worker makes a dollar, it’s a tradeoff: even at minimum wage, it’s about eight minutes of his labor in return for a dollar’s wage. In a successful business, the employee performed more in the way of value to the company than the pay but the rate of pay was still acceptable to the employee. (On top of that you have benefits, but for the purpose of this argument I’ll concentrate on pay.) My full time employer bills me out at a rate that is supposed to cover the wage, benefits, and overhead so in return I have work to do. My writing employer gives me an assignment on Thursday night and expects a turnover for the following morning. As long as this is done profitably for both parties, everything is cool – the problems occur when labor costs begin to outweigh value added. (For an example, consider why you are faced with a kiosk instead of a live person in some fast food restaurants – human order takers didn’t add a lot of value if they were inaccurate, grouchy, not feeling well, or disorganized, especially at the $15 an hour for which they were pining.)

Now think about a dollar spent in taxes, where the tradeoff is completely different. There are a number of vital services these taxes pay for, especially at a local level where the business receives its public safety protection, maintenance for the roads, portions of the utility infrastructure, and various other items which vary based on the jurisdiction.

Unfortunately, the higher up the taxation food chain you go, the more likely you’ll find these tax dollars aren’t creating value. Oftentimes these entities will act as a pass-through, returning tax dollars to the state or local jurisdiction after keeping a cut for themselves and necessitating the employment of a grant writer on a local level. It’s making a pencil-pusher rich, but that’s not really adding to society like a guy out working on an oil rig, writing computer code, or burning the midnight oil trying to figure out how to please her engineering client. Even worse, that dollar may be paying the bureaucrat who’s writing the rule that will do the business in at the behest of a lobbyist bought and paid for by some special interest.

By keeping dollars in the more productive and efficient private sector, not only does lowering taxes help increase GDP but it also provides the incentive for people to work harder. I’ve often cited Atlas Shrugged as one of my favorite books, not because it’s a feelgood story but because I see it as an absolute indicator of where our nation could be headed under the government we’ve put in place. If working harder has no reward, then why do it?

We have a long way to go before we see tax reform, if it even comes about at all because Republicans in Congress aren’t completely sold on the package. (I thought the GOP was supposed to be the party that supported lower taxes – didn’t you?) But the argument shouldn’t be who wins and loses financially – it should be about whether we believe it’s our money we’re getting for our labor or if we feel we just get to use that which is benevolently granted to us by government.

Taking matters into their own hands

So here I am, just thumbing through my e-mail for the day, and I find this on the Daily Signal website.

I would quibble enough to say that Delaware isn’t really part of the Northeast – particularly Sussex County, although many who have arrived there in recent years hail from the states commonly considered the Northeast – but the prospect of a right-to-work law in the heart of Delmarva could be enough to get a second look from prospective employers.

Councilman Rob Arlett introduced the proposed ordinance on Tuesday, according to the Daily Signal report, and it would need the support of two other Sussex County Council members to pass. (All five are Republicans, although not necessarily conservative ones.) The matter will be up for public discussion, per the article by investigative reporter Kevin Mooney, at the next Sussex County Council meeting on October 24. (As an aside, it should also be noted that Arlett was the state chair for the Donald Trump campaign so perhaps he has some of Trump’s business acumen.)

The article also details an interview with Seaford Mayor David Genshaw, who pointed out, “Right to work is a tool we need to compete for jobs. If you compare right-to-work states with non-right-to-work states, you can see where this could mean big gains for Delaware.”

I have a little bit of knowledge about the way Sussex County’s economy works as an erstwhile employee of one of their leading homebuilders. The eastern half of the county, basically from U.S. 113 to the beach but mainly close to Coastal Highway (Delaware Route 1) is booming with new developments, primarily homes that are purchased by retirees from nearby states who sell their $500,000 houses there and buy a $350,000 house in Delaware with the proceeds. On the other hand, the western half of the county languishes and Seaford may be the poster child for those doldrums as it’s littered with older housing stock and vacant storefronts throughout the city. While the population has increased by about 25% over the last 25 years (from 5,700 to the latest estimate of around 7,700) its growth is well off the pace of Sussex County as a whole, which has nearly doubled in that timespan.

So adopting right-to-work isn’t really going to affect the beachfront areas where the jobs are primarily retail, health care, or other service positions. But in those areas along the U.S. 13 corridor (in order from the Maryland line: Delmar, Laurel, Seaford, Bridgeville, and Greenwood) that have some infrastructure in place for new manufacturing facilities, this could be the economic shot in the arm they need to tip the scales their way.

Of course, I’m sure the union apologists will say that all right-to-work does is drive down wages. (Delaware’s minimum wage is currently $8.25 an hour, with legislation pending to eventually raise it to $10.25 an hour by October, 2020.) But the best argument to counter that is to simply remind this person that a person with no job makes $0 an hour, and anything that can bring jobs in will be beneficial to Sussex County. (The rest of Delaware would be unaffected.)

And you can bet your bottom dollar that, if this passes, Big Labor and their leftist allies will go running to the Delaware-based Clinton appointee who sits on the Third Circuit for a restraining order. While Mooney’s story notes a similar law has passed muster in the Sixth Circuit – which heard the case of a Kentucky county passing similar legislation – it’s much more of a crapshoot in the Third because most of its judges were appointed by Democrats and they tend to be more receptive to what passes for logic from the standpoint of Big Labor.

But there ought to be a little bit of interest in the fate of this bill in Annapolis and Salisbury. While Maryland is doing its best to attract new industry, they are still a closed shop state and large manufacturers have tended to prefer locating in right-to-work states. Should Sussex County succeed in its quest it’s incumbent on the state government to respond in kind by allowing the Eastern Shore to be a right-to-work area. (Perhaps our home rule would allow us in Wicomico County to do this, but I tend to doubt that’s the case in Maryland law.)

This is a story that could be huge for local economic development, so it’s a head-scratcher that a Google search for news on “Delaware right to work” didn’t find anything aside from the story linked above. I guess they would rather find other controversy to discuss for the umpteenth time. So maybe my local friends have heard it here first.

Carrier economics

I’m really not a great fan of tax breaks and such to attract or maintain companies, but I’m realistic enough to understand that most states and regions use these as one of the weapons in their arsenal to attract new companies. (Case in point: last year Governor Hogan proposed a ten-year tax break for companies relocating to certain parts of Maryland, but the proposal went nowhere.) So it was with Carrier Corporation, which was supposed to abandon the state of Indiana for Mexico but brought that move to a screeching halt at the behest of President-elect Trump and his running mate, Indiana Governor Mike Pence.

One thing that has been brought out in the general conversation over Carrier’s change of heart was the Trump proposal to punish companies that move overseas. He’s proposing a 35 percent tariff on such firms, so under his idea had Carrier moved its operations to Mexico they would have had a 35% surcharge on their product.

But the incoming President is also advocating for a series of proposals to make America more business-friendly, such as cutting regulations and lowering the corporate income tax from roughly 35 to 40 percent down to about 15 percent. (These are ballpark figures, but that’s okay since Trump only sees these as starting points for negotiation anyway.)

The reason I bring this up is to make the case that all the carrots should be utilized before a stick is ever brought out. It’s patently obvious that America doesn’t make things like it used to, but the factors of why are most important. Just off the top of my head, here are some possible reasons:

  • Overseas labor costs are far cheaper.
  • There are fewer labor and environmental regulations to deal with.
  • China is a larger market overall and is growing in its consumerism.
  • The tax structure overseas is more beneficial.

However, even if all these things are true, it boggles my mind that it’s possible to profit by creating a product halfway around the world and shipping it back here on a slow boat when the most affluent consumers are still in the good old U. S. of A.

And then you have certain advantages we can exploit for ourselves: a first-class transportation system, a ready-made skilled workforce, and sufficient, reliable energy that’s inexpensive. Unfortunately, previous administrations were reluctant to allow companies to use these advantages, so they departed for greener pastures. In the case of labor-intensive products such as clothing, it’s not likely they will be coming back.

But at the same time we are looking to make things in America, it’s worth pointing out that these things that we can make use more and more automation to create. I’ll jump across the pond for this example, but a reason cited for the demise of the long-running Land Rover Defender model (a 67-year run) was that:

Five hundred workers build the car by hand – there are fewer than 10 robots on the whole line; step across to the Range Rover line on the other side of the Lode Lane, Solihull factory and you’ll find 328 robots.

If you assume that each robot takes the place of a single employee (which is probably generous to the employees) that means about 1/3 the manpower built the Range Rover compared to the Defender. The same is true in Detroit and Japan. To a manufacturer, there’s a lot of appeal to automation: it doesn’t take smoke breaks or mental health days, won’t come back from its lunch break drunk or stoned, and won’t go on strike for ever-increasing health care benefits or wages. The quality of work is very consistent, too, and once set up there’s no such thing as training a new hire.

For decades, though, workers have used machines to assist them in creating products – even the assembly line itself was a vast machine that automated the process of moving the frame of the car along as its component parts were added. Plastic products aren’t really created by hand, but by machines that extrude the parts for them – an offshoot of the process is 3D printing. When you come right down to it, the Carrier plant is one where premade components such as a motor, fan, cooling unit, outside shell, and electronics are assembled to create a larger product, which is where the value is added in this case. There’s not a huge amount of skill needed to put these things together – the skill comes from the design of these units to keep up with the demands of regulation, consumer preferences, and profitability. (Apparently the luckless Land Rover Defender stopped keeping up with these demands.)

But no amount of physical skill can overcome the capricious nature of government whim, and this is where Trump’s idea becomes somewhat impractical. Let’s say in three years Carrier decides it has to move production to Mexico, so it becomes subject to the 35% tax. A unit that cost $10,000 will now have to run at $13,500.

On the other hand, Carrier’s competitor Fujitsu, which is headquartered in Japan, may have a price for a similar unit of $11,000 because they have to ship it over. (For the sake of argument, I’ll assume their products are made overseas.) Thanks to Trump’s proposal, they can raise their price to $12,500 – making more profit for their foreign owners yet still undercutting their competition. Similarly, if Trump decides to go full-bore protectionist and slap tariffs on imported items, there’s no doubt everyone else will do the same thing and that will kill our export market.

I understand the frustration Americans have when they perceive China and others are beating us economically because they are cheating. Truthfully, they could be absolutely correct – in the case of China, I put nothing past Communist scum. But the solution is to make China less attractive by making ourselves more attractive, not trying to punish people. If Trump wants his 35% penalty, that should be the absolute last resort once all other efforts have been made to make our nation as business-friendly as possible. Unfortunately, I think The Donald is too vindictive for his own good.

Someone will pay for all these Carrier incentives, and I suspect these far smaller businesses will be the ones who suffer for the sins of others around the world.

Odds and ends number 83

Subtitled, the post-election edition.

I have a number of items I collected over the last few weeks that I figured I would end up getting to after the election. Well, the election is over so now I can clean out the e-mail box with this handy feature.

Despite Donald Trump’s stated defense of Planned Parenthood (coupled with his vow to defund it) and shaky position on abortion, the head of the pro-life group Created Equal was pleased with the election results and their efforts in securing them.

“Now, we must hold our new president-elect accountable for his promises to defund Planned Parenthood, pass a 20-week ban, and nominate a Constitutionalist to the U.S. Supreme Court,” said Created Equal’s Mark Harrington.

Defunding Planned Parenthood will be a battle since Congress controls the purse strings and a Republican majority couldn’t get the job done in this edition of Congress. And as a reminder: they are funded through September 30, 2017 – the end of the federal fiscal year. Passing a 20-week ban and getting a pro-life SCOTUS justice will also be difficult with 48 Democrat Senators, although eight of them may want to keep in mind that Trump won their state and they are up for re-election two years hence. (In 2018 Democrats face the same minefield Republicans did this time: 23 of 33 Senate seats at stake are held by Democrats, along with two “independents” who caucus with the Democrats.) But I suspect the pro-life side will be disappointed with a President Trump; however, I never thought he would be President either so he may shock us all.

Another group angling for a payoff is my old friends at the American Alliance for Manufacturing, who are begging:

President-elect Trump and Congress must come together on much needed investment that will put Americans to work building and repairing our nation’s crumbling infrastructure. Stronger trade enforcement to address China’s massive overcapacity and a crackdown on countries trying to circumvent U.S. trade laws can boost manufacturing jobs.

Factory workers were more than a prop in this election. Now’s the time to deliver for them.

The signs are there that Trump may be their kind of President: we know he’s more hawkish on trade, and he’s planning on making it possible for up to $1 trillion in private-sector infrastructure investment over the next decade. But it takes two (or more) to tango on trade, so progress on that front may be slow. And the union-backed AAM may not be happy with the infrastructure plan if it doesn’t feature union-friendly rules and prevailing wage regulations. (Maybe this is a good time to repeal the Davis-Bacon Act? I doubt Congress has the guts to.)

But if you thought AAM wanted a tougher stance on trade, this diatribe came from Kevin Kearns, head of the U.S. Business & Industry Council:

Trump’s antagonists (on trade) are Wall Street institutions, multinational corporations, major business organizations, academic economists, editorial boards, business journalists, opinion writers, bloggers, and the generally knowledge-free mainstream media. All are opposed to Trump because they are wedded to a false, outdated “free trade” dogma, which has decimated the working and middle classes.

On Capitol Hill, a minority of Democrats and majority of Republicans are partial to the same free-trade theories. Speaker Paul Ryan admitted as much in his remarks on the election victory, noting that Trump alone had recognized the dire plight of average Americans.

I found it interesting that the LifeZette site has as its editor-in-chief Trump ally (and radio talk show host) Laura Ingraham. But this was the real payoff of the Kearns piece for me:

Trump must impose a Value-Added Tax of 18-20 percent applicable at the border to all imports. Over 150 of our trading partners use such taxes to make American exports pricier in their home markets. We should reciprocate.

So anything we import becomes 18 to 20 percent more expensive? Yeah, that will end well.

Another item in the election hopper was some attempted reform from another guy who I’ve oftentimes cited on my website, Rick Weiland. A “trifecta of reform” his group successfully put on the South Dakota ballot went 1-for-3 the other night. Measures for redistricting reform and non-partisan elections failed, but South Dakota voters narrowly passed a sweeping campaign finance reform package the state’s Attorney General said “may be challenged in court on constitutional grounds.”

Personally, I would have been fine with the two that failed in a broad sense – as a Maryland resident, I know all about partisan gerrymandering and would be interested to see how non-partisan elections pan out. (The duopoly would have a fit, I’m sure.) But this campaign finance reform was a bad idea from the get-go, and it tips the Democrats’ hand on how they would attack the Citizens United decision. One controversial facet of this new law would be a $9 per registered voter annual appropriation to pay for this public financing – such a law in Maryland would be a required annual $35 million appropriation from our General Fund. (The fund Larry Hogan used in his successful 2014 campaign was built with voluntary donations via a checkoff on income tax forms; a checkoff that was dormant for several years but was restored last year.)

And instead of “democracy credits” as this amendment proposed, a better idea would be one I believe Ohio still uses: a tax deduction of up to $50 for political donations. But I’m sure soon a South Dakota court (and maybe beyond) will be ruling on this one.

I also received some free post-election advice from the creators of iVoterGuide, which is an offshoot of a small Christian group called the Heritage Alliance (not to be confused with the Heritage Foundation.)

Pray specifically for the appointment of Godly people as our newly elected President selects his Cabinet and closest advisors.  Pray that the Administration, Senate and House will work together to honor life and liberty as set out in our constitution by our founding fathers.  Pray for ALL elected officials to humble themselves and seek God’s will for our nation.  We need to repent, individually and as a nation, and turn from policies contrary to God’s word.

Pray for unity and peace.  Our country is deeply divided. Christians must truly start loving our neighbors as ourselves so that there can be a spiritual awakening.  Now is not a time to gloat but to turn our hearts continually toward God so we can be examples of His love and work toward reconciliation and unity.  Pray for all nations, as a new stage is being set both nationally and internationally.

I think I can handle that. Oddly enough, this was also a subject of our Bible study prayer group Wednesday – maybe one or more of them is on this e-mail list, too. As for iVoterGuide, what they need is a larger state-level base as Maryland and Delaware aren’t among the handful of states they cover (it’s mostly federal.)

As iVoterGuide‘s executive director Debbie Wuthnow concludes, “we ask you pray about how God wants you to be involved in retaining the freedoms He has so graciously granted us.” I suspect I’m going in the right direction here but one never knows what doors open up.

I was originally going to add some energy-related items to this mix, but I think I will hold them until later this week for a reason which will become apparent. There’s one other subset of items I’m going to have fun with tomorrow – I would consider them odds but not ends. And so it goes.

Haiti needs electricity. Hillary gives them a sweatshop (and her foundation gets a new donor)

Commentary by Marita Noon

Until Hurricane Matthew hit Haiti nearly a month ago, on October 4, the impoverished island country was out of the headlines – pushed aside by election news. But new emails which were obtained through a Freedom of Information Act lawsuit by the Republican National Committee and then shared with ABC News, made public on October 11, make Haiti part of the U.S. election news, as they highlight the cozy connections between the Clinton Foundation, Hillary Clinton’s State Department and the Clinton’s cronies. The corruption that has been brought to light is nothing short of scandalous – though, since it’s merely one more such story, few are probably following it.

I’m aware of this new information due to my multi-year collaboration with Christine Lakatos and her Green Corruption Files. She alerted me to the “bombshell new evidence” and she now has a full 26-page report available.

Hurricane Matthew made clear that the billions of dollars that poured into Haiti after the 2010 earthquake did little to help the 1.5 million people who were displaced when the 7.0 magnitude earthquake destroyed their homes in 2010. According to the New York Times, 55,000 people were still living in shelters when Matthew hit. However, earlier this year, HBO’s VICE newsmagazine series did a segment titled: The Haitian Moneypit. In it, Vikram Gandhi takes viewers through the deplorable conditions found in the refugee camps that have no electricity, fresh water, or functioning toilets. He claims: “hundreds of thousands of survivors are still displaced.”

Gandhi says that despite the $10 billion in relief that came into Haiti after the earthquake, “many parts of Port-au-Prince still look like the earthquake struck just yesterday.” He addresses the Zoranje model home project – described as a $2.4 million dollar showroom and the first approved reconstruction project headed by Bill Clinton and the Interim Haiti Recovery Commission. However, Gandhi reports, the homes were unsuited to Haiti. Once the expo was over, zero homes were built for Haitians. Today the model homes are occupied by squatters who live in the makeshift village without plumbing or electricity.

Perhaps the homes were never built because the companies didn’t donate, or didn’t donate enough, to the Clinton Foundation. In his film Clinton Cash, Peter Schweizer relays a story about a Florida firm with extensive disaster relief experience. The company spent $100 million getting equipment into Haiti, but only made a small contribution to the Clinton Foundation. The company didn’t get any relief contracts. Many contracts went to relief organizations that were also involved in the Clinton Foundation – which brags about its role in Haiti.

Lakatos explains: “In digging through over 1000 emails from Hillary’s State Department related to Haiti, I discovered additional damning proof that the Haiti ‘reconstruction plan’ was a huge pay-to-play scheme for filling the coffers of the Clintons and their cronies.” She continues: “We now have an ocean of evidence confirming that our former president Bill Clinton and his wife, then-Secretary of State Hillary Clinton, exploited the poor Haitian people in the wake of the 2010 earthquake.”

In 2015, in an article titled The King and Queen of Haiti, Politico summarizes: “The amounts of money over which the Clintons and their foundation had direct control paled beside the $16.3 billion that donors pledged in all.”

While Lakatos’ complete report provides details with links to the supporting documentation, due to space here I am jumping to what I believe is the most dramatic example: The Caracol Industrial Park (CIP) – a $300 million project that was planned before the 2010 earthquake and was built in a part of Haiti that was not impacted by the earthquake (therefore not helping the victims.) The CIP was originally lauded by Secretary Clinton as creating 100,000 new jobs in Haiti, but got revised down and down – with current jobs at a dim 8000-9000.

The comingling of players, companies and organizations is overwhelming – but one of Hillary Clinton’s closest confidants, Cheryl Mills, is at the center of it. Addressing the project and the Clintons’ “public-private web,” the New York Times (NYT) states: “Cheryl D. Mills worked ceaselessly to help a South Korean garment maker open a factory in Haiti, the centerpiece of United States government’s efforts to jump-start the island nation’s economy after the 2010 earthquake.”

In short, “Sea-A Trading secured millions of dollars in incentives to make its Haiti investment more attractive,” writes NYT. Sea-A Trading’s chairman Woong-ki Kim became a Clinton Foundation donor after his firm secured the lucrative contract in Haiti. NYT calls Kim: “the sort of enlightened global capitalist the Clintons favor.” Adding to the intrigue, when Mills left the state department, she started a company called BlackIvy Group – for which Kim is a financial backer. NYT describes the relationship this way: “The partnership with Mr. Kim sheds light on the business activities of Ms. Mills – a longtime Clinton loyalist who is likely to play a significant role in any future Clinton White House – as well as the interlocking public and private relationships that have long characterized the Clintons’ inner circle.”

The company makes clothes using Haiti’s cheap labor (roughly $6.85 a day – though reports claim the factory doesn’t pay that much and accuse the factory of sexual harassment, bullying and humiliation.) Workers complain that after they pay for lunch and transportation, they don’t have enough money left to feed their families. Many feel that they were better off farming the land they were thrown off of to make room for CIP.

The primarily female workforce makes clothes for large American retailers, including Walmart and Gap Inc., which get special tax breaks for importing the clothes made in Haiti.  Both companies are Clinton Foundation donors: Walmart has given $1 million to $5 million and Gap has given between $250,000 and $500,000 to the foundation.

Part of the $124 million in “incentives” the U.S. government provided (an unwitting donation from taxpayers) for CIP was to build a power plant to run the factory. While I have been unable to ascertain what fuels the plant, video makes it clear it is not wind or solar that Clinton touts. My research revealed: “Haiti is highly dependent on imported fossil fuels for electric generation.” It is most likely oil-fueled.

The electricity provided by the Caracol Electrification Project also powers some of the surrounding communities. The USAID site features stories of people living with electricity for the first time and elaborates on the dramatic improvement in health and quality of life since the area has reliable power. Many other similar reports exist.

A few months ago, Lakatos and I wrote about Hillary’s clean cookstove initiative: The developing world wants natural gas and electricity, Hillary Clinton sends cookstoves. This story is similar. Haiti needs electricity and Hillary gives them a sweatshop.

Considering the conditions in the Sea-A Trading factory and the hundreds of thousands of people throughout Haiti living in plastic tents and without electricity and the benefits it provides – one must wonder if the hundreds of millions of dollars that went to enriching Clinton Foundation donors, like Kim, wouldn’t have been better spent providing reliable fossil-fuel power to the people of Haiti. Doing so would have boosted the economy and helped families improve their lives. But that’s not how the Clintons operate and their fingerprints are all over the Haiti recovery efforts. Obviously, they have hurt the Haitian people, while helping themselves and their friends.

On November 8, America will decide if this is the kind of leadership we want.

The author of Energy Freedom, Marita Noon serves as the executive director for Energy Makes America Great Inc., and the companion educational organization, the Citizens’ Alliance for Responsible Energy (CARE). She hosts a weekly radio program: America’s Voice for Energy – which expands on the content of her weekly column. Follow her @EnergyRabbit.

Earning my presidential vote: trade and job creation

I am finally approaching the halfway point in this quest, and pocketbook issues have considerable importance. This section is the first of two consecutive segments dealing with the economic end of government. Trade and job creation, to me, are the areas of government which most directly affect your income. (The next section, taxation, is the other end of the pocketbook equation.)

As I have noted throughout, you can work your way through the series by starting here and working forward as issues gain in weighting my decision.

In five bullet points or less, our next President should:

  • Revisit the Trans-Pacific Partnership (and other deals) to see if they can be salvaged as a good deal for the United States – which provides the majority of the GDP in each deal and should have the most favorable terms while maintaining our sovereignty. Otherwise, I believe in free trade that is fair, so we should work to isolate countries who don’t play by the rules.
  • Get government out of the way! According to the Competitive Enterprise Institute, regulations cost business $1.885 trillion in 2015. That has to stop.
  • Rather than knuckle under to the knuckleheads who think we should have a “living wage,” the federal minimum wage should be abolished entirely. States are free to continue the lunacy and watch their businesses suffer the consequences when minimum wages get too high for the market.
  • Be an advocate and cheerleader for the right-to-work movement.
  • Invest in necessary federal infrastructure, particularly highways – the “post roads” of the modern era. Not only does this benefit job creation but it would assist in getting goods from place to place more quickly.

So where do my contenders stand? Let’s find out how many of the nine points they will receive.

Castle: Opposed to TPP as “the worst of our free-trade agreements.” Should freely trade with all nations but formal agreements cost us sovereignty. (Facebook)

Hedges: Opposes Republican policy of giving away our jobs through free trade.

Supports “appropriate employment at a living wage available to all citizens who are able to work.”

“The importing of goods from and the offshoring of services to other nations are the primary causes of lost jobs and impoverished communities in America. We favor free trade only on a reciprocal basis among equals. We will impose balancing tariffs on all goods imported from countries whose wage scales, labor benefits, and environmental protections are not similar to our own. No nation which fails to protect the civil rights of its citizens may be accorded ‘most favored nation.'” (party platform)

As a party they also support right-to-work states and would index Congressional pay to the minimum wage.

Hoefling: “Politicians constantly talk about ‘jobs, jobs, jobs,’ even though they don’t have any jobs to offer that aren’t government jobs, or jobs that are subsidized by the taxpayers, and by debt shoved off on our grandchildren. As if we don’t already have more than enough of those kinds of jobs, right?

Here’s another thing: while working for a paycheck is certainly an honorable thing, it is not the American ideal. The ideal is for YOU to OWN your own piece of this country.

My goal, should I become the governor, is not to offer jobs to my fellow Iowans, or to use your money to bribe some company to provide you with a job. My goal is to secure your rights, and to then create an economic environment of FREEDOM, low taxes, reasonable, minimal regulation, and OWNERSHIP, an environment that will quite naturally lead to productivity and prosperity for all.

And, of course, the bonus is, companies will line up to do business in a state like that. You know it’s true.

‘Jobs, jobs, jobs’?

NO!

OWN, OWN, OWN!” (as Iowa gubernatorial candidate, 2014)

Johnson: Reduce the administrative burden. Level the playing field. Incentivize job growth.

As governors, both Gary Johnson and Bill Weld supported policies that incentivized job growth. In 2012, Gov. Johnson was praised as having the best “job creation” record of all presidential candidates. And Weld transformed Massachusetts from having the highest to the lowest unemployment rate of any industrialized state in less than 8 years.

Yet, Johnson has said that, “As Governor, I didn’t create a single job.” His point, of course, being that government doesn’t “create” jobs. Entrepreneurs, businesses, and economic prosperity are the building blocks for job growth.

Governors Johnson and Weld believe that we must allow a regulatory and tax environment that incentivizes fairness. Not one that picks winners and losers. The purpose of government regulation is to protect citizens from bad actors and the harm they might do to health, safety, and property. But regulation should not be used to manipulate the economy, to manage private lives and businesses, or to place unnecessary burdens on those who make our economy work.

Today, the reason so much corruption and power thrive in Washington, D.C., is that powerful corporate interests actually benefit from over-regulation. After all, they have the resources to comply with onerous laws. But for the average American, entrepreneur, or small businessperson, they don’t have teams of high-priced attorneys to help them navigate the bureaucracy.

We simply need to apply common sense to regulatory policy. Let’s get rid of the unnecessary laws and taxes that siphon the resources businesses use to create the jobs we need.

Governors Gary Johnson and Bill Weld helped create the conditions for job growth in their states. In the White House, they will create the conditions for massive job growth across the entire country. (campaign website)

McMullin: American businesses export more than $2.2 trillion per year of goods and services. The demand for American exports supported 11.5 million jobs, an increase of more than 50 percent over the past 20 years. On average, these jobs pay 18 percent more than jobs that are unrelated to exports. For all these reasons, Evan believes that trade is an engine of prosperity and that well-designed trade agreements can help our economy grow even more.

At the same time, we can do more to help American workers adjust and thrive in the 21st century. Since 2000, the U.S. economy has lost 5 million manufacturing jobs, although more than 12 million Americans still work at factories. The main driver of this trend is advanced technology, especially advances in robotics and computing. Today, U.S. automakers produce just as many cars as they did 20 years ago, yet the auto industry employs 300,000 fewer workers, a reduction of almost 25 percent.

Therefore, Evan believes that one of the most important ways to help American workers is to make education more affordable while supporting the growth of technical schools, online education, and work-based training programs. It is essential to support these alternatives to the typical full-time four-year degree program, which may not be a good fit for older students who need to work and support their families while studying. While U.S. factories have cut millions of jobs for those with a high school education or less, hiring of college graduates remains stable, while hiring of those with graduate degrees continues to demonstrate strong growth.

Around the globe—even in China—manufacturing employment is shrinking rapidly as factories rely more and more on advanced technology. Thus, using tariffs to raise the cost of Chinese imports won’t bring those jobs back to the United States. In fact, it will kill American jobs, because China and others will block U.S. exports, which now support more than 11 million jobs.

In addition, raising the cost of imports will force hard-pressed American families to pay hundreds or thousands of dollars more each year for basic necessities, from clothing to pots and pans and diapers.

Evan supports the Trans-Pacific Partnership (TPP), a trade agreement recently signed by 12 countries, including Japan, Australia, and Vietnam. The TPP will eliminate tariffs for all the countries that sign, but it will not go into effect until ratified by Congress, which must vote ‘yes’ or ‘no’ without making any changes to the agreement.

One of the biggest advantages of the TPP is that reducing tariffs to zero favors American companies. Right now, America has low tariffs, not far above zero. In contrast, other countries’ tariffs will plunge when the TPP goes into effect, opening up their markets to U.S. exports. TPP is still a good deal for those countries, because it gives them better access to the biggest market in the world (ours) and the third biggest (Japan).

TPP also helps create a level playing field between U.S. workers and their counterparts overseas. If foreign companies lower their costs by mistreating workers and polluting the environment, then its puts American companies at an unfair disadvantage. However, TPP has the strongest protections for labor and the environment of any major trade deal.

Finally, TPP is important for national security reasons. Our allies in Asia are watching to see whether the U.S. still has the ability to set the rules of the road, or whether their security depends on submitting to China. That is why the secretary of defense has said, “TPP is as important to me as another aircraft carrier.” If the U.S. abandons TPP, China is likely to intensify its campaign of intimidation in the South China Sea. Thus, support for TPP is a win-win proposition; it enhances our security and reinforces the growth of job-creating American export industries.

Americans are ready to work hard to provide for their families, but fewer and fewer are capable of finding the good jobs necessary to support a middle-class standard of living and help them to pursue their dreams. If we accept the slow growth of the Obama years this won’t change. Only if the economy begins to grow faster—at a rate of more than 3 percent year instead of less than 2—will good jobs become more widely available.

Right now, there are three major roadblocks standing in the way of a stronger economy: a tax code that rewards special interests while hurting small businesses, excessive regulations that cost businesses almost $2 trillion per year, and runaway entitlement spending that multiplies the national debt.

Evan McMullin will dismantle these roadblocks. (Editor’s note: see my next part, taxation, for point 1).

Federal regulations play an essential role in making sure that Americans have clean air, clean water, and safe food. Yet the blizzard of intrusive regulations issued by the Obama administration have gone far beyond what is necessary to protect our health and the natural environment. Instead, these regulations serve as an invisible tax that raises the cost of doing business and prevents firms from creating jobs. As president, Evan McMullin would direct federal agencies to identify a clear problem that needs to be fixed before resorting to further regulation. If an agency believes regulation is necessary, it would still have to prove that the benefits of a proposed regulation are greater than its costs. The same test would also be applied to existing regulations, which would be lifted if they were not achieving their goals.

If the United States can’t get its national debt under control, the government will eventually have to impose harsh taxes or pursue other policies that would drive the economy into a deep recession, destroying millions of jobs. The number one cause of runaway debt—now more than $19 trillion—is the cost of entitlements. Our country needs Social Security and Medicare to ensure the health of senior citizens and prevent them from falling into poverty. We also need Medicaid to provide health care to the needy. Yet these programs are so inefficient, wasteful, and susceptible to fraud that their costs are out of control. The result is that the government must borrow vast sums to keep the programs going. The Obama administration has already added $9 trillion to the debt, almost as much as every previous administration combined.

With a smarter tax code, streamlined regulations, and entitlement reform, the U.S. economy can begin to grow again at the rates it did in the 1980s and 1990s.

Evan McMullin believes that America should be the best place in the world for innovation, entrepreneurship and opportunity. We must reform a system that too often benefits the politically connected and the corporate elite, while leaving too many Americans without good jobs. By running for president, Evan McMullin is giving voters the opportunity to get the economy moving again instead of doubling down on the status quo. (campaign website)

**********

I wish Darrell Castle had been more specific and forthcoming on his economic policy. I’m sort of stuck here – on the one hand, the fealty to the Constitution he advocates would mean he would properly address most of my issues, but there are always the provisos and conditions to watch out for. I consider this a wasted opportunity for him. 3 points.

Jim Hedges has somewhat of a right idea on free trade, but the rub comes in dictating what policies other nations may have – particularly when we are so overregulated. Moreover, his stance on jobs at a “living wage” is troubling, and suggests he may not be as strongly in favor of the right-to-work platform plank. I can only give him 1.5 points.

I suspect Tom Hoefling is speaking of entrepreneurship, which is indeed sorely lacking in this country. Even better, it is a philosophy that is scalable to a national level, although the details could really be fleshed out more. He has the same problem as Castle insofar as the specifics aren’t being put out there and easily available. I give him more credit since he addressed the more important aspect of job creation. 4 points.

Gary Johnson gets it insofar as the philosophy goes, and he makes an extremely salient point regarding how the regulatory climate stifles competition. Big corporations become big donors, and then they move into the realm of lobbying for regulations designed to keep small players from gaining market share. But the question is how much will he do to promote “fairness” vs. to promote “opportunity.” There is a subtle but important difference, because fairness implies equality of outcome and that isn’t the way a free market works. Maybe I’m being picky with the term, but generally these campaign issue statements are thought through to make a certain point. 5.5 points.

Evan McMullin is much more sold on TPP than I am, particularly because China is not a party to it. One has to ask what we are giving up if other nations are suddenly going to reduce their tariffs to our level. I don’t think not having access to economies in Chile, Brunei, and several other signatories will break us.

And there’s the idea of justifying regulations – well, any idiot will tell you that of course the government agency that writes and enforces regulations will say they are justified. This needs to be determined independently of the government because job one for a bureaucrat is preserving his job, not solving problems. It’s also telling to me that Evan really didn’t discuss these educational alternatives in workforce training in his general education segment. Here he seems to want more government involvement, not less.

Note that I moved the taxation part of job creation to the next installment, but left the part about entitlements in because he also makes those same points there. I’ll discuss that subject in due course. Anyhow, Evan doesn’t do that well in this category with his political-speak. 2.5 points.

As I noted above, it’s certain my next part is taxation.

Blame for Ford’s Mexico move falls on Obama administration

Commentary by Marita Noon

Ford Motor Company made headlines on Wednesday, September 9, when, during an investor conference, CEO Mark Fields told attendees that it will invest $1.6 billion building a manufacturing plant in San Luis Potosi, Mexico, and will move all of its small car production there during the next two to three years.

The announcement was hardly news as Ford has been talking about the shift for more than a year. But in the throes of an election that has both candidates decrying companies that send jobs to low-wage countries, the decision was an invitation for attention. The next day, during a speech in Flint, MI, Donald Trump declared that it was: “horrible.” He’s previously called the proposed move “an absolute disgrace” and promised to punish Ford with a 35 percent tariff on cars made in Mexico that are then sold in America – which he believes will prevent them from moving production out of the U.S.

No one wants American jobs to go away – and Ford plans to build more profitable vehicles in the plants that currently produce the Focus and C-Max small cars. It claims it is not going anywhere and that the U.S. is its home. Reports do indicate that no jobs at the Wayne, MI, plant will be lost, as it will likely be converted to building the new mid-size Ranger pick-up truck and, possibly, a new Bronco compact sport-utility.

But there’s more to the story that isn’t generally being addressed.

Earlier this year, Fields told CNBC: “We’re always going to invest where it makes sense for business.”

Obviously, it no longer makes “sense” to invest in small car production in America. Most of the news surrounding the move to Mexico addressed the benefit of low-cost labor. According to the Detroit Free Press: “The industry has known for decades that domestic manufacturers struggle to make a profit on small cars.” In Slate’s MoneyBox blog, Jordan Weissmann says: “You can protest that Ford should find a way to consistently churn out profits while manufacturing small cars at home, but that’s easier said than done.”

The number of auto jobs in Mexico is up 40 percent from 2008, while they are only up in the U.S. by 15 percent over the same period. Reuters reports: “American automakers pay Mexican workers $8 to 10 an hour, including benefits.” By comparison, Ford’s labor costs average $57 per hour at home.

Even with the huge labor cost differential, American car companies’ trucks and SUVs are profitable to manufacture in the U.S. and they are the vehicles Americans want to buy – which should raise the question: Why do car companies make small cars when they can’t make them profitably? The answer is the story not being addressed in the current coverage of Ford. And this is where Trump could, possibly, change the outcome.

In a free-market world, companies that want to stay in business should stop activities that lose money and focus on those that make money. Yet the Big Three automakers continue to produce small cars that for years have made little, if any, money.

Business Insider explains: “If Ford is going to keep them around, it needs to address the profit problem. Americans don’t want to buy small vehicles at the moment (actually, they almost never want to buy small cars), so Ford’s only rationale for continuing to build them is to satisfy the more stringent fuel-economy standards in the future.” Those fuel standards are called CAFE – which stands for Corporate Average Fuel Economy. In short, it means that car companies can only sell the bigger vehicles that Americans want if it also produces cars that achieve very high fuel efficiency (including electric vehicles, in which Ford is investing heavily) that results in an “average” of the mandated miles per gallon – which is now 54.5 by 2025.

Merrill Matthews, Ph.D., a resident scholar with the Institute for Policy Innovation, blames the Ford move on, along with other draconian government policies, the CAFE standards: “The CAFE standards, which began in 1975, require auto manufacturers to meet government-imposed fuel economy standards across a fleet of cars. In order to meet those standards, which have been dramatically increased under President Obama, carmakers have to make light, inexpensive cars with high fuel economy to offset their trucks and SUVs with lower fuel economy. And electric cars really help their fuel economy balance. So the companies make minimally or even unprofitable small cars and electric vehicles so they can sell their popular and profitable large products – and hope for a profit in the end. By moving their small cars to Mexico, which has skilled but cheaper labor, Ford hopes to break even or make a little profit off of them.”

While the CAFE standards have increased dramatically under the Obama administration, and have also increased costs for consumers, most people don’t realize that they are not set in stone. Brad Plumer, senior editor for VOX.com outlines the options: “A new president can revise them, up or down. These CAFE (corporate average fuel economy) rules are scheduled to come up for a midterm review in 2017. At that point, automakers may lobby to allow the standards to rise more slowly – particularly if sales of fuel-efficient vehicles have been sluggish due to low oil prices. Green groups, meanwhile, could push to make the standards stricter, or to have them keep increasing past 2025, to push vehicle emissions down even further.”

A President Trump could, perhaps, by promising to allow car companies to make whatever kind of cars they want to make, entice Ford to keep its money in America – though, admittedly, there are other factors (such as trade deals) that make manufacturing small cars attractive in Mexico. CAFE is just one of the many policies that make doing business difficult in America.

Revising the CAFE standards, which could reduce the cost of future cars and would remove government intrusion from vehicle selection, is something Trump can do that would make doing business in America “make sense” again for U.S. car companies. For all business, let’s make America a place where it makes sense to invest.

The author of Energy Freedom, Marita Noon serves as the executive director for Energy Makes America Great Inc., and the companion educational organization, the Citizens’ Alliance for Responsible Energy (CARE). She hosts a weekly radio program: America’s Voice for Energy – which expands on the content of her weekly column. Follow her @EnergyRabbit.