Friday, December 17, 2010
Read more about Tuesday's revenue hearing here.
Sunday, October 24, 2010
There is some upside to the passage of Question 3. Consumers will have more dollars to spend in Massachusetts. The money doesn't disappear from the state's economy. It goes somewhere else including making retailers along all of the Massachusetts borders a bit more competitive.
Because a lower tax rate will generate economic growth. An analysis by the Beacon Hill Institute at Suffolk University shows that a sales-tax rollback to 3 percent "would create 27,199 private sector jobs, increase annual investment by $73 million, and raise wages by $1.03 billion." Money not confiscated by the public sector would remain in the far more productive private sector, while a sales-tax reduction would give Massachusetts businesses a competitive advantage. And any government jobs eliminated would be more than offset by the creation of new jobs in the private economyIt's time to broaden the debate beyond the diet of fear the public's been served.
Tuesday, October 5, 2010
Published since 2001, the report features an index that measures the ability of all 50 states to establish policies that sustain long-term economic and personal income growth.
First Floor Function Hall, Suffolk University Law School
120 Tremont Street
Boston, MA 02108
RVSP - phone: 617-573-8750;
THE BEACON HILL INSTITUTE & THE DEPARTMENT OF ECONOMICS at SUFFOLK UNIVERSITY
Wednesday, September 29, 2010
Those same progressives tell us that expanding unemployment insurance and other government programs is an easy way to raise employment in the United States. But they seem to have forgotten that European policies have likely caused Europe’s employment to be less than ours, not more.
Monday, September 20, 2010
WASHINGTON (AP) — The longest recession the country has endured since the Great Depression ended in June 2009, a group that dates the beginning and end of recessions declared Monday.
The National Bureau of Economic Research, a panel of academic economists based in Cambridge, Mass., said the recession lasted 18 months. It started in December 2007 and ended in June 2009. Previously the longest post World War II downturns were those in 1973-1975 and in 1981-1982. Both of those lasted 16 months.
Friday, July 30, 2010
To Obama-administration economists, as well as to many others, the recession that followed the financial crisis of 2008 seemed like a classic case of decline in aggregate demand. Because of the credit crisis, people were not able to obtain loans — for homes, cars, business equipment, or any of the countless other transactions that rely on credit in today's economy. And because people were unable to obtain loans, these sales and purchases couldn't take place, resulting in a significant drop in demand across the economy.
So, inspired by the view that fiscal policy can prop up aggregate demand, Obama's advisors (and their congressional allies) began to design a stimulus plan heavy on direct government spending. A few days before President Obama's inauguration, his economic advisors released a document titled "The Job Impact of the American Recovery and Reinvestment Plan," in which they detailed some of their economic assumptions. They determined that the "government-purchases multiplier" — that is, the multiplier for direct spending — would be 1.57, while the tax-cut multiplier would be 0.99. In other words, every dollar spent by the government would yield $1.57 in aggregate demand, while every dollar in reduced taxes would yield only 99 cents in increased demand. And because 1.57 is larger than 0.99, the Obama team concluded it was better to increase spending than to cut taxes.
Obama and his advisors arrived at these numbers through a standard macroeconometric model of the sort economists have been using for years. Such models take various past relationships among economic variables (inflation and unemployment, for instance) and extrapolate them into the future. In essence, the economy is modeled as a system of equations, each describing how one variable responds to many others. University of Chicago economist (and Nobel laureate) Robert Lucas famously criticized these models for lacking an appreciation of people's changing expectations; many economists, however, still find such models valuable, and have continued to employ them for forecasting and policy analysis.
The question for economists now is whether the administration's assumptions, and the model based on them, were correct. After all, if we could be sure their model was right, we would know what to conclude when their stimulus plan was followed by 10% unemployment: The patient was sicker than they thought, and unemployment would surely have been higher still if not for the stimulus. (Indeed, since Obama's advisors do believe their model was right, this is the conclusion they have reached.)The trouble is, we have no way of knowing for sure if the model was in fact correct.
Here is my first law of economic growth: When we encourage more investment, and ensure this investment is being channeled to the most productive uses, growth will follow.Some people never learn.
For all the talk about fiscal stimulus and jobs creation at the federal and state level, almost no one in government is doing anything about reducing the roadblocks to investment. For example, millions of people are newly unemployed, and in past recessions a large number of these folks have eschewed looking for a new corporate job and have started businesses of their own. Unfortunately, such prospective entrepreneurs will face a tangle of registration, regulatory and licensing hurdles, many of which have been backed by established businesses that want to avoid just this kind of new competition. Even steps like the extension of unemployment benefits tend to discourage such entrepreneurship by increasing the opportunity cost of working for oneself.
Wednesday, July 21, 2010
Why is it that some of the states with the biggest fiscal problems have the highest individual state income tax rates, such as New York and California, while some of the states with the least fiscal problems have no state income tax at all?
High-tax advocates will argue that the high-tax states provide much more and better state services, but the empirical evidence does not support the assertion. On average, schools, health and safety, roads, etc. are no better in states with income taxes than those without income taxes.
More importantly, the evidence is very strong that people are moving from high-tax states to lower-tax-rate states — the migration from California to Texas and from New York to Florida being prime examples. (Next year, the combined federal, state and local income tax rate for a citizen of New York City will be well over 50 percent, as contrasted with approximately 38 percent for citizens of Texas and Florida.)
If the citizens of California and New York really thought they were getting their money's worth for all of the extra state taxation, they would not be moving to low-tax states.
The obvious question then is: Where is all the extra money from these state income taxes going? It is going primarily to service debt, and to pay for inflated salaries and employee benefits. It is interesting that the high-tax-rate states also, on average, have much higher per capita debt levels than states without income taxes. (Alaska is an outlier because it has its oil reserve to borrow against and actually gives its citizens a "dividend" each year.)
Wednesday, July 7, 2010
Tuesday, June 29, 2010
Monday, June 14, 2010
"The only direct funding a host country receives from the proceeds of the World Cup are the ticket sales and the predetermined amount promised by FIFA for hosting. In the past host countries have banked on tourism to compensate for the costs of infrastructure and new stadiums."
Friday, June 4, 2010
In theory, fiscal federalism is a great tool that holds state and local governments accountable for their policy actions. In practice, it hardly exists. The increasing scope of federal programs and grants has largely eroded its impact on policy decisions by state and local government to the point that tax considerations become almost irrelevant in people’s decisions about where to live.By removing the natural check that mobility imposes on bad state tax policy, those who favor expanding the scope of federal government activity make it difficult to correct bad state tax policy.
All other things being equal, it remains less costly to live or run a business in a low-tax rate state than in a high-tax rate one. However, when the central government imposes an ever-increasing percentage of each taxpayer’s total tax burden, differences in state taxes become less important. In other words, if your main tax burden is going to be the same wherever you live, why bother even moving to another state, especially if you get to deduct your state taxes from your federal ones? Being able to deduct state taxes from the federal burden obviates any differences between the states.So say goodbye to Tiebout.
Wednesday, May 19, 2010
In tough economic times it is all the more important for consumers to distinguish between items they “must have and those they “would like to have.” One cannot be postponed: The other most certainly can wait.
The problem is that all too many consumers do not take the time or trouble to ask themselves “Do I really need this? Can I just as well postpone it or do without?” The choice is often difficult because the options are not always clear. The problem is muddied and magnified when all of the economic experts and most government entities urge consumers to spend themselves silly to help the economy recover. The problem is deepened by desperate merchants who engage in complex price discounting, noisy up-grades, confusing introductory offers and exaggerated advertising claims—the dark side of merchandising.
Thorstein Veblin, the economist, wrote extensively about the phenomenon of “conspicuous consumption” as to pervasive practice by consumers. Will Rogers complained that “Too many people spend money they haven’t earned, to buy things they don’t’ want, to impress people they don’t like.” Where is Andy Rooney of 60 Minutes when we need him?
What inescapably dooms the rational decision to purchase an item is the universal consumer memory lapse about income taxation. Almost everyone assumes that the price tag shown on an item is the actual cost to the purchaser. Nothing could be further from the truth. What the purchaser sees is not what he or she gets! When income is taxed before the consumer makes a purchase, the consumer has already paid a price for the dollars he or she is about to spend.
The actual cost, then, is not 100% of the price tag but more like 120% of the price tag shown for anything, for everybody. Add two extra cost items that add to the bad news:
1. Sales taxes might apply, depending upon local or state laws or the item purchased. These generally range from 5% to 8% of the price tag.
2. Finance charges if the consumer buys on credit or otherwise borrows to get the money to make the purchase.
How does it look for consumers to pay 130% or 140% of the price shown? It ought to feel good because most consumers are doing it. Isn’t it high time for consumers to do a better job of distinguishing between must have and would like? Isn’t it time for consumers to spend less and save more if they can? Alas, consumers are an irrational, disorganized lot to begin with, and an unpredictable prop for the economy.
Now, businesses face a similar challenge and a responsibility to distinguish between things they must have to conduct their operations and the things they would like to have—in order to remain competitive. But businesses have three powerful advantages consumers almost never have.
1. Businesses typically have a basic choice between incurring a current operating expense or investing in assets like equipment and inventory to save on current and future operating expense, or to grow the business. Consumers rarely have such options. The tax laws allow businesses to spread their investment cost over a number of years, but not consumers.In addition, for a variety of justifiable reasons, the interest charged on consumer borrowing is roughly double the interest charged on business loans. Time payment, or consumer credit card purchases on consumer durables—kitchen appliances, TV’s, home furnishings and the like cost the equivalent of 20% per year. Business loans are typically in the range of 10%.
2. Businesses are allowed to deduct the current year cost of an expense from their revenue before arriving at their profit—which is then taxed at lower rates than consumer income. Generally speaking, businesses spend on their needs with less costly before tax dollars; and unlike consumers, businesses are not noted for irresponsible, carefree or casual spending, or impose buying—despite all of the current concern about executive compensation.
3. Unlike consumers, businesses can also pass along some or all of their expense increase to customers, in the form of price increases. When times are tough, it is more difficult or impossible to do so. But well-managed businesses are able to use highly skilled professional resources to help them contain and control expenses.
Home buying interest rates might seem like a glaring expectation. But they are not. Because of the traditionally long periods used in mortgage financing, the published rate of 5% on a 30-year mortgage seems low enough. But the 5% translates into three to four times itself when the period of the loan is normalized to a ten-year payoff.
Businesses account for roughly 25% of the nation’s spending, consumers roughly 50% and government roughly 25%. The fiscal sedative/stimulus spending debate in the government sector is a subject of hourly public debate and needs no further elaboration here. At its core government spending is a must have versus would like seesaw, no less than the challenge in the private sector.
One does not have to be an economic genius or policy maker to know that business investment spending is the most direct and effective way to stimulate the economy and create jobs. That is where the jobs are. That is where employment opportunities are created, now and for the future. What can all of us in America do to encourage business to invest?
The author is an economist and consultant to early stage companies in New England.
Wednesday, May 5, 2010
Governor Deval Patrick's Five Year Capital Investment Plan FY2010 - FY2014 "Existing Debt Burden" Administration and Finance (2009) http://www.mass.gov/bb/cap/fy2009/exec/hdebtafford_5.htm (accessed May 3, 2010).
2 Massachusetts School Building Authority Annual Report 2008 – 2009 http://www.massschoolbuildings.org/uploadedFiles/Pressroom/Newsletters/2208.2009_Annual_Report.pdf (accessed May 3, 2010).
3 Massachusetts Department of Transportation, "Stakeholder Briefing," (October 2009) http://www.eot.state.ma.us/downloads/90_DayReport/briefing100609.pdf (accessed May 3, 2010).
Tuesday, May 4, 2010
WASHINGTON, May 3 (Reuters) - The United States still has 71 million doses of H1N1 swine flu vaccine that have not been used, but it is not yet time to throw them out, the federal government said on Monday.
States and other providers should hang on to the vaccine and continue to offer them to people until drug companies can start distributing seasonal vaccine for the coming influenza season in the autumn, said Health and Human Services Department spokesman Bill Hall.
Senator Chuck Grassley, the ranking Republican on the Senate Finance committee, released a letter on Monday that he sent to HHS secretary Kathleen Sebelius asking her how much vaccine was left over and when it would expire...
Sebelius said last month that 162 million doses were produced and distributed, but only 90 million actually got into people's arms or noses.
Full article here.
MANDEL: "We all know that state and local government finances are a mess. This chart helps explain why."Key paragraph:
Chart is here.
Now, I’m not anti-government, by any means. But this trend is disturbing. In times of crisis and economic struggle, government workers should not be getting bigger pay increases than the private sector. The domestic private sector has really been struggling for a decade, both in terms of job and pay. But the public sector kept paying higher compensation.Hat tip to Marginal Revolution.
The arithmetic is very clear. State and local governments can’t keep funding higher wages and better benefits for their workers, while the private sector struggles. As a wise man once said, you can’t wring blood from a stone. And you can’t ask troubled taxpayers to pony up bigger pay gains for government workers than they are getting themselves.
Thursday, April 29, 2010
Is it possible that California's pro-13 majority, denounced for decades as shortsighted and greedy, is actually on to something? The reason people refuse to believe that California's taxpayers keep too much money and its tax collectors don't get enough is, as Brown now says, that there's "so little confidence in state government."
The core of that distrust is the belief that California's public sector suffers not from the lack of money but from the failure to use the ample funds it does receive efficiently and beneficially. There's no shortage of facts about the revenue and spending sides of government, California-style, to justify that suspicion.
California, in the first place, is not a state with low taxes. It's not even a state with especially low property taxes. In 2007, the year of the most recent Census Bureau data comparing state finances, California's state and local governments levied $1,141 in property taxes per capita, less — but only 11% less — than the corresponding average, $1,288, for the 49 other states and the District of Columbia.
If we broaden the view to look at all taxes (property, income, sales and excise taxes) paid to state and local governments by individuals and corporations, California's governments received $4,731 per resident, 14% more than the $4,160 average outside California. Only eight states and the District of Columbia had a higher per capita tax burden.
Not only is California a high-tax state, it is even more conspicuously a high-revenue state. Things that aren't taxes, such as fees for government services, often have a high degree of "taxiness," as Stephen Colbert might say. The Golden State, routinely described as desperately short of funds because of Proposition 13, brought in $12,776 per capita in governmental income from all sources — taxes, fees, federal aid, charges for government-administered insurance and revenue from government-owned utilities — in 2007. Only three states and the District of Columbia received more.
Thursday, April 22, 2010
Using public choice economics, how might we redesign the Constitution of California? Lawmakers from both parties have proposed this idea, plus there were (failed) attempts to call a new constitutional convention through a referendum. Did you know that the operative constitution from 1879 is the third longest in the world, after Alabama and India?As Tyler notes California has the third longest constitution in the world. Reformers should aim for shorter, distinct Constitutions that affirm limited government. I think California needs to eliminate popular referenda that mandate the legislature to spend on specific programs.
I see a few options on the table:
1. Eliminate the 2/3 legislative majority required to pass a new budget.
2. Eliminate popular referenda.
3. Move closer to a Swiss-like "veto only" system for referenda.
4. Eliminate the power of referenda to authorize state-level expenditures.
5. Cap state-level expenditures.
6. Regulate state treatment of pensions more strictly, to encourage fiscal responsibility.
7. Amend the constitution to make it harder to...amend the constitution.
Wednesday, April 14, 2010
Only 15% of the nation's construction workers are unionized, so from now on the other 85% will have to forgo federal work for having exercised their right to not join a union. This is a raw display of political favoritism, and at the expense of an industry experiencing 27% unemployment. "This is nothing but a sop to the White House's big donors," says Brett McMahon, vice president at Miller & Long Concrete Construction, a nonunion contractor. "We've seen this so many times now, and how many times does it have the union label? Every time."Recent Beacon Hill Institute publications on Project Labor Agreements:
It's also a rotten deal for taxpayers. White House economist Jared Bernstein blogged that these agreements "significantly enhance the economy and efficiency of Federal Construction projects." In fact, the carve-outs put an end to open, competitive federal bidding, which means higher project costs. They also mean taxpayers must finance the benefits and work rules of union members.
Mr. Bernstein could check all this with the Department of Veterans Affairs, which last year commissioned an independent study showing the Obama project labor agreements would likely raise the VA's construction costs for hospitals by as much as 9% in three of five markets—Denver, New Orleans and Orlando. In two others, New York and San Francisco, the study predicted a mixture of small cost increases and small cost savings.
The study reported "strong evidence to suggest that the result of a PLA [project labor agreement] that dictates work rules, double benefits, team structure and activities on non-union type contractors will be that production costs will increase—given these union-related requirements." It also rebutted a favorite liberal argument that such agreements lead to less labor strife, noting that there are "many examples for projects where there have been strikes but also no strikes—unrelated to whether or not a PLA is in place."
The Veterans study mirrors academic work showing that project labor agreements raise the costs of construction by 10% to 20%. The Beacon Hill Institute at Boston's Suffolk University in 2006 investigated the costs of building 126 Boston-area schools. It found project labor agreements raised winning bids for school construction projects by 12% and actual construction costs by 14%.
Boston's Big Dig, Seattle's Safeco field, Los Angeles's Eastside Reservoir project, the San Francisco airport, Detroit's Comerica Park—all were built under PLAs marked by embarrassing cost overruns...
BHI Survey: Overwhelming majority of state voters oppose a key feature of Project Labor Agreements
Cato Journal: Why PLAs are not in the public interest
Project Labor Agreements on Federal Construction Projects: A Costly Solution in Search of a Problem
Friday, April 2, 2010
Tuesday, March 30, 2010
Should the United States someday suffer a budget crisis, it will be hard not to conclude that Obama and his allies sowed the seeds, because they ignored conspicuous warnings. A further irony will not escape historians. For two years, Obama and members of Congress have angrily blamed the shortsightedness and selfishness of bankers and rating agencies for causing the recent financial crisis. The president and his supporters, historians will note, were equally shortsighted and self-centered -- though their quest was for political glory, not financial gain.
Let's be clear. A "budget crisis" is not some minor accounting exercise. It's a wrenching political, social and economic upheaval. Large deficits and rising debt -- the accumulation of past deficits -- spook investors, leading to higher interest rates on government loans. The higher rates expand the budget deficit and further unnerve investors. To reverse this calamitous cycle, the government has to cut spending deeply or raise taxes sharply. Lower spending and higher taxes in turn depress the economy and lead to higher unemployment. Not pretty.
Thursday, March 25, 2010
For nearly 80 years, contractors working on federally funded construction projects have been forced to pay their workers artificially inflated wages that rip off American taxpayers while lining the pockets of organized labor. The culprit is the Davis-Bacon Act of 1931, which requires all workers on federal projects worth more than $2,000 to be paid the "prevailing wage," which typically means the local union wage.BHI's research on the prevailing wage.
Here's what happens. Unskilled construction workers possess one clear advantage over their skilled, unionized competitors: They're willing to work for less money. But Davis-Bacon destroys that advantage. After all, why would contractors working on a federal project hire any unskilled workers when the government forces them to pay all of their workers what amounts to a union wage? Contractors make the rational choice and get their money's worth by hiring skilled unionized labor even when the project calls for much less.
Davis-Bacon is a blatant piece of special-interest, pro-union legislation. It hasn't come cheap for taxpayers. According to research by Suffolk University economists, Davis-Bacon has raised the construction wages on federal projects 22 percent above the market rate.
Related material here.
Thursday, March 18, 2010
WABC 3/18/2010 12:13:50 PM: ...What is up with Grover Norquist look at it from has a piece up today at national review online good though they budget for MSN at the health-care legislation will cost up to 700,000 jobs but will let you and that doesn't include the doctors were such are probably the auto of stories about nurses want to quit hospitals around the country hospitals rather than the original that's on top of the all know what this means yet is this just happened the national Council of rows of dosage of their opposition to the health-care bill setting immigration restrictions which disallow undocumented workers combined coverage on this federal money or troops you learned earlier support for the gangs is not as congenital as the label for a dog of a transfer payment for giveaways for our people and on the 21st of some to the immigration privately delivered until the storm Washington in the hope that quarter million people there or a big march and rally demanding illegal immigration amnesty on the day there theoretically would be voting on the health-care bill I stumbled up in the morning and helped her build file that they have the votes in the heavily actual numbers of the deadly when it was revealed as a woman or a everyday lives they have told you has been about dispiriting you depressing to hear that it's a lost cause but you give up regulators locally defined today they just gobble down about the only form of the CBO but they're no closer than they were and that's what all this means all this trickery while the chicanery all this behind the scenes look on the effort to create momentum word doesn't exist balder asking the president to delay his departure some to later in the week and reason are doing that is because the people who have the votes on something by somebody and it's going to complicate the summit is what's what's...
Wednesday, March 17, 2010
Monday, March 8, 2010
During 2009 seven states and the District of Columbia raised sales tax rates, with one jurisdiction--North Carolina--actually doing it twice. Only four states hiked rates in 2008 and only one in 2007. Given state budget problems, the 2009 state sales tax increases aren't surprising. States have also been raising income tax rates on the wealthyand on corporations and boosting excise taxes on alcohol and tobacco. With states now facing record budget shortfalls, more tax increases seem likely.
State level sales tax generally accounts for only about two-thirds of the total sales tax bill. The rest comes from levies assessed by counties, municipalities, Indian tribes and special-purpose taxing districts funding mass transit, urban renewal and even stadiums. Among lower level jurisdictions such as counties and towns, Vertex counted 649 new or increased sales tax rates during 2009 and just 192 reductions.
The result is a wide range of combined sales tax rates across the country. At the bottom: 0%, found in all of Delaware and New Hampshire, and most of Montana, Oregon and Alaska. The country's highest rate now is 12%, in the tiny portion of tiny Arab, Ala., (population 7,500) sticking into Cullman County. The rest of the northern Alabama town, in no-sales-tax Marshall County, pays just 8%.
Right now Chicago has the highest big-city rate, 10.25%. But in a move forced by Cook County lawmakers, the rate is scheduled to drop on July 1 to 9.75%, matching that of Los Angeles. In New York City the total bite is 8.875%. Other high big-city rates include San FranciscoandSeattle(9.5%), New Orleans (9%), Houston, Dallas and Charlotte (8.25%), Las Vegas (8.1%) and Philadelphia and Atlanta (8%).
Thursday, March 4, 2010
Opposition to the idea of requiring construction contractors to hire through union hiring halls runs counter to voters’ otherwise sympathetic attitudes to unions. The same survey showed that a majority (52%) of Massachusetts voters have a favorable opinion of unions. It also found that only 19% of voters believe that public sector union workers are overpaid.Press release.
The requirement that construction contractors hire their workers through union hiring halls is opposed by almost every segment of the electorate. Eighty‐eight percent (88%) of Republicans, 76% of Independents and 52% of Democrats oppose the requirement. Even among households with union members, 59% are opposed. Opposition is consistent across voters segmented according to age, gender, race and attitudes toward candidates for governor and the U.S. Senate. Only the 15% of voters who have a "very favorable" view of unions support the requirement.
More from the Boston Herald.
Wednesday, February 24, 2010
Jetmira Kaziu is the COO of Cigar Masters, a cigar bar and lounge in the Back Bay. As a smoking bar, by law, at least 60 percent of its revenues must come from tobacco sales. Kaziu is worried that if the excise tax increase passes, she will feel like she’s stealing from her customers because they could easily get their favorite cigars cheaper elsewhere. Maintaining that 60-percent requirement would be difficult.The governor acts as if the law of diminishing returns doesn't apply to state tax revenues.
Glance: Cigars Taxes
“We are in between two states, New Hampshire, which doesn’t have any tax, and Rhode Island, which has just a 50-cents tax,” Kaziu said.
“So that means that all my customers, they’ll buy their regular cigars from the states next to us or probably go online and buy them, and as such we might even go out of business … and obviously the employees thrown out on the street in this economy is not such a viable thing to do.”
Joe Corrado, a 24-year old bartender, is a regular at Cigar Masters. He’s there a couple times a week, spending $30-50 a week, and he says if the excise tax hike passes, he would still most likely be a fixture in the bar, but his habits would change.
“Where I’m smoking $10 to $12 cigars now, I might bump down to the lower grades,” he said. “Or alternatively, I have aunts and uncles and friends that make frequent trips to New Hampshire, 40 minutes away or less, they make a day of it and stock up for the month.”
Tuesday, February 23, 2010
I don’t think that states should cut spending now, but I’m not happy with the idea that the federal government is stepping in and eliminating the states’ need to handle their own obligations. In principle, states can create sufficient rainy-day funds and allow for sensible borrowing during economic downturns. Moreover, handling state budget shortfalls with federal bequests creates all manner of oddities.
Thursday, February 18, 2010
In reality, the CBO is underestimating their underestimation. Skopol’s fiscal watchdogs must be asleep on the job. Evidence from my home state of Massachusetts confirms my view that healthcare costs will only vastly increase if the package passes. Despite the fact that Obama is basically proposing a federal version of the plan already in place in Massachusetts, nobody likes to talk about the Massachusetts healthcare experiment for partisan reasons. Republicans don’t want to talk about it because it was pushed by then Republican Governor Romney while Democrats don’t want to talk about it because it’s largely a failure. Despite assurances otherwise, the number of new coverage mandates has continued to expand and now Governor Patrick wants to institute ad hoc price controls on insurance rates because nothing has been done to curb rising costs.Read the whole blog entry.
Wednesday, February 17, 2010
I'm sure the success of this viral video was not designed.
More on the making of this video with creator and economist Russ Roberts here.
Monday, February 8, 2010
The Patriot Ledger:
The school building committee had a wealth of information for weighing the pros and cons, Chairman John Rogers said.More from the Brockton Enterprise.
“A lot of Rockland people pay taxes and are not in the union; they deserve a crack at a cut of (the project),” said Rogers, who described himself as “not anti-PLA.”
Rogers said he voted in favor of a project labor agreement for redevelopment of the South Weymouth Naval Air Station several years ago, when he was serving on the board overseeing the redevelopment. He believes the school-project circumstances are different.
He said he was concerned about whether the committee would be able to successfully defend itself if it approved a project labor agreement and that approval was challenged in court.
A previous court decision suggests that the court would analyze the complexity, duration and size of the project.
“The cost of legal fees to defend a court challenge was also a consideration for committee members,” Rogers said.
“Union people can still bid on the project,” he said.
Friday, February 5, 2010
The latest issue of Cato Journal dedicated to current labor issues is now out and it includes the latest from BHI: "Why Project Labor Agreements Are Not in the Public Interest" by executive director David G. Tuerck.
Tuesday, February 2, 2010
Arthur Laffer, creator of the Laffer Curve that showed how low tax rates boost economic growth, is warning anyone who will listen that the economy is headed for a “train wreck” in 2011 that will make the current recession look tame by comparison.
The famed economist, whose supply-side, tax-cutting policies enacted by President Reagan in 1981 put the economy on a record-breaking, 25-year economic trajectory of growth and prosperity, is telling Americans not to be lulled by sporadic signs of growth this year, because the economy is headed for a sharper decline next year when tax rates are expected to jump sharply, sending the economy into a new tailspin.
“It will make the decline in U.S. output from 2010 to 2011 worse than the decline in output in 2008 and 2009 which will catastrophic,” Laffer said in an interview with HUMAN EVENTS.
Thursday, January 28, 2010
The "Shadow Budget" is part of a proposal outlined in BHI's latest study, Massachusetts Fiscal Policy: The Legend v. the Facts.
The study also hypothesizes how the Commonwealth of Massachusetts would have performed it a Tax and Expenditure (TEL) were in place since 1999.
Monday, January 25, 2010
Why do economists disagree?
Thursday, January 21, 2010
I don’t think a shift is taking place. First, Attorney General Martha Coakley is a terrible campaigner and Brown is an attractive guy. Also, as I said, President Obama went farther to the left than the union rank-and-file would have liked. Keep in mind that Massachusetts approved Proposition 2½ over 25 years ago and that puts a strong limit on property taxes. We also voted to cut the income tax eight years ago. When we have a statewide issue—like this one—Massachusetts can go to the right.
When Nixon was president, we imported 25 percent of our oil. Since then, our "leaders" have wasted billions on subsidies for alternative energy. The result? Today we import nearly 70 percent of our oil.
Terrible as that sounds, I say, "So what?" Interdependence is just fine! And journalist Robert Bryce, author of Gusher of Lies: The Dangerous Delusion of Energy Independence, agrees. He'll be my guest on Stossel tonight (Fox Business Network, 8 Eastern, and again Friday at 10).
Bryce points out that while Saudi Arabia and Iran are oil exporters, they are gasoline importers. "If even Saudi Arabia and Iran are energy interdependent, why wouldn't we be?" he says. "Energy interdependence" is just a way of saying "division of labor" and "comparative advantage."
Our biggest foreign oil suppliers are Canada and Mexico. Do they threaten us? Venezuela or Iran might, but they need the oil money. They would hurt themselves if they tried to cut us off.
Even if they did try, we'd still get their oil. All the world's oil ends up in the same bathtub. The dictator sells to someone who sells to someone who will then sell to us. Chasing energy "independence" is pointless. Free trade is better. It makes us richer and more secure.
Thursday, January 14, 2010
Tuesday, January 12, 2010
At a hearing of the board in Springfield, BHI argued:
These changes are, by any account, a step in the wrong direction. The national unemployment rate for construction workers currently stands at 19%. The prevailing wage law creates rigidities in construction wages that already make it impossible to relieve this problem by reducing labor costs for public projects. This new regulation will simply increase labor costs and thus further aggravate the current unemployment problem in construction.Entire testimony is available at www.beaconhill.org.
The regulation will have adverse long-run effects as well. It effectively restricts labor supply for sheet metal workers at a time when experienced workers are reaching retirement age in greater numbers than before. By attempting to shift the composition of the workforce from younger to older workers, the regulation promises ultimately to invite labor scarcities and escalating labor costs.
Holiday sales at local merchants dropped 2.6 percent compared with the same period in 2008, the third straight year of declines in Massachusetts, according to a survey released yesterday by the Retailers Association of Massachusetts.BHI's analysis of last year's tax hike is here.
Results of the 2009 survey of 3,100 business owners were in line with the association’s projection of a 3 percent drop for November and December sales. That comes on top of a 7 percent plunge during the same months in 2008.
Some businesses, including jewelers and home goods shops, saw a small uptick in Christmas sales, but the recession, coupled with an increase in the state’s sales tax, made it another tough year for Massachusetts merchants, according to Jon Hurst, president of the Retailers Association of Massachusetts.
“Retailers were more prepared this year with lower inventories and lower expectations,’’ Hurst said. “This year’s decline isn’t as bad as 2008, but that was really the worst holiday season that the retail sector had seen in a long time.’’
Research firm ShopperTrak yesterday reported that sales across the country rose 1.7 percent for the 2009 holiday shopping season while traffic at shopping centers dropped 2.9 percent for the same period. Winter weather also seemed to take a toll in New England, with BJ’s Wholesale Club blaming a severe snowstorm before Christmas for taking away sales.
Hurst and other local merchants suggested Massachusetts fared worse than other states because of the sales tax increase. State lawmakers hiked the sales tax in August to 6.25 percent from 5 percent.
Monday, January 11, 2010
A growing number of state regulators are urging the Obama administration to slow the rollout of proposed federal rules curbing industrial greenhouse-gas emissions, saying the administration's approach could overwhelm them with paperwork, delay construction projects and undercut their own efforts to fight climate change.Read: BHI's Comments on Regulating Greenhouse Gas Emissions under the Clean Air Act;
The concerns echo some criticisms that business groups -- including the American Petroleum Institute and the National Association of Manufacturers -- have voiced about the potential consequence of new regulations, though the states generally don't challenge the legality of the proposed regulations, as some business groups have. Indeed, many state regulators continue to say they support the Environmental Protection Agency's effort to regulate greenhouse gases. Their concerns, they say, have more to do with how quickly such rules should be phased in, and how to pay for an expansion in regulatory oversight at a time when their budgets are in the red.
Regulators from around the U.S., including Kansas, Pennsylvania, Florida and California, are calling on the EPA to go slowly with its new rules, and in some cases warning that they lack funding to regulate some of the new emissions sources that would be covered.
The states' warnings vary in urgency, with some saying the EPA's proposal can be easily tweaked and others urging the agency to reconsider the proposal, predicting dire consequences. South Carolina regulators, in a letter to EPA dated Dec. 23, said the proposal will cause chaos and warned that many construction projects -- and jobs -- are at risk.
Advanced Notice of Proposed Rulemaking RIN 2060-AP12
The lesson from these transactions is clear. If the Treasury bails out large banks in the future, it should demand the same terms as those received by sophisticated institutional investors. Some of the rescued banks will become profitable, while others will become insolvent. Taxpayers need to maximize their gains on the successful turnarounds to compensate for their losses on the bailouts that inevitably fail.Pozen, chairman of MFS Investment Management, is the author of Too Big to Save: How to Fix the U.S. Financial System