Earlier this month, I went on a snowboarding trip to California. One of my companions on the slopes loves the world of wine. She’s such an insider that she has a legitimate business reason to live in Napa Valley. And she does–but no more than just under half the year. Her detailed calendar and bevy of receipts offer proof.

Why is she so precise about her comings and goings? Taxes, to start with. California has the seventh-highest income taxin the country, as measured by per-person collections. It also has the highest top marginal rate, after Hawaii. (Stop to consider that: The state with the highest income tax rate among the continental United States does not have the highest collections. Why not?)

To get around California’s income taxes, my skiing friend spends a slight majority of the year in the state of Washington. Washington, in addition to having all the natural beauty of the Pacific Northwest, has a top income tax rate of 0.0 percent. That’s right: No income tax. So my friend’s state income tax liability is zero dollars and zero cents. Wouldn’t you like to write that check to Minnesota Revenue each year?

I don’t know what my friend’s political beliefs are. I don’t know if she has read Milton Friedman or any supply-side economists on the effects of the income tax. But the way she lives her life suggests that she knows they speak the truth.

Incentives matter.

(First published by the Center of the American Experiment)

We’re loading up the nation in public debt, but at least the entertainment lobby will be happy!

From The Detroit News: http://apps.detnews.com/apps/blogs/watercooler/index.php#ixzz2HggH5zMb

From a commentary in the New York Times: “The agency has no proof that electronic devices can harm a plane’s avionics, but it still perpetuates such claims, spreading irrational fear among millions of fliers.”

Regulators regulate. It’s in their nature.

From The Detroit News: http://apps.detnews.com/apps/blogs/watercooler/index.php?blogid=6039#ixzz2HggkybBc

In the 1930s, president Franklin D. Roosevelt to increase the role of the federal government. He was blocked by a majority of members of the Supreme Court who (rightly) held that FDR had overreached. In response, FDR suggested that, well, maybe the justices on the court needed some extra members to help them out–people who would, ahem, be agreeable to the president’s view of things. In what has been called “the switch in time to save nine,” Justice Owen Roberts reversed his philosophy, and upheld FDR’s plans.

Fast forward to 2012. Opponents of Obamacare pinned their hopes on two possibilities. One was a Republican presidential victory in November. The other was that in June, the Supreme Court would strike down a key portion of Obamacare, and (continuing the theory) as a result, the entire law.

Instead, a member of the Supreme Court, who had previously infuriated President Obama with his rulings, found a novel way to uphold the individual mandate, by which the feds took the unprecedented step of requiring that you buy a product (health insurance) merely as a condition of living. His name: Chief Justice John Roberts.

In the 1937, an expansionist president’s plans were saved by Justice Roberts. In 2012, an expansionist president’s plans were saved by … Justice Roberts.

Perhaps it’s time to say: Nobody named Roberts on the Supreme Court. Granted, that’s silly, but so, it appears, is the idea of depending on the courts to save constitutional governance. Taming the federal government, instead, depends on changing cultural expectations about the role of government–a very challenging task.

Under the electoral college, a group of people in each state, called electors, vote for the presidential candidate who won the popular vote within the state. Each state gets as many electors as it has in Congress. (“College,” in this case, simply means a collection of people.) The vote of these “electors” on a state-by-state basis is what actually selects the president: the presidential candidate who wins 270 or more of these votes takes over the White House.

As the National Archive observes, “there have been more proposals for Constitutional amendments on changing the Electoral College than on any other subject.”

Today, there are two different, major attempts to change (some would say gut) the electoral college. Under a plan advanced by the group National Public Vote (NPV), state electors would vote not for the candidate who actually won their state, but whoever won the most number of votes nationwide. NPV is bankrolled by, among others, uber-lefty George Soros, though I know several Republicans who are part of the work.

The second major attempt to change the college is to have states apportion their electoral college votes by congressional district. In Michigan, Mitt Romney won more votes that Barack Obama in 9 congressional districts, but will receive zero electoral votes, since Obama won more votes statewide. Under the by-congressional district approach, Romney would have won 9 electors while Obama won 4.

Saul Anuzis, the former chairman of the Michigan Republican Party, is a leading advocate of this second plan. The idea, at least as articulated by The Atlantic, is a naked political power play. One anonymous source tells the magazine, “There’s no kind of autopsy and outreach that can grab us those electoral votes that quickly.” Stupid party, meet evil party, all in one party.

There are several reasons why changing the electoral college as we know it is a bad idea. It would weaken the idea of federalism, the American system by which power is shared by one national government and 50 state governments. Federalism exists in the fact that each state gets at least one vote in the U.S. House and two in the U.S. Senate, regardless of population. The rules of the electoral college are also an act in federalism.
Federalism is not only the American form of government, it is beneficial. As debates over abortion, marriage, and other issues have shown, nationalizing political questions increases political strife. In addition, federalism promotes policy innovation and provides a safety valve. If the government of Michigan proves sufficiently inept, people can move to Indiana, Texas, or elsewhere.

National Popular Vote, for its part, has the added problem of adding to the incentives for voter fraud. Right now, inventing votes in Denver or Richmond affects only the electoral college vote of Colorado or Virginia. Under the NPV, a fraudulent vote anywhere has national importance, which means post-election squabbling all over the country. Do we really want to hear about “hanging chad” in each of the 50 states?

As for voting-by-congressional district, the major problem there is that unlike states, congressional districts have no historical, political, or economic identities. In fact, they are so transitory that they are redrawn–for blatantly political purposes–every 10 years.

But voting by congressional lines is — today at least — politically attractive to the Party of Elephants. Says The Atlantic, “This year, Democratic House candidates won more than 1 million more votes than Republican candidates, but Republicans won 33 more seats.” This suggests (though does not guarantee) that with current congressional lines in place, Republican presidential candidates would do better. The results of the next cycle of redistricting, though, could bite Republicans back, which is just one sign that they shouldn’t proceed. A sound principle of changing procedures in government is, “would I be willing to let my opponents do this?”

Ever under attack, the Electoral College is an important part of American governance. Long live the college!

From The Detroit News: http://apps.detnews.com/apps/blogs/watercooler/index.php?blogid=5986#ixzz2HghXgHWQ

It wasn’t the first time I’ve been wrong, of course.

While Gov. Snyder has a history of discouraging the right-to-work cause, he recently saw a need, opportunity, or both, to go ahead with it. So he gave his assent, and even threw in a pitch for it. Naturally, it was on the grounds that a business leader would understand: competitiveness. I think that right-to-work is morally correct, but if competitiveness sells the idea, that’s fine, especially since that’s another benefit of workplace freedom.

To quote Henry Payne, the RINO did it; he played a key role in the realization of a long-term goal of Michigan’s conservatives, if not Michigan’s big business leaders. Good for him. Now I’m intrigued by what else he can do. Michigan needs a lot of help. Maybe it has the turnaround specialist it needs.

From The Detroit News: http://apps.detnews.com/apps/blogs/watercooler/index.php?blogid=5962#ixzz2Hgi2KaDo

Long-term decline leads to a one-state recession

One factor in Michigan’s move to right-to-work is the state’s dismal economic performance. In the 1970s and 1980s, many people fled the state for economic opportunity elsewhere, notably in the sunbelt, where right-to-work is the rule. One running joke was “will the last person leaving Michigan please turn off the lights?”

People kept leaving the state; in 2007, Stateline.org noted that Michigan has lost jobs for six-years running, and was experiencing a “one-state recession.” In 2008, data from United Van Lines showed that Michigan was the number one state for outbound traffic. No wonder; the state ranked 37th in per-capita income. In other words, the old way of doing business wasn’t working anymore.

Much of the decline is related to the auto industry, and the state’s dominance in the world auto market was temporary for at least one reason: The United States bombed the world’s manufacturing base during World War II, and eventually the world would, and did rebuild. But some of the damage was self-inflicted. The over-reach of the UAW, combined with the acquiescence of the “Big 3,” contributed to a decline of the state’s leading industry vis-a-vis companies from Germany and Japan. The power of unions as an engine of prosperity, in other words, came under question.

The Republican Party stays in the game

Another factor setting the stage for right-to-work is that the policy has had a natural home in a major political party. Despite the state’s reputation as a blue state, Republicans have long been competitive, at least in state politics. During the 1990s, John Engler served three terms as governor (1991-2002). During his early years Engler enacted some reforms that kept the idea of competitive markets in play. (In later years he succumbed to some of the temptations of central planners.)

In 2010, Rick Snyder, a businessman, ran as “one tough nerd” in the Republican primary for governor, actively courting Democratic and independent voters, and eschewing red-meat rhetoric. The technique succeeded, both in the primary and in the general election.

Some though certainly not all Republican lawmakers pushed for right-to-work in the new session, but Snyder gave the word that he wasn’t interested in making waves, or at least those waves.

Ballot proposals pushed by unions in 2012 alienated key Republicans

In the 2012 general election, union interests placed two constitutional amendments on the ballot. Proposition 2 would ban right-to-work in the state, and change a number of laws on the books. It promised such chaos, simply on an administrative level, that the pro-union Detroit Free Press encouraged people to vote no. They did, by a final result of 58 to 42 percent.

But the union overreach ticked off Gov. Snyder, as well as some key Republican legislative leaders who were not keen on enacting right-to-work.

While Prop 2 failed, another union-backed measure succeeded. Prop 1 repealed a state law governing emergency managers, officials sent by the state to oversee financially troubled local governments. Several local governments, in particular the City of Detroit and the Detroit Public Schools, have been poorly run and in need of oversight. Not surprisingly, they objected to the emergency manager law.

The intransigence of local governments, based in large measure on public unions, did not endear the union cause to Gov. Snyder, who finally gave word that he would sign a right-to-work bill.

Indiana provides the rationale

It’s worth noting that there are some similarities between Gov. Snyder and Mitch Daniels, the former governor of Indiana. The men are both known as nerds (in the case of Daniel’s, a budget geek), and both opposed right-to-work. But in the last year as governor, Daniels consented, and Indiana became the first state in over a decade to enact a right-to-work law. Snyder has since cited economic developments in Indiana, and his fraternal philosophical twin.

The Affordable Care Act provides the legislative model

The Affordable Care Act (Obamacare) provided Republicans a template for action: If you see a key policy area that is dear to you, and could have long-term political benefits, enact it, regardless of the short-term political consequences.

The public image of unions has suffered, especially in recent years

In Michigan, forced unionism has been a part of the landscape, but its image has also been tarnished by the defects of union-made autos. In my youth, the joke was that you didn’t want to buy a UAW car built on a Friday (the workers were so eager for the weekend that they were careless) or on a Monday (they were hung over). Unionism also suffered a PR blow with the “jobs bank” of a few years ago, in which union members were paid in excess of 90 percent of their salary not to work, but to do community service projects. Even this week, the extreme nature of unionism can be seen in the case of stoned and drunken workers being returned to the job, thanks to a union contract.

The union movement has also overreached in its organizing work. In recent years, it attempted to force self-employed daycare owners into unions, as well as people who served as personal care attendants for their children. Both attempts have tarnished the narrative of unions as necessary counterweights to corporate power.

Right-to-work for Minnesota? Not yet

Will right-to-work come to Minnesota? Maybe. But Michigan and Minnesota have some significant differences that make right-to-work in Minnesota less likely.

First, Michigan’s union sector is much more dominated by the private sector than Minnesota’s, and thus more prone to the discipline of the market.

Second, the economic case for right-to-work has been more compelling in Michigan than in Minnesota. It’s likely that Michigan Republicans would not have been as open to right-to-work had the state been an economic basket case–a description that cannot be applied to Minnesota.

Certainly, competitive pressures from Indiana are key, as Henry Payne points out.

But the lessons of Obamacare should not be overlooked, either. Consider how Washington Democrats passed the “Patient Protection and Affordable Care Act” (ACA), as the law is formally known. It on a strict party-line vote: The majority party decided that it was wiling to use its raw majority power when it it was required. The law was enabled by special deals made to key senators (the “Cornhusker Kickback” and the “Louisiana Purchase”). It was also assisted by a phony-baloney promise from the Obama Administration to (now) former U.S. Rep. Bart Stupak of Michigan’s first district that the law would not advance abortion. Finally, the ACA’s legislative backers practiced all sorts of procedural shenanigans. They used the budgetary technique known as “reconciliation” to avoid a filibuster. They used a Senate rather than a House bill (as is required of all tax-raising laws) because it was more expedient. They jiggered the law in ways that underestimated its costs.

In other words, the Democrats in Washington played hardball, circumvented established procedure, and were even willing to suffer the lose of their majority in the House of Representatives (which they did).

Why did they do this, despite dissatisfaction their far left members who wanted a single payer law? Because they knew that that the effort would be worth it in the long run. The entitlements and special favors set up by Obamacare will almost certainly mean that America will permanently tilt, both politically and culturally, away from free-market capitalism and towards a social-democratic-welfare state. Aim for the long run, baby.

Perhaps Michigan Republicans, or at least some of them, have taken the lesson to heart. They’re willing to act on their policy convictions, and also to strike at their opponent’s heart while they have a chance. The near-death experience of Prop 2 no doubt stiffened some spines, but also proved a sentiment of “holy cow, we have to do something!”

Will right-to-work benefit Michigan Republicans politically? I think that in the long run, the answer is yes, though frankly, I’m not too concerned about that. I’m in it for the substance, not whether team red or team blue gets the corner office.

I hope Michigan’s Republicans are willing to follow their Democrat counterparts in the U.S. House, and be willing to (temporarily) lose the majority (or majorities) to enact legislation that advances their policy goals and (perhaps) political fortunes. Unlike the ACA, right to work is morally correct, and good for the economy as a whole.

If they wish to govern rather than simply mark time towards a public pension, Michigan Republicans should flatter the advocates of government, by imitating them.

First published by The Michigan View

Meanwhile, the head of the TSA refuses to testify before the (are you ready for this?) House subcommittee on aviation. Yes, aviation, as in airplanes and airports, where 99 percent of TSA employees currently (or should) work. A committee on aviation composed of politicians who are responsible for doling out the dollars the TSA depends on sounds like a “must visit” location for any TSA chief. But if he’s shy, why doesn’t the committee issue a subpoena? It would certainly be a more legitimate use of the hearing process than badgering pro athletes over their use of steroids.

Is there hope for some sensible policies and accountability? I’m not sure, but Christopher Elliot gives five reasons to opt out of “microwave” screening. He further predicts that the TSA as we know it will soon be dead.

I’d like to think so, but there’s nothing as permanent as a government program.

First published by the Michigan View

Take, for example, the financial state of the federal government (which is to say, all of us). The federal debt is not the widely reported $16 trillion–already larger than the national economy–but something even worse. It’s $87 trillion, or5.5 times the entire economy.

Why haven’t we heard this before? As former congressmen Chris Cox and Bill Archer explain, the numbers are out there, but they’re segmented into various reports. We don’t have a single report that accurately describes the federal balance sheet.

They conclude, “Were American policy makers to have the benefit of transparent financial statements prepared the way public companies must report their pension liabilities, they would see clearly the magnitude of the future borrowing that these liabilities imply” (emphasis added).

Would being able to see clearly lead to smarter decisions? I would hope so, but then again, short-term thinking tends to dominate over long-term thinking, especially in politics.

From The Detroit News: http://apps.detnews.com/apps/blogs/watercooler/index.php?blogid=5877#ixzz2HgibTdF1